North Wales Economic Infrastructure

David Jones Excerpts

Wednesday 25th March 2015 Westminster Hall

[Mark Tami]

That would have a massive impact. If my hon. Friend can wait a little longer—I am sure that he can—I will address that point towards the end of my remarks.

I mentioned the importance of a quality work force in attracting new companies to the area. That does not happen by accident; it happens because we train the people who are needed. Coleg Cambria has an excellent record of doing such work. It works with employers to develop training packages that meet their needs, rather than offering, and only ever having offered, an off-the-shelf programme that people can take or leave; I believe that that has been a failing of some further education colleges. Coleg Cambria is good at looking to deliver what employers want. I have talked to companies such as Raytheon, and they are pleased with the arrangement, which includes work placements. The arrangement works well.

[Mr David Jones (Clwyd West) (Con)]

The hon. Gentleman rightly praises Coleg Cambria for its engagement with industry, but is it not the case that Glyndwr university in Wrexham has a similar relationship with, for example, Airbus and that such education links across north Wales give the region added value to prospective employers?

[Mark Tami]

It does indeed. I was just about to mention Glyndwr university, which is important. Both further education and higher education institutions have to be adaptable and have to consider how they can deliver the skill base that employers need, rather than just offering courses that have not changed for years. We need such flexibility, which is important.

There are still many hurdles to get over in changing attitudes, particularly towards apprenticeships, and we have to be honest about that. There is still a culture in this country that apprenticeships are done by people who do not go to university, and who perhaps do not have the skills to go to university. In many people’s minds, apprenticeships are a second-class thing to do. I do not hold that view—it is totally wrong—but we have to be honest and admit that people still hold it, and that we have to counter it.

We are light years behind Germany and some other countries where apprenticeships and university are on the same level, and people have the opportunity to take up an apprenticeship that can lead to a university education. Airbus, through the higher apprenticeship scheme, is doing that, but far more employers should be going down that route. It should not be an either/or; people should be able to move seamlessly through one to the other. We are a long way from that. It is no good just talking about the importance of apprenticeships. We have to deliver apprenticeships for people across the gamut of qualifications so that they can move. We will then change the attitude towards the importance of engineering, but we are a long way off that at the moment.

The Deeside enterprise zone established by the Labour Welsh Government offers a great opportunity to create thousands of jobs, but it also creates challenges. The northern gateway project is a major opportunity, and I am pleased that the Welsh Government announced that they will be funding a highway through the site, which will help to speed up growth. I also welcome the £2.2 million investment for flood defences, which are long overdue and are part and parcel of that new site.

There will be other road improvements. Work on the A483-A55 intersection is still ongoing. I recognise that there are major concerns about delays but, if we are honest, the time will never be right for making road changes, which will always cause problems. If someone has a magical solution for making those road changes without causing delays, I would love to hear it. The intersection is a pinch point that needs to be addressed, and I am pleased that is happening.

As I said at the beginning of my speech, rail is the major area in which a lot of work remains to be done. Cross-party colleagues and I recently attended a meeting of the North Wales economic ambition board, in which it presented its case for the electrification of the railway line from the north-west across north Wales. The board pointed out that north Wales has not received any major investment in rail since Queen Victoria was on the throne. My hon. Friend the Member for Vale of Clwyd (Chris Ruane) probably remembers those days, but most of us in this room do not.

The board estimates that electrification across north Wales to Holyhead would create some £400 million in economic growth, help to regenerate areas that have suffered for many years and promote inward investment. If electrification stops at Chester, the board’s evidence shows that there would be a negative impact on the economy of north Wales, and even on the economy in England, too. If the project is to go ahead, we clearly need joined-up thinking to extend electrification for the length of the route. For that to happen, the Department for Transport, the Welsh Government, local government and the train operators need to work together. Although electrification is on the list of infrastructure investment projects and priorities for Wales published by the Wales Office, there is no start date, and the status is “locally supported,” which I presume is code for there not being any money and the project not being on the blocks to go ahead—certainly not in the short or medium term.

I am sure we would all like the electrification to go ahead, but if the reality is that it will not go ahead in the short or medium term, we have to consider what we can achieve on a smaller scale, and whether we can perhaps deliver economic benefit without that massive injection; electrification would clearly be an extremely costly project. The reinstatement of the Halton curve with a more modest £10.4 million investment, which I welcome, will have a positive effect. My hobby-horse, and the hobby-horse of my hon. Friend the Member for Wrexham (Ian Lucas), is the Wrexham-Bidston line. It would be fair to say that we have been banging on about that for many years. It could offer real benefits, including an improved service with more trains running. Longer term, the line could be electrified and have a dedicated station for the Deeside enterprise zone. The line could make a real difference, because Flintshire has one of the country’s highest rates of people travelling to work by car, which probably tells us all we need to know about how well our rail routes, and probably bus routes, work.

Broadband coverage in the area is improving, although not where I live, but that is probably my fault as much as anything else. We still have a long way to go before we can say that we have cracked it. A number of companies and individuals have come to see me, and they have been told that they have good coverage in their area, but when they started operations they found out that the coverage was actually very poor. It is all very well for the Government to say that 90% or so of people are covered, but that is not the same as saying that 90% or so of the country is covered. Rural areas are particularly badly affected. Broadband is not an optional extra for businesses today; it is not something they can pick and choose. If they do not have broadband, their business will suffer. The way in which we all do business has changed, which is why we have to improve broadband coverage. This is not just about rural areas, because we have not-spots in our towns, too.

Energy infrastructure is extremely important. I do not want to go on a lot about that, because my hon. Friend the Member for Ynys Môn (Albert Owen) will have something to say on the subject, but I will mention my concern about the viability of Deeside and Connah’s Quay power stations in the longer term. They are older gas stations, but they play an important role in meeting peak demand. They can operate only if they receive the right support to make them viable.

House building is another issue, because if we are encouraging companies to site in north Wales, their employees have to live somewhere. We need more affordable housing, not just to buy but to rent. I applaud Flintshire county council for starting a council house building programme, which is an important step that will help a lot of people. Like many colleagues, I know a lot of families in which both adults are working but cannot get a first step on the ladder. Getting on that ladder is very important in encouraging people to site themselves in the area. We are moving in the right direction, but major concerns remain about our rail network. We are doing better than some areas, but there is room for improvement.

Finally—my hon. Friend the Member for Vale of Clwyd has been waiting for this moment—I worry that all that good work could be undone if we put everything at risk by exiting the European Union. That would have a devastating impact on companies in our area such as Airbus and Toyota, among many others. I do not think that they would shut up shop and go the following day, but I worry that we would not see further investment, and then we would see operations starting to go back the other way. Companies such as Airbus are European partnerships, which are a great example of how Europe can and should work. Our European partners—the Germans, the French and the Spanish—would love to have that wing work. Let us not kid ourselves: if we think that they would not push harder for that work and make the case about all the difficulties of us being outside the European Union, we are naive in the extreme.

To believe that we can leave the EU and then establish trade arrangements so that we can carry on exactly as before is as ludicrous. We are not Norway, and even it has to abide by the same rules and regulations to sell its goods, but it does not have a chair at the table when those rules and regulations are being made. The think-tank Open Europe published a report this week that warned that, in one scenario, UK GDP could be 2.2% lower by 2030 if Britain leaves the EU and fails to establish liberal trading arrangements.

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[Mr David Jones (Clwyd West) (Con)]

It is a huge pleasure to serve under your chairmanship, Sir Roger. I congratulate the hon. Member for Alyn and Deeside (Mark Tami) on securing the debate. At the start of his remarks he made an important point when he identified north Wales as not so much a discrete region, as part of the much larger and important north-western economic region. That is extremely important, because I frequently feel that people in Whitehall and—dare I say it?—Cardiff do not understand north Wales’s relationship with the large cities of north-west England such as Liverpool and Manchester.

That is why I echo what the hon. Gentleman said in applauding the work of the Mersey Dee Alliance, an extremely important vehicle for cross-border co-operation. It should be given even more recognition and regarded as a statutory consultee by not only the Westminster Government but the Government in Cardiff on all aspects of economic development in north Wales.

I want to focus my brief remarks on rail transport in north Wales, because, as the hon. Gentleman rightly said, that is an important element of the north Wales economy. I am optimistic. Like him, I attended the event organised by the North Wales economic ambition board and I believe that Members of Parliament of all parties support working towards electrification of the north Wales main line.

The hon. Gentleman also mentioned what he called the Wrexham to Bidston line. He is right that hon. Members have debated that old chestnut in this House for many years. The economic case for electrification of that line is probably stronger than ever, but I think that, because we are Welsh, we tend to look at that through the Welsh prism: Wrexham to Bidston rather than Bidston back towards Wrexham.

What has changed over the past few years has been the establishment of two important enterprise zones: one, as the hon. Gentleman said, is in Deeside, but the other is at Wirral Waters in Birkenhead. The Wirral Waters enterprise zone is almost immediately adjacent to the station at Bidston, and those two zones could benefit immensely from being linked by a fast, electrified line, which would put Deeside within easy commuting distance of the centre of Liverpool.

Only a few weeks ago, Network Rail announced proposals to create a new hub at Shotton, which provides an enormous opportunity for hon. Members to press Network Rail and Merseyrail to look again at the prospect of electrifying that important line. That would effectively put those two enterprise zones within a 15-minute commute, which would create enormous synergy. Perhaps we could then speak in terms of extending electrification down as far as Wrexham, for which the hon. Member for Wrexham (Ian Lucas) has pressed for many years. However, if we take an incremental approach and initially think about improving that important stretch of line, we will lay the foundations for an enormous boost to the economy not only of north-east Wales but right across the region, from the River Conwy to Ellesmere Port and beyond. The Minister could do well to put that to Network Rail; the time is right. We need to do as much as we possibly can to integrate the north Wales economy even further into the Merseyside economy.

In the next Parliament there will be considerable debate about so-called English votes for English laws. When one has regard to the extent to which not only public services such as health in north Wales but the economic considerations we are debating today are bound up with those across the border and tapped into the north-west economy, one sees that it is essential that whatever arrangements are put in place should give proper recognition to the legitimate concerns of north Wales Members.

[Chris Ruane]

Does the right hon. Gentleman believe that Welsh Members should be able to vote in the British Parliament on health, education and transport issues?

[Mr Jones]

I have already said many times and I am quite happy to repeat—that is why I started by saying that frequently I think politicians in London and Cardiff do not fully understand the north Wales element—that whenever any such issues touch and concern the interests of the people of north Wales, their representatives should have the right to speak on those issues in this Parliament.

[Mark Tami]

I am very pleased to hear what the right hon. Gentleman has to say. He makes a very strong point, and one of the best examples of what he is talking about is the Countess of Chester hospital. It was absolutely established not as an English hospital but as an English and Welsh hospital, and its catchment area is Deeside and Chester; it serves Deeside as much as it serves Chester. It would not be viable without Welsh patients, so to look at it as purely an English hospital would be wrong, and he is absolutely right that people outside our area do not understand how that dynamic works.

[Mr Jones]

Yes, the hon. Gentleman is entirely right. In fact, that is a point that I put to my right hon. Friend the Leader of the House when he announced the proposed arrangements for so-called English votes for English laws.

We must have regard to the fact that people in north Wales rely on English services, not only health services but in so many other respects. Our people work across the border, and, as the hon. Gentleman rightly said, people from the north-west of England work in factories, such as Airbus, Toyota and so on, on the Welsh side of the border. It is essential that people in north Wales should have proper representation in this place whenever necessary.

Frankly, one of the other difficulties is that there has been an unfortunate tendency to equate Wales and Scotland. Wales is a very different place from Scotland. The border of north Wales is highly populated, whereas the border between England and Scotland is not. It is essential that Members from all parties should ensure that, whenever the concerns of people from Wales are debated in this place, their representatives have a full voice in those debates.

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[Albert Owen (Ynys Môn) (Lab)]

It is always a pleasure to serve under your chairmanship, Sir Roger.

I want to continue talking on themes raised by hon. Members, adding a north-west Wales dimension. I am not only the most western Member here but the only Member from north-west Wales, and indeed the only Member from the centre of north Wales and north-east Wales. I bring to the debate not just north Wales matters, but will mention the important links with the Republic of Ireland.

I want to create a north Wales powerhouse, along with members of my party with whom I have been working during the past few weeks. We want north-west Wales to be not just a place that people go through on the way to Ireland but a location where manufacturing, research and development and various other activities take place. We want north Wales to be the place to visit and the place to work and live.

The creation of a north Wales powerhouse has already begun. As my hon. Friend the Member for Alyn and Deeside (Mark Tami) said—I congratulate him on securing this debate—Airbus, which is based in north Wales, is one of the flagship companies, not just in north Wales and not just in Wales, but in the UK and Europe. We must be proud of that. The Horizon project on Anglesey at Wylfa Newydd, which began in 2009, is moving forward and is a business investment in north-west Wales equivalent to the London Olympics in terms of cash. We have heard about Gwynt y Môr, a successful offshore project, and the Deeside enterprise zone. All these projects are helping create what I consider to be a north Wales powerhouse.

We have made great progress on transportation, as has been said. 1997 was a good year for Anglesey, because it was the year the dualling of the A55 across the Isle of Anglesey began. I had one disagreement with the late Sir Wyn Roberts, an Anglesey man, about whether the previous Government had completed the A55 across north Wales. It stopped in Llan- fairpwllgwyngyllgogerychwyrndrobwllllantysiliogogogoch, in my constituency. It is the village with the biggest name, but it is also a village with a big heart and a pioneering area of the UK, where the first Women’s Institute was established 100 years ago this year. The Women’s Institute is an institution born and raised on Anglesey. I am proud of that. The serious point about the A55 not being dualled is that the economy of Anglesey, and the west of north-west Wales, was hampered for some 10 to 15 years until that road was linked.

The link to Ireland is important. Members of Parliament would not be here, and we would not have the infrastructure, if it was not for Irish Members of Parliament lobbying for the old A5 from Dublin to London. When I talk about transportation in this country, I talk about linking the great cities of Dublin and London via the north Wales corridor.

I want to concentrate on three big issues: transport, energy and tourism. These three big sectors of industry need a big, modern 21st-century infrastructure. Anglesey is a strategic location. I will not let anybody say we are on the periphery because, looking at the map of the UK, Anglesey is the heart of the British Isles. It is an equal distance from Anglesey to Scotland, Wales, northern England and Northern Ireland. We are at the centre of it. It is, as the hon. Member for Vale of Clwyd (Chris Ruane) said, a Cardiff-centric and London-centric view to suggest that north Wales is on the periphery. We are at the centre. However, we have to increase the investment in that area to make the north Wales powerhouse work.

I want to talk about road-rail being fully integrated and about sea and air, which are often regarded as Cinderella modes of transport when we talk about transport, but are hugely important to the UK.

The A55, which is now complete, is a victim of its own success. It is very crowded at times and has pinch points, not least across the Britannia bridge from Anglesey to the mainland. Having been at sea, I came home when the A55 was being built across Llanfair PG. Although the dual carriageway across north Wales was extended and expanded across Anglesey, there are only single lanes across the bridge. I cannot understand why this was not thought through by the then Welsh Office and the Government. This has been a big issue for a long time in respect of north Wales transport. We need ambition regarding a new crossing from the mainland, because, as I said, it is not just for local transport but for Irish transport. One of the biggest boosts to the economy in north Wales has been the Irish economy growing again, meaning that we have greater trade with the Republic of Ireland. I want to mention that later.

We have had some good news about roads. The Welsh Government are investing in a transport hub in my constituency—a lorry park—which will create 37 jobs immediately. With the trade with Ireland increasing, that will be an excellent facility for the port and for north Wales.

On rail, we have to have a vision. I echo what other Members have said about links with Liverpool and Manchester as well as with London and Cardiff. My family came from Liverpool to north Wales some time ago, and in those days people could travel directly from Holyhead to Liverpool without having to change trains. There was that link with Merseyside, predominantly with the seafaring communities and the Irish communities. We need to re-establish that direct link because, as my right hon. Friend the Member for Delyn (Mr Hanson) said, when our constituents go on holiday, many of them do not go to Heathrow and Gatwick; they go to John Lennon airport and Manchester airport. Those are important strategic airports to the whole of north Wales, and we must work together to ensure that we get that link back.

Arriva Trains and the franchise of Wales and Borders are creaking. They are running over capacity. In north Wales, too many people are travelling on too few trains that are too small, and we need to address that. The current franchise system simply is not working. We met Arriva, and it said, “That is all we had written into the franchise.” If we will have private operators and rail infrastructure heavily subsidised by taxpayers’ money, we want to see the companies showing some initiative and investing in the rolling stock. I hope that an incoming Labour Government will look seriously at that, because the franchise system is already outdated. We saw the debacle with the west coast main line and Virgin, where an error in the refranchising cost taxpayers millions of pounds. We need to look closely at that.

Transport on the sea is important; we are an island nation, and we trade with the rest of the European Union and the rest of the world. The port of Dublin is one of the fastest growing in Europe. I had the honour of launching a new vessel, the Superfast X, which will run between the ports of Holyhead and Dublin. It is owned by Stena. The port manager of Dublin and the family of Stena indicated to me that they want to see the link between Holyhead and Dublin as the new Dover-Calais. It has that potential to transport goods and people across the European Union through the north Wales corridor in both directions.

As a former seafarer, I pay tribute to the merchant navy and the merchant fleet that we have. They are a major employer for the future. The Superfast X is registered in Cardiff and flies not just the red ensign but the red dragon. Stena has made a huge commitment to invest in Wales and the port of Holyhead. We should be proud of the seafaring traditions of this country. I pay tribute to the coastguard and the Royal National Lifeboat Institution, of which I am vice president. We are a mercantile nation, and we should be investing more in cargo and passengers.

Tourism is a massive boost. A large number of people come and trade from Ireland as part of the European Union. My hon. Friend the Member for Alyn and Deeside is right: it would be harebrained to withdraw from the European Union when we have such established links with European nations on both sides, whether they are from Dover to France and the continent of Europe or to the Republic of Ireland.

Air links are important. We have an airport on Anglesey that is linked to the capital city of Wales, Cardiff, but we must have more ambition than that. We need the airport to be expanded. Looking not from the south-east of England or even from south Wales, but in a different direction, at the western corridor of the United Kingdom, we should have flights from Cardiff or Cornwall up to Belfast and tourist destinations so that people can link between the peripheral areas of this country. That is the ambition I hope we will have in the next Parliament.

I was laughed at when we talked about a link between Cardiff and Anglesey. I was told that it would not work, but it brings north-west Wales within 40 minutes of Cardiff. Fast flights to Dublin could be made in 15 minutes. That connection would mean that north-west Wales was 15 minutes from one capital and 40 minutes from another. The airport has that potential. Rather than having massive infrastructure projects and growing hubs in south Wales and the south of England, I encourage a future Government, which I hope will be of a different colour, to look at a different dimension so that we can move people through that western corridor.

In my remaining time, I want to touch on two other subjects. The first is tourism. If food and farming are included in tourism, it is one of the fastest-growing sectors of industry in the United Kingdom and the world. It is the fifth largest sector in the world, so we need to develop it. As we are talking about infrastructure, I say that we need rail, road, sea and air links to bring people to destinations. With my local authority, I have been promoting Anglesey as a destination within the United Kingdom. That is hugely important, but we need to have the infrastructure.

My right hon. Friend the Member for Delyn and my hon. Friend the Member for Alyn and Deeside mentioned broadband, but we also need to improve mobile phone coverage, because there is very little in some areas. In the past three years, we have been creating the big three in telecommunications. We must be worried about them investing solely in our large towns and cities and forgetting the rural areas, which do not have the strong economic case. I turn that argument on its head: my constituents and every Member of Parliament pay the same costs for mobile phones as those in cities and towns across the United Kingdom. We need to have universal services for the 21st century so that tourists, people working in rural areas and future investors have the telecommunications in rural areas that they deserve.

The second issue is energy. In my constituency, we have a massive proposal on nuclear power with Wylfa Newydd. That will create not only 6,000 to 8,000 construction jobs but 1,000 jobs for life in energy production. The supply chain and skills are absolutely essential for the future. In my constituency, Coleg Menai is training people for the construction phase and apprentices for high-quality engineering jobs in the energy sector. With the shadow Secretary of State, my right hon. Friend the Member for Don Valley (Caroline Flint), I recently visited Coleg Menai and saw young people with the aspiration of working in the area.

[Mr David Jones]

The hon. Gentleman politically cohabits with a Plaid Cymru Assembly Member. Can he tell us what the current policy of Plaid Cymru is on the development of Wylfa Newydd?

[Albert Owen]

I will stay away from the policies of other parties, because they will be developing their manifestos, but since no Plaid Cymru Member is here, I know that the leader of that party is on principle opposed to nuclear power. In the new alliance of the Green party, the Scottish National party and Plaid Cymru, all three leaders are opposed to nuclear power, which puts future nuclear power in this country at huge risk. I will leave it at that for the moment. I am sure I will have the opportunity to develop that argument over the next five weeks.

I do not only want to talk about nuclear power. A biomass eco park has been announced for my constituency. It will create 500 jobs and is starting next month. That is great for the area. It will bring food production and energy production together on one site. We need to move forward with the large projects. I make no apology for banging the drum for north-west Wales. It is an important area for the United Kingdom and links us with the Republic of Ireland. I am pro-Wales, pro-Anglesey, pro-British and pro-European. My party will be putting that forward at the general election, and I hope we will return a Labour Government to develop the projects.

[Chris Ruane (Vale of Clwyd) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate my hon. Friend the Member for Alyn and Deeside (Mark Tami) on securing this important debate.

My proudest moment as an MP came in 1999, when I secured access to European objective 1 funding for Denbighshire and Conwy. The map was redrawn after I lobbied my right hon. Friend the Member for Neath (Mr Hain), who was a junior Minister in the Wales Office at the time. Since then, more than £200 million has been invested in economic infrastructure in my county alone. I believe that the same amount has been invested in the county of Conwy, which is represented by the right hon. Member for Clwyd West (Mr Jones).

That important injection of investment has helped the economies of Denbighshire, Conwy and the whole of north Wales. It has helped to fund projects such as the £10 million redevelopment of Rhyl harbour; the £4 million Drift Park development on Rhyl promenade; buildings in Prestatyn, such as the one colloquially known as Tango towers; and, 10 years ago, the best European regional development fund project in the whole European Union, the Opto-electronics Technology and Incubation Centre, or OpTIC. All that investment occurred because we are partners with Europe. It will disappear if we pull out.

We have another seven years of European funding to go; possibly another £100 million to £150 million could be pumped into my county and constituency, if we stay in the EU. We will not get that funding if we pull out. Since 2009, the economy of north Wales has benefited from £1.2 billion of European funding. That is a massive amount of money to inject into the economic infrastructure of north Wales. If we leave the EU, not only will we lose that funding, but companies such as Toyota have said that they will pull out. Airbus will not get its future investment. Seventy thousand jobs in the UK depend on Airbus—do we really want to lose them?

In north Wales, there is £800 million-worth of public procurement, what with the police, the fire service, the health authority and local authorities across the region. Public investment from the public sector, which Labour believes in, is helping to prime the north Wales economy. If public procurement is handled properly, the economic multiplier can be seven times what is put in. If public money goes to a local firm with local contracts, employing local people, that money stays in the local community; if it is given to a multinational company, it will disappear, or there will be no economic multiplier.

I am proud of Labour’s public investment and procurement record in Wales. I will give some examples from over the years. Labour invested in Rhyl college. In the past, people who lived in Rhyl had to travel 25 miles to and from Deeside college every day, or 20 miles to and from Llandrillo college—40 miles a day, or 200 miles a week. Labour founded the college in Rhyl, and then Denbigh college was founded, so local people could upgrade their skills locally.

That is in the past, but the Welsh Labour Government are currently investing £35 million in the refurbishment, redevelopment and rebuilding of schools in Denbighshire. Denbighshire county council is also investing £35 million, so that is £70 million overall. The £35 million that Denbighshire is investing is the result of excellent funding over the past 10 or 15 years. In my patch, local Conservatives have criticised that investment in their own local authority. In 1997, investment in Denbighshire local authority was £63 million; today it is £163 million. They have criticised Labour for the investment that is allowing us to build schools.

I recently visited Rhyl high school, which is under construction and set to cost £23 million. The builders, Willmott Dixon, told me that of that £23 million, 60% will be spent within a 30-mile radius of Rhyl. That will localise procurement and maximise jobs, skills and investment in our local economy. I congratulate Huw Lewis, the Education Minister in Wales, for going ahead with that excellent £70 million investment in our local economy.

Energy has been mentioned, and it is key in north Wales. The £20 billion investment in Wylfa is fantastic news—it will mean 8,000 jobs. The tidal lagoon going from Penrhyn bay to Prestatyn will be 28 km long and 11 times bigger than the Swansea bay lagoon. It is set for £5 billion of investment, of which 56% will be spent in Wales.

[Mr David Jones]

I agree entirely with the hon. Gentleman on the attractiveness of the tidal lagoon project. It is, of course, a private sector proposal, as he will know.

[Chris Ruane]

Absolutely. It is a private sector proposal, and that is good. I am not saying that private sector investment is bad; I am saying that to castigate the public sector, day in, day out, decade in, decade out, is wrong. The public sector has a vital part to play in providing essential services and priming our economy. If it goes ahead, the tidal lagoon project will bring £5 billion of investment, which will help to transform the economy of north Wales, especially alongside the £20 billion investment in Wylfa.

About 10 years ago, I switched on 30 turbines at North Hoyle off the coast of Rhyl. When he was at the Conservative party conference in Llandudno as Leader of the Opposition, the Prime Minister referred to those turbines as “giant bird blenders”; he then went back to Notting Hill and stuck a bird blender on his house. That shows the Conservative party’s lack of belief in renewable energy. Another indicator of that, from a north Wales perspective, was the changing of the feed-in tariff in 2010 so that the biggest solar panel factory in western Europe, in Wrexham, had to close down.

On transport, I agree entirely with my hon. Friend the Member for Ynys Môn (Albert Owen) that we have to see transport connections in north Wales not from a north Wales perspective but from a European perspective, linking Dublin, Holyhead, Manchester, Hull, the Baltic states, Crewe, London and the rest of Europe. We must invest in a strategic trans-European network. We cannot be left as a branch line when billions of pounds are being pumped into HS2, HS3, HS4 and whatever. We need to be a main artery linking Dublin to the rest of Europe via north Wales and Holyhead.

That is so important because £53 billion in trade flows each year back and forth between Ireland and the UK. The principal port is Holyhead, and we want to keep it that way. More trade is conducted between Britain and Ireland than between Britain and Russia and Britain and China put together. That is how important it is. That is how important the transport links are. We must also have electrification, and connections to Manchester and Liverpool airports are really valued—we need a connection right into those airports.

In this very Chamber about 18 months ago, I mentioned a hovercraft connection between Liverpool and Rhyl. We had one more than 50 years ago—the first hovercraft passenger connection in the whole world—and we want to see the project taken up again. We have had some support from a Conservative Transport Minister, and we are looking to the Welsh Government to support the project. A hovercraft connection could bring 200,000 visitors to north Wales each year.

The right hon. Member for Clwyd West mentioned private sector investment. I welcome the excellent work done by councillors and officers in Denbighshire to attract Neptune Developments from Liverpool to Rhyl to develop £30 million or £40 million-worth of tourism infrastructure. The news was reported in the Daily Post some six or seven weeks ago, and it is a fantastic development. We must ensure that the hovercraft lands exactly where the development is going to take place.

I have discussed hard infrastructure, but there is also soft infrastructure: people, and how we treat them. Under Labour, the future jobs fund put 420 young people back to work in my constituency. The first malicious and malign act of this Conservative Government in June 2010 was to end the future jobs fund. The Welsh Government took up the baton and developed Jobs Growth Wales, which has an 80% success rate at getting young people back to work or into training. That is excellent work.

In 2007, I established the Rhyl City Strategy, which has helped to put thousands of people back to work or into training. We need decent housing for local workers. The Welsh Government are pumping £28 billion into west Rhyl to create housing for people to buy. This is fantastic investment from the Welsh Labour Government, but it will all be put under threat if the Tories get in on 7 May.

Welsh Affairs

David Jones Excerpts

Thursday 5th March 2015 Commons Chamber

[Mr David Jones (Clwyd West) (Con)]

May I say what a great privilege it is for me to follow the right hon. Member for Torfaen (Paul Murphy), who has been such an outstanding Member of the House? I am sure I speak on behalf of all the Members present when I say that we all wish him a very happy retirement, although I half suspect that we may be seeing a bit more of him in the years to come.

The right hon. Member for Dwyfor Meirionnydd (Mr Llwyd), too, will be leaving this House after a distinguished career. He and I have known each other for a very long time—longer than either of us would care to mention—since we were both practising law in the magistrates courts of north Wales. I wish him, too, a very happy retirement.

I thank my hon. Friend the Member for Montgomeryshire (Glyn Davies) for his opening speech and the Backbench Business Committee for agreeing to this debate. It is an important debate, which we should have every year because it is, as the right hon. Member for Torfaen points out, extremely important that the unique issues that concern the people of Wales should be ventilated in this Chamber.

We are in the final weeks of this Parliament and this debate is as useful an opportunity as any for us all to take stock. In constitutional terms, Wales has seen great changes, some of which were initiated by my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan), who gave strong and sterling service as Secretary of State. But there are more changes to come, which were announced by my right hon. Friend the Prime Minister in Cardiff last week. These will be matters for the next Parliament and we will all have our views as to the course that those changes should take, but this is a useful opportunity to consider what has happened over the past five years.

In 2010 the incoming coalition faced the worst set of economic circumstances that any incoming Government had faced since, possibly, the 1930s. The country was still reeling from the crash of 2008 which, although a global catastrophe, was more keenly felt in Britain than perhaps in any other country in the developed world because Britain was carrying the worst structural deficit of any major country, largely as a consequence of what I would term the economic mismanagement of the Labour Government. The coalition Government therefore, in which I had the privilege to serve for more than four years, had difficult decisions to take. We are constantly criticised for what are styled as cuts by the Opposition, but cuts were essential. It is the easiest thing in the world for any Government not to take the difficult decisions. We took those difficult decisions.

[David T. C. Davies (Monmouth) (Con)]

Does my right hon. Friend agree that one of the biggest cuts that we have made is in the amount of interest that we are paying the banks on the increasing amount of money that we were previously borrowing, and that that is one cut we should be making?

--- Later in debate ---

[Mr Jones]

The interest is declining—that is the point. Had we not taken those difficult decisions, we would be spending more money on paying interest to banks than on providing services to the people of this country, so my hon. Friend is right.

Five years on from that—

[Owen Smith]

Does the right hon. Gentleman agree that the styled cuts, as he put it, also resulted in a massive increase in in-work poverty, resulting in an extra £9 billion spending on social security under this Government?

[Mr Jones]

The decisions that we took were difficult and, clearly, people have felt pain. But people across the board have felt pain. It is interesting to hear the criticisms from the Labour party. What would have happened if that party had remained in power? Where would we be now? Under this Government 1.85 million new jobs have been created. That is 1.85 million people with the security of a pay packet every week and the dignity that employment brings.

[Owen Smith]

rose—

[Mr Jones]

No, I will not give way. I will continue for a while.

Those new jobs would not have been created, had the hon. Gentleman’s party been in power.

In my constituency, Clwyd West, the improvement is tangible. The last Labour Market Statistics showed that over 12 months, the number of people claiming jobseeker’s allowance or not in work and claiming universal credit fell by 519 over 12 months—an annual decline of 34.5%. Those figures are mirrored right across Wales and right across the UK. In January, the International Labour Organisation measure of unemployment was 1.86 million people, down 486,000 on the previous year.

[Owen Smith]

rose—

[Mr Jones]

No, I will not give way for the moment.

These are strong, substantial changes, which we should all welcome, even the hon. Member for Pontypridd (Owen Smith), while acknowledging the task ahead. [Interruption.] He will have plenty of time to speak.

I would like to focus my attention today primarily on north Wales, which is the part of Wales in which I have lived nearly all my life and which I know best. I was brought up in the village of Rhosllanerchrugog near Wrexham, a very unusual, strange, unique and wonderful village. At the time of my boyhood, most of the working men were employed in coal mines and in the steelworks. Since then, there have been huge changes. We all know that the coal industry has virtually gone and the steelworks in north Wales are much smaller than they used to be. But now, north Wales is the home of dynamic new industries.

The wings of every Airbus aircraft that flies anywhere in the world are made in Broughton, in north-east Wales. Close to Broughton is the Deeside industrial estate, part of which is now an enterprise zone. There, high-tech industries serve customers across the globe. Deeside is one of the most dynamic, forward-looking, thrusting industrial areas of the United Kingdom and we should all take huge pride in it. On the other side of the region of north Wales is the island of Anglesey, where we see the Wylfa nuclear power station, which will soon, I hope, be replaced by a new power station, Wylfa Newydd. That will be a gigantic project employing many thousands of people for many years during the construction phase, and many people for decades after the station is up and running. It will provide the opportunity for the creation of centres of excellence in skills, education and training and I am tremendously pleased that the island of Anglesey has welcomed the developers so warmly.

Wylfa is only one element of what I believe is a bright future for north Wales as an energy hub. Out to sea, we have the Gwynt y Mor, Rhyl Flats and North Hoyle offshore wind farms, one of the largest groupings of offshore wind farms anywhere in the world. Let me be frank: as many hon. Members know, I have never been a huge fan of wind power. I believe that it is unreliable, supplying only intermittent and unpredictable energy, and it is far too heavily subsidised. Furthermore, onshore wind, and to a certain extent offshore wind, blight—as my hon. Friend the Member for Montgomeryshire put it—the spectacular landscapes, both onshore and offshore, of north Wales.

Nuclear power, by contrast, provides predictable and reliable base-load generation, which is precisely what is needed. However, nuclear must be seen as part of an energy mix. Wind is currently part of that mix, but I was extremely pleased when the Prime Minister indicated only a few weeks ago that subsidies for onshore wind farms will be phased out under the next Conservative Government.

A new technology, and one that has been developed in Wales, is that of tidal lagoons. I remember taking evidence on tidal lagoons several years ago when I was a member of the Welsh Affairs Committee. I was immediately struck by what a tremendous opportunity they represented for Wales, given its huge tidal ranges. The technology has been slow in coming, but it appears that it will soon be here. The company Tidal Lagoon Power has not only made an application for development consent for a new lagoon in Swansea, but has ambitions to create a chain of lagoons stretching from Lancashire in the north, right around the coast of Wales, to Somerset in the south. Only a few weeks ago I chaired a meeting in Colwyn Bay to discuss proposals for a huge tidal lagoon there. It would have a potential generating capacity of 4 GW, which is equivalent to a very large nuclear power station.

Lagoons have the advantage of being green—they produce no carbon emissions—but they also have what wind power lacks: they are entirely reliable. Nothing on the planet is more reliable than the ebb and flow of the tide. As a result, each tidal lagoon would have the capacity to generate for 22 of every 24 hours. This is a new technology, and a British technology. Moreover, it could be centred in Wales. I believe that Wales could become a leader in what could rapidly become an important export industry.

Obviously there are environmental issues to consider, not least with regard to transmission infrastructure, which is having a catastrophic effect across Wales. My hon. Friend the Member for Montgomeryshire mentioned the impact that transmission lines would have in Montgomeryshire. Equally, in my constituency of Clwyd West there is now a strong campaign aimed at requiring the transmission lines serving the new Clocaenog wind farm to be buried underground. Saving the planet should not mean at the same time trashing our landscapes and seascapes. I therefore strongly support the proposition that developers of wind farms, which are heavily subsidised, should be required to pay the cost of laying transmission cables underground.

I would like to touch on transport in north Wales. The railways are increasingly important in north Wales, and they are being used increasingly heavily, as is the case across the country. Journey times have improved tremendously. When I was first elected to his House some 10 years ago, the journey back to London from Colwyn Bay on a Sunday took some four and a half hours. As a result of efforts by both the previous Labour Government and this Conservative Government, that has been reduced dramatically—the same journey now takes almost exactly three hours. The fast train, which I hope to take tonight, takes approximately two and three quarter hours.

That is all commendable, and it is a tribute to the work done by Network Rail, but we must look to the future. We know that HS2 will be built and that it will go to Manchester. It is important that north Wales should benefit from it, which is why I believe that the new hub proposed for Crewe should be built and that there should be a fast connection right through to Holyhead. We must bear it in mind that north Wales is very much part of the north-western economic region; economically, the region has always looked to the great cities of the north-west, Liverpool and Manchester. I was therefore delighted when last year the Chancellor announced funding for the reopening of the Halton curve, which will put Liverpool and the expanding Liverpool John Lennon airport within easy travelling distance of north Wales.

In north-east Wales we should seek to maximise the economic benefit we can derive from the new enterprise zone at Deeside by encouraging synergy with the new enterprise zone at Wirral Waters in Birkenhead. There is a railway line linking Liverpool and north Wales, but the difficulty is that passengers have to change at Bidston from an electric train to a diesel one to take them through to Wrexham. I believe that a very good improvement, and one that could be achieved at relatively low cost, would be to electrify that line, certainly between Bidston and Shotton, where a new interchange is proposed. That would mean that the two great enterprise zones at Deeside and Wirral Waters would be within easy commuting distance of each other.

Tourism has always been the mainstay of the north Wales economy, but I believe that more could be done for it. One simple measure that is acquiring support from hon. Members from all parties is to give serious consideration to reducing the rate of value added tax on tourism businesses. That has been tried out in competitor countries, not least Ireland, and has been found to be entirely successful. It has been calculated that the immediate loss of revenue would be made up within four years. The big problem is that, in areas such as north Wales, most tourism businesses are run by small family undertakings that, in order to remain competitive one way or the other, try desperately to avoid being registered for VAT, the consequence of which is that they are deterred from expanding and improving their businesses because they cannot have the benefit of input VAT to set against the cost. Therefore, one measure which should appeal to my right hon. Friend the Chancellor, and to which I hope he will give serious consideration in the impending Budget, is to reduce the rate of VAT for tourism businesses to 5%.

Finally, I want to touch on a matter that is worrying to everybody with a constituency in north Wales, namely health care. I know that the issue is a hot potato in this House and that Government Members are frequently criticised for criticising the Welsh Government’s delivery of health care. The fact is, however, that areas such as north Wales are almost entirely reliant on the north-west of England and the midlands for very specialist medical care. It has been a concern for many years that north Wales patients have to wait considerably longer than their English counterparts for elective surgery in English hospitals, simply because of the way in which the Welsh Assembly Government fund health care.

The situation is getting worse. Yesterday in Prime Minister’s Question Time the hon. Member for Arfon (Hywel Williams) mentioned his constituent, Mr Irfon Williams, who has been obliged to move out of Wales to Ellesmere Port in order to access drugs that he would have got routinely had he been resident in England. He is not by any means a unique example. I have a number of constituents who, because they live in Wales, simply cannot access the medicines they need. They have to go through the most byzantine consenting procedures if they are to have specialist treatment. Frankly, the matter is causing huge distress in north Wales. The situation was compounded recently by the decision of the Betsi Cadwaladr university health board to downgrade maternity care in Glan Clwyd hospital, because it is finding it difficult to attract staff of the necessary calibre and quality.

I believe that that shows that there are structural difficulties with the health care system in Wales under the Welsh Government. It is suggested that the Welsh Government have been subject to cuts, but the fact is that the Barnett formula protects the health budget in Wales. The simple fact is that the Welsh Government, of their own volition, decided to cut the health budget, and the consequence is that patients in my and other north Wales constituencies are suffering.

I am rapidly coming to the view that the Welsh Government are finding it almost impossible to run a decent health system in Wales. Before I sit down, I plead with them to look very carefully at the misery being inflicted on a lot of people in north Wales and to turn to the Department of Health in Westminster for advice. They should not be too proud to do so. Until they do so, I believe that health care in Wales will only continue to decline.

[Several hon. Members]

rose—

Oral Answers to Questions

David Jones Excerpts

Wednesday 4th March 2015 Commons Chamber

[Alun Cairns]

A renegotiated European Union provides greater opportunities for businesses in Wales. I know that the hon. Gentleman shows great interest in Airbus, which says:

“Regardless of which decision the UK will make, we are strongly committed to our operations in the UK”.

The British Chambers of Commerce also supports that position. I am absolutely confident that the growth in Wales will contribute to more jobs and provide more of the certainty that people want.

[Mr David Jones (Clwyd West) (Con)]

Does my hon. Friend agree that the issue of British membership of the EU is indeed of concern to the people of Wales, who have not had their say on the issue for 40 years? Does he further agree that the only way they will get that say is with the return of a Conservative Government, because Labour will not give it to them?

[Alun Cairns]

My right hon. Friend is absolutely right. We cannot pretend that this debate is not happening. We need to make the arguments for what the CBI wants—a reformed European Union of which the UK is a part.

Oral Answers to Questions

David Jones Excerpts

Wednesday 21st January 2015 Commons Chamber

[Stephen Crabb]

I thank the hon. Gentleman for that question, and I absolutely do concur with his sentiments about the role local partners have played in taking forward the bay campus development. I was there on Friday, at the hon. Gentleman’s recommendation, and it is indeed a truly fine example of partnership-working. We know that success in the 21st century will belong to those economies that can harness knowledge and innovation, and having world-class university sites is part of that.

[Mr David Jones (Clwyd West) (Con)]

Has my right hon. Friend noted the recently published report of South Wales chamber of commerce, which notes that confidence in the Welsh economy has been high throughout 2014 and that it looks to remain the same for 2015? Is he as pleased as I am that real business people in Wales are so enthusiastic and keen to talk up the Welsh economy, unlike the hon. Member for Pontypridd (Owen Smith), who devoted his recent article in the Western Mail to talking it down?

[Stephen Crabb]

I thank my right hon. Friend for that question, and he is absolutely right: the sentiment among businesses in north Wales, south Wales and west Wales is very confident and optimistic, and what they tell me every week as I criss-cross Wales talking to them is in stark contrast to the message we hear from the Opposition, who regularly now talk down the Welsh economy and the efforts of Welsh business.

Government's Legislative Programme (Wales)

David Jones Excerpts

Thursday 5th June 2014 Written Statements

[The Secretary of State for Wales (Mr David Jones)]

The Government’s Fourth Session legislative programme announced in the Queen’s Speech on 4 June contains a wide range of measures that will apply to Wales, either in full or in part.

The following Bills and draft Bills will extend to Wales:

Armed Forces (Service Complaints and Financial Assistance) Bill (Ministry of Defence)

Childcare Payments Bill (HM Revenue and Customs and HM Treasury)

Modern Slavery Bill (Home Office)

National Insurance Contributions Bill (HM Revenue and Customs)

Pensions Tax Bill (HM Treasury)

Private Pensions Bill (Department for Work and Pensions)

Draft Protection of Charities Bill (Cabinet Office)

Recall of MPs Bill (Cabinet Office)

Draft Riot (Damages) Bill (Home Office)

Social Action, Responsibility and Heroism Bill (Ministry of Justice)

Serious Crime Bill (Home Office)

The following Bills may extend to Wales in varying degrees:

Infrastructure Bill (Department for Transport)

Small Business, Enterprise and Employment Bill (Department for Business, Innovation and Skills)

The following draft Bill will not extend to Wales:

Draft National Park Authorities (Elections) Bill (Department for the Environment, Food and Rural Affairs)

Discussions will continue with the Welsh Government on Bills that might include provisions that require the consent of the National Assembly for Wales or Welsh Ministers.

Wales Bill

David Jones Excerpts

Monday 31st March 2014 Commons Chamber

[The Secretary of State for Wales (Mr David Jones)]

I beg to move, That the Bill be now read a Second time.

The legislation before the House today delivers an ambitious package of devolved powers for Wales, including powers providing incentives and opportunities for the Welsh Government to grow the Welsh economy and increase prosperity; powers making the devolved institutions in Wales more accountable for raising some of the money they spend; and powers that make devolved governance in Wales fairer.

The Government have a strong record on Welsh devolution. We have delivered a referendum on full law-making powers, established the Silk Commission on Devolution in Wales, which has since published two comprehensive reports, and have now introduced the first Wales Bill in more than eight years. The Bill implements most of the recommendations that the Silk commission made in its first report. I wish to record my thanks to Paul Silk and his commissioners for the dedication and hard work with which they reviewed the case for devolving fiscal powers to the National Assembly.

The powers devolved to Wales by this Bill will, for the first time, make the devolved institutions in Wales—both the Welsh Government and the Assembly—directly accountable to the electorate for raising some of the money they spend. The Bill will give the Welsh Government more levers to enable it to deliver sustainable economic growth in Wales. It will also deliver borrowing powers that will allow the Welsh Government to invest more in critical infrastructure, not only in transport links such as the M4 and the A55, but in schools and hospitals.

The Silk commission included commissioners from all four political parties in the Assembly, and reached unanimous agreement on its recommendations. I hope that the same spirit of co-operation and broad consensus will extend to all parts of this House today in respect of the Bill.

Let me turn to the detail of the legislation. The Bill provides that the Assembly will assume responsibility for devolved taxes. These are, initially, a tax on land transactions and a tax on disposals to landfill, replacing stamp duty land tax and landfill tax in Wales. The commission recommended the devolution of both taxes. This will put new economic levers in the hands of the Assembly and the Welsh Government.

[Geraint Davies (Swansea West) (Lab/Co-op)]

What does the Secretary of State say to the Mayor of London, Boris Johnson, who has now asked for stamp duty to be devolved to London, which would give him £1.3 billion? Is this not a charter for the proliferation of all sorts of competitive taxes across different parts of the United Kingdom?

[Mr Jones]

It seems to me that that is a concern of the Mayor of London and does not really fall within the scope of today’s discussion.

Our proposal will put new economic levers in the hands of the Assembly and Welsh Government, while also providing independent streams of revenue to facilitate borrowing. It will help Welsh Ministers to grow the Welsh economy and ensure that its performance has a direct impact on their budget.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

In devolving those minor taxes, the UK Government are conceding the principle of fiscal empowerment for the Welsh Government. Why does the Secretary of State therefore feel the need to require a referendum on devolving income tax?

[Mr Jones]

Simply because it is an important constitutional step. It was given to the Scottish people in 1997, and we feel it is necessary to pay equal respect to the people of Wales on the occasion of the proposed devolution.

[Hywel Williams (Arfon) (PC)]

Is it the principle of devolution or the practice—the specific nature of income tax devolution—that requires a referendum?

[Mr Jones]

Clearly it is the devolution of income tax, and I would remind the hon. Gentleman that this was specifically recommended by the Silk commission.

[Jonathan Evans (Cardiff North) (Con)]

Has my right hon. Friend noticed in recent days—not just from the interventions so far, but from some Labour Back Benchers—the idea that there should not be a referendum and that the matter should be left to a general election, depriving the people of Wales of a vote?

[Mr Jones]

Yes, I have heard that, certainly from those on the Plaid Cymru Benches. I would simply repeat that it is appropriate that the people of Wales have their voices heard on such an important matter.

The Bill also provides a mechanism for additional taxes to be devolved in future, with the approval of both Houses of Parliament and the Assembly. I am pleased that the Bill delivers new borrowing powers to the Welsh Government—again, as recommended by the commission. As for capital borrowing, we are providing the Welsh Government with the ability to borrow up to £500 million to invest in capital infrastructure in Wales. That is a generous limit, allowing the Welsh Government to get going on the much needed upgrade of the M4 around Newport. It also reflects the independent funding streams for which the Welsh Government will assume responsibility through the two devolved taxes and is a limit that can be increased in future if the Welsh Government become responsible for additional taxation, including income tax.

[Alun Cairns (Vale of Glamorgan) (Con)]

Does my right hon. Friend not agree that the project for a new motorway around Newport is essential? There has been far too much delay—it was cancelled by the Labour Administration back in 1997, despite the previous commitment. Today’s announcement is basically the green light for the project to go ahead.

[Mr Jones]

Indeed. I think that everyone in the south Wales business community recognises that the M4 is indeed a foot on the windpipe of the economy and we are anxious to see it upgraded. The competence that we shall be giving the Assembly Government—in fact, we have already extended it to them—will enable them to proceed as quickly as possible with that essential upgrade.

[Chris Bryant (Rhondda) (Lab)]

While we are on infrastructure improvements, the Government here have much boasted that they will be electrifying the valleys lines. Every time they seemed to suggest that they would pay for it, but now it seems they are refusing, so who will actually be paying for the electrification of the valleys lines?

[Mr Jones]

We are skiing somewhat off piste, because that is not within the competence of this Bill, but there is clear correspondence between the Assembly Government and the Department for Transport on how the upgrade would be funded, and it is absolutely clear that the Welsh Government were paying for the upgrade of the valleys lines.

[Owen Smith (Pontypridd) (Lab)]

Does the Secretary of State wish to deny that he said on several occasions that it was his Government who were paying for the electrification of the railways in Wales, including the valleys lines?

[Mr Jones]

What I will say is that we made it absolutely clear that this Government were paying, directly and indirectly, for the upgrade of the main line as far as Swansea and for the valleys lines. I think that if the hon. Gentleman has a word with his friend the First Minister, he will find that there was an exchange of correspondence between the two Administrations which made the funding arrangements very clear, as did an e-mail from the Office of Rail Regulation.

[Geraint Davies]

Will the Secretary of State give way?

[Mr Jones]

No; I will make some progress.

The Bill also provides for a referendum to be held in Wales on the devolution of an element of income tax, should the Assembly decide to call one. The Silk commission recommended that income tax devolution should be subject to a referendum, as it was in Scotland in 1997, and the Government agree with that recommendation. As I have said in the House on several occasions, I should like the Assembly to call a referendum as soon as it is able to do so, and I personally would support a yes vote in such a referendum. It would make the Welsh Government, and the Assembly, significantly more accountable to the people who elect them.

[Stephen Mosley (City of Chester) (Con)]

Has my right hon. Friend been able to give any consideration to the impact that changing tax rates in Wales will have on cross-border regions, particularly the economic sub-region that covers Chester and north-east Wales? Has any assessment been made of what would happen if the rates on the two sides of the border were different?

[Mr Jones]

Indeed. As my hon. Friend will know, there was a separate consultation on that very issue. It is another element that will be taken into consideration during the debate on the referendum.

[Wayne David (Caerphilly) (Lab)]

The Secretary of State has put it on record that in his view the Barnett formula is coming to the end of its life. What progress have the Government made in reforming it?

[Mr Jones]

We have made it very clear that we need to rebalance the finances of this country before we will consider that. Let me remind the hon. Gentleman, however, that in October 2012 there was a specific agreement between the Welsh Government and the Treasury that on the occasion of each spending review there would be an assessment of the issue of convergence, and that is indeed what happened on the last occasion.

[Owen Smith]

The Secretary of State said a moment ago that he would be voting yes and campaigning for a yes vote in a referendum on tax-varying powers. May I take him back to the time when he was a Member of the Welsh Assembly? In his maiden speech, he said:

“We have no tax-raising powers—long may that state of affairs continue.”

When did he change his mind?

[Mr Jones]

That was some 12 years ago, and, of course, we all change our minds. I am sure that the hon. Gentleman changed his mind in the light of his experiences in the Blaenau Gwent election, the first election that he fought.

[David T. C. Davies (Monmouth) (Con)]

As one who has not changed his mind, may I ask whether the Secretary of State was as surprised as I was to read in the Western Mail that Opposition Members are offering to give the Assembly the power to raise income tax by up to 15%—and this only a few years after they all seemed to agree that the Assembly had the tools with which to do the job?

[Mr Jones]

Indeed: a Damascene conversion. The hon. Member for Pontypridd (Owen Smith) is a particular enthusiast—he now believes that 15p should be devolved to the Assembly, whereas as recently as 5 February he clearly stated that he did not believe in any tax devolution at all. He will clearly have some interesting explaining to do later in the debate.

[Owen Smith]

I think that the Secretary of State has just misquoted me. He will know that what I have said previously in the House on several occasions is that I do not believe in tax competition.

[Mr Jones]

The hon. Gentleman changes his mind with astonishing regularity. For example, on 5 February, in a Welsh Grand Committee debate, he said:

“I do not believe for a moment that having additional responsibility for tax-varying powers would confer any extra degree of accountability on the Welsh people.”—[Official Report, Welsh Grand Committee, 5 February 2014; c. 18.]

However, during last weekend’s speech to the Welsh Labour party conference, he spoke glowingly of the prospect of devolving 15p in the pound and said that that would

“increase both the accountability of the Assembly and its borrowing capacity too.”

He is clearly a bit at odds with himself, and we look forward to hearing what he has to say later on.

[Mr Peter Hain (Neath) (Lab)]

Will the Secretary of State explain how, with income tax devolution, Wales will continue to benefit—like, for example, north-east England, a comparable area, does—from the redistribution of income and wealth that comes through the Barnett formula, albeit imperfectly, from the 40% of GDP that exists in London and the south-east of England if income tax is devolved?

[Mr Jones]

That is an important point and it is a matter that would have to be debated in a referendum. My own view, as the right hon. Gentleman knows, is that Wales would benefit from a modest reduction in the rate of income tax, but I have to remind him that all we are talking about is a referendum that would empower the Welsh Government to decide on the rate of tax they want to charge the Welsh people. If they decided they did not wish to do that, there would be no compulsion on them to do so. However, it would provide Wales with an additional borrowing stream referable to the level of income tax devolved. It would also provide a powerful incentive to the Assembly Government to grow the Welsh economy, because clearly the more the economy grows, the more would be the revenue.

[Mr Hain]

I understand the Secretary of State’s point. However, I find it very interesting that he has not got an answer to my question—namely, how would Wales continue to benefit from the vast wealth that exists in a relatively limited area and is redistributed right across the UK? The fact that he does not have a clear answer makes me extremely sceptical about this entire proposal.

[Mr Jones]

Clearly, Wales would not be deprived of Barnett consequentials; the right hon. Gentleman knows that. We would have an additional tool for the Welsh Government to use, should they decide to do so, in growing the Welsh economy. I would have hoped he would be bold, because he has spoken in the past of the need to grow the private sector in Wales. I would have thought a small differential in the rate of tax would be a significant incentive to that private sector growth.

[Mr Hain]

The Secretary of State is being generous in giving way, but this is an important point. The Barnett consequentials will continue to come through from that portion of income tax which remains reserved to the Treasury, but the bit that is devolved under the scenario the right hon. Gentleman proposes would not, unless there was some kind of compensating mechanism which is not described. That is what makes me extremely sceptical about this.

[Mr Jones]

Some of what is passed to the Assembly would be subject to indexation every year. This would take into account both growth and contraction in the wider UK economy, so there is a mechanism built into the Bill that addresses the right hon. Gentleman’s point.

[Mark Tami (Alyn and Deeside) (Lab)]

As the hon. Member for City of Chester (Stephen Mosley) has made clear, this is not just about the Welsh economy; it is about the cross-border economy. Changing tax rates, whether personal or business, will obviously have an impact both sides of the border.

[Mr Jones]

The hon. Gentleman is entirely right, which is why the Government went out to further consultation before announcing their response to the commission’s recommendations. Again, these are points he would no doubt raise in the context of a referendum debate, and given the view he has just expressed, he would clearly be voting against the proposal.

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

I congratulate the Secretary of State on introducing this Bill. I approve of virtually all its contents. I was reading a document produced by the Government in March this year on financial empowerment and accountability, and I was greatly heartened to read that if the Welsh rate of income tax is implemented following a referendum, the Government have accepted the Silk commission’s recommendation that the block grant adjustment should be determined using the index reduction mechanism originally proposed by the Holtham commission. If I remember correctly, those proposals were supported by the Labour party. It goes on to say:

“The detailed operation of the system will be discussed with the Welsh Government.”.

Surely that is the assurance that we need to hear and that will make sure Wales gets its fair share.

[Mr Jones]

My right hon. Friend is entirely right. The indexation proposals would amount to a damp, which would effectively smooth out any peaks and troughs in relation to overall UK income and act as a strong reassurance to the Assembly Government. While I am on my feet, I would like to thank my right hon. Friend for her part in commissioning the work of the Silk commission in the first place.

[Wayne David]

Has the Secretary of State resolved his differences with the leader of the Conservative group in the Welsh Assembly on income tax devolution?

[Mr Jones]

The leader of the Conservative group in the Welsh Assembly, and indeed the group as a whole, fully support the legislation before us.

[Owen Smith]

Will the Secretary of State explain how the indexation method works? Has the Treasury done any analysis on whether the Welsh people would be better or worse off if the rates were not amended at all in Wales? At the moment, that is unclear.

[Mr Jones]

It should be entirely clear to the hon. Gentleman, because the Under-Secretary of State for Wales, my hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) took the trouble to write to the Chairman of the Grand Committee, the hon. Member for Gower (Martin Caton), on 10 February, setting out these matters in great detail. I know that a copy of that letter was sent to the hon. Gentleman, and he will know, having read it, that the provisions are as follows:

“In the first year of operation (and any transitional years) the block grant adjustment will equal the amount of tax revenue generated by the Welsh rate of income tax set at 10p. It is important to note the following:

This is the amount of income tax forfeited by the UK Government as a result of reducing the main rates of income tax by 10p in Wales. If the Welsh Government sets a rate of 10p then there will be no impact on their budget compared to current arrangements. By setting a rate of, for example, 11p or 9p the Welsh Government can increase or decrease its budget (respectively) compared to current arrangements, as the block grant adjustment will still be based on the 10p forfeited by the UK Government. That means that the higher or lower revenue resulting from a rate of 11p or 9p (rather than 10p) would not be netted off the block grant.”

[Chris Bryant]

Riveting.

[Mr Jones]

Well, the hon. Member for Pontypridd had not read this letter, so I am reading it out to him. It goes on:

“In subsequent years the initial deduction is indexed against movements in the UK NSND”—

that is, not savings, not dividends—

“income tax base. That means that if the UK NSND income tax base contracts by 2%, the block grant adjustment will decrease by 2%; if the tax base grows by 2%, the adjustment will increase by 2%.”

That should have been absolutely clear to the hon. Gentleman, but he clearly did not read the letter, so I am glad to have had this opportunity to acquaint him with its contents. It clearly contains the reassurance that he seeks.

[Owen Smith]

Will the Minister give way?

[Mr Jones]

No, I will not give way.

Subject to the outcome of a referendum, the legislation provides for the introduction of a Welsh rate of income tax. The main UK rates of income tax would be reduced by 10p for Welsh taxpayers, and the Assembly would be able to set a new Welsh rate—a whole number or half a whole number—which would be added to the reduced UK rates. The rest of the income tax structure would remain a matter for this Parliament.

The Silk commission estimated that reducing the Welsh rate of income tax by 1p would cost the Welsh Government around £185 million, without taking account of any gains resulting from people moving to Wales to take advantage of lower tax rates. That is not an insignificant amount of money, but lower rates of income tax would boost the spending power of working people in Wales and bolster growth in the Welsh economy. Stronger economic growth in Wales could deliver a real boost in tax revenues, providing the Welsh Government with more resources to invest in devolved services and infrastructure across Wales.

Some Opposition Members, most notably the hon. Member for Pontypridd, have suggested that the devolution of an element of income tax is some sort of unspecified coalition trap, set to ensnare the Welsh Government.

[Geraint Davies]

May I ask for clarification on something, because my right hon. Friend the Member for Neath (Mr Hain) talked about the levels up to the current rate? At a marginal tax rate of one extra penny, the gross value added in Wales is 70% that of the UK. My understanding is therefore that the extra penny charged locally in Wales would generate less income than an extra penny charged across the UK and then transferred over to Wales—so we would lose out, would we not?

[Mr Jones]

For the reasons I have explained, there would be no loss. May I remind the hon. Gentleman, as I reminded the right hon. Member for Neath, that there would be no compulsion on the Assembly Government to change the rate of tax? This is simply an issue of whether or not the competence should be devolved. Once it is devolved, it is then a matter for the Assembly to decide what the Welsh rate of tax should be.

[Jonathan Edwards]

The Secretary of State mentioned that one of the main reasons for devolving income tax was to incentivise the Welsh Government, yet he handcuffs them with his proposed lockstep, which was not included in the Silk recommendations. In the unlikely event of a no vote in Scotland, does he expect the lockstep to remain in Scotland following its referendum?

[Mr Jones]

I am not here to speculate on what will happen in Scotland in September, but I will talk about the lockstep in a moment—no doubt the hon. Gentleman will be paying close attention and intervening as he considers appropriate.

The reality is that this legislation—income tax devolution following a referendum—is a real opportunity to be seized with both hands by the Welsh Government. It is an opportunity to make Wales more competitive and to make the Welsh Government more accountable, as the hon. Member for Pontypridd now agrees. Our challenge to those who view the devolution of income tax negatively is not to shy away from this opportunity, but to seize the moment with enthusiasm and support the proposals in this Bill for a referendum on income tax devolution.

The Silk commission recommended that the Welsh Government should be able to set separate Welsh rates of income tax for each of the three income tax bands, but the Government believe that a single Welsh rate for all three bands—the so-called “lockstep”—is the right system for Wales. The same system is being introduced in Scotland under the Scotland Act 2012. The Government have a responsibility to take a UK-wide view: to consider the interests not only of Wales, but of the United Kingdom as a whole, including Wales. If the devolution of income tax is supported in a referendum, the lockstep mechanism would be the best way to maintain a progressive tax system that redistributes wealth across the whole of the UK but does not unnecessarily benefit one part of the UK at the expense of another.

The Bill also devolves responsibility to the Assembly for its own budgetary arrangements, so that it can establish new procedures for scrutinising and setting the annual budget. That was also recommended by the Silk commission, and by the Welsh Affairs Committee following its pre-legislative scrutiny of the draft Wales Bill. The Bill before us today and the Command Paper the Government have published alongside it have benefited greatly from the Select Committee’s thorough and rigorous scrutiny, and I am grateful to all hon. Members on that Committee for their hard work.

Although the majority of the Bill is devoted to fiscal devolution, the legislation also implements a number of other important reforms: it permanently moves the Assembly to five-year terms; it removes the prohibition on dual candidacy; and it makes provision to preclude Assembly Members from simultaneously being Members of this House. Those are all changes which we consulted on in our Green Paper in 2012. The move to permanent five-year terms will make it less likely that Assembly elections will clash with UK general elections, now that the length of Parliaments is fixed at five years. It is important that Assembly elections should be contested, wherever possible, on issues specific to Wales, and the Bill ensures that they will not be overshadowed by the wider issues that often dominate elections to this House.

[Chris Bryant]

The Secretary of State has used the word “accountable” 14 times so far in his speech and has talked about how this Bill will make politicians in Wales more accountable, but it is going to mean that there will be fewer elections. Does that not make them less accountable?

[Mr Jones]

I would not have thought so. By the way, I am grateful to the hon. Gentleman for counting how many times I have used the word “accountable”. That now makes 15. I would have thought that he would be concerned to ensure that Assembly elections were not overshadowed by general elections, and that in my book makes for accountability.

[Mr Mark Harper (Forest of Dean) (Con)]

I am surprised by the hon. Gentleman’s intervention. When the Fixed Term Parliaments Act 2011 was going through this House, it was Labour’s First Minister in Wales who agreed that the date of the Assembly election in Wales should be moved to 2016 so that it would not coincide with the general election. The hon. Gentleman does not seem to be joined up with his own party.

[Mr Jones]

My hon. Friend was involved in that Bill, and he is of course entirely right.

[Chris Bryant]

The thing is, it is the former Minister who is not very joined up with his own memory. At the time, Labour voted for a four-year fixed-term Parliament in here, which would have meant a four-year fixed term for Wales as well. In that way, we would not have had to coincide and we would have had greater accountability. Let us have a general election now, shall we?

[Mr Jones]

As we have five-year terms for general elections, we take the view that we should also have five-year terms for Assembly elections.

The removal of the ban on dual candidacy restores the position to how it was in the Government of Wales Act 1998. I believe that the change is supported by all parties other than the Labour party, which introduced the ban in the first place. The ban on so called “double-jobbing” between the Assembly and this House addresses legitimate concerns about whether it is possible for someone adequately to represent constituents’ interests in two elected legislatures at the same time.

The legislation also implements several changes that have been specifically requested by the Welsh Government, including formally enshrining that name—the Welsh Government—in statute, as it has been common parlance for the Welsh Assembly Government to be so referred to for several years now.

In responding to the Silk commission’s recommendations, the Government made it clear that we were unconvinced by the case for devolving air passenger duty to Wales, so the Bill makes no provision for that. Neither does it make provision for the full devolution of business rates. That is because, in terms of legislative competence, business rates fall within the devolved subject of local government finance and so we need make no further provision in this Bill. In order fully to devolve business rates, the Government are amending current funding arrangements so that the Welsh Government benefit directly from revenues raised by that tax in Wales.

Finally, as I said in my written statement to this House on 3 March, we do not see this Bill as an appropriate vehicle for implementing the recommendations made by the Silk commission in its second report. The commission’s second report raises crucial questions about the future governance of Wales within the United Kingdom, and it would not be right to rush into implementing its recommendations without careful assessment. It is essential that we take the time needed to get things right. Consequently, the Bill is focused on devolving the package of tax and borrowing powers to Wales recommended by the commission in its first report. Including a whole raft of other powers would merely serve to delay the Bill and jeopardise its enactment before the 2015 general election.

The Government believe that devolution should be used to give a competitive edge to Wales, and that powers devolved should be used to grow the Welsh economy and make Wales a more prosperous place. The Bill will deliver that. It will make devolved governance in Wales fairer, more accountable and better able to support economic growth. I hope, and I believe, that we can achieve a broad consensus in this House around this Bill, and make rapid progress. I commend the Bill to the House.

--- Later in debate ---

[Owen Smith]

I am not talking about Scotland today; I am talking about Wales. I am talking about the Clwyd West scandal, which the Secretary of State oversaw. I am talking about the fact that this measure is clearly in the interests of the Tory party and nationalist allies, which is why our nationalist colleagues are so keen to intervene.

[Mr David Jones]

rose—

[Owen Smith]

Clearly, the Secretary of State is going to explain it differently.

[Mr Jones]

In the first place, let me say that I object quite strongly to the hon. Gentleman’s suggestion that I would ever be involved in gerrymandering, particularly given that it was his party that introduced this atrocity in the first place in the 2006 Act. May I refer him to what Professor Roger Scully said in his written evidence to the Welsh Affairs Committee:

“If parties that are defeated at constituency level can still win representation through the list, then it is difficult to see why that should not also apply to individuals”?

Individuals represent parties; where they happen to be standing makes no difference at all.

[Owen Smith]

I am just getting over the fact that the Secretary of State referred to what we thought was a fairly simple safeguarding of democracy as an “atrocity”. I am pleased that I let him intervene, because he chose to read out a piece of evidence given to the consultation on the measure. I note, however, that the Secretary of State failed to inform the House that the overwhelming majority of respondents to the consultation were opposed to the measure. Clearly, this is a nakedly partisan reversal by the current Government. Let me be clear with the House: if we get the opportunity to win back power in this place, we will reverse the measure.

--- Later in debate ---

[Owen Smith]

I am very sorry, Madam Deputy Speaker. I was not, of course, rolling my eyes at your good self, but at the Secretary of State. I put on the record that my inability to recall the name of the constituency of the Minister without Portfolio, might have something to do with the multiple aliases that he deploys outside this House and which make it very difficult to recall how to refer to him within it.

[Mr David Jones]

I would not want the hon. Gentleman to have wasted his eye rolling. Just for clarification, is it his case that the Labour party wants devolved income tax competence to be able to increase the rate of tax for the 4,000 or so who pay the additional rate of tax in Wales, but not to cut the standard rate of tax for the 1 million-plus who pay the standard rate?

[Owen Smith]

I have already made that very clear in this House. I take your admonition that I should be coming to the end of my speech in the spirit in which it was intended, Madam Deputy Speaker, although I believe that I have spoken for slightly less time than the Secretary of State. [Interruption.] If it is significantly longer that is perhaps because I have addressed more of the substance of the Bill than the Secretary of State, who glossed over most of the gerrymandering and the other reasons for it.

Let us be very clear that our proposals to allow the Welsh people, if they so choose at a referendum, to give powers to the Welsh Government to set a progressive rate of income tax would guard against a Tory Government with malign instincts reducing the justice of our taxation system in Wales and increasing the outrageous targeting of Wales that has been described and exposed in other areas in recent days. We will not allow such exposure on the economy to be passed on to Wales. We will not allow Wales to be worse off as a result of the measures, and we will scrutinise the Bill extremely carefully.

--- Later in debate ---

[Mr Hain]

It may well be the case that it exists outside the United Kingdom.

[Mr David Jones]

I am grateful to the right hon. Gentleman for giving way. The hon. Member for Rhondda (Chris Bryant) is entirely wrong. Is it not the case that Wales is the only country in the world where, under this electoral system, dual candidacy is presently banned?

[Mr Hain]

I am not sure about that, but what I can say is that we should look at the experience in Wales. If there is no such bar in other countries, then perhaps there was no such abuse there. There was widespread abuse in Wales, practised by 15 of the 20 list Assembly Members who used taxpayers’ money to open constituency offices in the very seats in which they were defeated. They then used those resources to try to win at the following election by cherry-picking local issues against the constituency AMs who had beaten them.

--- Later in debate ---

[Hywel Williams]

My job is to represent Wales. The Labour party advertises itself as the unified, indivisible Labour party in England, Scotland and Wales. The hon. Gentleman’s point is bogus.

It is important that we now move forward, whatever the weaknesses hon. Members on both sides of the House might find in the Bill. Realistically, income tax might not be varied for some time, or ever, depending on what happens in the referendum, but the Bill will give access to vital borrowing and investment powers.

The Silk commission produced its second report earlier this month. Plaid Members say that Wales should be moving to a reserved powers model as swiftly as possible. We believe it would make more sense to have a referendum on the Silk part II recommendations. That larger and more substantive referendum would consider both true income tax-varying powers and wider policy powers. We will table amendments to preserve the integrity of the Silk report recommendations. Given that the principle of fiscal devolution has been conceded in respect of the other tax-varying powers, we say there is no need for a referendum on a simple income tax-sharing model. I agree with the hon. Member for Islwyn (Chris Evans), who is in his place, who said today that that should be the case. We will seek to amend the Bill accordingly.

[Mr David Jones]

At the risk of appearing to carp, I should point out to the hon. Gentleman that, a moment ago, he accused the Conservative party of cherry-picking the recommendations of the Silk commission. Is he not cherry-picking, too, when he says that we should dispense with the referendum, which, after all, was recommended by the commission?

[Hywel Williams]

Our argument is on a package of measures, but the Government have cherry-picked. Our ambition—I make no apology whatever for it—is to have both Silk I and II and even more implemented.

--- Later in debate ---

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

I welcome the Bill, which contains much that will benefit the residents of west Wales in particular. The more I listened to the speeches today, especially from the right hon. Member for Neath (Mr Hain), the more I came to the conclusion that we must be doing the right thing, given the level of opposition that he expressed.

I probably have more in common with my hon. Friend the Member for Monmouth (David T. C. Davies), the Chairman of the Select Committee, than I should perhaps readily and publicly admit. That is because I am not an anti-devolutionist but I am a reluctant devolutionist. I am pragmatic about it and I accept that we are where we are. I am reluctant because, in the time that I have lived in and represented my area, I have never had a business—small, medium or anything in between—come and tell me about the need for further devolution or for further powers to be devolved to Cardiff. In many cases, I have been on the end of contrary suggestions. Very few people say that the one thing standing between them and sustainability and profitability is more politicians, more devolution and more of the confusion that can sometimes result.

Nor have I heard from many members of the public about the need for further devolution. I suppose that that is a contradictory comment, because when put to the test in a referendum the result is somewhat different, but not many people talk to me about the need to devolve the criminal justice system, the police or other such matters. I therefore come at the issue from a very schizophrenic position, knowing that we are where we are—as the hon. Member for Arfon (Hywel Williams) has just said.

My hon. Friend the Member for Monmouth and I come into step on the danger of mission creep. I do not always admit to sharing the views of the former Prime Minister Mr Blair, but I will on this occasion, because he said:

“I was never a passionate devolutionist. It is a dangerous game to play. You can never be sure when Nationalist sentiment ends and separatist sentiment begins.”

That was not entirely different from what Donald Dewar had said at the time that the Scottish Parliament was set up. He very explicitly said that he saw it as the end of the debate about independence—but a few short years later we are on the eve of a referendum on Scottish independence. That troubles me because—as other hon. Members have said—we appear to be travelling in one direction only, towards independence in all but name. The Bill is a chance to put all that to bed. It strikes the correct balance between practical considerations and ideological objectives. Above all, it is a Bill that has the voter, the ratepayer and the business man and woman in mind, rather than the ambitions of politicians, either here or in Cardiff.

I want to touch on one and a half issues—both constitutional—and I shall be as brief as I can, because the afternoon seems to be dragging on into the night. The first issue is fixed-term Parliaments. When I was on the Political and Constitutional Reform Committee, we looked at this in some detail, and there was very little objection to the notion of fixed-term Parliaments. They were felt to have the potential to reduce uncertainty and instability, to give a clear timetable for the next election, and to provide more effective forecasting and the ability to prioritise more effectively. All of that is a given. There was not quite so much consensus on whether the term should be four years or five. The general view is that we are one of a relative minority of countries across the globe that have opted for five years. Nobody considers it to be much of a problem except when a collision of dates occurs, perhaps between elections to this Parliament and to the Welsh Assembly. Even then, the Electoral Reform Society was not particularly alarmed by the fact that the public may have to make a choice between candidates in Cardiff and candidates in Westminster. I agree: plenty of evidence suggests that people are capable of making an informed and intelligent decision in two simultaneous elections.

I am concerned that if boundaries were to change as a result of future legislation, asking people to vote for candidates on different boundaries might cause confusion, and we would need to guard against that. People ask how likely that is to happen, and it is probably some way off, but there is a more immediate problem. If there were to be—God forbid—a yes vote for Scottish independence in September, the whole basis of our future government could be affected by people who will spend only a few months in this House. The question is—and I suspect that Plaid Cymru Members will sympathise, and perhaps even Members from other parties—whether we could legitimately have an election in May 2015, the outcome of which was decided by people who would not be in this House for very many weeks thereafter. That is an argument—I put it no more strongly than that—for deferring the general election until after those matters have been resolved, which would then bring us into collision with the Welsh Assembly elections, now set for May 2016. Although I do not have too much of a problem with a dual election, we need to consider that that might be an inevitable outcome of a result in favour of independence—albeit unlikely—in Scotland later this year.

I do not intend to say much about double-jobbing, although it is an area of the Bill that I was concerned about until I heard the speech by the right hon. Member for Neath, who compelled us to accept his arguments even though they were at odds with the independent evidence available. As I result, I came to the view that I must be wrong and the Bill must be right. It is a bit rich—and I would say this if the right hon. Gentleman were in his place—for a former Secretary of State, who was partially responsible for the legislation and the problems that he highlighted, to go against the only authoritative independent evidence that is available to us from the Electoral Reform Society and the Electoral Commission. To suggest that they are wrong and he is right is taking the House for fools, so I am completely confident that the inclusion of double-jobbing in the Bill is the right approach.

I shall conclude, as I know that other hon. Members wish to round off the evening with a flourish. The tax position is more an area of expertise for my hon. Friend the Member for Aberconwy (Guto Bebb) than it is for me, but the situation is confused, and it would be further confused if we were to expand—perhaps post boundary reviews and all the elections we have mentioned, and taking into account the evidence provided to the Select Committee on our various visits around the country—the number of Members of the Welsh Assembly. It is an extraordinary suggestion that the Assembly in its current form does not contain sufficient expertise to deal with tax-varying powers, if that is what the Welsh nation wishes. Yet academic after academic, witness after witness, has come to us over the last few months suggesting that that is an inevitable consequence of the passage of the proposal. I think that would cause considerable concern in the minds of the business and voting community in Wales. It would be poor timing to suggest that what Wales needed was more politicians rather than fewer. There are cost and electoral implications and all sorts of economic and social considerations. I very much hope that the Secretary of State or the Minister can reassure us that such an outlandish and inappropriate proposal will not come into effect during our lifetime.

[Mr David Jones]

rose—

[Simon Hart]

I was going to finish on that point, but I will take an intervention.

[Mr Jones]

Before my hon. Friend resumes his perch, he will recall that the First Minister indicated that he felt that the Assembly as currently constituted, with 60 Members, could cope comfortably with new powers.

[Simon Hart]

I thank the Secretary of State for his intervention. The First Minister did, and a number of other canny politicians in the Welsh Assembly also came to that conclusion, but the academic and independent evidence tended to point in a different direction. We used the expression “direction of travel” earlier and there seemed to be a slightly surprising thirst for a larger institution in Cardiff than I was comfortable with. I think the First Minister was just guarding against an unhelpful headline in the Western Mail and was being über-cautious, whereas his academic colleagues who gave evidence to the Committee were a little more forthright.

--- Later in debate ---

[Mr Williams]

Sorry, not quite, but the vote was much better than before. I think there was a bit of a swing of opinion. We certainly welcome the fact that people along the borders voted in bigger numbers for this, although I stand corrected. I am still slightly shocked by the glowing appraisal my hon. Friend the Member for Monmouth (David T. C. Davies) gave of Liberal Democrat policy on federalism; he commended us on that. However, I take on board the point made by the hon. Member for Clwyd South (Susan Elan Jones).

[Mr David Jones]

It would appear that my hon. Friend’s sole, or at least principal, concern about the Bill is the issue of the referendum, but does he agree that when we are talking about whether Wales should have a different tax basis from the rest of the country, that is something that concerns every resident of Wales and people should have their say on that?

[Mr Williams]

I do agree with that. I should, perhaps, make it clear that I was warning about referendum fatigue in the future. I have signed up to the Silk package and he has made that recommendation very clearly, as has my right hon. Friend the Secretary of State. We must be very mindful of that fatigue in the future, however.

The hon. Member for Islwyn talked about the Blackwood high street survey that he unofficially—or maybe officially—makes when he is back in his constituency. He said that nobody raises these issues. I would just say that there is a case to be made in respect of our business community. People come to talk to me about business rates and the lack of clarity on responsibility over business rates, and there is a case for fully devolving them to the National Assembly. Over the past nine years I have dealt with many cases involving this subject. I can think of many constituents who have come to me struggling with issues about where responsibility lies. Therefore, I am particularly pleased that decisions will, because of this Bill, be made closer to Wales and that rates can be more responsive to the needs of Welsh businesses.

The Federation of Small Businesses in Wales agrees that businesses in Wales are facing the most onerous business rates of any constituent nation of the UK. We do not have many options available to us, such as using different multipliers for different-sized firms, and it hits our small businesses hard. Small businesses are the backbone of the Welsh, and particularly the Ceredigion, economy.

The Select Committee addressed that issue. Now that the Government have made their position on it clear, I would like to know how they intend to take forward their policy on devolving business rates completely. We need a clear settlement of business rates, which gives politicians the incentive to be creative on business rate policy and to be accountable for it.

I am also pleased about the Government’s views on the full devolution of stamp duty and landfill tax. It is true that those taxes are not massive generators of revenue; they generate about £200 million a year out of an overall budget of £15 billion, which is 0.3%. However, I welcome the fact that stamp duty and landfill tax could be used to encourage inward investment and business generation in Wales, providing a much needed boost to the economy.

Moving on to the key issue of borrowing powers, the Select Committee urged in our pre-legislative scrutiny report that by the time of the publication of the Bill the Government should have set out how they decided the limits of the £500 million current account and the £500 million for capital account borrowing. That was an incredibly worthwhile report, and I think that the Government should acknowledge that there is a need for pre-legislative scrutiny of all Bills of this nature. Comparing the lobbying and transparency Bill with this Bill, the work we have undertaken on the Select Committee will serve the process very well. I remember that the Welsh Liberal Democrat leader, Kirsty Williams, came before the Select Committee and made the comparison between the settlement for Scotland and the settlement for Wales.

We also talked about, and sought clarification on, the issue of bonds, and I am encouraged that the Government seem willing to consider further whether it might be appropriate for the Welsh Government to issue bonds alongside the other measures.

--- Later in debate ---

[Albert Owen]

I do not know who the people were. The hon. Gentleman may well be right, but Labour is obviously the biggest party in Wales and has a strong voice there, unlike some other parties. It was a consultation exercise—[Interruption.] I am getting chuntering remarks from the hon. Member for Carmarthen East and Dinefwr again, but perhaps Plaid Cymru should also have had enough intelligence to do standard letters to put its view across in this open consultation. The point I am making is that this coalition proposal, supported by Plaid Cyrmru, is on the wrong side of the argument. These parties are doing it for their own political reasons. Nobody has said to me, “Wasn’t it terrible what you did in 2006 when you banned the dual mandate?” Nobody has raised the issue and it is right to leave things as they are. I shall be voting against the measure when the time comes, for the reasons I have given.

Individuals have been mentioned, which is wrong, but I must mention the leader of Plaid Cymru who, when she was elected, made a bold statement that she was not going to stand on the list. She made the brave decision to go before the electorate as an individual and leader of her party. She chose the seat for Rhondda, which she had every right to do, but now she has the jitters. She no longer feels secure in her statement, so she wants the lifeboat of a list place to get her into the Assembly for Wales; that is what this is all about. That is why I point to a deal being done. I smell a dirty deal here between the coalition parties and Plaid Cymru.

[Mr David Jones]

I have to say that the hon. Gentleman has raised a red herring there. I assure him that there has been absolutely no deal with Plaid Cymru. He knows me well enough to know that of all the parties in this House, Plaid Cymru is probably the last one I would ever do a deal with.

[Albert Owen]

I will take the Secretary of State’s word on that, but he is pandering to its views and helping it out. I certainly will not be doing that when it comes to voting on this Bill.

There are lots of things in this Bill that I do support. I have mentioned some already including the borrowing powers, the landfill tax and the stamp duty measures. I will support the Bill on Second Reading if there is a Division, but I will be working with Members from across the House to scrutinise it so that we get to a position where it is sellable to the people of Wales in a referendum, because I am, first and foremost, a democrat and a devolutionist, and a proud one too.

--- Later in debate ---

[Guto Bebb]

I am grateful to the hon. Gentleman for that intervention. I am sure that the Labour party is a democratic institution; it also believes strongly in the hereditary principle, as we have found out from Aberavon.

The hon. Member for Pontypridd made a clear statement in the Welsh Grand Committee on 5 February that there was no need for fiscal devolution for the Welsh Government to have any further accountability, yet in his speech in Llandudno on Sunday he clearly made the point that the further devolution of income tax varying powers so that they were on a par with those in Scotland was necessary to give that accountability.

[Mr David Jones]

I think I ought to tell my hon. Friend that I ventured into Llandudno on Saturday and it was reasonably quiet there. Does he not get the impression, as I do, that far from its being a damascene conversion on the part of the shadow Secretary of State, it is more likely that he has been leaned on by his bosses in London and Cardiff?

[Guto Bebb]

I would not want to offer an opinion on whether the hon. Gentleman has been leaned on or not. There is clearly a significant difference between the comments made in the Welsh Grand Committee on 5 February and the speech delivered in my constituency on Sunday and those differences need to be reflected on, because ultimately I agree with the speech that he made on Sunday. There is clearly a need for fiscal accountability for the Welsh Government. If we are to have grown-up politics in Cardiff Bay, it is important that decisions about spending and raising money should be taken by the elected politicians there. It is a step in the right direction to have a proposal in the Bill that will allow the Assembly, if it so desires, to trigger a referendum to allow a degree of control over income tax to be devolved to the Welsh Assembly in Cardiff. That is the key point about this legislation, which attempts to work with the grain of Welsh public opinion. The income tax variation is not being imposed on Wales; the Welsh Government, or the Welsh Assembly for that matter, are being allowed the ability to ask for those powers and trigger a referendum. The challenge for the Welsh Government will be to ask themselves whether to trigger that referendum or not.

Let me make a brief final point about the tax accountability issue, as I am aware that the debate has gone on for quite a while. The Select Committee had a significant and long discussion about whether we needed a lockstep or not. As some Opposition Members may wish to remind me, we had that debate in the Welsh Conservative party too. My own view is that the lockstep is something I can comfortably live with. The hon. Member for Arfon (Hywel Williams) made an interesting point on the arguments about whether the progressive nature of our tax system would be affected by the lockstep. He argued about whether, if we increased taxes by a penny on the standard rate and a penny on the 40p rate, we would make the system less progressive. The reverse argument can be put. For example, if we reduced the standard rate by 2p and the 40p tax rate by 2p, that would in effect be more progressive because it would give a 10% cut to the standard rate taxpayer and a 5% cut to the 40% taxpayer. As a Welsh Conservative who believes in lower taxes, I am confident that those powers will be necessary to reduce taxes in Wales. If we reduce taxes using the lockstep, the result will be a more, rather than a less, progressive system. The principle of fiscal accountability justifies the imposition of the lockstep at this point in time. As such, I am happy to support the Bill as it stands.

--- Later in debate ---

[Geraint Davies]

Perhaps I have been misinterpreted. There was no small print. There was a big announcement, as my hon. Friend has just said, by the Prime Minister, the Secretary of State and others. The small print I was referring to was the weasel words in the long-winded document that was exchanged between Ministers, which presumably changed the headline proposition. It had been, “We will provide this,” and then the Minister argued, “When we went through it all I found here on page 23 that it says that actually it is interpreted in this way, so according to our lawyers the Welsh Government will have to do that.” That is not what we heard on the radio.

[Mr David Jones]

The hon. Gentleman will know that there was a letter, signed by Carl Sargeant, the relevant Welsh Minister, confirming that there was an agreement. Is that small print?

[Geraint Davies]

The Prime Minister said that the UK Government would pay for the electrification of the railway lines, which are essentially UK infrastructure. I think that it is disgraceful, frankly, that while £52 billion is to be spent on HS2, the Secretary of State will not even fight for that extra bit of money for Wales. We desperately need it. He should resign.

Wales Bill

David Jones Excerpts

Thursday 20th March 2014 Written Statements

[The Secretary of State for Wales (Mr David Jones)]

The Chief Secretary to the Treasury and I have today published the Wales Bill and the accompanying Command Paper, “Wales Bill: Financial Empowerment and Accountability”.

The Wales Bill will provide the Welsh Government and the National Assembly for Wales with more levers and incentives to deliver greater economic growth in Wales. The Bill will make the Welsh Government more accountable to the people of Wales, as they will be responsible not only for the money they spend but also, for the first time, how they raise some of that money. The Bill will also provide the Welsh Government with the mechanism to borrow in order to fund improvements in Wales’s infrastructure and reforms the Assembly’s electoral arrangements to make them fairer and more equitable.

Alongside the Bill the Command Paper, “Wales Bill: Financial Empowerment and Accountability” explains the effects of the finance elements in part 2 of the Bill in more detail and sets out further actions that the Government are taking, following the recommendations of the Silk Commission’s part 1 report, that do not require legislation. A Welsh language version will be available at: https://www.gov.uk/government/organisations/wales-office

I have also written to my hon. Friend the Member for Monmouth (David T. C. Davies), Chair of the Welsh Affairs Committee, enclosing a memorandum responding to the Committee’s report on its pre-legislative scrutiny of the draft Wales Bill. The Government have accepted most of the Committee’s recommendations, and I wish to place on record my thanks to the Committee for its timely and thorough scrutiny of the draft Bill. For the convenience of the House, and with the Committee’s permission, I have placed a copy of the memorandum in the Libraries of both Houses.

Welsh Affairs

David Jones Excerpts

Thursday 6th March 2014 Commons Chamber

[Albert Owen]

My hon. Friend makes an excellent point and he puts the issue to bed. We are not just talking about foreign individuals who may be chief executives of companies; we are talking about skilled, well-paid jobs and investment that will boost the economies of Deeside, Bristol and other parts of the United Kingdom. Business leaders at events with Airbus that I have attended have been clear that they are investing in Europe. That is why they want to invest in the United Kingdom, and they choose Deeside because it has an excellent skilled work force. I want that to continue and for many other parts of Wales and the United Kingdom to benefit from that as well.

The Welsh dimension to the constitutional debate in this Parliament has concentrated on the Silk commission, but I am being honest with hon. Members when I say that not one constituent has raised that with me as an important or pertinent issue for them. They do, however, raise important issues about public services and the cost of living, and they talk about international affairs—we had an excellent debate on women in Afghanistan today. People send us here to talk about real issues that affect them.

I speak as a proud pro-devolutionist and I supported devolution in 1979. Many fellow travellers have come along since that time, including the Labour party. To me, however, real devolution is about empowering people throughout our country. It is not about the simple transfer of powers from one institution in Whitehall to another in Cardiff Bay; to me it is about empowering people in Cemaes bay in my constituency, and in Colwyn bay, Cardigan bay, and many other parts of Wales. It is not just about the boring constitutional issues that we, the political elite, are bogged down with and a few commentators are talking about.

I want to talk about the real issue of developing a stable and growing economy in Wales as part of the United Kingdom and the European Union, and I will mention two things that affect businesses and people in my constituency: energy and tourism.

On energy, I very much welcome the fact that we are getting a consensus on the big energy issues, for reasons that I gave earlier including the stability that businesses crave so that they can make huge investments in the future. I welcome the Secretary of State’s support for Wylfa Newydd and his conversion to offshore wind. I shall put this mildly because I want the consensus to continue, but when the Secretary of State worked alongside me on the Welsh Affairs Committee I recall him being concerned about the consents under the previous Government. He now backs those schemes and even claims credit for them as the flagship of the coalition Government.

[The Secretary of State for Wales (Mr David Jones)]

I can actually see the Gwynt y Môr wind farm from my sitting room, so I can recognise a fact of life.

[Albert Owen]

I take that point, and the Secretary of State may now find that an attractive view from his window, but at one time he did not want it to go ahead. He would not have been able to see it from his window, nor would he have been able to meet many of the targets that we are making progress towards in a low-carbon economy. I have always thought that offshore wind has a great future, although I am a little less certain about onshore wind, because of the sheer size of some of the turbines.

[Albert Owen]

We need a mix. We need a base load and we need variable energy. If we do not have interconnectors and we are producing too much energy in the summer, when peak demand is less, we cannot switch off nuclear power stations and it is expensive to switch off gas. It is easier to switch off variable supplies such as renewables can provide, including wind. There is an initial cost, but those costs are coming down, and I believe that with economies of scale—as with the strike price for nuclear or for any other renewable—the price will decrease as the sector matures. In the long term, bills will be cheaper if we get a steady supply of low carbon energy.

Nuclear power is also part of the mix. I welcome the conversion of the Secretary of State to wind power and the conversion of the Liberal Democrats to nuclear power. I hope that that means that the three larger parties, two of which form the Government now and one of which I hope will form the next Government, will be consistent in the future.

[Mr David Jones]

Would the hon. Gentleman be able to inform the House of the position of Plaid Cymru in his constituency on nuclear power?

[Albert Owen]

It is up to Plaid Cymru to defend itself. As I have been provoked into raising the issue, I will say that it is important that all the larger parties here and the larger parties in the Assembly—of which Plaid Cymru is one—show their support. In my opinion, a party cannot claim to be in full support of a technology if its leader says that she wants an energy future without nuclear power. The leader of a party cannot say that to business leaders and then say that she supports the jobs. We need to support the development of the technology. On Plaid Cymru’s website, which I get little notes about occasionally, the energy spokesperson says that it wants 100% renewable energy by 2035—there is no mention of nuclear. That is a clear indication that Plaid Cymru opposes nuclear as part of the energy mix in the future. That will be an issue for the general election as we make progress on the building of Wylfa Newydd. I hope that that answers the Secretary of State’s intervention.

--- Later in debate ---

[The Secretary of State for Wales (Mr David Jones)]

May I take this opportunity to wish you, Madam Deputy Speaker, a belated happy St David’s day? It is, in fact, the end of St David’s week. I commend the Backbench Business Committee and the hon. Member for Ynys Môn (Albert Owen) for recognising the importance of having such a debate and securing it. I echo what he said about the importance of being proud of our dual national identity—being both Welsh and British. It is something he understands, I understand, the hon. Member for Pontypridd (Owen Smith) understands and clearly, and most importantly, Sam Warburton understands.

The hon. Member for Ynys Môn focused his contribution largely on the economy, and rightly so. One of the joys of this office is that I have the privilege of travelling the length and breadth of Wales, meeting some of our world-leading companies, visiting the small and medium-sized enterprises that are very much the backbone of our economy and hearing inspirational stories of lives that have been transformed by securing employment.

Wales has a proud industrial history. At the height of the industrial revolution, Wales was at the forefront of technological advances. It retains many innovative industries, from large multinationals, such as Airbus and Tata Steel, to small but dynamic niche market companies, such as Torquing in Pembroke Dock. We must have a thriving private sector, confident to create employment opportunities, innovate and expand into new markets.

If Wales is to be a country where companies grow, invest and take on new people, the Government must create the right conditions to allow that to happen. That means cutting business taxes, reducing red tape and fixing the banking system. As a consequence of the measures we have put in place, corporation tax in the UK will be down to 20% in 2015, the lowest in the G20, and our red tape challenge means that by the end of this Parliament there will be fewer regulatory burdens on businesses than there were when we came to power in 2010. All that is good for Welsh businesses, but if we are really to succeed, we need the Welsh Government to work with us here in Westminster.

In order to compete in a global market, we must also ensure that Wales has a highly skilled and educated work force. However, the recent PISA results, which my hon. Friends the Members for Monmouth (David T. C. Davies) and for Vale of Glamorgan (Alun Cairns) quite properly touched on, show that in education Wales is sadly falling further behind the rest of the UK and is internationally uncompetitive. The First Minister recently admitted that the Welsh Government had taken their eye off the ball on education in Wales. Well, admission of fault is a start, but what parents and employers now want to see, as my hon. Friend the Member for Vale of Glamorgan said, is an early start on improving educational outcomes in Wales.

Crucial to economic success is infrastructure. This Government recognise the importance of high-quality infrastructure in a modern economy. Despite the difficult economic circumstances we inherited, we have made it a priority to invest in infrastructure upgrade. We have invested in energy, as the hon. Member for Ynys Môn kindly acknowledged, in transport infrastructure, with the electrification of the south Wales railway lines, and in first-class broadband, with an announcement of £57 million of investment and, most recently, another £12 million to ensure that the hardest-to-reach locations will be served. Once completed, we will have achieved a truly remarkable transformation. Wales will be part of one of the finest broadband networks in Europe.

Hon. Members made a number of important points that I would like to deal with as far as possible. My hon. Friend the Member for Monmouth is concerned about more powers for the Welsh Assembly, which I found quite surprising, coming from him. Nevertheless, we will shortly introduce the Wales Bill, which will give additional powers to the Welsh Assembly and, most importantly, will introduce for the first time a degree of accountability on the part of the Welsh Government for the money they spend. That can only be a good thing, and was welcomed by several hon. Members.

The right hon. Member for Torfaen (Paul Murphy) raised the important issue of legal highs. It is not new, and I remember raising precisely the same issue with his right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) when he was Home Secretary. This is a priority. We are working across Government and with delivery partners to tackle the elicit supply of and demand for legal highs. Legislation is only part of the solution and we are targeting those drugs on all fronts.

We are seeking to reduce demand by raising awareness of their dangers not only among those who take them, but among family members and parents in particular, making it difficult to obtain and supply them, and ensuring that statutory services can provide effective treatment and recovery. I do not in any way seek to downplay the significance of the problem. I am very grateful to the right hon. Gentleman for raising this important issue.

My hon. Friend the Member for Montgomeryshire (Glyn Davies) raised the issue of mid-Wales. He said that it needs better treatment, and that it is a battle to develop awareness of it. As someone who is married to a lady from mid-Wales, I would not seek to overlook that part of the world. I agree with him entirely about cross-border routes which, as he knows, we are working on.

The hon. Member for Newport East (Jessica Morden) also spoke about legal highs, and raised the important issues of Avana bakeries and the Orb steelworks on which my office is engaged, as she knows. I fully understand the concern she expressed.

My hon. Friend the Member for Ceredigion (Mr Williams) raised the issue of the recent storm damage and specifically whether the Assembly Government had made a request for assistance under the EU solidarity fund. Some inquiries were made by the Assembly Government with the Department for Environment, Food and Rural Affairs, but no direct request for assistance was made.

The hon. Member for Islwyn (Chris Evans) raised the important issue of exclusions. I refer him to a constituent of mine, Colette Ryan, a teacher at ysgol Emrys ap Iwan in Abergele and an inspirational lady. I would be pleased to discuss the matter with him at a later time.

There were other important contributions and I apologise to hon. Members for not dealing with them specifically because of shortage of time. I am sure that hon. Members across the House are united in their desire that Wales should become more prosperous, more successful and, most of all, that we should continue to be proud to be Welsh.

Commission on Devolution in Wales

David Jones Excerpts

Monday 3rd March 2014 Written Statements

[The Secretary of State for Wales (Mr David Jones)]

The Government established the Commission on Devolution in Wales (the Silk commission) in October 2011 with the support and full engagement of the Welsh Government and all four parties in the National Assembly for Wales.

The Silk commission reported on the first part of its remit in November 2012, recommending the devolution of fiscal powers to the National Assembly for Wales (“the Assembly”). The Government are implementing almost all of the Silk commission’s recommendations, and will bring forward a Wales Bill as soon as parliamentary time allows to devolve tax and borrowing powers to Wales. The Welsh Affairs Select Committee reported last week on its pre-legislative scrutiny of the Bill in draft, and the Government are carefully considering the recommendations which the Committee has made.

I can inform the House that the Silk commission has today reported on the second part of its remit (“Silk II”), examining the powers of the Assembly and recommending modifications to the Welsh devolution boundary. I have placed copies of the report in the Library of the House.

The publication of today’s report concludes the work of the Silk commission. I would like to thank the commission for fulfilling its remit and for its commitment and hard work over the last two and a half years. I would like to pay tribute to the commissioners, who have worked tirelessly and on an unpaid basis, and to Paul Silk, chair of the commission, for his dedication and leadership. The commission has produced two thorough, well researched reports which I am sure history will record as important contributions to the development of devolution in Wales.

I warmly welcome publication of the report, which provides a comprehensive analysis of devolution in Wales and makes recommendations for change which are thought-provoking and thoroughly researched. The Government will now carefully consider in full each of the recommendations and their implications.

This Government have a proud track record on devolution within a strong United Kingdom—devolving further powers to Scotland in the Scotland Act 2012, and in Wales providing for the 2011 referendum which resulted in the Assembly assuming primary law-making powers in all 20 devolved areas. The Wales Bill will take devolution a step further, devolving tax and borrowing powers to the Assembly and the Welsh Government for the first time, making those institutions more accountable to the people who elect them.

The Silk II report proposes a clear course for the future, and makes recommendations which would broaden and deepen Welsh devolution further. I would like to set out how I see matters moving forward.

There is now a little over 12 months remaining of this Parliament. This is insufficient time for the Government to implement any changes that would require primary legislation, given the degree of consideration that the Silk commission’s recommendations demand.

Given the significant extent of the work now needed to be done, I do not consider the Wales Bill to be a suitable vehicle to implement the recommendations made in today’s report. I believe it is important that the Bill remains focused on delivering the devolution of tax and borrowing powers which the Government announced in November. The Government intend that these powers will be devolved to the Assembly and the Welsh Government well before the next Assembly elections in May 2016, subject to the successful parliamentary passage of the Bill. Adding additional measures to the Bill in relation to Assembly powers would inevitably delay the Bill’s progress and jeopardise this timetable.

These will therefore be matters for the next Government and Parliament, and it will be for political parties to set out their proposals and intentions to the electorate. However, I can say now that we in Government will be taking a very positive approach to the Silk commission’s work, in keeping with our proud record on devolution.

For those recommendations that will not require primary legislation, we will consider early implementation during this Parliament if, after due consideration, we are satisfied that the case for the change is clearly made, there is a broad consensus in favour and it can be implemented quickly and easily.

Supplementary Estimate 2013-14

David Jones Excerpts

Wednesday 12th February 2014 Written Statements

[The Secretary of State for Wales (Mr David Jones)]

Subject to parliamentary approval of any necessary supplementary estimate, the Welsh Government’s departmental expenditure limit (DEL) net of ring-fenced depreciation and impairments will be increased by £105,082,000 from £15,009,464,000 to £15,114,546,000.

The following changes have been made to the Welsh Government’s departmental expenditure limit:

Devolved Administration Budget Exchange addition of £84,181,000 (£71,900,000 resource, £11,081,000 ring-fenced depreciation and £1,200,000 capital);

Addition of £ 1,450,000 in respect of the Coastal Communities Fund (resource);

A claim on the Reserve of £326,450,000 for Student Loans impairments;

Addition of £575,000 following the 2013 Autumn Statement - Capping Rail Fares at RPI (resource);

A budget transfer from the Department for Education of £22,123,000 for Teacher Training (£168,000 resource, £21,955,000 capital);

A budget transfer from the Ministry of Justice in respect of the Administrative Justice Tribunal Council of £42,000 (resource); and

A budget transfer from DCMS in respect of Broadband UK of £7,792,000 (capital).

Within the total departmental expenditure limit (DEL) changes, the impact is set out in the following tables: