Regional Pay (Public Sector)

Glyn Davies Excerpts

Tuesday 10th January 2012 Westminster Hall

[Glyn Davies (Montgomeryshire) (Con)]

Thank you, Mr Chope, for calling me to speak on this complex, interesting issue. This is the first time that I have spoken under your chairmanship, and it is a great pleasure to do so. I congratulate my good friend, the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards). We have discussed this matter once, briefly, on Welsh radio, and I said then that I wanted to speak in this debate. The gist of what I said then, and shall say now, is that we are facing a complex issue. It is difficult to understand how the hon. Gentleman could be so definitive about a response.

There are serious issues here. On 29 November, the Chancellor announced a review of the case for regional pay. We are talking about an announcement that there will be an inquiry reviewing the case; that is not sufficiently definitive to be described as proposals. A number of hon. Members who intervened mentioned proposals, but we are considering something that could have a damaging effect and could distort local markets.

The issue is not new. I first became involved in it 30 years ago, and it was a chastening experience. I am talking about the general, in-principle case for looking at regional pay. I had just become chairman of Montgomeryshire district council, and had very little experience of public work; I had probably been put in that position a little earlier than I should have been. I was a local farmer—a small businessman—and it seemed to me that the local authority was distorting the local market. It was paying a significantly higher rate than the local market. People were being transferred, and local businesses were complaining about losing their best staff.

I went to a conference in Kensington town hall; I was very green and new. My chief executive, who came with me, put me down to speak. When I was on the platform, I made what I thought was an entirely rational point, but I was booed off the platform. I was an independent chairman; I was speaking with a local businessman’s logic about how we could run the business—the local authority—more efficiently and not distort local markets, but I was booed off. That was more than 30 years ago, so there is nothing new about this debate.

I have read some quotes made by the previous Prime Minister when he was Chancellor of the Exchequer, and they were incredibly positive about regional pay. I am sure that when we have this debate in July after the inquiry reports, which will be the obvious time to discuss what might then be considered proposals, his quotes will be mentioned; there are legions of them, strongly supporting regional pay and saying how vital it is for the future of our economy.

[Helen Goodman]

Labour Members are concerned that there is not an open inquiry, but a collecting of arguments for doing something that the Chancellor already wants to do. Will the hon. Gentleman say who is on the commission, who is undertaking the review, and whether the trade unions are involved with it?

[Glyn Davies]

No, I cannot say.

[Hywel Williams]

The hon. Gentleman says that the debate is on a long-standing, old question from 30 years ago. I thought that the Conservative position on it in Wales was made clear in a debate on 30 September 2008, when Mr William Graham—some hon. Members might not know that he is a senior Conservative Assembly Member—said:

“First Minister, you will know that the Welsh Conservatives firmly oppose the introduction of regional pay for civil servants.”

What has changed?

[Glyn Davies]

I am sure that Mr William Graham will be extremely honoured to be quoted in a debate in this House. I will tell him about that when I speak to him later today, as I have arranged to do—[Interruption.]—not on this issue, but on another one that will be of particular interest to Welsh Members across the board.

This issue has the potential to distort local markets. That was my view 30 years ago, and I still see that potential now. I should have thought that I would have found a measure of agreement with the hon. Member for Carmarthen East and Dinefwr in our discussions on Sunday morning, because there are significant questions about the difficulty of transferring from one area to another, for example, and whether inflexibilities will be introduced into the market. There are a host of other issues to consider, too.

We need an inquiry. I understand that one or two Opposition Members feel that the inquiry may not look across the board. I would be disappointed if that were so. We need an inquiry that will bring forward the information that all of us, including the Chancellor, need to make a balanced judgment. The appropriate time for that to happen that will be in six months.

[Owen Smith (Pontypridd) (Lab)]

Will the hon. Gentleman undertake to speak to his boss, the Secretary of State for Wales, and perhaps even the Chancellor, because, as he just learned from my hon. Friend the Member for Bishop Auckland (Helen Goodman), there is not a review? A series of letters have been sent to the national pay review bodies, asking them to consider the matter. Will he take up the challenge and tell the Chancellor that there ought to be a public review, and that trade unions and other bodies absolutely ought to be involved?

--- Later in debate ---

[Glyn Davies]

I thank the hon. Gentleman for that intervention, and as the Parliamentary Private Secretary to the Secretary of State for Wales, I reassure him that all the issues that I am involved with in the House feature in our discussions. When I am asked tomorrow what I have been doing since Christmas, I will certainly point to the debate that I am involved in today. I hope that that satisfies him on his request.

The only point that I want to make in my contribution is that the debate is too early. We need to have it in July, and we will. It will be an issue for the Floor of the House—an important and possibly contentious issue; I do not know. We will have to wait and see what the report says. It is possible that the issue will be contentious, but we must wait to see any proposals. In principle, I do not have any objection to the idea of a flexible labour market. Clearly, however, it must work and must not have a negative impact, and that can be decided only when we see the results of the inquiry, and information on which we can base a proper judgment.

--- Later in debate ---

[Owen Smith]

I am grateful to the hon. Gentleman for that intervention and pleased that he makes no apologies for what he said. I entirely agree with the arguments that he made in respect of solidarity and collaboration right across the UK for people who have similar interests across Britain, whichever area of the country they live in. I wholeheartedly share his views about that, which is why I am a Unionist, not a nationalist, on today of all days.

I congratulate the hon. Member for Arfon (Hywel Williams), my hon. Friends the Members for Newcastle upon Tyne Central (Chi Onwurah) and for Sedgefield (Phil Wilson), who made a powerful speech, and of course the hon. Member for Montgomeryshire (Glyn Davies), who I am delighted is taking up the challenge of telling the Secretary of State for Wales and the Chancellor of the Exchequer that we need a proper review to address this very complex issue—as he described it—as opposed to a couple of private letters to the heads of the national pay review bodies.

Public sector workers must wake up every morning wondering what this Government will do to them next. We have seen the continuing pay freeze; we have seen additional cuts in wages when inflation is taken into account for the next two years; we have seen the 3% additional effective cut in wages as a result of the changes in public sector pensions; and 710,000 public sector workers, up from the 400,000 previously admitted to, are waiting to see whether they will be in a job at the end of this spending period.

Against that backdrop, there was the bombshell in the Chancellor’s autumn statement that regional pay will be re-examined. The Chancellor said that the evidence suggests that regional pay should be considered, because there are disparities between pay bands in the public sector across the UK. As we know, the Chancellor is very keen on evidence-based policy, so I thought that I would assess the evidence in respect of regional pay to date, because we have some experience of it.

London weighting is well established. It is a means of trying to deal with the problems, particularly in respect of housing, for people working in London on lower public sector wages. The previous Government sought to expand that by looking at key worker status and further help for key workers in London. As several hon. Members have said today, and as the Chancellor said repeatedly when he appeared before the Treasury Select Committee, we also have the experience of the Courts Service. However, the Chancellor has been slightly less than fair with the facts in respect of the Courts Service. The fact is that the Courts Service changes that were introduced in 2008—the previous Labour Government introduced zonal pay and five zones across the UK—were a significant improvement on the disparities that existed hitherto. The Courts Service came together in 2005. There was a merger involving the magistrates courts, the county courts, the Crown court and the Supreme Court. Before that point, more than 50 rates of pay were being applied across the Courts Service, so we went from 50 to five. The reality is that despite protestations by some of the unions at the time, most members happily opted into that service; indeed, more than 95% did so.

Opposition Members, who believe in evidence-based policy, would like the Government properly to review the experience of workers in the Courts Service. They should consider retention, rates of pay and the way in which the system has facilitated movement or otherwise across the country, and bring that to the table as part of the evidence for the current proposal.

[Glyn Davies]

It has become fashionable for Opposition Members to disown the policies of the previous Government and, in fact, to disown their own policies at the start of this Government. I have listened to the hon. Member for Pontypridd (Owen Smith), who has discussed the five regional zones and evidence-based policy. He has described the current proposal as a bombshell, which indicates to me that he has no interest in the results of the inquiry. All we are hearing is knee-jerk opposition to make a point before we have even heard the facts.

[Owen Smith]

For the third time, I have to tell the hon. Member for Montgomeryshire that there is no inquiry. A couple of letters have gone from the Chancellor to the heads of the pay review bodies asking them to come forward with evidence on how local pay might reflect local market conditions, which is not an open inquiry. I thought that the hon. Gentleman had taken up the challenge to appeal for an inquiry.

The world has changed since the policies were implemented in 2008 on the Courts Service, which took place in an economy that was growing right across the UK. The world has changed. When the facts change, we reconsider our views, and we are doing that right now. We are thinking about the meaning of the Government’s proposals on regional pay and what the evidence shows us. We will come to a considered view when we know what the Government are proposing, but let us look at the evidence.

Of course, it was a previous Tory Chancellor, in the 1990s, who first talked about introducing regional pay on a much wider scale. What happened in the NHS? Local bits of the NHS were given the right to conduct local bargaining, but they lacked the necessary experience and were unable properly to assess local market conditions. As a consequence, there was more than a year’s delay before regional pay bands were set. When regional pay bands were set, the differential across the country was 0.1%. The rationale for that was, of course, that managers understood that, given the problems and complexity that widespread differentials would throw up, a collective agreement right across the country was the best possible option. The Chancellor agreed, and a year later he took back the power, concerned that there might have been spiralling costs had the situation continued.

Communities and Local Government

Glyn Davies Excerpts

Tuesday 20th December 2011 Commons Chamber

[Duncan Hames (Chippenham) (LD)]

May I wish you, Madam Deputy Speaker, and all the staff of the Houses of Parliament a very merry Christmas?

I speak today in support of increased local decision-making in the planning system. Specifically, I would like to encourage the Government to ensure that the neighbourhood plans made possible by the Localism Act 2011 give local people enough power to have a real say over what development takes place in their area, where it takes place and, crucially, whether it meets the sustainable development test.

There are many cases in my constituency that illustrate not only the ways in which people currently feel disengaged from the planning system, but the great potential in communities when they get organised. A great number of my constituents have contacted me about large housing developments proposed near Birds Marsh woods and the Avon floodplain in Chippenham. They have emphasised the importance of preserving the countryside around the edge of the town, and many have expressed their frustration at their apparent inability to affect the decisions being made. One lady made the point that,

“the voice of ordinary residents does not seem to be heard, and decisions are made by people for whom this is not their home”.

Similarly, the expansion of an edge-of-town Sainsbury’s superstore has recently been approved by the council, leading to the resignation in dismay of the chair of the Chippenham Vision group.

Earlier this month, I asked the Minister with responsibility for decentralisation what advice he would give to councils that face such developer interest in out-of-town sites. He assured me that the “town centre first” policy remains firm, but that development in Chippenham would suggest otherwise, as Wiltshire council felt free to ignore it. There will be no public confidence in a "take it or leave it" attitude to planning policy, with some councils proceeding with development that is neither sustainable nor what local people want, for fear of paying for expensive appeals by developers.

[Glyn Davies (Montgomeryshire) (Con)]

I intend to speak on much the same issue later in respect of wind farms. Does the hon. Gentleman take the view that when the Government impose massive development on an area where the people simply do not want it, it poses a huge threat to people’s faith in democracy?

[Duncan Hames]

The imposition of development plans that are not owned by the local community was exactly what we had in the regional spatial strategies—the grand regional plans left to us by the previous Government —and I applaud this Government for abandoning them. The RSS in the south-west of England never actually took legal force, and I am glad that it will never do so. It is important that people feel that decisions are made locally and democratically.

In Wiltshire, the council has not yet adopted its core strategy—its local plan—and we of course await the final version of the national planning policy framework in the spring. In the interim, our system is not robust enough to balance the competing interests in the planning process, and development too often seems inevitably set to proceed.

Energy and Climate Change

Glyn Davies Excerpts

Tuesday 20th December 2011 Commons Chamber

[Glyn Davies (Montgomeryshire) (Con)]

I have spoken about wind farms in mid-Wales before, in particular in a Westminster Hall debate on 10 May, which I secured. It is the dominant issue in my constituency, and in the neighbouring constituencies of the hon. Members for Ceredigion (Mr Williams) and for Brecon and Radnorshire (Roger Williams), who are not present today.

I am sceptical about onshore wind, and have been for a long time, and an increasing number of MPs have been contacting me since the Westminster Hall debate to tell me that they agree. I do not want merely to repeat the points I made in May, but I must outline why I am sceptical about onshore wind and why I am so implacably opposed to the mid-Wales connection project.

The cost of the huge subsidies involved is a matter of great concern, particularly to the poorest citizens in our society. Between 5 million and 6 million people are already in fuel poverty, and they are facing a choice between heating or eating. This is, in effect, a Robin Hood tax in reverse: the poorest people in society are having to pay additional sums in their energy bills and that money is being transferred to huge, powerful companies.

There is also an impact on business competitiveness. Some 1 million young people are unemployed in our country—that is 1 million lives scarred by the scourge of unemployment. We are doing what we can to find jobs for those people, but we are making matters worse by undermining competitiveness and driving jobs overseas.

There is also the impact on the landscape, which is particularly important to me. History in Wales teaches us the cost of thoughtless development. We had coal spills dumped all over the valleys, which this generation has had to pay to clear up. We have had irresponsible coniferous forestation, which caused massive environmental problems, and which this generation has also had to clear up.

I am particularly concerned about the scale of what is proposed in mid-Wales—the sheer horror of it. The mid-Wales connection is based on the largest ever onshore wind development in England and Wales. Under the proposals, permission will be granted for the erection of about 500 new onshore wind turbines in mid-Wales—the final figure depends on their size—over and above the 250 that currently exist and those that already have planning approval. There will also be a 20-acre electricity substation and about 100 miles of new cable, much of it carried on steel towers 150 feet high down one of the narrow valleys that lead from mid-Wales to Shropshire. It is scarcely believable; the scale is almost impossible to comprehend. Not even the enemies of Britain over the centuries have wrought such wanton destruction on this wonderful part of the United Kingdom.

However, today I want to speak about the impact of wind farms on democracy—that great invention that is the foundation of Britain’s constitution, and which is being disregarded so casually throughout Europe. I wanted to entitle this speech “Wind farms and democracy in mid-Wales”, but I felt that that would be deemed too tendentious.

In his response to my speech on 10 May, the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry) offered some reassuring comments. In referring to wind farm development, he said that

“it must be in the right location, and it must have…democratic support”.

He warmed to this theme, saying that

“too often, onshore wind is imposed on communities that do not want it. I am keen to ensure that we address that democratic deficit…in our plans.”

He went on, adding with a flourish that

“it needs more democratic legitimacy than it has today, and I intend to ensure that that happens.”—[Official Report, 10 May 2011; Vol. 527, c. 365-67WH.]

I was much encouraged, not surprisingly.

In my speech on 10 May, I also referred to a public meeting in Welshpool, to which 2,000 people came. I asked those people to come with me on a three-hour journey to Cardiff to express their views to the National Assembly. A few weeks later, they did—2,000 of them, on 37 buses. It was the best protest ever seen outside the National Assembly. That is how strongly people feel, and as a result the First Minister changed his position on the maximum cumulative impact that could be allowed in mid-Wales. He said that a new 400 kV line and a substation were not needed. We were generally encouraged, but then the giant energy companies got to work, the way dark forces do in science fiction. These massively powerful wind farm companies—leviathans fattened on public subsidy—got to work with a mixture of threats to people and community payments, which is a way of securing support for their proposals locally. A terrific amount of pressure was applied, and there was a huge lobbying exercise.

Members can imagine my shock and disappointment at reading a BBC report two weeks ago which said that more wind farms and pylons may be built in Wales in the national interest, despite local protests. The very same Minister whom I quoted earlier was quoted as saying that

“this is a national decision…the local views are important…but at the end of the day we are making decisions in the national interest”.

In the national interest—that is autocracy, not democracy.

Even more shocking is the pressure being put on local planning authorities. They are being pressured into deciding on applications by a particular date, and conditions have been ignored. They are told that all the conditions that would apply to any other planning application must not apply to wind farm developments. Transport infrastructure, ecological and environmental information, power usage—none of these factors is known, and yet they are being pressured into making decisions. It is utterly outrageous.

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I call Caroline Lucas.

--- Later in debate ---

[David Mowat (Warrington South) (Con)]

Over the next few minutes, I shall give a critique of aspects of the Government’s energy policy, but first I thank the Government for having an energy policy that it is possible to critique. Although I do not want to make a party political point, it is worth reflecting on the legacy that we inherited. On renewables, we were 25th out of the 27 EU countries, in front of only Malta and Luxembourg. Some 90% of our energy is from gas, coal and oil; 2.5% is from renewables. Furthermore, in 2010—the last year for which figures are available—the percentage of our energy that came from renewables actually fell. That is a staggering achievement, and it is worth noting.

What the previous Government were able to do—they had some success in this—was pass legislation, some of which is important, and that is the basis of what I shall talk about today. The Climate Change Act 2008 requires us to reduce our emissions by 80% from a 1990 baseline. I will not argue about the basis for that; we have heard from the hon. Member for Brighton, Pavilion (Caroline Lucas) about the importance of the 2° C target. I agree with much of what she said on that, but as she is present I just make the point that if she, like George Monbiot, had accepted that nuclear power has a part to play in meeting the target, her speech would have had more resonance.

The Act places onerous requirements on us. Broadly speaking, reducing our use of carbon by 80% from a 1990 base requires a strategy that may embrace 25,000 wind turbines—I say that with some regret to my hon. Friend the Member for Montgomeryshire (Glyn Davies), who is sitting in front of me—and 25 nuclear power stations. Of course, it would also mean a massive reduction in energy use; I think that Members on both sides of the House would agree with that, and the green deal is a great way forward. My difficulty is with the next Act that the previous Government enacted, relating to the EU 20-20-20 directive of 2009, which requires us to produce 15% of our energy from renewables over the next decade. In my judgment, that directive contradicts our needs under the Climate Change Act 2008. We must decarbonise, and not necessarily go in for a renewables frenzy.

People might wonder why that matters, given that renewables need to be part of the mix. It matters because the emphasis on renewables has, in my judgment, meant that we have de-emphasised other low-carbon solutions that need to go ahead much more quickly, such as nuclear power and more use of gas, which I shall discuss.

One particular aspect of the renewables frenzy brought about by the 2009 directive undermines our ability to decarbonise, and we can see it in the solar power episode that is still playing out. We made a decision to pay 40p per unit for electricity that we can sell for 8p or 9p a unit. That, of course, generates a big industry. We make that subsidy even though we are no more than 2% or 3% of the global industry for solar, and therefore realistically cannot make a big difference to how the price comes down, and even though solar power produced through photovoltaics produces more than three times more carbon than nuclear power, as was shown in a recent peer-reviewed paper from Imperial college.

Why does all that matter? Why does it matter whether we go for renewables so hard, as opposed to going for gas, which is part of this? One of the things that we have to do is get our car and transport infrastructure off oil. We shall do that not just by electrifying, although that might be part of the solution, but by going down the route of gas cars. There are about 10 million gas cars in the world, more than 2 million of which are in Pakistan. There are nothing like that many electric cars. To say that gas is not part of the solution is just wrong.

[Glyn Davies]

Notwithstanding the fact that my hon. Friend is focused on putting too many wind farms in my constituency, I agree with much of what he says. Does he agree that we need to emphasise the potential of tidal power as well? I have not heard that mentioned a great deal. The Severn barrage can supply 5% of British energy needs. The potential of tidal power is massive.

[David Mowat]

I thank my hon. Friend for that intervention. I am not an expert in hydro power, the potential of which is very large. We have a deadline of 2017 to replace about a third of our generating capacity. To do that, we must use proven technology. That meant nuclear, but we might be late for that now. It is going to end up being gas, because gas is the default solution of a failure to invest in other technologies.

The very real need to decarbonise is being threatened by the costs that we are incurring through a strategy that is too focused on introducing the wrong sort of renewables too quickly. Let me give an example of the likely cost of the carbon floor. A £70 per tonne price of carbon will add about £400 to £500 to the average domestic bill. That is important because fuel poverty is at 10% now. We have energy-intensive industries laying off people or not investing in this country, in the context of trying to grow manufacturing as a percentage of GDP. The risk is that that will prevent some of the things that we need to do in pursuing decarbonisation. I ask the Government to consider this point: optimising renewables is not the same as optimising decarbonisation, and we need to do the latter.

[Chris Heaton-Harris (Daventry) (Con)]

It is such a pleasure to follow my hon. Friend the Member for Warrington South (David Mowat), who is a great mind in all areas of energy and one of the more assiduous Members of the House when it comes to constituency work, I am told.

I welcome the hon. Member for North Norfolk (Norman Lamb), who is standing in on behalf of Department of Energy and Climate Change Ministers. So far in this debate, the Government business managers have replied, probably better than most of the Ministers would have been able to do on their own, so I welcome the hon. Gentleman. He should be aware that the Secretary of State for Energy and Climate Change has a history of getting people to stand in for him in various matters, but I trust that his Christmas present from the Secretary of State will be slightly nicer than others that he might have given in the past.

Like my hon. Friend the Member for Montgomeryshire (Glyn Davies), I am suffering from a spate of wind farm applications in my constituency. For years I have been campaigning against them. We should have gone nuclear a lot earlier, as my hon. Friend the Member for Warrington South said. There is a fantastic quote in a very good book, “Let Them Eat Carbon” by Matthew Sinclair of the Taxpayers Alliance: “Renewable energy is plagued by old problems. Whilst the wind and the sun are free, using them to supply energy when and where we need it to power a modern economy is extremely expensive.”

We all know that, and even the hon. Member for Brighton, Pavilion (Caroline Lucas) would have to recognise it, so why do we keep trying to foist onshore wind farms on to areas of low wind speed, where they devastate areas of natural beauty? I guess it is because wind was the only game in town for a long time and its lobbyists are among the best.

I thought that in the spirit of localism, it would be a good idea to give power to local authorities, so I introduced a ten-minute rule Bill, the Onshore Wind Turbines (Proximity of Habitation) Bill a number of months ago. It languishes, I think, at No. 13 for the next Friday sitting that we might have, so is unlikely to see the light of day in this Session. However, I would like to think that, like the gubernator of California, it will be back in some form in the future. I offer it to Ministers as a way forward in trying to solve some of the problems by letting local councils decide the correct proximity of wind turbines to habitation.

Why am I so interested in this? In Daventry district, 19 sites are being looked at, are in the planning stage or are on appeal for wind turbines, most of which would be about 126.5 m high, roughly the size of the London Eye, and in a beautiful, green part of rolling English countryside. I am against the turbines because they simply do not work. Last December was one of the coldest periods on record, but it was also remarkably still. The turbines barely produced any energy and we needed to use all the other carbon-eating technologies.

[Glyn Davies]

Does my hon. Friend agree that the sheer antipathy to wind farm development right across Britain is turning people against the development of renewable energy? It is transforming antipathy to onshore wind into antipathy to renewable energy.

Banking Commission Report

Glyn Davies Excerpts

Monday 19th December 2011 Commons Chamber

[Mr Osborne]

I believe this is quite a complex operation. We have looked at this, as has John Vickers—and he thought 2013 was the appropriate timetable. We are trying to create a seamless service through which people can indicate that they want to change their current account; that happens within seven days without any charges and all the direct debits and the like will follow people to the new bank. It is, as I say, quite complex to achieve and we want the service to be seamless for the customers, so I would rather spend a few months to get it right rather than try to rush its introduction.

[Glyn Davies (Montgomeryshire) (Con)]

Notwithstanding the benefit to individual taxpayers, the banking sector is unlikely to welcome the separation of its retail banking from its investment banking activities, so will my right hon. Friend assure us that he will stand his ground and ensure that our banks cannot look to the taxpayer to save them from the consequence of high-risk borrowing in future?

[Mr Osborne]

I can absolutely assure my hon. Friend that we will stand our ground. While I have been on my feet, I have received the news that John Vickers has welcomed our response. I absolutely commit to my hon. Friend, to John Vickers and to others that we will implement the proposals in the report to make sure that our banking system is safer, that taxpayers are better protected, that customers get a better service and that we do not repeat what went so badly wrong under the previous Government’s regulatory regime.

The Economy

Glyn Davies Excerpts

Tuesday 6th December 2011 Commons Chamber

[Mr Leigh]

That is absolutely right. We do not know what is going on in a lot of areas. Many EU countries, including Greece and Spain, tax their economies less than might be thought.

I apologise to Opposition Members for having to say this, but much of the blame lies with the previous Government. They increased Government spending by more than 55% in real terms and, contrary to all the political argument here today, we are cutting that by just 3%. The Government must decide whether they want to be liked or to deliver long-term prosperity and growth. As we have also heard today, we are still borrowing £141 billion every year. The cost of servicing that debt is £43 billion every year, more than we spend on defence. This is a staggering burden. I want to hear more of an intellectual case for smaller government. Big government leads to big waste. Sir Philip Green calculated in his study that £700 million could be saved on the Government telephone bill alone.

People are hit with a double whammy by all this Government spending. Like a black hole, it sucks in enterprise, and it inflates prices and taxes people of all their spare income so they have less to spend on their families and themselves. As a result, the economy deflates.

Governments say in such circumstances that more must be done and propose a fiscal stimulus, usually through public works, but those works are often driven by politics not the marketplace. A better way to deliver stimulus is to cut taxes.

[Glyn Davies (Montgomeryshire) (Con)]

I have a lot of sympathy with the case my hon. Friend is making, but can he point to any international examples of countries or organisations that recommend going further and more quickly in terms of austerity measures?

[Mr Leigh]

I can point to successful economies in the world that have the taken the view that the way to get out of the problem of a flatlining economy is to release more money back into the economy through the stimulus of lower taxation. I have referred to one tax that raises little money but acts as a tremendous disincentive to enterprise: the 50% tax rate. I would abolish that, as it achieves very little apart from bearing down on enterprise.

We still have the longest tax code in the world; indeed, it is longer than the tax code in India. The Centre for Policy Studies estimates that the marginal tax rate on poor people is as much as 96%, while the marginal tax rate on higher earners is 57%. There is a greater imperative than ever before for Government to be the facilitator, not the central planner. They can, by all means, deliver some public works, but they must not be fantasy or vanity projects such as high-speed railway lines. Instead, they must be works such as the third runway at Heathrow, which the market is prepared to build for us because the market wants it. By all means, let us have public works, but they must make sense in terms of the marketplace, and let us also have tax cuts. I support the Liberal proposal to take the lower paid out of tax, because that also delivers incentives and cuts the marginal tax rate on the lower paid. I want us to have a much flatter overall tax system, too.

Despite all that we have tried to do, Great Britain ranks as the 72nd country in the world for Government wastefulness, which is lower than Tajikistan and Ethiopia. The House may not accept all my arguments, but I hope Members will accept that an intellectual case must at least be made for a smaller and leaner Government who tax people less and deliver more vitality and entrepreneurship back into the economy. That is the only way we will fight our way out of this recession.

--- Later in debate ---

[Glyn Davies (Montgomeryshire) (Con)]

I shall take a Welsh perspective, and to some extent a constituency perspective. Debt hangover, deficit reduction and the problems facing the eurozone have an impact in Wales, just as they do in the rest of Britain, but some issues are specific to Wales and I want to touch on them.

Much of the management of the Welsh economy is devolved, but not completely; for example, policies on tax rates and international investment are still determined at Westminster. That inevitably means that a close working relationship between the Governments in Cardiff Bay and at Westminster is crucial. Without one, there is the potential for damage. Enterprise zones are an important aspect of the Government’s policy for dealing with the economic problems of England. I do not want to blame anyone, but in Wales they are still incredibly ill defined and the process is slow, so we need a much closer relationship between Ministers in the Assembly Government and Ministers at Westminster.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The hon. Gentleman said that most economic control was devolved to Wales. Would he be as comfortable with a relationship between London and Europe as there is currently between Cardiff and London—with most powers held in Europe and London, despite the economy of Wales being devolved?

[Glyn Davies]

I thank the hon. Gentleman, although I am not absolutely certain that I picked up his point. Governments and institutions have to work as closely together as possible for the benefit of the people they all serve.

First, inward investment has historically been strong in Wales. Yesterday the Secretary of State for Business, Innovation and Skills told the Welsh Affairs Committee that Wales was doing relatively badly. I think Wales is doing very badly indeed; last year only 3% of inward investment in the UK went to Wales. In the two previous years the proportion was 6%, which is about what one would expect given the population of each country. In the days when Lord Walker was Secretary of State for Wales, it was 20% for two or three years in a row. There was a major focus on Welsh links to the most successful parts of Europe, such as Baden-Württemberg, Stuttgart, Barcelona and Lombardy. There was a strong relationship with Japan, which in those days was aggressively developing its economy throughout the world. A lot of investment was going to Wales, and we need that sort of advantage. When I became a Member of this House I had been a Member of the Welsh Assembly for eight years, and I want the relationship between the two institutions to work as well as possible. On inward investment the working relationship has not been as close as it should be, and we need to change that.

Secondly, I want to touch on cross-border issues, in particular their impact on my constituency of Montgomeryshire. Again, it is a question of making devolution work for the people. There is a real problem in terms of capital investment in Wales. A consequence of the autumn statement is that over the next three years another £216 million will go to Wales for capital projects, but projects on the border will not be considered, because the arrangements following devolution mean that they cannot be. For my constituency and for the whole of mid-Wales, industrial development depends on access to the west midlands market and the motorway network. One of the biggest impediments is the stretch of the border between Welshpool and Shrewsbury. A road project there has high priority for the Welsh Government and would almost certainly have gone ahead, but the total cost is around £30 million, with a significant proportion—about £5 million—over the border in England. Although it has huge priority in Wales it is given almost no priority at all on the English side. That project has been sitting around for ages and is not going ahead, yet it should really be a priority. I could give three or four similar examples.

[Owen Smith (Pontypridd) (Lab)]

I entirely agree with the point that the hon. Gentleman is making, but would it not have been easier if the Government had chosen not to cut £900 million overall from the Welsh capital budget? Admittedly they gave back £200 million last week, but there is an overall reduction of £700 million in this Parliament.

[Glyn Davies]

I thank the hon. Gentleman, but he completely ignores my point and is going back to the partisan knockabout that produces absolutely nothing. There is an important point of principle relating to cross-border investment, and all Members of the House and of the National Assembly, not just the Government, should try to focus on the issue so that we have a resolution that benefits the people who actually depend on it.

Thirdly, I want to touch on the impact of proposals for wind farms in mid-Wales. Many of my constituents, and indeed people in neighbouring constituencies, fear that there is an intention, or a desire, to sacrifice mid-Wales on the altar of onshore wind, irrespective of the consequences for the economy. About two decades ago, when I was involved in developing the economy of mid-Wales, strategy was based on the growth of manufacturing industry—what today we might call rebalancing the economy—after the loss of jobs from agriculture and mining over a long period. Over the last 30 or 40 years the percentage of people employed in manufacturing rose from about 7% to about 24%; it was a terrific performance, but between the late-1980s and the mid-1990s there was less concentration on regional development and the figures probably slipped back.

Today the most important developing industry in Wales is probably tourism. People who work in the industry contact me regularly to tell me that onshore wind is the biggest threat to the potential of their business. We cannot ignore that. Planners in mid-Wales are aware of the threat. They are deeply concerned that wind farm applications are being submitted without the necessary information about ecological or environmental impacts. There is almost no transport planning for the 20 or so proposed wind farms, yet planners are under pressure to approve the applications. If they do, they will be sacrificing the economy of mid-Wales. Many of us in the House have concerns about the costs and their impact on the fuel bills of the most vulnerable in society, and we are worried about the impact on British jobs, which will be exported as a result of those costs. From the perspective of my constituency, the economy of mid-Wales will be destroyed at the same time.

Fuel Prices

Glyn Davies Excerpts

Tuesday 15th November 2011 Commons Chamber

[George Eustice]

The issue of VAT has been covered widely by others. I would just say that I think all Government Members regret the fact that the Labour party made such a pig’s ear of running the economy that we had a £150 billion black hole in our finances.

I would like to focus on a separate but linked fact: fuel tax has a disproportionate impact on areas that are geographically peripheral. I come from Cornwall, and there is no doubt that fuel tax is a regressive tax that hits Cornish businesses far harder than businesses in the main population centres.

[Glyn Davies (Montgomeryshire) (Con)]

I am grateful to my hon. Friend for giving way, because the issue is particularly important in my constituency too. High fuel prices act as an anti-regional-development policy. Not only are they a cost on business, but they discourage business from locating in certain places. They work very much against the thread of Government policy in other areas.

[George Eustice]

I completely agree. That will be the main thrust of what I say. I was in business in Cornwall; indeed, on many occasions, I drove a lorry that took our excellent Cornish strawberries to Birmingham. The reality is that Cornwall is 300 miles away from London, and 260 miles away from Birmingham. We have to drive the best part of 100 miles just to get to the seat of my hon. Friend the Member for Totnes (Dr Wollaston). Let us look at how that translates into tax. A typical 16-tonne lorry doing a round trip to London would incur, in total, tax of £220, just on that one trip. Let us compare that with a lorry driving from Birmingham to London: the tax taken for that would be only £80. A similar operation in Cornwall has to pay three times more tax. That is unfair, and it is felt acutely by businesses in the primary sector, particularly in areas such as fishing and farming, in which Cornwall has a comparative advantage.

If we are serious about developing a regional policy, we have to help the most peripheral regions to develop industries and jobs in the sectors in which they have a comparative advantage. The irony is that places such as Cornwall have EU grants to help develop businesses in the areas where we have strengths, which include food processing, farming, and green energy. The regional growth fund has a similar purpose. We are undermining those efforts by having a regressive tax through high fuel duties. The impact is to compound the single most important disadvantage that the regions have, which is their distance from the market. As I say, that is particularly noticeable in Cornwall. Our climate gives us a comparative advantage; we grow potatoes early, and can grow cauliflowers in winter—bulky commodities that cost a lot to transport. Of course, with our marine resources, we have fishing, too.

I want to finish with a suggestion on how we might go forward. Alongside the rural rebate, which is due to be piloted, we should consider, perhaps as a strand of regional policy, some kind of rebate for businesses in peripheral regions such as Cornwall. It should not be beyond the wit of man to devise such a scheme. To be eligible, a business would have to be located in a county such as Cornwall. The rebate would be available only on fuel supplies delivered to an address in the area. As for how we would give the rebate, we have heard that most businesses that run a transport fleet would be VAT-registered, so it would be possible to have some kind of fuel duty rebate that runs alongside the VAT return. I know that none of these things is easy; it would take some work to develop the detail of such a policy, but it would be an interesting idea to look at. It could be a very powerful regional policy. In the meantime, I commend the motion to the House, because it is important that there be cross-party consensus on how to deal with the issue.

Eurozone Crisis

Glyn Davies Excerpts

Tuesday 15th November 2011 Westminster Hall

[Mr Baron]

That is absolutely right. My hon. Friend reinforces my point. The US is a currency union and the IMF is not expected to ride to the rescue there, yet it is expected to ride to the rescue of countries in the eurozone, which is also a currency union. That is completely wrong.

[Glyn Davies (Montgomeryshire) (Con)]

Let me ask my hon. Friend about the wider context. We are dealing with the financial aspects here, but I have always had a greater interest in the constitutional aspects. It seems that the euro is destroying democracy as we know it. Should we not consider that issue, especially as we are seeing the end of democracy in Greece and Italy? Europe has always been my concern, which is why I opposed the whole thing in 1975. We are now seeing the creation of a single country in Europe, to which the British people have not signed up, and that will eventually lead to trouble.

[Mr Baron]

My hon. Friend is absolutely right. If he needs confirmation, I suggest that he look at the front page of City A.M., where he will see what Angela Merkel has said about political union. There is a political deficit in the eurozone at the moment, which is why Governments are being appointed and not elected in Greece and Italy. That is a consequence of the fact that the eurozone and the EU are hellbent on political union at the cost of democracy and getting the people’s consent.

--- Later in debate ---

[Glyn Davies (Montgomeryshire) (Con)]

Thank you, Mr Caton, for giving me the opportunity to contribute to what is probably the most important subject of debate that we will have during this Parliament. I congratulate my hon. Friend the Member for Basildon and Billericay (Mr Baron) on securing the debate and on presenting his arguments in a challenging and clear way. I look forward to the Minister’s response to the points he has raised.

Most of my hon. Friend’s speech dealt with the financial aspects of the issue. My view, however, is that it is not possible to consider the issue without also looking at the wider context. Indeed, I raised that point when I intervened on him. The key concern for me and many others is that the euro is destroying democracy as we know it in western Europe. That was my main reason for opposing Britain’s entry to the euro when it was established.

I am not sure how many of the hon. Members present were involved, like me, in the 1975 campaign to leave the European Economic Community, but I think that some of us might have been—I can see one or two. At the beginning, we thought there was a chance that we would be successful, but in the end the argument that I supported was well beaten. I was not trained as an economist—or as anything really; I left school when I was 16 to be a farmer—but my argument was that the public’s gut instinct in those days was that we were creating a huge bureaucracy whereby the ability to influence decisions in our country was to be transferred somewhere where we would not have influence. That was the fundamental gut instinct that drove us to the “no” side.

When the eurozone was being established, I became involved in the opposition to it, which was unusual, because I was the chairman of the Agriculture and Rural Development Committee in the National Assembly for Wales and the agricultural community was fairly supportive of Britain joining the euro. I remember being dismissed on platforms as an extremist, but I was simply not in favour of Britain joining the euro. My argument was exactly the same as that which many people are making today—to create a successful eurozone almost certainly means financial union. Nobody has hidden that. In 1975, the purpose of many people who were behind the establishment of the EEC was that we would eventually move to political union in Europe. That was the small print. Today, I hear people saying that they thought we were joining an economic community, but that is not what I or a lot of other people thought.

[Mr William Cash (Stone) (Con)]

My hon. Friend is making an important point. Last night, the Prime Minister made a speech at the Guildhall in which he called for fundamental reform in the European Union, but it is not really just a question of fundamental reform in the EU, is it? What we have to have is a fundamental change in the relationship between the United Kingdom and the European Union, because it is a failed project. We have been enmeshed in it and it is increasingly causing damage to our own economy.

[Glyn Davies]

My hon. Friend has anticipated my next point, although I shall not use precisely the same language that he uses and has used for a long time—probably about 30 years. The Government’s policy, which I support, is that we should seek to repatriate powers from the European Union. That is easy to say, but for the Government to deliver that objective, the Prime Minister, Chancellor and Foreign Secretary have to have a way to do so. As Members of Parliament, we have a responsibility to think about exactly how we are going to do that. Which parts of European policy, precisely, do we wish to repatriate—whole blocks or just specific parts? The issue is hugely complex and a tremendous amount of work will have to be put in to enable it to be addressed.

We could speak for hours on the issue—I am sure that I could. A lot of Members want to speak. I have raised the points that I wanted to make and look forward to the Minister’s response.

Oral Answers to Questions

Glyn Davies Excerpts

Tuesday 6th September 2011 Commons Chamber

[Mr David Nuttall (Bury North) (Con)]

5. What recent assessment he has made of the financial crisis in the eurozone.

[Glyn Davies (Montgomeryshire) (Con)]

12. What recent assessment he has made of the financial crisis in the eurozone.

[The Chancellor of the Exchequer (Mr George Osborne)]

The financial crisis in the eurozone is extremely serious. Fortunately, Britain is not in the euro; unfortunately, however, we are not immune to the instability on our doorstep. The euro area must implement its policy commitments to address the crisis, made most recently at the July summit. As I have said, the euro area should follow the remorseless logic of monetary union with greater fiscal integration. We must ensure that we are not part of that integration and that our national interests are protected and promoted at all points.

[Mr Osborne]

As my hon. Friend knows, the treaty does not provide for a member state to leave at the moment, and there is no immediate prospect of major treaty renegotiation—something that the German Government have made very clear again this week. In other words, we need to focus on the task at hand, which is implementing all the agreements, communiqués and commitments made in recent months by the eurozone. That is absolutely crucial to the stability not just of the eurozone but of the wider global economy.

[Glyn Davies (Montgomeryshire) (Con)]

Is the Chancellor aware that under the previous Labour Government, of whom the current shadow Chancellor was a prominent member, a euro preparations unit with a staff of 17 worked for 13 years on 11,500 documents to prepare Britain for joining the euro?

GM Food Technologies

Glyn Davies Excerpts

Tuesday 19th July 2011 Westminster Hall

[George Freeman]

The hon. Gentleman makes an excellent point. Yes, a number of our universities play a key role in GM development and I absolutely agree with him that Queen’s university in Belfast is in the vanguard of that, along with the universities of Liverpool, Reading, London, Norwich and Aberystwyth, and one or two other universities in the UK. Moreover, GM is potentially an important part of helping our universities to generate novelty and to put themselves at the front edge of this important area of science. The foresight report frames for us the challenge and the opportunity for the UK. In my own area of Norfolk, when one openly discusses the benefits of the technology for local agriculture, people are interested, and there is an appetite out there to hear more about it.

It might be useful to share one or two facts to help frame the debate. It is worth remembering that commercial GM crops have been grown and eaten since 1994. In 2010, the hectarage of GM crops worldwide was 148 million hectares across 29 countries, 48% of which was in developing countries. Some 15 million farmers, 90% of whom are small and resource-poor, are already actively involved in growing GM crops. The argument is often put that the technology is untried and untested, but I suggest that that is a substantial body of evidence, with proper scientific and rigorous monitoring, and I do not think that anyone is aware of any serious problems that have arisen as a result of the adoption of the technology.

It is also worth acknowledging the extent to which it is the developing world that is driving the adoption. On top crops by area, the percentage of global crop that is now GM is 77% of soybean, 26% of maize, 49% of cotton and 21% of canola. The interesting thing that comes from that is that GM crops have a potential not just in food but in fuel and fibre. One of the problems with the debate in the UK is that the extremists take us straight to the hardest point of all, which is the compulsory—that is often the implication—force-feeding of people here with GM food. To my knowledge, no one is proposing that; I certainly am not. I do propose, however, that we should debate whether this country has a role to play in the application of the technology in fuel and fibre, and certainly in food production around the world. That should be non-controversial.

Going further, one could say, “Should there not be choice in the UK, particularly in the health care and the nutraceuticals and functional foods areas?” I think it would be perfectly appropriate—and the idea would enjoy public support—to say, “The consumer should have choice, but what is wrong with going into a supermarket and having on one side the organic carrots grown locally, here in Norfolk, over there the carrots grown more intensively at a lower cost, and over here the rather more expensive cholesterol-reducing carrots that have been grown and bred specifically for a group with particular dietary, nutritional and health care needs?”

[Glyn Davies (Montgomeryshire) (Con)]

I am grateful to my hon. Friend for allowing me to intervene, particularly as I missed the first five minutes of his speech because I went to the wrong Chamber. I come from a part of Britain that considers itself to be GM-free. Does my hon. Friend agree that unless we grasp the issue of GM in this country we are in real danger of becoming seriously globally uncompetitive and will eventually lose a huge number of jobs and a huge amount of business, along with the ability to influence the debate across the world?

[George Freeman]

I could not agree more. My hon. Friend makes an excellent point, and I was just about to turn to the extent of the global nature of the matter.

As chair of the all-party group on science and technology in agriculture, I recently had the great privilege of welcoming two people from around the world who are involved in biotechnology: a gentleman from Brazil who specialises in soya, and a gentleman from Uganda who specialises in bananas. No sooner had I given them the warmest of parliamentary welcomes—I confess, possibly with a sense of welcoming people from the Commonwealth to the mother of all Parliaments—than I ate my words, because they had not come to find out what we thought about the sector but to share how much progress and investment they were making, what extraordinary innovations they were driving, the local benefits in terms of food production and productivity, and the health benefits in their countries. In response to my hon. Friend’s point, that is happening around the world in any case, and the question for Britain and Europe is whether we want to participate and bring our expertise, insight and science to bear, or sit on our hands and become irrelevant, missing out on all the opportunities that we have touched on.

It is worth looking at some of the global data. I was very struck when I looked at which countries are the biggest adopters. One would expect to see the United States of America at the top of the list, but the next 10 are Brazil, Argentina, India, Canada, China, Paraguay, Pakistan, South Africa, Uruguay and Bolivia. The fact is that the technology is being adopted rapidly by some of the fastest-developing second world countries, not because they are threatened by global mega-corporations or because they are under compulsion but because the technology offers extraordinary benefits to their rapidly growing populations, their domestic economies and their ability to develop as nations.

Part of my argument is that the technology is being adopted globally whether we like it or not, and it is bizarre that in this country we are getting into a situation in which it is almost impossible to debate the technology, and in which the European Union appears to be encouraging a national framework that countries can opt into or out of purely on the basis of emotional and political rationales—I will come on to that in a minute. As the eurozone teeters on the brink of bankruptcy, it seems peculiarly bizarre not to be involved in this major area of global growth.

I want to look at some of the things that some of the organisations involved have said. I draw Members’ attention to the Food and Drink Federation, which has issued an excellent briefing on the subject. The federation believes that

“modern biotechnology, including GM, offers enormous potential to improve the quality and quantity of the food supply but the impact of this technology must be objectively assessed through scientific investigation. Robust controls are necessary to protect the consumer and the environment; and consumer education and information are fundamental to public acceptance.”

I could not agree more. It goes on to stress the importance of choice:

“However, we believe that the time has come when serious consideration should be given to reopening a free and unbiased debate about the environmental, safety and consumer benefits of GM. FDF therefore welcomes”

the debate today. It also supports the foresight report’s conclusions that we need to produce more from less and with less impact. I am pleased that the report makes a call for the recognition of the role of GM.

Oral Answers to Questions

Glyn Davies Excerpts

Tuesday 21st June 2011 Commons Chamber

[Danny Alexander]

The hon. Gentleman is right that we need to see the private sector lead the economic recovery. Many of the measures that we announced in “The Plan for Growth”, such as reforms to the planning system, the measures on regulation and some of the tax measures that we announced to support investment, will all help to encourage and support private sector businesses to lead the recovery that we all want to see.

[Glyn Davies (Montgomeryshire) (Con)]

19. What steps he is taking to reform the regulation of banks and financial institutions.

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

Last Thursday we published “A new approach to financial regulation: the blueprint for reform”, which sets out the Government’s proposals to reform financial regulation in the UK.

[Glyn Davies]

With a permanent annual levy worth £2.5 billion, tough rules on bonuses, a new deal on lending and regulatory responsibility returned to the Bank of England and handed to a new Financial Conduct Authority, is not the coalition making good progress in creating a sustainable banking system?

[Mr Hoban]

My hon. Friend is absolutely right that we have made significant progress over the past year in getting the financial regulatory system back in good shape. Of course, the Opposition should remember that it was the shadow Chancellor who spent his time in office trumpeting the value of light-touch regulation across the world.