Government Policies (Wales)

Huw Irranca-Davies Excerpts

Wednesday 26th November 2014 Commons Chamber

[Owen Smith]

My right hon. Friend is entirely right. Of course, it is not only the changes to welfare that are having an impact on people in Wales. A culture of fear and insecurity is increasingly becoming the norm in the workplace, with between 50,000 and 70,000 Welsh workers now employed on zero-hours contracts. Some 200,000 Welsh workers are self-employed. I note that the Secretary of State has said in the press today that those people are effectively entrepreneurs, but the reality is that they are people who are increasingly being forced into bogus self-employed status and counted as entrepreneurs by the Office for National Statistics.

[Huw Irranca-Davies (Ogmore) (Lab)]

My hon. Friend will know that there has been a rally today of UCATT, Unite and other unions—and I will take no jeering at union members by coalition Members on this issue—on behalf of construction workers. They are now working for bogus, so-called umbrella companies who sanction—take out of—their pay the employer’s national insurance contributions to annual pay, so they go home with a far smaller wage at the end of the week. That is despicable, but I remind coalition Members that it is a function of the sort of economy and the hands-off Government that we have.

[Owen Smith]

Yes, it is an economy of maximum insecurity for the work force and maximum security and flexibility for employers. Invariably these days the employers are umbrella companies, supply agencies or contract companies, and often people do not even know who is employing them. We do know that the number of self-employed workers in Wales has gone up by 17,000 since the Government came to power, but their incomes have crashed by more than a fifth. Similarly, in Wales there are now 71,000 part-time workers who wish they were working full time. That is up from 54,000—an increase of almost one third under this Government. Those are the hallmarks of the culture of insecurity—the culture of fear—in the workplace that is now affecting Wales and the rest of the country.

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[The Secretary of State for Wales (Stephen Crabb)]

I am delighted to follow the shadow Secretary of State for Wales and to have the opportunity to talk about the record of the UK Government in Wales. I notice that the Opposition changed their minds on the original motion that they sought to table. I believe it was originally entitled “The disastrous effect of Government policies on Wales”. It seems that they no longer believe that to be the case, and quite right too. We are winning the argument and we have not even begun our speeches yet.

We have to ask ourselves why, at this precise moment, the Opposition have tabled such a ludicrous motion and are trying to talk down the Welsh economy and present a black caricature of what is happening inside the Welsh economy when last week was such a successful week for Wales. On Friday, the Prime Minister, Labour’s own First Minister of Wales, business leaders and journalists stood together at Celtic Manor for the UK Investment Summit, rallying together to bang the drum for the huge strides made in the Welsh economy in recent years. Why would Labour choose to have such a debate at this time to talk down the efforts we are all making to secure new investment and new job creation in Wales?

[Huw Irranca-Davies]

I would applaud any jobs created in my constituency, but I will tell the Secretary of State why we are having this debate today. A guy came into my surgery two weeks ago and showed me his payslip. It was disgraceful. An umbrella company was taking more than £50 from him to contribute to its—the company’s—employer’s national insurance contribution, and deducting £35 as a contribution to his own annual leave. According to HMRC he was employed by the company. Does the Secretary of State condone or condemn such companies?

[Stephen Crabb]

I condone companies that invest in Wales and create jobs, which is the most important thing in driving up wages. Let us be clear about this on both sides of the House: we acknowledge and recognise that wages are not where we would like them to be in Wales. We want to see real wages going up in Wales. The best hope for workers in Wales to see real increases in wages is more job competition: the creation of more and higher quality jobs. That was exactly the purpose of last week’s investment summit. Welsh Labour Members really need to make up their minds. They say one thing at this end of the M4, but back down the road in Cardiff they say another thing about what is going on inside the Welsh economy. They need to make up their minds on whether they back Welsh business or not.

[Huw Irranca-Davies]

The Secretary of State is making a strong and forceful case. Will he argue as strongly and as forcefully for the groups of construction workers in my constituency who are now up to £100 worse off, for the youngsters who are at the beck and call of employers on zero-hours contracts with no continuity and no certainty of employment, and the people working in two part-time jobs because they cannot get one full-time job? Would he say that they are benefiting from the economy in the same way?

[Stephen Crabb]

We feel equally offended by the abuses in the workplace that the hon. Gentleman describes. The record of the coalition Government is actually very positive: increasing penalties for companies that do not pay the minimum wage properly, and consulting on the abuse of zero-hours contracts and taking action.

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[Guto Bebb (Aberconwy) (Con)]

It is a pleasure to follow the right hon. Member for Torfaen (Paul Murphy). I congratulate the Secretary of State for Wales on his positive and upbeat view of the situation in Wales, which can be contrasted with the doom and gloom from the Opposition. Indeed, I shudder at the possibility of the hon. Member for Pontypridd (Owen Smith) becoming the Secretary of State for Wales. He would be our own version of Private Frazer, going around saying, “We’re all doomed.”

In effect, what is happening in Wales is a success story, and that is hurting the Opposition because that is not what they want to hear. They want to claim that it is only the Government who can make a difference to the people of Wales, but the truth is that it is this Government who are showing quite clearly that it is the people of Wales who can make the difference. It is the people who are willing to take responsibility for themselves and to make a success of their lives. Effectively, this Government are giving the people of Wales that opportunity; they are not saying that they can depend on the Government for hand-outs.

The Opposition should be truly ashamed that they are highlighting figures in relation to poverty levels in Wales. Labour has been in government at a local or national level in Wales for the past 100 years. Where the Labour party is strongest, poverty is at its greatest. It should look at the valleys of south Wales and feel truly ashamed of what it has done to our proud nation. Labour in Wales has failed, failed and failed again. This coalition is giving people a sense of honour and integrity and a belief in their ability to make a difference once more.

[Huw Irranca-Davies]

rose—

[Guto Bebb]

I will not take an intervention from the hon. Gentleman. It is about time that the Labour party heard some hard truths about the way it has failed Wales time and again. That failure in Wales is replicated in Scotland. The Scots have seen through the failure of Labour; it is about time that the people of Wales did the same.

The people of Wales should turn to the Conservative party and this coalition, as we are showing people that we can make a difference to their situation. We can ensure that we create employment. In my constituency, unemployment has fallen by 42% since the coalition came to power, and we should welcome that fact. I am proud of every single one of those jobs. My constituency had 13 years of a Labour MP, and it is not hard to guess what happened to the unemployment figures—they went up. With this coalition, unemployment is falling. We have an increase in the number of people employed and self-employed in my constituency, and we should be proud of every single one of those individuals.

The Opposition always say that they can make a difference to Wales, but they believe that the difference lies in the hands of Government. We believe that difference can be made by people setting up their own businesses and making a success of those businesses. Last week, the Under-Secretary of State for Wales, my hon. Friend the Member for Vale of Glamorgan (Alun Cairns), visited two businesses in my constituency. We failed to visit a third because the owner was in London winning an award. That owner is not just the UK butcher of the year but a man who started a business that now employs 60 members of staff—[Interruption.] The Labour party is laughing at entrepreneurial job creation in my constituency. My hon. Friend then visited the Welsh food centre, which was established two years ago and now employs 60 members of staff. It is the largest privately led project in north Wales and has been receiving funding from the European Union. It is a fantastic success story—somebody had a vision; they were willing to implement it and take a risk with their own money. [Interruption.] The hon. Member for Rhondda (Chris Bryant) is chuntering from a sedentary position. He does not understand what running a business means, let alone appreciate the difficulties. It is that type of success story that is changing lives in my constituency.

The success of small businesses in my constituency has been helped by the fuel duty freeze and the cuts implemented by this Government. The Labour party, by contrast, has bled our rural communities dry with its fuel duty escalator. My constituency also has a significant number of people of above-average age, including a lot of pensioners. Despite the economic inheritance that the Labour party gave us, those pensioners have been protected by the triple lock. The degree of respect that they have been shown by the coalition contrasts with the insult of the 75p pension increase provided by the Labour party. Labour Members say that their party looks after the poorest in society, but it was willing to forget our pensioners. In difficult economic times, the coalition has not forgotten our pensioners, and those people will remember that at the general election.

A key point to remember is the way we have tried to be reformist in difficult times. The Government’s introduction of the single-tier pension is immensely important to a constituency such as mine, which has a significant number of self-employed people. In such times, the coalition Government are not scared of taking long-term decisions that will make a real difference to my constituents’ lives. We hear complaints from Labour Members about changes to the welfare state, but we know why: they like a compliant, complicit population. The truth of the matter is that the welfare state in Wales was not working and we needed to ensure that changes were made.

One of the key successes of welfare reform throughout the United Kingdom, although perhaps not so much in Wales, is the Work programme. Its huge success will grow, as National Audit Office reports clearly show. Labour Members often talk about the Work programme supporting the lowest hanging fruit, but no one—not a single individual—accesses the Work programme unless they have been unemployed for at least 12 months. Compare and contrast that with the situation under Jobs Growth Wales which, by the way, I have supported and publicised to my business community. Under that programme, a person can be a graduate today and on Jobs Growth Wales tomorrow, but someone cannot get on the Work programme until they have been unemployed for 12 months, so it genuinely helps the hardest to reach. Jobs Growth Wales has done a good job, but it is not an attempt to support such individuals. We have a success on our hands—

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[Huw Irranca-Davies (Ogmore) (Lab)]

I am delighted to follow that excellent contribution by my good friend the Member for Ynys Môn (Albert Owen), which struck the right balance between the necessary optimism and the vision we have for a better future and the real challenges.

It has been a passionate debate and I have been as passionate as many with my interventions, but I want to say first that when I speak for my constituents, I speak for all of them. Many of them are in small businesses and micro-businesses—one man or one woman operations that they intend to build up slowly. They drive the economy locally. I also speak, however, for people who work within the set-up of Raspberry Pi down at the old Sony site at Pencoed in my constituency, and who have reinvented a way to take computers forward, so that everybody can pull them apart and put them back together, and use them in schools and for developing nations, and have different applications for them. They are helping our trade balance, and that is a fantastic story, as is the story of Ford Bridgend in the neighbouring constituency represented by my hon. Friend the Member for Bridgend (Mrs Moon). Ford consistently employs and invests in that plant, and takes on many apprentices.

[Stephen Crabb]

I am pleased that the hon. Gentleman has mentioned the case study of Raspberry Pi. Does he agree that this is a great example of what we now call reshoring? It has brought back the manufacturing of this product from China to the UK, helping the trade balance. It is a great example of what we mean by rebalancing the economy.

[Huw Irranca-Davies]

I agree. It is an astonishing story, showing how sometimes the coincidence of business and political networks meeting happens, so that an offhand conversation can lead to a company thinking, “Well, why do we have to be out in the far corners of the world? Why don’t we come back here? We have a skilled work force.” Sony Bridgend, which has had difficult times over the past couple of decades, has re-engineered itself as a national award-winning centre of design in manufacturing and production, and that is what attracted the company back. It has been a huge, rip-roaring success, and there are another 20-odd companies on that site that we hope will build up as well.

That is all good, and I welcome every instance of the claimant count dropping, but we also have to look at the other side of the story. As parliamentarians, no matter what seat we represent, we have to look at the kind of jobs that those individuals are going into. As my hon. Friend the Member for Ynys Môn said, we need to ask whether they can get credit or a mortgage. Can they think seriously about setting up a home for a family and a future? Can they rent somewhere?

I am sure that Members on the Government Benches know in their heart of hearts that behind the claimant count drop there are a lot of people who want to be paid a bit more, who want to work a few more hours and who want the certainty of a permanent contract with the protection that any decent employer would surely want to give to a decent worker. That does not involve loading burdens on an employer. Government Members often tell us that we know nothing about this, but I can tell them that I have managed businesses in the public and private sectors. I understand the challenges of balancing a business plan and bringing in the bottom line, but that has to involve treating the workers decently as well.

We cannot achieve this overnight. This is not just a case of extolling the virtues of business and job creation; let us also talk about the quality of those jobs. Let us take businesses, large and small, by the hand and ask what more we can do to lift people up by giving them skills, education and training, a decent wage and decent terms and conditions. That involves making an investment in the worker as well as in the plant. There are many good companies out there. I am trying to avoid using a soundbite, but this is a reflection of the reality in my constituency: it has an M4 catchment. We can travel down into what is still a very good manufacturing centre along the M4. Thanks to Labour’s investment over the years, people can also get on a train in Maesteg—now at a lower price than a couple of years ago, thank goodness—and travel to work in Cardiff or Newport.

Let us take as an example a youngster who has to get a minimum wage job. Getting to work could mean spending £5 a day on a ticket or driving in a clapped-out car that will cost them 50 or 60 quid a week. When they ask me whether it is worth going out to work, I will say, “Of course it’s worth it. It is always worth going out to work, because of all the good things that come from being a valued member of a work force.” I want those people to be valued. I want them to be paid decently. This debate has sometimes seemed polarised, but this is not a question of me, as the MP for Ogmore, standing here and saying that all businesses are horrible. They are not; they create the jobs. We can put some of the framework in place and make it easier for them to create the jobs, but it is the businesses themselves that create and drive those jobs, and the people in those jobs need to be treated decently.

It is not all doom and gloom in my constituency, but when I first became an MP, there was one food bank there. Now, there is not a single village without a food bank. Last week, I went to the setting up of a Christians Against Poverty debt advice centre. We already have a citizens advice bureau, as well as debt advice being given by Valleys to Coast. We have had a tenfold increase in the number of people in work who are taking out payday loans.

Yes, let us welcome job creation, but let us also be honest about what we want out of those jobs. I do not want anyone to be forced into taking two or even three low-paid jobs. They should be able to find an employer who will pay them decently to do a job with good terms and conditions and who will value their contribution. I do not want youngsters or people close to retirement to be told that their only option is a job in retail with no guaranteed hours. I do not want them to be told, “We may or may not call you but, my God, if we do, you’d better come in because if you don’t, there are half a dozen other people who will do the job instead.” I do not want that. It is not a good way to drive an economy.

Let us have some frankness in the debate. If we can say that we want job creation but we also want them to be good jobs, we will have done a good job for our constituents. That, by the way, means tackling one of the biggest scandals that I have come across recently. There has been a massive change since March or April this year, with HMRC’s new rules and its approach to umbrella companies in construction. Constituents are coming into my office, skilled, long experienced construction workers, who are £100 a week worse off. It is there in their pay slips and it is legal. It is due to subcontracting out beyond the original contractor to umbrella companies, which deduct payments from those workers. If one thing comes out of today’s debate, I hope it is that the Minister will condemn that practice and undertake to destroy it.