Oral Answers to Questions

David T C Davies Excerpts

Wednesday 18th January 2023 Commons Chamber

[Owen Thompson (Midlothian) (SNP)]

14. What assessment he has made of the potential impact of inflation on the devolved budget for Wales.

[The Secretary of State for Wales (David T. C. Davies)]

The Welsh Government are well-funded to deliver public services in Wales. As a result of the autumn statement, Welsh Government funding is increasing by around £1.2 billion over the next two years. That is on top of the additional £2.5 billion a year on average announced at spending review. The Prime Minister has also been clear that we will halve inflation to ease the cost of living.

[Richard Thomson]

The Secretary of State says that the budget is increasing by £1.2 billion over the next two years, but inflation has already eroded the purchasing power of the Welsh Government in the current year by £1 billion. Since the UK Government are responsible for approximately 80% of the resource base of the Welsh Government, what further representations does he plan to make to the Chancellor of the Exchequer to ensure that that purchasing power for essential public services in Wales is made good?

[David T. C. Davies]

The overall funding amounts for the devolved Administrations, including the Welsh Government, have still increased in real terms over the period despite the impact of inflation. If the hon. Gentleman is serious about dealing with inflation, I hope he will support this Government as they propose to halve inflation over the coming year. In doing so, we will need to carefully control public spending in areas such as pay.

[Owen Thompson]

The Institute of Welsh Affairs says that budgetary pressures highlight the impotence of Welsh devolution and that tax scheme changes by the Scottish Government are a model that would help Wales’s financial situation. If the UK Government will not provide vital increases to devolved budgets, will the Secretary of State explore devolving similar tax-bearing powers to Wales, as in Scotland, to help the Welsh Government mitigate the Tory mismanagement from this place?

[David T. C. Davies]

I am not quite sure I follow what the hon. Gentleman is saying, because of course the Welsh Government do actually have tax-bearing powers. They have chosen not to use them, because the Welsh Government recognise that taxes have already increased as far as is sensible, and that means that all of us have to deal with the constraints that have come about as a result of the very difficult economic situation we face due to covid and the impact of a land war in Ukraine.

[Jonathan Gullis (Stoke-on-Trent North) (Con)]

Inflation, of course, causes pressure, but it is also true that Wales gets £1.20 per head for public services for every £1 in England. Yet the Welsh Labour-run Government spend less than that on their public services. Does my right hon. Friend agree with me that ruinous Welsh Labour Governments should stop wasting money on things like the Senedd expansion and instead spend money where it is needed: tackling backlogs in hospitals and stopping the decline of education in Wales?

[David T. C. Davies]

I agree absolutely with my hon. Friend; he is absolutely right. Money is being wasted in the Senedd, for example on spending up to £100 million on increasing the number of Senedd Members at a time of economic difficulty. [Interruption.] I hope Opposition Members who are chuntering are listening carefully to what my hon. Friend has to say.

[Chris Stephens (Glasgow South West) (SNP)]

2. What recent assessment he has made of the potential impact of the cost of living crisis on (a) households and (b) businesses in Wales.

[Ben Lake (Ceredigion) (PC)]

13. What discussions he has had with Cabinet colleagues on the impact of rising costs on (a) businesses and (b) households in Wales.

[The Secretary of State for Wales (David T. C. Davies)]

I understand that people across the UK are worried about the cost of living, which is why we have taken decisive action to support households and businesses across the UK, while remaining fiscally responsible. That support includes a £26 billion package for the next financial year, which will be targeted at protecting the most vulnerable.

[Chris Stephens]

Almost half of adults UK-wide say the cost of living crisis is harming their mental health, and that rises to 61% of Welsh adults. Devolved initiatives such as the fuel support scheme in Wales help, but inflation and UK Government cuts put such schemes in jeopardy. How does the Secretary of State justify his Government’s repeated refusal to support devolved Governments in tackling the crisis his party has created?

[David T. C. Davies]

First, I fully acknowledge that there is a cost of living crisis at the moment. It has come about because the UK Government rightly had to spend hundreds of millions of pounds dealing with the covid pandemic. We then saw inflation increase through the roof as a result of a land war in Ukraine. I recognise that there is a cost of living crisis being faced by countries across the whole of the western world at the moment. The UK Government have certainly not cut funding. We have increased funding for the devolved Administrations. We have increased money for the national health service. It is a shame that in Wales that funding is not being fully passed on to the national health service. Frankly, on the NHS, the Welsh Labour Government are getting more money and delivering a lower service.

[Anna McMorrin]

My constituent Sarah and her children could not celebrate Christmas this year: they were crippled by the fear of bailiffs and of being made homeless in the minus 2° weather. The toll this has taken on her mental health is unimaginable. She said to me, “My children and I will just break.”

A YouGov poll, out this week, shows that this Tory-made cost of living crisis has had a huge impact on people’s mental health in Wales—significantly more than elsewhere. Thirteen years of Tory Government have crippled this country. Cardiff Council is already £23 million worse off. Is the Welsh Secretary going to push my constituents to breaking point?

[David T. C. Davies]

There is a cost of living crisis going on all over the world at the moment. This Government have acknowledged that and faced up to it. That is why we have prioritised help for the least well-off. That is why this Government have made sure that the minimum wage has risen in line with inflation, that pensions have risen in line with inflation and that benefits have risen in line with inflation. People on benefits will receive a £900 payment, pensioners are getting a £300 payment and households with a disability are getting a £150 payment. At all times through these crises, which have not been caused by this UK Government, we have targeted our help at the most vulnerable in society.

[Ben Lake]

The Government have announced that support for homes and businesses connected to the mains gas grid will be extended for another year, but it seems that the single round of alternative funding announced for off-grid homes will be expected to last for the full 18 months. Notwithstanding the fact that the first payment to off-grid homes is still to be made, will the Secretary of State push colleagues in the Department for Business, Energy and Industrial Strategy and the Treasury for a second round of alternative funding to provide support for off-grid premises ahead of next winter?

[David T. C. Davies]

The hon. Gentleman is correct to say that the UK Government have recognised that those who are off grid are facing an increase in costs. It has not been as sharp as the increase for those who are on grid, and I think that the figures reflect that, but I note the hon. Gentleman’s comments about the fact that full details of the payment have not yet been made fully clear. I am sure that my colleagues in BEIS will have noted his question and will be coming forward shortly with more information about the payment.

[Jo Stevens (Cardiff Central) (Lab)]

This month has seen dreadful news for steel businesses and steelworkers in Wales. Steel is an energy-intensive industry, and its operating costs during the cost of living crisis have rocketed. Thirteen years of Conservative Governments have seen decline, offshored jobs and damaged communities.

Steel is integral to a modern economy. Labour will put Welsh and UK steel at the heart of our wider industrial policy, building wind turbines, railways and investing in carbon capture and storage and in hydrogen infrastructure. Other than creating a cost of living crisis, what is the Government’s plan for our steel industry and for steelworkers’ jobs?

[David T. C. Davies]

First of all, the news from Liberty in Newport was very disappointing and is very concerning for many people. That has not come about as a result of actions by the UK Government, as I think the hon. Lady will recognise; there are other issues pertaining there.

The UK Government are completely committed to the steel industry. We demonstrated that with a £30 million loan to Celsa during the covid crisis, and we have demonstrated it with the various schemes that have been brought forward to support industries with high energy use. We are developing a scheme that will enable those in the industry, such as Tata, to decarbonise. We are also in discussions with Tata about how we can support it further over the coming years.

[Jo Stevens]

Steelworkers need a Government on their side. The industry needs a partner that can provide stability, not sticking plasters. Floating offshore wind in the Celtic sea is a real opportunity for our steel industry and the wider supply chain in Wales. It would also help to mitigate the impact of the cost of living crisis for many Welsh businesses in the supply chain. If the Government do not provide the necessary stability, we will see platforms being built in France and Spain and floated over to the Welsh coast, which would be absolutely unconscionable. What is the Secretary of State doing to ensure that the Crown Estate leases will use local supply chains in Wales?

[David T. C. Davies]

I have met the Crown Estate on a number of occasions to discuss the next bidding round for the sites out in the Celtic sea. Obviously we hope to develop the industry. I agree with the brunt of the hon. Lady’s question, which is about the importance of developing a floating offshore wind industry off the coast of Wales. I have been trying to ensure that the supply chain is as local as possible. That is why we have supported the conversations between developers and the Crown Estate; it is also why I have personally visited Pembrokeshire to ensure that the growth deal there supports the new infrastructure at the dock that can allow those projects to be floated out to sea. We are actually doing a great deal to support the floating offshore wind industry in Wales.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

For Harlech Foodservice, a key business in my constituency, last week’s news that the UK Government were slashing their energy support for businesses was devastating. The company is already struggling under soaring energy bills and interest rate hikes in coronavirus business interruption loan scheme repayments. Can the Secretary of State clarify the position? Will any support be forthcoming on CBILS repayments, and will any savings made by the Treasury as a result of falling wholesale gas prices be ringfenced for targeted support for small and medium-sized enterprises and vulnerable households?

[David T. C. Davies]

I hope the right hon. Lady will recognise that over the last year the Government have done an enormous amount to support businesses through the energy price guarantee. They have made it clear that that support package cannot continue at the current level after April, when the next financial year begins, but they have said that they will also make clear, fairly shortly, what the new package will look like. Unfortunately, no Government anywhere in the western world will be in a position to completely underwrite and subsidise energy costs for all businesses for an indefinite period, so we have to confront some realities, but I hope the right hon. Lady will be supportive of the efforts that the Government have made to do more to develop energy security in the United Kingdom. Perhaps she should talk to some of her colleagues in the Scottish National party about their opposition to opening up further oil and gas projects in the North sea.

[Liz Saville Roberts]

I would have appreciated an answer about the coronavirus business interruption loan scheme as well.

We all know that extortionate energy costs are part of this Tory winter of discontent, which bookends 13 years of deliberate austerity. Key workers are striking and real incomes are in freefall. Following the last Budget, funding for Welsh public services will be worth £3 billion less over the next three years. Enough is enough, and cutting key workers’ salaries is not the right answer. Will the Secretary of State urge the Treasury to reverse this decline by establishing a truly fair funding system for Wales that recognises our nation’s needs, taking into account age, disability, and poverty levels?

[David T. C. Davies]

The right hon. Lady will surely be aware that the Welsh Government are receiving £1.20 per head for public services for every pound that is spent in England. That is why it is so difficult to understand why not only are the waiting lists longer in Wales but educational outcomes are lower, after more than 20 years of a Labour Government. Perhaps it is time that Plaid Cymru started to stand up for the people of Wales and hold the Welsh Labour Government to account, rather than propping them up in the Senedd.

[Hywel Williams (Arfon) (PC)]

3. What discussions he has had with Cabinet colleagues on research funding for Welsh universities.

[The Secretary of State for Wales (David T. C. Davies)]

I have regular discussions with Cabinet colleagues on research funding for universities in Wales. We are committed to making the UK a science superpower, backed by nearly £39.8 billion, the largest ever research and development budget. Last week I was pleased to visit Bangor University—at the suggestion of the hon. Member—and to observe the cutting-edge research being done there. I remain committed to Welsh universities capitalising on the funding opportunities that are available.

[Hywel Williams]

The Secretary of State has seen for himself that Welsh universities can and do deliver world-class research, but I think he will accept that their research funding is perhaps less than would be expected. I accept that this is not a simple matter—it is not a matter of counting heads—but what practical help can the Secretary of State give to increase research support in Wales, particularly for new and innovative projects such as those he saw in Bangor?

[David T. C. Davies]

In terms of practical support, I want to visit every single university in Wales over the next few months. I have already met representatives of UK Research and Innovation to make clear my concern about the relatively low percentage of grant funding that is going to Welsh universities for research projects. I want to bring UKRI and those Welsh universities together at an event at Tŷ Gwydr later in the year, and given the hon. Gentleman’s own commitment to this particular issue, I will try to ensure that he is invited and is able to attend.

[Sir Oliver Heald (North East Hertfordshire) (Con)]

Does my right hon. Friend agree that Britain, including Wales, has a proud history of international collaboration? Will he continue to keep up the pressure on the European Commission to allow us to associate ourselves with the Horizon programme, which would make such a difference to the future of British science?

[David T. C. Davies]

I absolutely agree with my right hon. and learned Friend. I would support the Horizon programme, but if that is not possible for any reason, such as intransigence in the European Union, I will be making the case to UKRI that Welsh universities can produce some of the best research in this country and should be receiving a higher percentage of the money that is currently available.

[Sir Chris Bryant (Rhondda) (Lab)]

4. What recent discussions he has had with the Welsh Government on the proposed refocusing of investment zone policy.

--- Later in debate ---

[Wendy Chamberlain (North East Fife) (LD)]

7. What recent discussions he has had with Cabinet colleagues on support for rail infrastructure in Wales.

[The Secretary of State for Wales (David T. C. Davies)]

I have regular discussions with Cabinet members on a range of transport measures. More than £340 million has been provided for rail enhancements in Wales, including at Cardiff Central station and for the electrification of the Severn tunnel.

[Wendy Chamberlain]

The Government’s failure to end rail strikes impacts all of us across the UK. Like in Scotland, transport is devolved in Wales, but we need people coming from England into our countries to get much-needed revenue for tourism and hospitality. In Wales, a pay agreement has been reached but its own railways cannot function on strike days because of UK- managed maintenance responsibilities. Can the Secretary of State outline what he is doing to resolve these damaging strikes and get railways up and running again?

[David T. C. Davies]

I must confess that I failed to hear much of that question, and I apologise for that. I heard the hon. Lady ask what I was going to do to get railways up and running again, but I am not certain which ones she was referring to. This puts me in a slightly difficult position as far as answering is concerned, but I can honestly say to her that we have spent £340 million on railways over this control the period, including £125 million on the core valley lines, £4.7 million on St Clears station, £4 million on the Bow Street station and £2.7 million on the Cambrian line. In addition to that, we have spent money on projects such as the electrification of the south Wales line. The Cardiff capital region South Wales Metro is funded partly by the UK Government through a growth deal, and our commitment to the railways is—

[Mr Speaker]

Order. I call Kevin Foster.

[Kevin Foster (Torbay) (Con)]

Direct train services between south Wales and Devon are a key part of our rail infrastructure, yet most are operated using older, less reliable rolling stock. What prospect does the Secretary of State see for getting new, more modern trains operating on these routes?

[David T. C. Davies]

I am pleased to be able to tell my hon. Friend that more modern stock is being rolled out on those particular routes, so he will be able to benefit from more comfortable carriages that will also emit less carbon and be better for the environment.

[Jerome Mayhew (Broadland) (Con)]

8. Whether he has had recent discussions with the Welsh Government on the closure of the Menai bridge.

--- Later in debate ---

[Michael Fabricant (Lichfield) (Con)]

9. What discussions he has had with the Welsh Government on investment from England into Wales; and if he will make a statement.

[The Secretary of State for Wales (David T. C. Davies)]

I have regular discussions with the Welsh Government on increasing investment in Wales and supporting the Welsh economy. Our plans for at least one Welsh freeport alongside our investment in infrastructure will act as a catalyst for further investment from the UK and beyond.

[Michael Fabricant]

A number of Welsh nationalists—not all but some—used the opportunity of covid and the closure of the Welsh border to incite anti-English feeling. Now we hear that Plaid Cymru, working with Labour, will introduce a hotel tax and other taxes. What does my right hon. Friend think that will do for English investment in Wales?

[David T. C. Davies]

I want to see people from England, and from all over the world, visiting Wales, and I am sure that all who do will appreciate the natural beauty and all that Wales has to offer to the tourism industry. I was disappointed that some people appeared to be indulging in anti-English rhetoric during the covid crisis. I hope all Members of this House would condemn such behaviour. I want to do more to encourage tourism, which is why I regret the fact that the Welsh Labour Government are bringing in a tourism tax. A tax on tourism is an attack on the tourist industry.

[Alison McGovern (Wirral South) (Lab)]

On the subject of investment between England and Wales, progress on speeding up the Wrexham to Bidston line is about as slow as the trains on the Wrexham to Bidston line. What has the Secretary of State personally done to improve rail connections between north Wales and Liverpool?

[David T. C. Davies]

I am sure I speak for the whole Government in saying that we are completely committed to better rail connections across the United Kingdom. I am well aware of the line between Wrexham and Bidston. I am also aware that it went through a business case procedure that was not completely positive. I can assure the hon. Lady that a number of projects in the rail network enhancements pipeline will be discussed shortly by the Department for Transport.

[Mr Speaker]

Order. Before we come to Prime Minister’s questions, I point out that a British Sign Language interpretation of proceedings is available to watch on parliamentlive.tv.