Farming in Wales and the UK

Debate between Hywel Williams and Jonathan Edwards

Tuesday 5th March 2024 Westminster Hall

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

I beg to move,

That this House has considered farming in Wales and the UK.

It is an absolute pleasure to serve under your chairmanship, Mr Paisley, and to have the opportunity to raise the concerns expressed in rural Wales in particular, but seeing that there is an honourable turnout from Members from all constituent parts of the UK, I suspect we will hear about the concerns of other farmers across the UK.

Feelings are running at fever pitch in Wales, and last week a mass protest converged on the capital city of Cardiff. For those in the rural heartlands of Wales, Cardiff is not the easiest place to get to. My hon. Friend the Member for Arfon (Hywel Williams) will attest that it is easier to get to London than to Cardiff from Caernarfon.

[Hywel Williams (Arfon) (PC)]

It is easier to get to Dublin.

[Jonathan Edwards]

Yes, it is even easier to get to Dublin. The turnout was extraordinary and showed the strength of feeling that has erupted over recent weeks. I was listening to the Wales podcast on the BBC on the train down over the weekend, and it said it was the largest demonstration that the Senedd has ever seen. That is testament to the strength of feeling in rural Wales.

Although I do not come from farming stock directly, my father and his brother were raised on Ffos y Ffin farm in Capel Dewi following the death of their father from tuberculosis. He got involved in the local young farmers movement, and his best friend was David Woods, who farmed Waunyryddod in Cwmfelin Mynach in the west of Carmarthenshire, near Whitland. Some of my fondest memories as a child include visiting the Woods family at their farm on weekends, watching my father and Mr Woods milk the herd, and helping out as I got a bit older. I witnessed at first hand the unwavering dedication of our farmers and grew a huge appreciation for their work and for the pride they feel in being food producers for the general population.

The pressures farmers work under are considerable. They are open to hugely fluctuating costs and prices while their payments largely flatline, and they work on extremely small margins. One of my first meetings after being elected was with a dairy farmer, who explained the huge financial difference that a 1p increase or decrease in the price of milk would cause his business. The inflationary pressures squeezing our economy are hitting farmers particularly hard, with skyrocketing input costs severely impacting their income. Last year, I received a justifiably angry message from a constituent complaining that fertiliser costs had doubled in less than 12 months. He was talking about having to drastically cut back on production. The inflationary pressures have driven up costs across the industry, yet farmers have not had the option of passing those costs on to consumers due to their position in the supply chain.

Mental health has become a major issue in the agricultural community. Suicide rates are far higher than those of the general population. Economic pressures undoubtably play a role, as do the insular nature of the job, the relentless hours and the demanding schedules. A recent survey revealed that over a third of farmers experience clinical depression and nearly half struggle with anxiety. I have been there myself on many occasions, and it is absolutely no joke. Being in that state of mind while working in an extremely dangerous workplace obviously makes matters even more serious. I know of a farmer who has had his struggles over the years. Recently he walked into a slurry pit before snapping out and phoning the emergency services, which thankfully got there in time. Mental health in farming should be a priority for policymakers, and I pay tribute to charities such as the DPJ Foundation, based in Carmarthen, for their work in providing advocacy and raising the profile of those issues.

From an economic perspective, agriculture is comparatively more important to the Welsh economy than that of the UK as a whole. Take out farming and other sectors will be severely hit. To further make the point, National Farmers Union Cymru recently hosted a meeting with over 100 stakeholders who are worried about the new sustainable farming scheme of the Welsh Government. A wide range of organisations and companies were represented, including agricultural contractors, vets, academic institutions, farming charities, legal firms and trade associations, as well as major meat, milk and food service companies based in and operating in Wales.

--- Later in debate ---

[Jonathan Edwards]

I am grateful to the hon. Member for his passion and his support of the farming industry. I do not want to write his election leaflet for him, but I will certainly be concentrating on Welsh Government policy further on in my speech.

Earlier this month, 3,000 farmers converged on Carmarthen market under the protest banner “Digon yw Digon”, which translates to “Enough is Enough”. I pay tribute to my constituents Gary Howells and Aled Rees for mobilising so many farmers in my home county. Indeed, protests have been erupting across Wales and England. As an aspiring historian in a past life, I have to mention that those massive protest meetings have parallels with the Rebecca rioters’ mass gathering at Mynydd Sylen, near Pontyberem, in the summer of 1843—I had to get that in. What we are witnessing today, however, is colossal discontent in the agricultural community. Thankfully, organisers and the unions have done a great job in ensuring that matters have remained peaceful and within the law.

Much of that anger has been growing since the EU referendum, as farmers have witnessed the destructive approach taken by policymakers to the development of post-Brexit agricultural policy. There is no doubt that leaving the European Union has been a disaster for Welsh farming. They were promised sunlit uplands by the leave campaign but have been let down, and in the post-Brexit trade deals that have been signed, the interests of our farmers have been sold down the river by the UK Government. I acknowledge that there seems to have been a slight change of approach with the current deals, such as the one with Canada. However, that is too little, too late in relation to some of the previous deals.

The Welsh Government calculate that, for the period 2021-25, rural support funding will be £243 million less than had we been under EU farming support policy, and that figure does not account for inflation. The difficulty faced by the Welsh Government in managing an overall budget declining in real terms perhaps explains some of the unfavourable policy approaches that we have seen towards agriculture over the last few years. If the UK Government have left themselves open to accusations that they have neglected agriculture, the Welsh Government are open to accusations of hostility.

[Hywel Williams]

I congratulate my hon. Friend on securing this debate; he is making a fine speech. He points to the double whammy facing Welsh farming. It is not only Brexit and the subsequent disaster—of course, the Canada deal is far from settled; a cruel pantomime is going on at the moment, as we shall see later in the main Chamber—but there is also the incompetence and lack of understanding and listening from the Welsh Labour Government, as witnessed at the very large protests last week. Clearly, we need a change.

[Jonathan Edwards]

My hon. Friend’s point about the Welsh Government is well made. I do not know of any farmer who votes for the Labour party, and I suppose one can understand why the Labour party takes the approach it does. But it is disastrous for agriculture to have a Government who are open to the accusation of being hostile to farmers.

One of the most emotionally difficult meetings I have had as an MP was on the case of the farm that was struck down with bovine TB. It is difficult to explain the mental health impact on those affected. Earlier this month, “Ffermio”, an agricultural programme on S4C, unmasked those horrors graphically on the Castell Howell farm of Mr and Mrs Davies in Capel Isaac in my constituency. The family had to witness their cattle herd shot in front of them, one by one. It was absolutely harrowing for the viewer and utterly despairing for the family. It has become a tipping point for the emotional outpouring we are witnessing in rural Wales at the moment. It was an incredible piece of filmmaking by the “Ffermio” programme team, led by my constituents Ellen Llewellyn and Meinir Howells.

The failure of the Welsh Government to get to grips with bovine TB, and the continued faith in the policy of destroying cattle herds, has become a perfect metaphor for the unsympathetic environment farmers face from their own Government. I am glad that the Welsh Government committed to reviewing their policy on farm slaughter last week, but there should be a wholesale review of policy, including dealing with TB in wildlife.

To compound matters, the Welsh Government partnership parties have acted with blatant disregard on changes proposed to school terms and the potential impact on the Royal Welsh show, one of the marquee events in the Welsh national calendar. Proposed school term changes could see the show fall outside the traditional summer holidays, with the organisers warning that they will face a £1 million-plus shortfall, making the event unviable. Last week, the Minister hosted an event by the Royal Welsh Agricultural Society in the very room where the idea to form it came to fruition, Committee Room 12, to celebrate the 120 years since that initial meeting. England has lost its royal show, and we in Wales now have the most successful, and possibly the largest, agricultural event in Europe. Yet the event operates on small margins, and a £1 million operational loss could be fatal. The Welsh Government need to sit back and think this policy through, and make sure that the Royal Welsh show and the National Eisteddfod are protected.

The all-Wales blanket approach to nitrate pollution by the Welsh Government has irked farmers further due to its disproportionality and the estimated cost of £400 million to the industry. Everybody acknowledges the need to reduce agricultural pollution. However, why the Welsh Government feel the need for a sledgehammer approach is beyond me. Coleg Sir Gar’s Gelli Aur Agricultural College in my constituency has been pioneering slurry treatment technology that separates waste into two reusable products by separating the water. Water can then re-enter the environment safely or be reused on the farm, with the remnants being a dried product that can be used as fertiliser with little pollution risk.

Instead of coming down on farmers like a ton of bricks, why are the Welsh Government not providing grants for farming businesses to upgrade their waste systems? That could be done on a collaborative basis among farmers. One system could service a number of farming businesses and would potentially provide an income source from a waste product. It ticks all the boxes.

There is huge innovation in Wales. Aled Davies and his company, Pruex, also based in my constituency, is pioneering using natural bacteria to disinfect chicken and cattle sheds from ammonia pollution instead of chemicals. The results I have seen look very impressive. I was delighted to receive an email last week from Mr Davies saying that he had secured a research contract from the Welsh Government—I will give them a bit of credit for that. That shows what can be achieved if the Welsh Government work with the sector. Wales can pioneer change.

Unfortunately, that brings me to the new sustainable farming scheme for agricultural payments proposed by the Welsh Government. Their own assessments indicate that the scale of job losses in the agricultural sector would be around double the expected steel job losses in Port Talbot. Unamended, the new policy would also lead to a loss of £199 million to farm incomes and an 11% reduction in livestock numbers—that is the Welsh Government’s own figures. The knock-on effect on the wider rural economy would be catastrophic.

Page 6 of the partnership agreement between Labour and Plaid Cymru endorses the SFS as a commitment in which both parties will develop the new agricultural support regime.

[Jonathan Edwards]

I thank the hon. Gentleman for his intervention; indeed, that is the criticism of the SFS coming from farmers. The Welsh Government made a statement last week saying they were going to review it, which is a positive step forward in response to the protests. However, reviewing is one thing; what we want is policy implementation. The hon. Gentleman’s point is well made, and it is often made to me by my farmers in Carmarthenshire.

Returning to what I was saying, it is worth reading out the section on the SFS in the partnership agreement, so that it is on the record. It says that both parties will work together to:

“Introduce a transition period as we reform the system of farm payments so stability payments will continue to be a feature of the Sustainable Farming Scheme during and beyond this Senedd term. We will agree the longer-term arrangements for Welsh agriculture, recognising the particular needs of family farms and acknowledging ecologically sustainable local food production.”

It pains me to say this, and I am sure my hon. Friend the Member for Arfon (Hywel Williams) will not be too happy with what I am about to say, but it seems to me that Plaid Cymru has been completely outmanoeuvred by the Labour party in the partnership agreement. They have effectively been lead down an endless 20 mph road to nowhere by Labour.

There is a clear case that the farming community has a vital role in helping the Welsh Government to reach their environmental targets, especially in terms of carbon sequestration—to return to the point made by the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone). The alternative is letting the speculators buy up Welsh agricultural holdings—as has been happening—and planting trees on productive Welsh farming land. As always, the Welsh Government would be better advised to take farmers with them on a journey, as opposed to dictating and imposing. Just to reiterate the point I made in response to the hon. Member for Caithness, Sutherland and Easter Ross, there has been a Welsh Government statement saying that there will be a review, but what we really want to see is action.

My understanding is that in Scotland the SNP aim to enable farmers to continue to access a level of basic payments, which seems to be a better approach. In Wales, we would do well to rethink the SFS, look at what Scotland is doing and meet the demands of the farming unions for a new universal baseline payment. As my constituent Ian Rickman, the president of the Farmers’ Union of Wales, has said:

“The reality is that if the scheme remains in its current form, and if the modelling report is correct, farmers uptake will be minimal and everyone will lose out—Welsh farmers, the environment, the public and ultimately the Welsh Government. There is a real worry that even under a scenario where scheme payments come nowhere near to compensating for the loss of the Basic Payment Scheme, there will be some farm businesses that will have no choice other than to participate in the SFS. This will, no doubt, place further pressure on farmers’ workload and mental health.”

He continued:

“The Sustainable Farming Scheme must be accessible by all, and provide long-term stability for farming businesses and the wider rural economy that relies upon agriculture. The SFS needs to provide a meaningful income stream which properly rewards farmers and underpins the importance of a high quality food supply chain, produced here in Wales.”

The deadline for the final stages of the Welsh Government’s consultation on the SFS is later this week, and I will be sending them a copy of this speech. As Ministers and negotiators on behalf of Plaid Cymru and the Government consider the responses, I urge them to tread very carefully before announcing their final plans. Conceding reviews is one thing; what matters is the policy environment that will be implemented, and unless concerns are addressed, the protests that we have witnessed to date will be magnified.

[Hywel Williams]

May I just say that the hon. Gentleman does a slight disservice to my party by lumping Plaid Cymru in with the Welsh Labour Government. We do have an agreement, as he knows full well, having been involved in discussions on this issue in past times, but that is far from being jointly responsible together as a coalition—as some parties have recently titled it.

[Jonathan Edwards]

I am grateful for the hon. Gentleman’s intervention because what he said is what a lot of the public discourse around the protests has been. However, I read out the actual partnership agreement—

[Hywel Williams]

Which has since developed.

[Jonathan Edwards]

Yes, there is a negotiation going on, and the hon. Gentleman is aware that his colleague in Arfon is the lead negotiator. I think she has been blindsided by the Labour Government.

He will like this bit now, though—

Media Bill

Debate between Hywel Williams and Jonathan Edwards

Report stage
Tuesday 30th January 2024 Commons Chamber

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

My hon. Friend is making a compelling case, and the events of the past week involving the commission vindicate the position he has taken. The recent difficulties in S4C have been very damaging for the channel. My firm view is that if the matter had been in the hands of Welsh Government Ministers and the Senedd, which can provide scrutiny and accountability, we would not have got to the damaging state we are in.

[Hywel Williams]

I thank my hon. Friend for that point, with which I entirely agree. Even Welsh Conservative Members concede that the arguments for reserving powers over broadcasting have been undermined by what has happened, and by the Department’s actions—or inactions. We are concerned about S4C, and its funding has plummeted since 2010. The decision to fund it through the licence fee led to a 40% reduction in staff. In 2015, its chief executive officer, Ian Jones, warned about the effects of huge funding cuts and called for “tegwch” or fair play. That was a valuable contribution from him.

S4C’s independence is clearly at stake. We need to remember that there was a substantial and hard-fought campaign during the 1970s to establish the channel. Indeed, we had a discussion about that in Committee, in which the right hon. Member for Maldon (Sir John Whittingdale) made some interesting points. I had the opportunity in the interim to consult the Cabinet papers, which I obtained from The National Archives. They show how the threat by the then Plaid Cymru leader Gwynfor Evans to go on a hunger strike was integral to the then Prime Minister’s decision to change course and allow the people of Wales our own channel. The Cabinet papers are very interesting to read, and I hope you will indulge my quoting briefly from them, Madam Deputy Speaker.

[Hywel Williams]

I thank the hon. Gentleman for making that point; that is what I am coming on to. However, a further argument arises from that unhappy episode, as I will show by quoting from the Cabinet papers. They state that the then Home Secretary, the late Willie Whitelaw, said that the Government

“would withdraw its plans to share Welsh language programmes between two television channels. Instead the programmes would, for an experimental period of three years, be broadcast on one channel as had been proposed in the Party Manifesto.”

That is the point that the hon. Gentleman was making.

What is more interesting is that the papers say that Willie Whitelaw

“still thought that the previous plans were preferable but he had agreed to change them in response to representations, put to him by Lord Cledwyn and others, of the views of informed and responsible people in Wales.”

The interesting point is the reference to

“the views of informed and responsible people in Wales.”

In fact, in the same Cabinet meeting, the Secretary of State for Wales said:

“Gwynfor Evans, the leader of Plaid Cymru, was threatening to go on what he called a ‘hunger strike’”,

before going on to say that there could be

“much tension and unpleasantness in Wales later in the year, if he persisted in this intention, and there would be a danger that Plaid Cymru would fall into the hands of extreme left wing leaders”,

mentioning no names. However, later on in the Cabinet papers, the Secretary of State for Wales said that it had been made clear in the press that the change been made in response to

“moderate opinion following very wide consultation in Wales.”

That is the point I want to make. The argument I am making for a Welsh broadcasting authority reflects settled and responsible opinion in Wales. As I said, the constitutional convention has met and taken evidence very widely over two years, and has come to the conclusion that broadcasting should be devolved to Wales.

[Jonathan Edwards]

I am grateful to the hon. Gentleman for giving way and for giving us a history lesson on the hard work of Gwynfor Evans. Anybody who is interested in this period in the history of Wales should watch the great drama that S4C recently commissioned on the life of Gwynfor Evans, and this campaign in particular. I was at Crymych rugby club at the weekend with Rhodri John, the actor who portrayed Gwynfor in the drama.

[Hywel Williams]

I can indeed recommend that production for anybody to have a look at; it is very interesting. I can also recommend the biography of Gwynfor Evans, which makes similar points.

The media industry in Wales is more than S4C. We have fantastic production companies, including Cwmni Da in my constituency, news outlets and radio—all kinds of things. The proposed authority would unite the media landscape in Wales under one regulatory roof and safeguard it from harms, including from large conglomerates. It would also focus on areas that are important to the people of Wales. The Labour Welsh Government’s expert panel on a shadow broadcasting and communications authority for Wales proposed that public interest journalism, sports and children’s media be areas of specific focus due to their cultural significance, position in relation to Welsh language ambitions and impact on long-term sustainability, among other reasons. The Welsh Government therefore propose a shadow broadcasting and communications authority for Wales. I look to those on the Labour Front Bench, as potentially the next Government, to give us reassurance that it is their intention to establish that authority, as well as the intention of the Welsh Labour Government in Cardiff.

Wales needs to have a say on its own media landscape to ensure that what works for us is what we get. Prominent commentators such as Professor Tom O’Malley and Mike Birtwistle have said that S4C should be built on shared principles of social partnership, public interest and democratic pluralism; that is, as they say, the Welsh political tradition. An independent regulator for Wales would be better equipped to regulate, defend and promote our national broadcasting and media industry in Wales and ensure that those values are represented. That is my argument in favour of a broadcasting authority.

I will say a few words on the prominence of S4C on the selection services—a point that I also raised in Committee. S4C’s content must be readily discoverable and prominent on television services, but I seek assurances that the “appropriate degree of prominence” will not lead to the limiting of S4C’s coverage to specific audiences, thereby depriving people of a wide range of broadcasts. This language matches that of the electronic programme guides code, which allowed S4C to be on channel 166 on Virgin Media in Wales until 2021. The Government should provide clear principles to guide Ofcom in drawing up the new prominence code, so that public service broadcasters’ designated internet programming services appear prominently and are easily discoverable on screens.

Global Britain: Human Rights and Climate Change

Debate between Hywel Williams and Jonathan Edwards

Tuesday 7th September 2021 Westminster Hall

[Hywel Williams (Arfon) (PC)]

I beg to move,

That this House has considered Global Britain, human rights and climate change.

It is a pleasure to serve under your chairmanship, Mr Betts. I am delighted to have secured this debate—a timely debate, given the circumstances—which will consider the interacting and integral relationship between the Government’s declared ambition for developing a global Britain, universal human rights and the ramifications of climate change, which are obviously global in their nature. I hope that today’s debate will further our shared hopes and wishes for the forthcoming COP26 summit, and that it will be a meaningful success. I think we all wish the Government well in that enterprise.

More than 20 years ago, the Government proposed the idea of what was then called an ethical dimension to foreign policy, famously announced by Robin Cook. I was a Member at the time and I remember Robin Cook on the steps of the Foreign Office declaring that there would be an ethical dimension to foreign policy, I suspect, to the dismay of some of his colleagues and possibly also to some of the professionally straight-faced officials standing behind him. I hope I am not being too sceptical in saying that.

That policy made it explicit that in the modern world

“foreign policy is not divorced from domestic policy but a central part of any political programme.”

Robin Cook said very clearly:

“Our foreign policy must have an ethical dimension and must support the demands of other peoples for the democratic rights on which we insist for ourselves.”

That must be the yardstick, must it not? What we would want for ourselves is what we would want for other people.

Those are fine words, and I do not need to entertain the Chamber with the outcome, or perhaps the lack of outcome. Tellingly, looking at the four priorities that Robin Cook outlined, I have picked out some words that give something of a flavour. He used words such as “security”, “disarmament”, “prosperity”, “exports” and “jobs”. He talked about improving the quality of life in the UK and the quality of our environment, and as I said a moment ago, said:

“Our foreign policy must have an ethical dimension”.

We can see the direction of travel in his remarks.

Looking at the present, with a commitment to delivering unparalleled socioeconomic change by achieving net zero by 2050, it is clear that domestic policy is, at least rhetorically, geared towards fighting climate change. Yet, the Government and UK foreign policy in general have unfortunately undermined the climate effort, tarnishing the UK’s international credibility and, in some instances, exacerbating rather than lessening the decarbonisation challenge.

I have to concede that many other countries are doing no better. There was a report today from the Clean Air Fund that noted that between 2019 and 2020, Governments in the world gave 20% more in overseas aid funding to fossil fuel projects than to programmes to cut air pollution, which those very projects cause. However, it is the Government who have delivered unprecedented cuts to our international aid budget. It is also the Government who have continued support for hydrocarbon projects that undermine our collective climate goals, and it is the Government who have largely missed the unique opportunity of being both the COP26 co-host and president of the G7. That challenge, which has largely been missed, is one of delivering leadership and securing climate action in a decade that will make or break our collective future. It is, indeed, an emergency.

From addressing climate change to the debacle in Afghanistan, it is quite clear that we must revisit the aims and the claims of global Britain, which is in the title of this debate. We must ask fundamental questions about what the UK Government’s foreign policy priorities are and how they intend to deliver them.

Against the backdrop of the climate crisis, rather than sending gunboats or aircraft carriers overseas, or securing some fairly marginal trade deals at present, the Government should revisit the notion of an ethical human rights-based foreign policy. By beginning with such a policy framework we can capture the human rights challenges posed by climate change; we can establish responsibility and frameworks for action. We can use existing international law and thus promote and enable collective buy-in by the global community. It is an extremely practical way to start.

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

I congratulate the hon. Gentleman on securing this important debate. I am glad he mentioned Afghanistan, because I believe it was a turning point for our thinking on global Britain, whatever than means. The US is going towards a more isolationist position, which leaves the UK somewhat stranded. The rational course of action is to improve our links with Europe, especially on security and defence. Does he share my concern that the incumbents of very important Ministries in Whitehall are probably the last people to rebuild those important bridges?

[Hywel Williams]

We are in danger of going off on somewhat of a tangent, but I agree with the hon. Gentleman. As far as our party was concerned, when the votes came in on the invasion of Afghanistan and the military action there, I was one of the 17 who voted against. I think I am the last person standing of that group. The point that we made at the time was that we should internationalise the response to the conflict by drawing in actors who were not involved in military action in the first place. That is a fine aim for action on climate change—drawing people in is obviously the way to do it, rather than sending gunboats.

The climate crisis has been described as the biggest threat to our survival as a species, and is already threatening human rights around the world. Rising global temperatures are driving unprecedented harmful effects, from drought to floods, rising sea levels to heat waves, extreme weather events and the collapse in biodiversity and all ecosystems. In both its scale and its devastation, climate change is the ultimate threat to the freedom and rights of human kind and to our environment—they all come together.

Most directly, environmental instability threatens basic human rights—the right to life, the right to health and the right to development. The World Health Organisation believes that between 2030 and 2050 alone, climate change will cause approximately 250,000 additional deaths every year. That is the scale of the effect. Those deaths will occur from malnutrition, malaria, diarrhoea and heat stress—a multitude of effects with one overriding cause: climate change.

Life will be harder for millions of the most vulnerable people in the world, especially children. By 2040, one in four children—around 600 million—living in areas of extremely high water stress, will be vulnerable. The World Bank believes that an additional 100 million people could be impoverished by 2030 due just to climate change. The potential for increased migration is obvious, and our response needs to develop. In the short term, we have our strategies, debates and disputes, but we must look properly at development in-country and in neighbouring countries.

Other freedoms, including the right to self-determination and political freedom are also threatened. It is no surprise that in some of the countries which are most threatened by climate change there are the most despotic regimes and the most conflict, death and disease.

Rising sea levels, which take no account of sovereignty, so prized by the Government, now affect the very existence of several island countries. That is the scale of the problem. Conflict is made more likely by climate change, as I said a moment ago. In Syria, sustained drought brought about by changing weather patterns is widely seen to have been a substantial contributing factor to the brutal civil war there; a conflict that has claimed 500,000 lives and has already led to mass displacements and migration. I concede and congratulate the Government—the previous one, at least—on the huge spending that the UK made in response; there was 500 million almost immediately. That is certainly a very good thing but, again, it provides an idea of the scale of the problem.

I am glad that these dangers are recognised, and I welcome previous ministerial comments calling on countries to ensure that climate action complies with human rights obligations. I hope that in his closing remarks the Minister will expand on these comments and detail how the UK Government are seeking to hold countries to their climate change commitments in a manner that respects and builds on human rights, especially given the UK’s current status in world affairs.

It is clear that we simply cannot say any more that we did not and do not know the consequences of our actions, which have become abundantly clear, if we continue to degrade the environment and pollute our atmosphere. As the UN Secretary-General has noted, we are

“on a code red for humanity”.

We must act accordingly, yet I fear that the Government are failing to meet the challenge. Prime Ministerial slogans about world-beating global Britain have not generated significant success ahead of COP26 and the UK’s performance as president of the G7 has been disappointing. One such failure was the inability to secure a definitive ban on the use of coal by the world’s largest economies at the G7 summit in Cornwall, and the promise of $100 billion climate-change assistance for developing countries has been largely unfulfilled.

More reports abound about the isolation of the Prime Minister in his own political group. His recent policies, ranging from international aid cuts to promoting domestic coal production, have gravely undermined his diplomatic efforts ahead of the summit in November. The Foreign Secretary yielded to the Chancellor with his savage cuts to the UK’s aid budgets, and actual world-leading programmes crashed because of fiscal circumstances—that was the real effect. However, as leading commentators have noted, the Chancellor managed to increase the UK’s defence budget, including finding money for nuclear weapons.

Worryingly, the UK has pledged £720 million of UK exports finance to support an offshore liquid gas project in Mozambique, at the same time as hosting COP26 and chairing the G7. Taken together with the domestic climate-change record and continuing Back-Bench opposition to net zero commitments, the Government have largely failed to present a credible climate-change action strategy to outside partners, which could be leveraged to inspire global action at COP26.

To close, as we head into the final straits before COP26 in November, the UK’s diplomatic efforts compare poorly with, for example, the French, who co-ordinated the Paris agreement. Their co-ordinated Government-wide approach led to the global success of the Paris agreement in 2015. The French-negotiated agreement could be the basis and the solution for this Government’s performance, and the reason for that is quite obvious.

The 2015 Paris agreement was the first universal, globally agreed, legally binding climate-change agreement explicitly to include human rights, requiring parties to “respect, promote and consider” their human rights obligations as they address climate change. That is why today I urge the Government to revisit the concept of an ethical foreign policy, particularly after the bloody events in Afghanistan, and for the Government to become an actual green force for good.

The public understand and value human rights, international law provides definitions, obligations and parameters, and existing international organisations can be a guarantor. The frameworks and the opportunities to do the right thing are there. This Government just need to seize them.

European Union Citizenship

Debate between Hywel Williams and Jonathan Edwards

Wednesday 7th March 2018 Commons Chamber

[Hywel Williams (Arfon) (PC)]

I beg to move,

That this House supports the maintenance of European Union citizenship rights for Welsh, Scottish, Northern Irish and English citizens; notes that the range of rights and protections afforded to individuals as European Union citizens are integral to a person’s European identity; further notes that many of those rights are closely linked to the UK’s membership of the Single Market; and calls on the UK Government to ensure that the UK’s membership of the Single Market and UK citizens’ right to European Union citizenship are retained in the event that the UK leaves the EU.

Before I begin, may I apologise to the House? I have a very bad head cold that has rendered me slightly deaf, although that is perhaps no great disadvantage in this place. I caution any Member who intervenes that I might have some difficulty hearing them.

Our motion calls for UK nationals to retain European citizenship after we leave the European Union. The key word here is “retain”: we wish to retain what we already have. It is supported by a wide range of organisations and individuals: the Scottish National party, the Liberal Democrats, the Green party, Open Britain, Best for Britain, the European Movement, The New European, Cymru Dros Ewrop—Wales for Europe, New Europeans, Our Future Our Choice, Brand EU, UKtoStay.EU and Another Europe is Possible, as well as Jo Maugham, QC, of the Good Law Project, and Professor Volker Roeben and Dr Pedro Telles, two of the authors of a report on EU citizenship commissioned by my good friend Jill Evans, the Plaid Cymru MEP. Since the referendum, they have been arguing consistently for the retention of EU citizenship, and I recommend the report to anyone who wishes to pursue this argument. To the relief of hard-pressed Members, I can say that the executive summary is very good.

The crux of our argument is that although we are leaving the EU, the European citizenship rights conferred on UK citizens are not extinguished. Although we are leaving, those rights persist. Continuing Union citizenship is the more convincing interpretation of European and international law. Indeed, the principle that although a treaty might be bought to an end, the rights conferred by it are not extinguished, is enshrined strongly in international law. I refer Members to the 1969 Vienna convention on the law of treaties, which will be binding on member states, the UK and the EU itself post Brexit. Article 70(1)(b) of that convention provides that “legal situations” created during the currency of the treaties continue after withdrawal.

As Professor Roeben et al say on page five of the report:

“This interpretation of the Convention, that ongoing situations and rights continue, is supported by the overriding objective of ensuring legal certainty and preventing withdrawals from treaties having any retroactive effect. It is also supported by state practice.”

That is a crucial aspect of international law. Governments withdrawing from treaties cannot just abandon the rights their citizens already have. Professor Roeben tells me, by the way, that this article, as with much international law, was drawn up with the prominent participation of British legal experts.

There is an alternative reading that article 50 extinguishes all rights of the individual created by the founding treaties. In that case, both EU and international law would demand that a treaty be negotiated on associate Union citizenship, bringing with it a bundle of rights that might be little different from those that come with full citizenship. One way or other, we believe that EU citizenship of a sort is required.

The EU could legislate on citizenship post Brexit. That legislation would protect UK nationals in the EU, but would have no binding effect on the UK—by definition, because we would have left. We therefore urge the Government to look to achieving continuity and associate citizenship through the withdrawal agreement. That is why today’s debate is particularly timely.

The report concludes that neither continuity nor associate citizenship would require any revision of the founding treaties. There is a great deal more detail in the report that I will not go into today, but it will become pertinent if the Government recognise the force of our argument and proceed as we recommend. For now, I wish to set the context for our party’s position and say plainly from the start that Plaid Cymru campaigned to stay in the European Union. This was consistent with our long-term pro-European policy—indeed, that has been our policy since our establishment in 1925.

We have always been aware of our European history and our nation’s European heritage and have set great store by it. That has influenced our party profoundly. Our long-time president, Gwynfor Evans, who was the Member for Carmarthen, would rarely miss the opportunity to remind the people of Wales of our European heritage and our 1,500-year history as a people with our own language and culture, from our immediate post-Roman beginnings onwards to the present day. In fact, his conference speeches would often consist of retelling our history. I am reminded of a small joke made by two valleys members during one of Gwynfor’s speeches. One said to the other, “Good God, this is 20 minutes in and we are only in the 9th century!”

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

My hon. Friend is making his usual excellent case when he leads these debates. We could go even further back to Saunders Lewis, who was the president before Gwynfor Evans. Saunders saw our European heritage as vital to his vision for Wales for the future, partly driven by his time in the trenches in the first world war and his desire not to see another generation of Welshmen die in the fields of foreign lands.

[Hywel Williams]

My hon. Friend makes a very good point. I was going to refer later to the fact that the European Union has helped largely to prevent war on the European continents, although there are obvious exceptions, such as in the former Yugoslavia, which was not a member of the EU. He makes a pertinent point about Saunders Lewis, who had that profound experience in the trenches. It was one reason why he and his friends set up Plaid Cymru in August 1925 in my home town of Preseli, at a meeting of the Eisteddfod. While I am on my feet, I might as well also say that our profound lack of political realism at that time meant that in a country that was almost exclusively non-conformist, teetotal and in favour of the British empire, we had as our president a Francophile, wine-drinking Catholic—I think Machiavelli is still rotating in his grave after that one, but there we are. The roots of our pro-European stance are very deep indeed.

--- Later in debate ---

[Hywel Williams]

I agree entirely with the hon. Gentleman. As with so many things Welsh, we lack the basic statistical information and the basic projections. I know that the Government do not believe in experts, projections and forecasts, but I sometimes wonder on what they do depend. In Rome, they depended on examining the entrails of sacrificed animals—I do not know whether that is what they get up to—but he makes a serious point: if we knew what we were dealing with, we could make the argument more effectively.

[Jonathan Edwards]

I am glad that my hon. Friend mentions Erasmus and Horizon, two schemes whereby the Welsh Government could act bilaterally with the EU. Does he share my concern, arising from my discussions with colleagues in Brussels, that the Scottish Government seem far in advance of the Welsh Government in negotiating with the EU how those schemes could be continued in our respective nations?

Wales Bill

Debate between Hywel Williams and Jonathan Edwards

Monday 12th September 2016 Commons Chamber

[Jonathan Edwards]

I am grateful for that clarification.

Plaid Cymru tried to include APD devolution in the Finance Bills of 2013 and 2014, I recall, but we did fall to some very England-centric comments by the Treasury officials at the time. These arguments have not yet satisfied us, or I imagine the 70% of the people of Wales who support the devolution of APD, as reported in recent opinion polls—as I said in Committee, that is an extremely impressive opinion poll rating.

On Second Reading of the Bill, the Minister said it was right and proper for Wales not to have the same rights regarding APD as the other devolved nations, and he has reiterated that this evening. Why would the Wales Office seek to deny Wales the same powers as Scotland and Northern Ireland? Why would it deny our only international airport in Wales the potential to use those fiscal levers to expand and develop, and why would it deny the ability of the Welsh economy to grow?

Clearly, increasing footfall at the airport would generate substantial revenues elsewhere in Wales, primarily by boosting economic performance across the whole of the economy, not least of course in the Secretary of State’s constituency, Vale of Glamorgan. Let us remember also that, as Members have said, Cardiff airport is owned by the people of Wales. The Welsh Government effectively nationalised the airport and this additional lever would further enable them to utilise a huge asset in the direct ownership of the people of Wales. It is highly regrettable that we have an airport in England, Bristol airport, effectively deciding UK policy, to the detriment of Wales.

While on the subject of Bristol airport, perhaps I should correct a statement I made in Committee, and I am happy to do so. I said Bristol airport could not accommodate long-haul flights and therefore there was no reason not to devolve long-haul APD. I received a strongly worded letter from Bristol airport—as we can imagine—a few days after the debate; it can accommodate long-haul flights. I am happy to correct the record, therefore, but what it cannot accommodate is the world’s largest aircraft, which Cardiff airport can, given the length of its runway. With the prospect of Wales being dragged out of the biggest and most successful trading bloc in the world, now, more than ever, it is important that we connect Wales to the world, and clearly devolving APD to Wales would enable the Welsh Government to do that more effectively.

New clause 7, in the names of my parliamentary colleagues and myself, seeks to equalise the situation between Wales and Scotland on VAT revenues. I will not be pressing it to a vote, due to the time left this evening. However, I remind the House that there is a consensus that devolution of public spending responsibilities should be accompanied by the assignment of significant own sources of revenue. That principle has now been accepted as this Bill progresses, and therefore the debate in Wales between the political parties is about what that fiscal package of tax powers should consistent of.

Wales’s funding framework has been highly unusual from an international perspective: there are not many Governments in the world with significant legislative and spending powers who do not also have a correspondingly important responsibility for raising tax revenues. If the UK Government are serious about securing a lasting devolution settlement for Wales, VAT should be seriously considered as part of the package of devolved fiscal powers.

The Scotland Act 2016 stated that revenues from the first 10 percentage points of the standard VAT rate would be devolved by the 2019-20 financial year. The current UK VAT rate is 20%, and half of all the VAT raised in Scotland will be kept in Scotland. A recent article published by the Wales Governance Centre confirms what I said in Committee, stating that Welsh VAT revenues have

“been far more buoyant than other major taxes, such that VAT has become the largest source of revenue in Wales.”

This is in contrast to the rest of the UK and Scotland, where income tax remains the largest source. The Government Expenditure and Revenue Wales report concluded that around £5.2 billion was raised in VAT revenue in Wales in 2014-15. A similar deal to that of Scotland would mean around £2.6 billion being assigned to the Welsh Government. This would mean that more than a third of total devolved expenditure would be financed by devolved and assigned taxes. By my calculation, that would represent an increase of about 13% compared with the amount to be raised under the current proposals.

I presume that as long as we have a Conservative Government in charge of the Treasury here, economic growth will continue to be driven by consumer spending. If that is the case, it is all the more important that the people of Wales benefit directly from that growth and from their own spending power. By devolving proportionately low revenue yielding taxes compared with the UK average, such as income tax, without devolving proportionately high revenue yielding taxes compared with the UK average, such as VAT, the UK Government are setting the tone in the Bill for an unfair and unstable fiscal position for Wales.

The devolution of VAT rates has been dismissed in the UK in the past on the ground that European Union rules prohibit the variation of VAT rates within a member state. Although we are calling only for parity with Scotland in this instance, the UK’s exit from the EU could open a debate on devolving rate-setting powers to Wales. If, as the International Trade Secretary and the Brexit Secretary seem to want, the UK does not remain part of the single market, that could open up a world of possibilities for fiscal policy. Setting VAT rates could give Welsh Ministers a powerful macroeconomic lever, and could perhaps be used in conjunction with other tax powers in considering the overall progressivity of the tax system in Wales.

[Hywel Williams]

I agree entirely with my hon. Friend. Does he agree that the record of Governments in London, both Labour and Conservative, is not encouraging? Under an agreement made in Helsinki in 2008, states are allowed to vary VAT down to 5% in labour-intensive industries. Were that to happen in respect of, say, tourism and construction in Wales, a huge amount of new business would be generated and the lost tax would be made up very quickly, but this Government and their predecessor did not take advantage of that dispensation. We do not need to wait for Brexit. We could make this change now, but the Government refuse to do so.

[Jonathan Edwards]

I am grateful to my parliamentary leader for that intervention. Plaid Cymru has a long-standing policy to make the case at Budgets and autumn statements in this House for the lowering of the VAT level for the tourism industry in Wales. The all-party parliamentary group on the tourism and hospitality industry in Wales, chaired by the hon. Member for Ceredigion (Mr Williams), has also called for that reduction, which would be of huge benefit to the industry.

The Under-Secretary of State for Wales, the hon. Member for Aberconwy (Guto Bebb), has said tonight that he will not support the new clause because the proposal was not part of the Silk commission’s recommendations. This is a classic case of the UK Government cherry-picking powers as it suits them and using the Silk commission as a justification for omission—in this case in relation to VAT—while dismissing its recommendations for the inclusion of measures on, for example, APD.

Wales Bill

Debate between Hywel Williams and Jonathan Edwards

Tuesday 5th July 2016 Commons Chamber

[Hywel Williams]

I have considered that, and it is my opinion and that of the Presiding Officer that it would not put her in that difficult position. These amendments are hers, after consideration. The point about parity and similarity with Scotland is persuasive, to our minds.

[Jonathan Edwards]

Is it not the case that under the Bill as drafted, the Welsh Government could act unilaterally if they so decided, whereas if the spirit of the amendments were accepted, adapted by the Government and incorporated in the Bill, the power would reside with the Presiding Officer, but only with the support of the legislature, which means that there would have to be cross-party support before she acted?

[Hywel Williams]

I take my hon. Friend’s point entirely. The four Assembly elections held so far have not produced a majority Government, so the consent of the Assembly collectively would be required in that situation. I am not casting any aspersions on the motives of Governments in Cardiff, London or anywhere else, but the amendment would remove any suspicion of political advantage being sought.

By adding a strict seven-day timeframe, during which period the Assembly must meet and elect a Presiding Officer, the Bill once again puts Wales on an unequal footing with Scotland. The Scottish Parliament is allowed 14 days to carry out this function. Given the history of the outcomes of elections to our Assembly, as I said a moment ago, and the obvious consequence that time has been required for the parties to discuss all manner of arrangements, seven days for this particular exercise seems unreasonable. That is why amendment 29 extends this period to 14 days for the Welsh Assembly.

Amendment 30 amends the Government of Wales Act 2006 so as to confer powers over varying the date of an ordinary general election to the Presiding Officer, as opposed to transferring this power directly to Welsh Ministers under the Bill as currently drafted. Finally, amendment 31 amends the 2006 Act so as to ensure that powers over proposing the date of an extraordinary general election are given to the Presiding Officer. The amendment once again extends the timeframe during which the Assembly is required to meet following an election to 14 days, thus establishing parity with Scotland.

These amendments are meant to probe and promote discussion. We do not intend to press them to a vote.

Wales Bill

Debate between Hywel Williams and Jonathan Edwards

Tuesday 14th June 2016 Commons Chamber

[Hywel Williams]

I am grateful for that point, which we have discussed before, and I have said that the number of pages might not be the best indication of the number of reservations or their complexity.

There are new reservations in this Bill that were not in the draft Bill, for example, on matters as important as the Severn bridges—that nagging toothache for our economy in the south.

[Jonathan Edwards]

Going back to the intervention by the Secretary of State, does not the fact that the number of pages has increased indicate that this is not the bonfire of the reservations that we were promised?

[Hywel Williams]

No doubt that is something that we will debate. I relish the opportunity to discuss the reservations and hear the Secretary of State or his colleagues justify them. The explanatory notes include a description or explanation of the reservations but, as far as I can see, there is very little justification for them. I therefore look forward to hearing about that in subsequent debates.

The report by the Wales Governance Centre and University College London on the draft Bill described the list of reservations and said:

“Complexity is piled on complexity...the potential for legal challenge casts a long shadow.”

I see little evidence that the revised list is much clearer. It remains, alas, a lawyer’s playground. As I have said, the shift to a reserved powers model was supposed to be made in tandem with a shift in mentality—that is extremely important—to determine what needed to be reserved, rather than what should be devolved. It is clear that the Secretary of State has instead facilitated a Whitehall trawl of the powers—a pick and mix of what the Sir Humphreys fancy bagging for themselves—sometimes based on principles no deeper than the chance to shout “Mine!”

If the Secretary of State is serious about creating a lasting devolution settlement, he cannot simply flip the current settlement from the conferred powers model to the reserved powers model, then allow Whitehall to pick and choose which tasty bits of power they want to hang on to. The process must be built on principles. I agree with the principles that he identified—clarity and coherence—but I would add proper subsidiarity.

Some time ago I had an entertaining lunch with the Irish Minister responsible for a new Irish language Act. He was quite candid, loquacious and hilarious. He had been to Canada and Quebec and had thieved—his words—a little bit of their language law. He had been to Wales and has snaffled bits of ours. He had been here and there in the rest of Europe, and hey presto, here was their language bill. We do not need to roam two vast continents, stitching together a bit of this and a bit of that. A model is already there for the borrowing and—perhaps Plaid people will forgive me for saying this—it is a home-grown British model called the Scotland Act.

The Silk commission hoped that moving to a reserved powers model would be a chance to rewrite the settlement to remove some of the defects of haste and inconsistency that have so far marred legislative devolution in Wales. The list of reservations does not reflect that hope. The director of the Wales Governance Centre has described the Bill as being underpinned by a “patronising attitude” and as continuing to regard Wales as “enjoying a lower status” than the other devolved nations. In practical terms it will undoubtedly lead to more blame shifting between Cardiff and London. That is the last thing that people in Wales want and the last thing that the governance of the people of Wales requires.

Both the Welsh Affairs Committee, which has a Tory majority, and the National Assembly’s Constitutional and Legislative Affairs Committee, which was also chaired by a Tory, recommended that each reservation should be individually justified. That recommendation has been ignored and, as I said, I look forward to hearing the Secretary of State or his colleagues making up for that as we go into Committee.

The Wales Governance Centre has offered a list of considerations for identifying functions that should be devolved: is it necessary to retain function X for the functioning of the UK as a state? Does retention of Y make the governance of the UK less clear or comprehensible? Does retention of Z undermine the workability, stability or durability of the devolution settlement? These are the questions that the Secretary of State should be asking himself for each and every one of the reservations in the Bill and I hope we will have time to hear him go through those steps. Simply making hundreds of reservations for no given reason is not acceptable, particularly when the real rationale seems to be a deeply suspect power grab by Departments of Government that have failed Wales so spectacularly over the past few years.

Bank of England and Financial Services Bill [Lords]

Debate between Hywel Williams and Jonathan Edwards

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 19th April 2016 Commons Chamber

[Hywel Williams (Arfon) (PC)]

Does my hon. Friend agree that a worthwhile commercial advantage would be gained by issuing banknotes? That value would then accrue to Lloyds bank, and possibly to taxpayers in Wales and the rest of the UK, which would be a good move.

[Jonathan Edwards]

I am grateful to my parliamentary leader for his intervention. He is completely right, and that is why four banks in Northern Ireland and three in Scotland have continued the practice. There is a commercial interest for Lloyds, but also a public interest due to our part ownership of the bank.

Permission to issue Welsh banknotes would be a welcome boost to brand Wales, recognising our country as an equal and economic entity. Notes in Northern Ireland celebrate individuals such as J.B. Dunlop, Harry Ferguson and James Martin, as well as architectural splendour such as that of Belfast city hall. Notes in Scotland pay tribute to that country’s fantastic bridges and recognise the contribution of people such as Sir Walter Scott and Robbie Burns. Notes currently used in Wales recognise people such as Elizabeth Fry, Adam Smith and Matthew Boulton, and previous notes have portrayed Charles Dickens, Michael Faraday, Sir Isaac Newton, William Shakespeare, George Stephenson and the first Duke of Wellington. They are all great people, but none, to my knowledge, has anything to do with my country.

Is it not fair and sensible for us in Wales to use notes that recognise our historic landmarks, such as the incredible Castell Carreg Cennen in my constituency, Pont Menai in north Wales, Yr Wyddfa—Snowdon, the largest mountain in our country—and our historic greats such as Owain Glyndwr, who was nominated the seventh most important person of the last millennium by The Times, of all papers? There is also David Lloyd George, the originator of the welfare state, Aneurin Bevan, the architect of the NHS, and Gwynfor Evans, the first Plaid Member of Parliament and the father of modern Wales.

A case could also be made for what is arguably the most famous Welsh painting of all: “Salem”, painted by Sydney Curnow Vosper in 1908. His painting of Siân Owen aged 71 at Capel Salem, a Baptist chapel at Pentre Gwynfryn in the north of Wales, is a national icon, much as Constable’s “The Hay Wain” is in England. The Royal Mint already produces Welsh-specific coins, so my proposals raise no major issue of principle—indeed, the Minister referred to the Royal Mint earlier in the debate.

A national poll by ITV Cymru/Wales found that more than 80%—indeed, it was 82.6% when I looked at the website today—of the Welsh public supported these calls. If we are unsuccessful in the Division, I hope that the UK Government will support Plaid Cymru in putting right this historical anomaly and bring forward their own proposals.

[Hywel Williams]

I have a Welsh pound coin with me, and it reeks of nationalist propaganda because around the edge it states “Pleidiol wyf i’m gwlad”, which means “True am I to my country”. I certainly agree with that, but it is issued by the Royal Mint.

[Jonathan Edwards]

My hon. Friend makes my point entirely. There is no issue of principle at stake; this is about finding the mechanism for delivery.

This issue has received considerable media coverage in Wales. Considering that we are only two weeks from the Welsh general election, I suggest to Treasury Ministers that the election prospects of their candidates in Wales may be damaged if they choose to ignore the strong views of the people of Wales on this matter.

Employment in Wales

Debate between Hywel Williams and Jonathan Edwards

Tuesday 27th January 2015 Westminster Hall

[Hywel Williams (Arfon) (PC)]

I congratulate the hon. Member for Vale of Clwyd (Chris Ruane) on securing this important debate. I will begin with a timely reminder to the hon. Member for Aberconwy (Guto Bebb); he is slightly behind the wave on the matter of cuts. The Prime Minister, on Radio 4 this morning, called them not cuts but adjustments—but of course, both sides are signed up to those adjustments.

I want to consider some of the more interesting facts of the matter, as opposed to engaging in rhetoric such as we have heard this morning. A key element in respect of employment in Wales is the balance between the public and private sectors. That is extremely important in my constituency, and in Vale of Clwyd, Aberconwy and other constituencies. A key element of the Government’s austerity strategy is that public sector expenditure cuts will be rebalanced by growth in private sector employment. What has happened and, in particular, how far has Wales succeeded compared with the rest of the UK?

The financial crisis broke in 2008 and the immediate impact was seen in the sharp drop in employment in the private sector in the following year to September 2009. There were 60,000 fewer people employed by the private sector in Wales in the year to September 2009 compared with a year earlier. Since bottoming-out in 2009, private sector employment in Wales has steadily increased and is now slightly higher than in 2008, with an increase of 1%. I am, by the way, using figures from the Office for National Statistics. That 1% compares poorly with the figure for the UK as a whole, which is 12%. We have done comparatively badly. Had private sector employment in Wales tracked that of the UK since 2009—the low point—and had we performed as well as the rest of the UK, there would have been an additional 43,000 people in private sector employment in Wales by September 2014. That is a criticism of the UK Government’s macro-economic policy, but also of the performance of the Welsh Labour Government in Cardiff.

If employment in the public sector in Wales had shown the same rate of decline as in the UK between 2010 and 2014, an additional 12,000 jobs would have been lost. The Welsh Labour Government have protected public sector employment, which is a good thing, and it has been more resilient than in the UK as a whole, but the figures are significant for the Government’s contention that cutting public sector employment leads to growth in the private sector. If Wales had tracked the UK since the Conservative-Lib Dem Government came to office in 2010, there would have been an additional 41,000 in employment in Wales by September 2014.

[Jonathan Edwards]

My hon. Friend is giving a forensic analysis of the employment situation across the UK and in Wales in particular. Is not private sector employment growth geographically lopsided, located very much in the south-east, with the other nations and regions of the UK lagging behind? There has not been the geographical and sectoral rebalancing of the economy promised in 2010.

[Hywel Williams]

My hon. Friend makes an interesting point. We have such a geographical imbalance in Wales, in relation to not only the number of jobs, but their quality, as the hon. Member for Vale of Clwyd pointed out. We have seasonal and low-quality jobs—some part-time and some on zero-hours contracts. My hon. Friend’s remarks have several implications.

In the case of Wales, therefore, the figures show scant evidence that austerity has worked either to rebalance the employment mix between the private and public sectors or to increase total employment. The data on the balance between the public and private sectors need to be treated with caution, because of the effects of reclassification. That political sleight of hand has frequently been used in the debate on the issue. For the UK, the proportion employed in the public sector has fallen from 20.4% in 2008 to 17.7% in 2014. In Wales, the proportion has declined from 25.8% to 23.9%. That is a smaller drop, and of course there is a much larger public sector in Wales.

We in Plaid Cymru were concerned about whether growth in private sector employment would be achieved for the UK, and particularly for Wales, because of its greater dependency on the public sector and the fragility of its private sector. After four and a half years, and with an election pending, the statistics are interesting, but we must be careful because, for example, the ONS reclassified staff of RBS and Lloyds Banking Group from the private sector to the public sector in 2008, and that represented 225,000 workers. Royal Mail staff went from the public to private sector following privatisation in the fourth quarter of 2013, while further education staff in England were reclassified to the private sector. In a later twist, employees at Lloyds Banking Group have been reclassified to the private sector, as the share of private sector ownership of Lloyds has grown.

The total private sector year-on-year decline of 6% in Wales compares unfavourably with the corresponding fall of 4% across the UK as a whole. Since the trough in 2009, private sector employment in Wales has steadily increased, as I said, but that compares poorly with the UK, where private sector employment has grown by a massive 1.7 million jobs. As I said, public sector employment in Wales has declined, while private sector employment has risen slightly, but in the UK, the situation is a good deal better. The conclusion that one has to reach is that had private sector employment in Wales tracked that of the UK since 2009, an additional 43,000 people would have been in private sector employment in Wales. Public sector employment in Wales has been quite resilient, which has been a good thing.

Let us have a quick look at the unemployment figures. If the unemployment rate in Wales was the same as that of the UK, 10,000 more people would be in work. In Wales, the figure for those who are economically active is 74%, whereas it is 78% for the UK as a whole, so we also have a problem with economic inactivity. That is well known, but the point is the number of people involved. It is equivalent to 67,000 fewer people of working age in Wales either being in employment or seeking work, and that shows the size of the problem that we face. Of those economically inactive people, 120,000 would like work. We therefore have people who are looking for work, which suggests to me and other observers that the measures in place to encourage those who are economically inactive into work just are not working properly. That is the challenge facing Wales—not only reducing the unemployment rate, but raising the rate of economic activity to the UK level and ensuring that the quality of the jobs is right for Wales.

There is scant evidence that austerity has worked for Wales, either from the viewpoint of rebalancing the employment mix between the private and public sectors, or by growing total employment. A great deal needs to be done, and we are looking in vain to the two main London parties for action.

Wales Bill

Debate between Hywel Williams and Jonathan Edwards

Tuesday 24th June 2014 Commons Chamber

[Jonathan Edwards]

The point I am making is that all the investment seems to be on an east-west basis, rather than on a north-south basis.

[Hywel Williams]

Apropos of that intervention, I would have thought that the hon. Member for Alyn and Deeside (Mark Tami) was rather more interested in developing the A55 than the M4.

[Jonathan Edwards]

I am sure that that very useful intervention will be noted by the constituents of the hon. Member for Alyn and Deeside (Mark Tami).

Plaid Cymru recognises the issue of congestion on the M4 corridor around Newport and wants investment to take place. However, the current Labour Welsh Government’s preference for a new M4 to the south of Newport at a cost of £1 billion is a disproportionate solution to the amount of congestion. According to Friends of the Earth and Professor Stuart Cole, the Welsh Government consultation documentation overestimated traffic growth in 2012 and 2013. The flows were lower than the Welsh Government predicted, so they do not have a strong enough statistical base on which to justify such a huge financial and environmental cost. As the Federation of Small Businesses has pointed out, committing the vast majority of Welsh borrowing capacity and money from outside the borrowing limit in the Bill to one single project is misguided and does not serve the whole of Wales or the whole of the Welsh economy.

Wales Bill

Debate between Hywel Williams and Jonathan Edwards

Wednesday 30th April 2014 Commons Chamber

[Jonathan Edwards]

The Minister made that point to me before the debate, but this legislation provides an opportunity now. Rather than making the case either for more Assembly Members or for fewer, the new clause essentially states that when the time comes to make that decision, it should be made by the National Assembly, not the House of Commons. It is a point of principle about where power lies in these matters. Given the shadow Secretary of State’s comments when he intervened on me earlier, I look forward to the Labour party’s support when we vote later—[Interruption.] Well, that is exactly the point.

[Hywel Williams]

I am disappointed by that sedentary intervention from the Opposition Front Bench. In our view it is the Assembly that should decide, because we see the people of Wales as sovereign, not this place.

[Jonathan Edwards]

I am grateful to my hon. Friend for that intervention, which highlights the key political difference between Plaid Cymru and our Unionist opponents.

Assembly Members are expected to be members of more than one Select Committee. Indeed, the Committees have a dual role, as they perform scrutiny and legislative functions. That means Members are under tremendous pressure, especially if they serve on more than one Committee, as many do. If more AMs were elected, some would be able to specialise in certain areas, and the burgeoning expertise would ensure that democracy in Wales is better informed. In any case, surely it should be for the National Assembly to determine its membership, not the House of Commons. We will therefore be pushing new clause 4 to a vote. We look forward to the support of like-minded individuals, even those on the Government Benches.

The motivation behind new clause 6 is straightforward. As we have been instructed to draft it by the Clerks, it proposes that the Welsh Government, rather than the UK Government, should have responsibility for determining the system used for elections to the National Assembly. Transferring this responsibility would streamline the election process and bring decisions relating to the democratic make-up of the National Assembly closer to the people it serves. It could also, I hope, lead to a more proportional system being used by that institution. Plaid Cymru’s preference would be for a move towards a more proportional system that reflected the wishes of voters more fairly.

Even with the top-up, the current system is extremely biased towards the Labour party. In the last election, Labour polled 40% yet got 50% of the seats. In elections before then, it has had 50% of the seats, and more, on 30% of the vote. We therefore argue that proportional representation would provide a better reflection of how people vote in National Assembly elections.

--- Later in debate ---

[Hywel Williams]

Does my hon. Friend find it peculiar that Labour’s position is to allow an increase in taxes in Wales, thereby handing a tax advantage to England? Its only policy on tax competition is to move it in favour of our friends in England.

[Jonathan Edwards]

That is an important intervention. The Labour party’s position is that it is worried about tax competition, yet, based on its tax policy, the only tax competition that could happen would favour England and other parts of the British state.

Finance (No. 2) Bill

Debate between Hywel Williams and Jonathan Edwards

Wednesday 9th April 2014 Commons Chamber

[Jonathan Edwards]

Diolch yn fawr iawn, Mr Bone. It is an honour to serve under the chairmanship of the best slow left-arm bowler in the Westminster cricket team.

It is with pleasure that I rise to support new clause 2 and new schedule 1, and I will be pushing for a vote at the appropriate time. The UK Government commission on devolution in Wales, headed by Paul Silk, published the first phase of its report in November 2012, which concentrated solely on fiscal powers. Some 18 months later we are still waiting for an essential part of the cross-party Silk commission recommendations to come to fruition: the devolution of responsibility for long-haul air passenger duty. The original cross-party report recommended that responsibility for APD be transferred to Wales at the earliest opportunity and that the Finance Bill was the appropriate vehicle for doing that. The commission had the 2013 Finance Bill in mind, following the precedent set during the 2012 Finance Bill when APD was devolved to Northern Ireland.

It therefore comes as no surprise that I am here yet again attempting to transfer APD to Wales, as was agreed by all the parties in the commission. I will seek to divide the House and to hold other parties to what their representatives on the commission said and, perhaps more importantly, what their representatives in the National Assembly say back in Wales. I would of course be ecstatic if by some divine intervention their masters here in London listened to them for once and voted in favour of the policies they advocate—I do not hold my breath in much hope.

I will go on to speak about the discrepancies between what the Unionist parties say in Wales and how they vote here on devolving APD. First, let me inform the House a little about the background to the UK Government commission’s recommendation to devolve APD as part of a comprehensive package of financial powers and about the stage we are at now. In short, the cross-party Silk commission recommended that powers over stamp duty land tax, the aggregates levy, long-haul APD, landfill tax and business rates be devolved in their entirety. It also advocated a sharing arrangement for income tax, with Wales having the ability to vary each individual income tax band and rate.

After having been made to wait for more than a year by the London Government to grace us with a response to the commission which they themselves set up, we find ourselves already having debated the Second Reading of the Wales Bill in this Chamber. We expect it to be confirmed tomorrow morning that the whole House will return to consider the Committee stage of that Bill after the Easter recess. Yet the Wales Bill has some glaring omissions. It seems like a long time ago now when, last autumn, the Prime Minister and Deputy Prime Minister swept into the Senedd building in Cardiff, to flashing camera lights and an adoring paparazzi, in order to announce new financial powers for Wales. Very few questioned what exactly was being proposed. Only later did it emerge that the Westminster Government were prepared to accept the cross-party commission recommendations only in part and that they would be ignoring some. That is despite the fact that they had representation on the commission in the form of a commissioner representing the Conservative party and a commissioner representing the Liberal Democrats.

In essence, the Government have cherry-picked the commission’s recommendations, even though they were agreed on as a comprehensive package of reforms. It is therefore greatly disappointing that the Westminster Government have decided to ignore the will of the people of Wales, who believe that Wales should have greater power over its own affairs, according to successive polls, not least the ones conducted by the commission while it gathered evidence as part of its reports. Those polls represent some of the most detailed research undertaken on attitudes towards devolution since we first had our own devolved legislature in 1999.

[Hywel Williams (Arfon) (PC)]

Is all that not doubly disappointing given that our representative on the Silk commission was prepared to compromise in order to get a unanimous report? We gave ground and support to the recommendations of the Silk commission, but the Government are cherry-picking.

[Jonathan Edwards]

My hon. Friend makes a very important point and of course he is right. As I will go on to say, the Silk commission was a huge compromise for Plaid Cymru, yet we find ourselves the only party represented here in Westminster, and the only party represented in the National Assembly in Cardiff, trying to preserve the integrity of the Silk commission. That is a vital point which the people of Wales will realise in good time.

The devolution of air passenger duty was an important element of the package recommended by the Silk commission. It was therefore a slap in the face for Wales when it was omitted from the Wales Bill, which is currently progressing through this House. Both my colleagues and I have spoken several times about that Bill so I will not go into it too much further, save to say that my party and I have been dismayed by the attempts of both the Government and the Labour party to put narrow party self interest ahead of the Welsh national interest and to lay down road blocks in terms of the Silk commission.

The Government have sought to water down the financial powers recommended by the commission by constraining them through a lockstep.

--- Later in debate ---

[Jonathan Edwards]

The key point is that if the First Minister cannot persuade his own MPs and those on his own Front Bench in Westminster to propose policies that he is promising to the people of Wales, why should the people of Wales listen to a single word he says to them in the media? It is a test of his credibility and authority and, based on tonight’s and last year’s evidence, I would argue that the First Minister has no credibility or authority whatsoever.

[Hywel Williams]

Does my hon. Friend agree that the First Minister has form on this matter? He will recall that we proposed a new clause to the Water Bill to implement the Labour Administration in Cardiff’s policy on borders and the control of water. Of course, the Labour Benches were entirely empty and, as he has mentioned, Labour failed to vote on that matter, too. Labour is entirely bogus.

[Jonathan Edwards]

Once again, I am grateful for that intervention. That is one in a long list of political issues on which the First Minister and his Cabinet members say one thing in Cardiff while Welsh Labour MPs operate completely differently down here. The proof of the pudding will, of course, be the Westminster Labour party manifesto. We will see what influence the First Minister has over that, but the manner in which he has been completely bullied by the shadow Secretary of State, who now supports a lockstep on income tax powers, seems to show that the balance of power is quite firmly here in London.

Finance (No.2) Bill

Debate between Hywel Williams and Jonathan Edwards

Tuesday 8th April 2014 Commons Chamber

[Jonathan Edwards]

I can certainly assure the hon. Lady that not many people in Carmarthen East and Dinefwr are enjoying that tax cut. That is why I am speaking in such fervent opposition to it.

[Hywel Williams (Arfon) (PC)]

It is not only the fact that income tax has been cut but that further cuts to social provision are envisaged. So into the future, people at the bottom of the pile and who face disability and sickness will be seeing cuts to their benefits while the very rich will be seeing cuts to their tax.

[Jonathan Edwards]

I am sure that my hon. Friend’s surgeries, like mine, are filled weekly with individuals who face problems with reductions in the support that they receive. With all that in mind, it is difficult to look them in the eye and support a tax cut for those on the highest incomes. It undermines the case for the moral crusade I alluded to earlier and public support for the fiscal policy of the current UK Government.

--- Later in debate ---

[Jonathan Edwards]

Unfortunately, I cannot enlighten my hon. Friend, other than to say that the Western Mail informed me that senior Labour staff described it as a “balls-up”.

To be slightly more serious, I was happy that, in response to an intervention from me last week on Second Reading, the shadow Chief Secretary, who is in his place, said that should Labour form the next UK Government, it would restore the 50p top rate for the duration of the next Parliament. I would certainly support that, and I look forward to doing so if there is a Labour Government. My understanding before his answer was that Labour was proposing a temporary increase in the top rate, so I welcome that development. I hope that during today’s debate, the Labour Front-Bench spokesman will confirm that that will be its policy at the next election and beyond.

Owing to the manner in which Finance Bills are processed, it is impossible to press to a vote amendments to alter tax band rates, which is why both new clause 4 and Labour’s amendment 4 call for a review from the Treasury of the impact of re-introducing the 50p rate. The 2011 Budget included the provision of a review to reduce the 50p rate. As I said, nobody foresaw the Treasury introducing such a policy within a year. In other words, the 2011 Budget provisions were a sop to Tory donors that their party was minded to reduce the top rate at some point in the future. The following Budget then introduced the policy.

Proponents argue that the reduction in the additional rate to 45p has led to a windfall for the Treasury because of reduced avoidance and evasion. I noticed in the lead-up to the Budget last month that some Tory Back Benchers were making the case for a reduction to 40p for this Budget based on higher than expected tax receipts—some £9 billion—following the top rate changes. In the newspapers this morning the hon. Member for Taunton Deane (Mr Browne) was making a similar call for his party to adopt the 40p top rate come the general election. He is not in his seat, so perhaps he has been told to go somewhere else. I find that argument difficult to swallow as individuals seeking to avoid tax at a 50p rate would surely be minded to do so with a 45p rate. The higher than forecasted tax receipts used to justify a further cut in the top rate was surely as a result of higher than projected economic performance, and therefore a 50p rate would have brought in even more receipts for the Treasury.

[Hywel Williams]

What credence does my hon. Friend give to the analysis that some high earners deferred declaring their income with a view to declaring it once the 45p rate was introduced, and that that led to higher receipts?

[Jonathan Edwards]

That is an important point about forestalling, which I will talk about in more detail later.

I note that the Office for Budget Responsibility’s March 2012 “Economic and fiscal outlook” states on page 110 that

“the revenue-maximising additional tax rate is around 48%.”

Again, that blows a hole in the Government’s argument that their reduction of the additional rate was based on sound economic and revenue-raising evidence. That is why they should now commit to carrying out a full report, as the new clause would compel them to do. I would argue that 48 is slightly closer to 50 than to 45.

The Chancellor told the House in 2012:

“The increase from 40p to 50p raised just a third of the £3 billion that we were told it would raise.”—[Official Report, 21 March 2012; Vol. 542, c. 805.]

I know my A-level maths is a little shaky, but that still makes £1 billion, a significant sum to the good people of Carmarthenshire and the good people of Wales and the rest of the UK. The Chancellor’s justification for the tax cut for the super-wealthy was that they would avoid the tax, they might leave the UK, it raised only £1 billion, and the reduction would lose the Government only £100 million. Having brought forward their income to avoid the 50p rate in the first year, the rich delayed it in the final year to benefit from the reduction to 45p. That forestalling and deferment will have cost the Treasury billions that could have been used to avoid some of the worst cuts to those on low incomes, such as those resulting from the bedroom tax.

Recent claims by some on the Government Benches that the tax cut for the richest has yielded more revenue conveniently gloss over the increased likelihood of those with an accountant being able to move their income into the following year, given the Government’s indication a year ahead of time that they were enacting the tax cut. My advice to the Government would be to enact the proper closing of loopholes to ensure that the super-wealthy pay their fair share, instead of the fig leaves of action that the Government have offered previously. They have still not introduced proper measures to make up the HMRC estimate of £35 billion lost each year through avoidance and evasion. Other estimates put the figure much higher. Claims that the rich were fleeing because of the 50% rate are also not very well grounded. Research by the TUC, using HMRC figures, indicated that 59% of those paying the 50% additional rate were employees, most working in banking and therefore unable to leave.

Wales Bill

Debate between Hywel Williams and Jonathan Edwards

Monday 31st March 2014 Commons Chamber

[Hywel Williams]

I am indeed very glad that the Bill is before us, as I said at the start of my speech, but I am contrasting the time between the commission reporting and the Government responding. We suddenly have the Bill before us today. I certainly welcome that, but I have no idea why it has appeared so quickly; it is not for me to comment on the lack of other Government business.

I know that the term “a slap in the face for Wales” is very well used, and I hope that it will be reported tomorrow by our friends in the BBC, but I must say that to ignore such a fundamental report—as the hon. Gentleman has just pointed out—for so long is somewhat disrespectful. More importantly for us in Plaid Cymru and for other hon. Members, it is also damaging to the political and economic progress that our country can make. The Welsh Government continue to be denied the powers that they should be able to exercise—they are also denied the funding that they should have—and that were recommended by Gerry Holtham. However, we are where we are—but where are we?

Towards the end of last year, the Prime Minister swept into the Senedd building in Cardiff Bay to a media fanfare and the flashes of cameras, and announced new financial powers for Wales, but the proposals were rather light on detail. Indeed, the Prime Minister had discovered “anti-gravitas”, as I called it at the time, in making a proposal that then seemed to float away. It was not until some weeks later that we learned that all was not as it seemed. The Government had cherry-picked the cross-party Silk commission’s recommendations—accepting some, but only in part, and even omitting others.

The draft Wales Bill was published in January, and the Welsh Affairs Committee, of which I was a member, was tasked with its pre-legislative scrutiny, with a tight turnaround for producing a report. I must say that I enjoyed the process of scrutinising the Bill, and I pay tribute to all Committee members and to the hon. Member for Monmouth (David T. C. Davies), for his chairmanship. Contrary to his rather fierce, if not sometimes eccentric, persona in this Chamber, he was the model of a balanced Chairman, and I was very glad, if slightly surprised, that he acted in that way.

To return to the narrative, the Government then seemed to be in a hurry, and we now have the Bill. The Welsh Affairs Committee sessions took evidence from a variety of independent academics, civil society groups and even elected politicians from both this place and the National Assembly for Wales. Interestingly, even Opposition party leaders from Cardiff graced the Committee’s sittings. That move was not uncontroversial, because the Committee’s purpose is of course to scrutinise the Government at Westminster. Having the party leaders from Cardiff caused a certain amount of head scratching, because it was something of a first. However, it indicated that this was not some humdrum scrutiny exercise of a small Whitehall Department or a minor Bill because, as was pointed out by the hon. Member for Montgomeryshire (Glyn Davies), the Committee was considering part of the blueprint for the next stage in our national political development, and it deserved such a level of scrutiny.

The consensus that began to emerge was that borrowing powers were vital to allowing the Government of Wales, formed of whichever party or parties, to be able to borrow for investment to boost our economy and create jobs. However, the consensus was that the lockstep on income tax rates meant that the provision could not realistically be varied, because the power was unusable. Other than the duo of the Secretary of State for Wales and his Treasury colleague, the Exchequer Secretary—unsurprisingly—all agreed that it would be far better to have the ability to vary each individual income tax band rate.

During sittings of the Welsh Affairs Committee, I pointed out a paradoxical effect of raising or lowering tax rates with a lockstep. If we raise the tax rates with a lockstep, the higher rates are then less progressive than the lower ones: if we raise tax by a penny on the 20p band, we increase it by a twentieth, while if we raise it by a penny in the 40p band, we increase it by a fortieth. We should bear that slightly obscure ratio issue in mind. Equally, a decrease has a similar effect.

The cross-party Silk commission recommended in the first place that we should not have a lockstep. I proposed an amendment in discussions on the Welsh Affairs Committee report—I proposed that the Committee recommended dropping the lockstep. Unsurprisingly, our three friends from the Tories voted against my amendment; the hon. Member for Ceredigion (Mr Williams) and I voted for it; but, unaccountably, Labour members of the Committee managed to abstain. Even though they have publicly declared opposition to the lockstep in the Committee, they did not step up to the plate.

[Jonathan Edwards]

How baffled is my hon. Friend on the Labour party’s position on the lockstep? The First Minister says he wants to get rid of it. The shadow Secretary of State said today that he supports it. Who speaks for Labour?

[Hywel Williams]

I remain baffled—that is all I can say. Irrespective of Labour party internal divisions and wrangling, Labour has said that greater financial powers should have been granted, but now it is possibly saying that they should not be. The Tories remain divided on the lockstep. The greater part of the group in the Assembly complains that income tax powers with the lockstep are unusable, but the other part supported the London party and was given the sack.

I referred to the referendum when the hon. Member for Caerphilly (Wayne David) was in his place. The formulation of the question, if we ever have a referendum, will be extremely difficult, but rather than make the point myself, I shall but quote from the widely respected economist, Gerry Holtham, who told the Welsh Affairs Committee that Welsh politicians are being asked to

“fight a highly losable referendum. Tax is not popular, and, to be frank, neither are politicians at the present time. It is most unfair, but there it is. You are asking them to fight a losable referendum for a tax power they can’t use. It doesn’t look like a high-odds proposition to me.”

I tend to agree with him, particular given the possible complexity of the question, and the possible lack of a no campaign, which has been referred to.

The hon. Member for Nottingham North (Mr Allen), the constitutional expert and Chair of the Political and Constitutional Reform Committee, urged members of the Welsh Affairs Committee to seek to amend the legislation so that the lockstep is removed. He has said that the requirement for a referendum on the limited income tax powers is “ridiculous”. The Secretary of State, however, sung the praises of the lockstep, saying that it could be used to vary all rates and would put Wales at a competitive advantage. He has also noted his opposition to the devolution of long haul air passenger duty, as that would put Bristol airport at a competitive disadvantage. On the one hand, he argues against a competitive advantage, but, on the other, he refers to a competitive disadvantage. That does not seem particularly coherent to me, but there we are. In evidence to the Welsh Affairs Committee, the First Minister seemed to say that he wants Wales both to have a tax competition advantage and not to have one, as expertly adduced in a telling question asked by the hon. Member for Aberconwy (Guto Bebb). That incoherence shows that the cherry-picking of the Silk recommendations falls apart. It is a whole package.

On Labour’s new-found conversion to the need for reform of the Barnett formula, Plaid Cymru has been pointing out the consistent underfunding of Wales through the block grant for well over a decade, but successive Labour Secretaries of State have assured us that

“the Barnett formula serves Wales well”.

I am sorry that the right hon. Member for Neath (Mr Hain) is not here, because those are his words. I know them by heart because I have heard them so often. His consistent standpoint is that the formula serves Wales well and we meddle with it at our peril. I will not intrude on Labour’s private grief and confusion, and the further inconsistency on Barnett that Labour’s leader in the Scottish Parliament seems to generate so effectively and so unconsciously. After 13 years in power when Labour could have sorted the formula, it now cries for fair funding—the hon. Member for Pontypridd (Owen Smith) says that income tax powers without fair funding is a “Tory trap”.

Wales should be fairly funded, as Plaid Cymru has long argued, because every day we lose around £1 million in additional funding. Those figures change, as the hon. Member for Vale of Glamorgan has said—he would no doubt jump up and remind me were he in his place. We lose around £1 million every day, which we could spend on improving our health service, tackling the scandal of poverty or building new schools. For now, the Labour position is no fair funding and no income tax powers for Wales. We know why. That is Labour’s position because it fears that, if we address Barnett, its anti-independence campaign in Scotland will be finally scuppered. Oddly, therefore, the Labour party says in Wales that we must reform Barnett, but the very same unified and indivisible Labour party says in Scotland that we must not reform Barnett.

Meanwhile, the UK Government water down the Silk recommendations to conform to their fundamentally anti-devolutionist view that Wales cannot possibly have something that Scotland does not have. As we have seen this past week, events in Scotland may overtake them all.

--- Later in debate ---

[Hywel Williams]

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

[Jonathan Edwards]

The Secretary of State has cherry-picked the Silk commission’s recommendations on the ability to vary income tax. Because he has cherry-picked, why does he not devolve the lockstep without the referendum, and then have a referendum on removing the lockstep? That would be a practical way of moving forward, and of preserving the Silk commission proposals and recommendations.

[Hywel Williams]

That might be a way forward, but I have no idea how we would formulate a coherent question on the lockstep, as I have said. We should work towards all parties committing to a tax-sharing model in their 2015 manifestos, so that that could be achieved without the need for a costly referendum. Then in the future we could possibly have a referendum on the power to vary income tax, along with the wider powers expected as part of Silk II.

Plaid Cymru believes that constitutional change should not happen simply for its own sake, but because it represents the means to create a better society in Wales—more prosperous, more just, more equal and more democratic. That is our positive case. The financial powers recommended in the first report by the Silk commission represent some of the means to achieving that. They empower, but with them comes responsibility—a responsibility that Plaid Cymru would welcome.

Most of the debate has been focused on Wales. As a nationalist, I am pleased to quote an English Member—the hon. Member for Nottingham North again. He said:

“I start from the premise that the UK is the most massively over-centralised of all the western democracies and I find that deeply unhealthy.”

That point is about England and devolution all round—if I may use that 19th century phrase. He continued:

“I welcome this Bill very strongly because it is a step, not a leap—it is a step in the right direction.”

Water Bill

Debate between Hywel Williams and Jonathan Edwards

Monday 6th January 2014 Commons Chamber

[Hywel Williams]

I thank the hon. Gentleman for his intervention. He anticipates my next points, though he is welcome to intervene again should he still be unsatisfied.

We are not in a static, pre-privatisation and pre-devolution situation. Things have moved on, not least in respect of the current status of the NAW as a legislature following the most recent Act—I note that some hon. Members still call it a Welsh Administration, but that is another matter—and there is the prospect of further change as a result of the Silk commission’s reports. Change is central to the relationship between England and Wales, and has been so at least since the establishment of the Welsh Office in 1964. The pace picked up enormously since 1997 and 1999, with the establishment of the Welsh Assembly. The then Labour Secretary of State for Wales said famously that devolution is a “process, not an event”. That is a truism, whatever the current Labour First Minister in Cardiff might wish for as a constitutional settlement, so that it will “all just go away” and he can continue on his unambitious meander.

Plaid Cymru tabled amendments to Labour’s Government of Wales Bill in 2005-06 that would have had a similar effect to new clause 1, but the then Labour Government rejected them. They retained what, as a shorthand, I call the “London veto on Welsh water”. Their attitude was in contrast to that of the then hon. Member for Suffolk Coastal and former Environment Minister, John Selwyn Gummer, who is now in another place. In response to my right hon. Friend the Member for Dwyfor Meirionnydd (Mr Llwyd), he said:

“Under the clause, a Secretary of State, by diktat, would be able to say that a Measure that has a passing or glancing effect on some matter of importance—sufficiently important for the Assembly to feel that a Measure is needed—should be stopped because he has ‘reasonable grounds to believe’ that it would have an ‘adverse effect’. It is difficult to imagine that a Secretary of State would not be able to stop anything that he did not like. The condition of having ‘reasonable grounds’ does not help, so vague is the wording used in the following paragraphs.”

It was not just the Plaid Cymru MP who was sceptical about the Labour Government’s attitude. John Selwyn Gummer went on to say:

“I agree with the hon. Member for Meirionnydd Nant Conwy.”

That was his constituency at the time.

“Either we trust the Welsh people or we do not. It is extremely difficult for me to accept that the Welsh people have to be singled out and measures taken to ensure that, where water is concerned, they should not in any way or in any circumstances be able to do anything that might upset the plans of English Ministers.”—[Official Report, 24 January 2006; Vol. 441, c. 1359.]

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

I congratulate my hon. Friend on making a powerful case for the full devolution of Welsh water resources. Is it not the case that were his new clause successful, the people of Wales would be in full control over their entire water portfolio and that those who abstain or oppose his new clause when we divide will essentially be saying that large parts of Welsh water resources should be under the control of the British state?

[Hywel Williams]

My hon. Friend makes a telling point that I shall refer to later: there is no centre ground on this matter. Either the Assembly controls Welsh resources or the Government here in London do so. It is a question of whether the Welsh people have self-determination on this matter or whether there is a veto from London. I know which option he favours—it is the same one I favour.

[Hywel Williams]

That is an interesting point. At every turn, when further devolution is proposed, right hon. and hon. Members of all parties always say that there is no appetite for it, and they point to polls allegedly showing no appetite for further change, but subsequent polls always show that the Welsh people support further devolution. They support devolution that goes further than the Government’s proposals. They supported further devolution before and after the Government of Wales Act. The hon. Gentleman has his own opinion and I have mine, but I think I have my ear closer to the ground of Welsh people’s opinion.

[Jonathan Edwards]

The hon. Member for Cardiff North (Jonathan Evans) might have noticed over the summer that the Silk commission undertook the most detailed study of devolutionary attitudes in Wales since the Senedd was created in 1999, and it clearly indicated overwhelming support for the people of Wales getting control over their natural resources, be that wind, water, shale gas or whatever. The people of Wales want those resources in the ownership of the Welsh people, and the guardian of the Welsh people is our own sovereign Parliament in Cardiff.

[Hywel Williams]

I am grateful to my hon. Friend for that further point, however disappointed we both might be with the guardianship of the current Government in Cardiff.

Eight years after the Government of Wales Act, circumstances on the ground are much more pressing. For example—a small example, perhaps—the fracking industry, if it proceeds, will be a heavy user of water, and as the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon), has confirmed:

“Water sourced from local water companies for projects in England could potentially originate from Wales.”—[Official Report, 18 December 2013; Vol. 572, c. 640W.]

At the very least, there is the threat of history repeating itself—of industrial development and growth in wealth in England being based on resources from Wales, of the benefits to Wales being limited and of the legislative control of the Welsh Government being limited to part of the country only and being subject to a London veto. I believe that that is insupportable. It would be seen by many as Capel Celyn and Tryweryn once again.

--- Later in debate ---

[Jonathan Edwards]

Considering the clear position of the Labour Welsh Government, does my hon. Friend share my surprise that there is not a single Labour MP based in Wales in the Chamber today to defend that position?

[Hywel Williams]

Alas, I am not surprised at all by the complete lack of Labour MPs from Wales in the Chamber. They might still be celebrating, who knows?

In conclusion, if the coalition Government are unwise and refuse to accept the new clause and we are forced to press it to a Division, I expect the main Opposition party, which is also the Government party in Wales, to join us in the Lobby. After all, this is not just a Welsh test for the coalition Government. It is also a test for the Opposition in this place and for their friends in Wales of their consistency and commitment to the people of Wales. Are they serious about devolving power to Cardiff, or is this to be a case of echoing St Augustine: “Make me pure, but not yet”?

Energy Transmission Infrastructure (Carmarthenshire)

Debate between Hywel Williams and Jonathan Edwards

Tuesday 19th November 2013 Commons Chamber

[Jonathan Edwards]

I fully agree with the hon. Gentleman. I was staggered to read in the submission on behalf of the company responsible for the Brechfa west wind farm, RWE npower renewables, that tourism and agriculture were of low economic value to the Carmarthenshire economy. My constituency has more than 1,000 farms, yet multinational companies describe them as of little economic value.

[Hywel Williams (Arfon) (PC)]

Any assessment of cost should surely be an honest assessment, but as far as I can see, the difficulties caused to the tourism industry in my hon. Friend’s constituency, and certainly to the open air industry, including the mountains and the sea, in my constituency, are entirely disregarded when the cost is assessed.

[Jonathan Edwards]

My hon. Friend, like the hon. Member for Montgomeryshire (Glyn Davies), makes a valid point. We need an holistic assessment of the impact of transmission infrastructure projects on other sectors of the economy that should not be ridden over roughshod by multinational companies.

Finance (No. 2) Bill

Debate between Hywel Williams and Jonathan Edwards

Thursday 18th April 2013 Commons Chamber

[Jonathan Edwards]

It is with pleasure that I introduce my new clause 4 and new schedule 1; I hope to press the new clause to the vote at the appropriate time.

The UK Government’s Commission on Devolution in Wales, headed by Sir Paul Silk, published the first phase of its report in November 2012. This phase concentrated solely on fiscal powers. Here we are, five months later, still waiting for the UK Government response, which was originally said to be due this spring. In a matter of a few weeks, the cricket season will be upon us and it will be summer, yet we are none the wiser about the intentions of the UK Government.

In short, the Silk commission recommended that powers over stamp duty land tax, the aggregates levy, air passenger duty for long haul, landfill tax and business rates be devolved in their entirety and as soon as possible. It also advocated a sharing arrangement for income tax. In addition, it argued—importantly—that should corporation tax be devolved to Northern Ireland, Wales should not be left behind. I reiterate the point that I made on the closing day of the Budget debate—that we are very interested to see the strong lobby, led by the CBI, coming from Northern Ireland. In total, the fiscal powers advocated by Silk for immediate devolution—the minor taxes—together account for about £1.2 billion of the Welsh Government’s budget.

[Hywel Williams (Arfon) (PC)]

Does my hon. Friend find it strange, as I do, that no one representing the Labour party in Wales is present to back the policy of the Labour Government down in Cardiff?

[Jonathan Edwards]

I am extremely grateful for my hon. Friend’s intervention, as we had a debate in the Welsh Grand Committee on this issue, and Labour speaker after Labour speaker lined up to say that they not only were in favour of the Silk recommendations on minor taxes, but wanted them devolved immediately. They went even further, saying that the Finance Bill was the appropriate vehicle for achieving that.

[Jonathan Edwards]

That is the exact point. This was said to be the appropriate legislative vehicle for devolving airport duty to Northern Ireland, and if it is good enough for Northern Ireland, it is certainly good enough for Scotland and Wales.

Needless to say, the proposed powers fell far short of what Plaid Cymru was advocating as a party. We wanted a more comprehensive list of job-creating and economy-boosting powers, including VAT, corporation tax, resource taxes and capital gains tax. In the interest of compromise, however, and not second-guessing Silk, we are happy to proceed as the commission recommended—not least because the fiscal powers recommended by Paul Silk and his team in the commission’s report are desperately needed for the sake of the Welsh economy. The minor tax powers, the income tax sharing arrangement and the borrowing powers that would be triggered as a result would enable us in Wales better to deliver job-creating and economy-boosting measures and policies to help turn around the continuing dire state of the economy.

Yesterday’s unemployment figures showed a small drop in unemployment in Wales, but the number of economically inactive people went up by 7,000. The rate is still 0.4% higher than in the UK, and there are still nearly 50,000 more people unemployed in Wales than there were before the recession began, and another 50,000 more people who are under-employed. That is on top of the extra 50,000 public sector jobs we expect to be lost in the coming years on top of the 24,000 that have already been lost.

Last week’s research by Sheffield Hallam university and the Financial Times, to which my hon. Friend the Member for Na h-Eileanan an Iar (Mr MacNeil) referred, highlighted that more than £1 billion is due to be taken out of the Welsh economy over the next year by cuts to social security. This will have a devastating human cost, which is becoming all too clear.

The private sector is already on its knees in Wales due to the depression caused by the disastrous economic policies pursued by both Labour and Conservative Westminster Governments, which have destroyed the productive economies within the British state. It will deteriorate further as money is sucked out of local economies through further austerity. We are yet to see any realistic plan of how jobs and growth will come about in these depressed areas or any effort to counterbalance the austerity cuts, despite the high rhetoric of geographical rebalancing.

There are three important reasons why the Welsh Government should be empowered with fiscal powers as advocated by the Silk commission and as proposed in my new clause. First, it would make the Welsh Government more accountable. Secondly, it would incentivise the Welsh Government to concentrate on developing the economy to raise the necessary revenue to invest in public services. Lastly, an independent fiscal stream would enable the Welsh Government to access the borrowing powers they have agreed with the UK Government.

Labour’s proposals for substantial cuts in Welsh capital spending in the last Budget that it presented before losing office were supported in the Conservative-Liberal Democrat comprehensive spending review in October 2010, which cut the Welsh capital budget by 42%. Announcements in subsequent UK Budgets or autumn statements have meant that the final cut is about 39%. Although that is admittedly a smaller reduction than the one planned by Labour, it represents a huge hit for economic activity in Wales. The devolution of minor taxes and the triggering of borrowing powers would go some way towards filling the gap, enabling the Welsh Government to invest in infrastructure projects and generate economic momentum.

[Hywel Williams]

I thank my hon. Friend for giving way again; he is being very generous. Does he agree that the term “minor taxes” is a misnomer, given that those taxes constitute a key that could unlock substantial moneys which the Welsh Government could invest in dealing with our economic difficulties?

[Jonathan Edwards]

That is exactly the point. We have experienced twin processes in Wales. We have had the Silk commission, but there has also been a bilateral negotiation between the United Kingdom and Welsh Governments. The consequence of that negotiation was that the Welsh Government would be given borrowing powers if it had an independent fiscal stream. That is why my new clause is so vital for the Welsh economy.

In January, the Welsh Grand Committee debated the commission’s part II recommendations. Although there was a difference of views over the proposals for income tax-sharing arrangements, it was broadly accepted on all sides that the minor taxes recommendations should be implemented as soon as possible. I must confess that during that debate I became slightly confused. Unionist politicians were in favour of full devolution of some taxes, but opposed to a sharing arrangement between the UK and Welsh Governments in relation to income tax. My natural conclusion following the debate was that as there was a consensus at least in relation to the minor taxes, we ought to get on with devolving them swiftly rather than waiting for what could be years for a new Government of Wales Act.

The most prominent of the minor taxes is covered by the air passenger duty recommendation. It is difficult for us to table amendments relating to the other minor taxes at this stage because consideration in Committee is in the hands of the usual channels, from which my party is excluded, but we are at least able to consider the devolution of air passenger duty. I suggest that that should serve as a spur for the implementation of the other minor tax powers recommended by the commission.

UK and Welsh Governments (Finance)

Debate between Hywel Williams and Jonathan Edwards

Tuesday 11th September 2012 Westminster Hall

[Hywel Williams (Arfon) (PC)]

It is a pleasure to speak under your chairmanship, Mr Leigh. I welcome the new Minister at the Wales Office to his place. His role recently has perforce been one surrounded by a deep silence. I consulted the online Hansard and apparently his last contribution was in the Christmas Adjournment debate of 2010—some time ago. Many hon. Members, not least from Wales, will be looking forward to that silence being broken. I am glad of this early opportunity to question him on a crucial issue for Wales and I am determined to allow him plenty of time to answer. I am sure that hon. Members who are here today and take an interest in the issue will understand that, as this is a short debate, I will take only a few interventions.

My purpose in applying for the debate could not be simpler. I want to know what is going on. I want to hear evidence of progress towards fair funding for Wales. Neither I nor the people of Wales can wait until the Chancellor of the Exchequer’s misguided policies are conclusively proved to be a failure for funding for Wales to be reformed. This is not a back-burner issue. There is and has been for a very long time a pressing case for reform. It would be worth hundreds of millions of pounds to the people of Wales and would provide part of the springboard—part of the power—that we need to bring Wales out of this deepest of recessions.

The previous Secretary of State for Wales set up a twin-track approach to deal with developing constitutional issues. On the one hand, we have the Silk commission, which has two parts, the first primarily considering taxation issues and the second examining the wider devolution settlement. A great deal of effort was put in to ensure that the commission has cross-party support and cross-party membership. Participants are drawn from the Tory party, the Liberal Democrats, the Labour party and Plaid Cymru. It also has independent members. Plaid Cymru is represented by that fearsome Paxman baiter, Dr Eurfyl ap Gwilym. To my mind, he should be stirring things up in another place, but I will not pursue that line of thought now. With the Silk commission, meetings are advertised, communiqués are posted and consultation takes place. According to its website, the report on part I of its work will be out this autumn and the report on part II in 2013, although the former Secretary of State announced that that might be delayed until 2014. We shall see.

On the other hand, there are bilateral discussions between the Welsh and the UK Governments to discuss financial matters. Participants in those discussions are drawn from the Tory party, the Liberal Democrats and the Labour party, so not all parties in Wales are involved—Plaid Cymru is not involved. I well understand that they are Government-to-Government discussions. I am no more paranoid than any other MP; this is not a case of paranoia or lack of understanding on my part. The point is that, unlike the Silk commission, those discussions are simply not open to all and not transparent.

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

I congratulate my hon. Friend on gaining this debate and the Under-Secretary on his appointment. My hon. Friend has hit the nail on the head. We have the two processes of the bilateral discussions between the Governments and the Silk commission. My understanding is that the commissioners have some contact in terms of how those discussions between the two Governments are proceeding, but surely it is very difficult for them to put together a comprehensive package unless the cloak of secrecy surrounding the intergovernmental discussions is lifted.

[Hywel Williams]

My hon. Friend makes a very pertinent point. The question was asked of me in preparation for this debate whether one set of discussions needed to be concluded before the other set of discussions could be concluded. Do we not need to wait until the questions about responsibility are decided before we decide what the financial settlement is? My hon. Friend makes a very good point. What I am looking for in this debate is some answers from the Minister, who perhaps can enlighten us. My understanding is that, with the intergovernmental discussions, no communiqués are issued. Ministerial statements have lacked detail. Freedom of information requests have been refused or severely curtailed. Written questions have produced stonewalling answers. There is little information in the public domain and there is no schedule for reporting as there is with the Silk commission.

Therefore, as I said, my aim in today’s debate is simply to obtain some information on who is involved in the meetings, what is happening, what progress they have made, when they will conclude and how they will be reported. The debate is an opportunity for the Government and, indirectly, their interlocutor in Wales to report back to the Welsh people in their favourite forum—Parliament here in London—so here is an open goal for the new Minister.

Let me set out the headings of the matters that I would like the Minister to address. The primary aim of the discussions, as I understand them, is to consider the conclusions reached by the Holtham commission about the block funding grant for Wales—the so-called and now much-criticised Barnett formula. I say “now much-criticised”, as the Barnett formula had no stauncher defenders than members of the previous Administration, who repeatedly referred to it as

“a good deal for Wales”—

that is, until they were no longer in government. Then it was all awful.

The Holtham commission, as we well know, found that the Barnett formula was “not fit for purpose”. There was agreement with that in a variety of other reports issued at the same time from the House of Lords, the House of Commons and the Calman commission and in discourse between political parties and the various parts of Welsh civil society. That is because Barnett is unrelated to the relative needs of each of the devolved Administrations. Instead, it depends on the spending decisions made by individual Departments in England, so the amount of money spent in Wales depends on the amount spent in England. More than that, the formula is intended to converge with the English average, irrespective of whether that helps the people of Wales. That was the initial intention at least—a converging formula.

The amount of money that we get is decided not according to our needs, but according to the formula; and the gap between the amount of money that we need and the amount available is growing. The Holtham commission estimated, conservatively, that there was a gap of about £400 million between the amount of funding that Wales receives and its relative needs. However, those figures are now several years out of date, as well as being based on spending estimates rather than the final budget. More recent estimates by our colleague, Dr Eurfyl ap Gwilym, suggest that the difference in 2010-11 could have been as high as £680 million, not £400 million.

My worry, therefore, as far as the discussions are concerned, is that if we accept the much-touted suggestion of a Barnett floor to prevent further convergence, we will lock ourselves into the existing inequality. The Barnett floor might actually become a Barnett ceiling. The question for us today and for the people of Wales is at what level that might be set. Would it be at 112% of need, 113% or 114%, as Holtham suggested? The answers to those questions are crucial.

Finance (No. 4) Bill

Debate between Hywel Williams and Jonathan Edwards

Thursday 19th April 2012 Commons Chamber

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

On a point of order, Mr Williams. I thought we were having a debate on the granny tax rather than on Second Reading of the whole Finance Bill.

[The Temporary Chair (Hywel Williams)]

That is a very good point.

Regional Pay (Public Sector)

Debate between Hywel Williams and Jonathan Edwards

Tuesday 10th January 2012 Westminster Hall

[Jonathan Edwards]

The hon. Lady makes an excellent point, and I thank her for that intervention. I will come on to talk about the brain-drain element and the polarisation of wealth across the British state.

I say to the Minister that, with the policy in operation across some parts of the public sector already, the Treasury should have the information about its impact at its disposal. That leads us to ask why the autumn statement pledged to hold an investigation into the issue. There is already a wealth of evidence from trade unions about the problems of the policy in the courts and prison services.

Without having sight of the Minister’s speech, I presume that her counter-argument might include saying that it is the Government’s intention to equalise the standard of living for public sector workers. Such an argument might go along the lines that a teacher working in Carlisle or Carmarthenshire has more disposable income than a colleague working in Reading, because of the difference in the cost of living and that that is morally unjustifiable. Superficially, that seems a seductive and attractive argument, but it is essentially a policy aimed towards a race to the bottom.

I hope that the Government do not embark on a divide-and-rule strategy and play public sector workers off against each other, as they have during the public sector pensions debate. Under the proposals, both public and private sector workers in the regions and locations concerned would be losers. The impact of such a policy would not be a geographical or sectoral rebalancing of the economy; it would be a sobering experience, with public sector workers already in fear of their jobs having their pockets picked for pension payments and suffering a prolonged period of wage freezes and real-term cuts.

[Hywel Williams (Arfon) (PC)]

Does my hon. Friend agree that the arguments about differential costs of living in some areas are sometimes bogus? He will know as well as I do that, for example, transport costs in rural areas are astronomical. People might have to run two cars, as they struggle to maintain a lifestyle that involves travelling to two jobs in different directions.

[Jonathan Edwards]

My hon. Friend makes an excellent argument. Indeed, following the autumn statement, he tabled an early-day motion on the topic, which I think has been supported by about 18 Members to date. I urge those Members who support the campaign on this issue to sign that early-day motion at the very least.

Public sector workers are facing real-term cuts and that is before we consider the impact on the private sector. In many places, the private sector is reliant on the trade generated by the public sector and the money circulated through public sector employees. In constituencies such as mine, where more than 30% of people work in the public sector, there is a direct correlation between their wages and the cash circulating in the local economy.

--- Later in debate ---

[Jonathan Edwards]

That is a fantastic intervention, if I am honest. Obviously, if we were to think this policy through rationally, it would mean that Members of Parliament should receive differential pay, and I can imagine how that might go down with hon. Members if we had to vote on it.

[Hywel Williams]

To return to the practical problems that we have in Wales, we share a long land border with England that is rather different from Scotland. There is much less traffic. I am very glad to see that link with England and both sides should profit from it, but it means that public sector pay in the Courts Service in Mold, for example, is different from that in Chester, which is just a few miles down the road, and that is ludicrous.

[Jonathan Edwards]

That is one of the practical problems that will come from this policy.

As a Welsh nationalist, I of course welcome the statements of the Government of my country that they will look into devolving public sector pay and conditions. Let us hope that if the UK Government continue with this policy, they match their words with actions. My only word of warning is: how will the Welsh Government fund this policy, given that they are reliant on block grant funding, which has been depressed by the Treasury, and that they are paralysed by an inability to raise their own revenue? If we go down this road, we will have to reform the funding formula, which the Labour party was previously cautious about doing.

Every hon. Member will acknowledge that the cost of living—particularly housing—for public sector workers in some parts of the UK is a problem. The chasm between private sector and public sector wages in London, for example, needs to be addressed. That is why my party previously made the case for a maximum wage to tackle the ridiculous earnings and bonuses paid to people in the square mile that do so much to inflate prices for ordinary working people in both public and private sectors. We must consider introducing innovative ideas, such as rent caps, as in New York, to reduce the housing benefit bill and ensure that public sector workers are not priced out of housing.

Rather than take such bold measures, the UK Government prefer to hammer hard-working people in the poorest parts of the state in an attempt to remedy the problems caused by the obsession of successive Westminster Governments with the economic elite here in London. That policy response, based on dealing with the consequences of macro-economic policy, has led to such imbalances across the state, rather than tackling the causes of those imbalances. The argument is that, through regional pay, the differences between public and private sector pay will disappear, but that claim comes about through looking at problems through the wrong end of the microscope. That is the same perspective from which people argued that cutting public sector jobs would lead automatically to their replacement with private sector jobs—and that has since been proven quite wrong, especially in areas such as the one that I represent.

In Wales, as in other parts of the UK, the private sector is undoubtedly too small, and that is sometimes misrepresented by people saying that there is too large a public sector, but that is not the case. The private sector in Wales needs to be given encouragement to grow through tax breaks, Government support for specific industries and infrastructure improvements. My party has been championing such intervention in response to the economic turmoil of the financial crisis in the past four years. I need not remind hon. Members that the Welsh economy under Plaid Cymru was growing faster than in any other part of the UK when we left office.

Sharp cuts in the pay available to public sector workers would have a hugely negative impact upon their ability to spend in the private sector and would probably lead to a vicious downward spiral, with job losses in the private sector and then a further downward impact upon public sector pay to again realign. This is what Blanchflower calls a “death spiral”. The effect of regional pay may be to institutionalise lower pay and create employment ghettos. I am concerned that, despite such significant problems, the twin siren calls of saving money and dismantling the public sector may be too much for the Chancellor to ignore. I hope that I am wrong. Diolch yn fawr.

Public Sector Pensions

Debate between Hywel Williams and Jonathan Edwards

Thursday 8th December 2011 Commons Chamber

[Hywel Williams]

No, I must try to make some progress. No doubt the hon. Gentleman will have an opportunity to speak later.

Whatever the Government say, the 3.2% is seen by workers and by the general population as an additional and carefully targeted tax, aimed largely at those who have the least means to pay. As for the negotiations, they must be based on proper evidence rather than on the cases that the Prime Minister quoted selectively during last week’s Question Time, which were so effectively debunked in Radio 4’s “'More or Less” programme and in Channel 4’s “FactCheck”.

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

I congratulate my hon. Friend on the excellent speech that he is making. Is he aware of a study by the Fire Brigades Union, which found that 27% of its members were likely, or very likely, to leave their pension schemes if employee contributions were raised? What effect does he think that would have on the sustainability of schemes if it were translated across the public sector?

[Hywel Williams]

There is clearly a danger that some schemes will become unviable, which would mean that in the longer term those who no longer had pension schemes would become even more dependent on the state. I am sure that Government Members would not want that to happen.