Oral Answers to Questions

Ian C. Lucas Excerpts

Tuesday 2nd September 2014 Commons Chamber

[Mr Osborne]

Of course, I want Weaver Vale and Cheshire to be part of that northern powerhouse, and may I commend my hon. Friend for the campaigns he has fought to get the second Mersey crossing, the Halton curve and the investment in Daresbury? Those are things that Labour MPs, including the one who used to represent his seat, campaigned for for years and got nothing from a Labour Government. We now have a Conservative MP delivering for his constituents under a Conservative Chancellor.

[Ian Lucas (Wrexham) (Lab)]

In 2010, the Chancellor said that he would eliminate the deficit by 2015. Why has he failed?

[Mr Osborne]

For the reasons that I have set out before—with the slower growth in Europe. This is extraordinary: all we get at Treasury questions and generally from the Labour party are requests for more spending and more borrowing, but now Labour Members seem to be complaining that we have not cut enough. Over the summer, we did our sums, we added up their summer spending spree and we found there had been £21 billion of Labour spending commitments in the past five or six weeks alone. That is another reminder of why it cannot be trusted with the British economy again.

Oral Answers to Questions

Ian C. Lucas Excerpts

Tuesday 24th June 2014 Commons Chamber

[Nicky Morgan]

My hon. Friend is right about the figures. We remain committed to continuing the fall and to eradicating child poverty by 2020. Our draft strategy sets out how we intend to achieve that. Children are three times more likely to be in poverty if they live in a workless household, which is why work remains the best route out of poverty.

[Ian Lucas (Wrexham) (Lab)]

9. What steps he is taking to promote private sector investment in the construction industry.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The Government published the Construction 2025 industrial strategy in July last year, setting out a clear vision of how the Government will work with the industry to maximise the opportunities for growth. The Construction Leadership Council, chaired by my right hon. Friend the Business Secretary and Sir David Higgins, is overseeing delivery of that strategy. In addition, efforts to drive improved delivery are being co-ordinated through Infrastructure UK’s cost review programme.

[Ian Lucas]

But Wrexham construction companies continue to tell me that banks fail to offer loans to support house building projects. Non-financial private sector investment has fallen from £43 billion in 2008 to £14 billion in 2013. Is this not just another aspect of the failure of the Chancellor’s short-term economic scam?

[Mr Gauke]

As a Government we are trying to do everything we can to help the construction industry, whether that is through the beneficial effect of Help to Buy, the local infrastructure fund, or the changes to planning. It is worth pointing out that construction output, according to the Office for National Statistics, is 4.6% up from where it was 12 months ago. The purchasing managers index also shows significant increases in construction. We are moving in the right direction.

The Economy and Living Standards

Ian C. Lucas Excerpts

Thursday 12th June 2014 Commons Chamber

[Ed Balls]

My hon. Friend’s description of the historical record since 2010 is correct. However, the real issue is why we still have such low investment and why living standards are still falling. The jobs that we are creating are not delivering rising living standards for working people. We have only to look at the election results from a few weeks ago to see the potential challenge to Britain’s place in the world if we do not understand those forces.

[Ian Lucas (Wrexham) (Lab)]

Will my right hon. Friend give way?

[Ed Balls]

In a second.

As I said, the first mistake is to bury our heads in the sand. The second mistake is to attempt to appease those who say that the problem is rapid globalisation and technological change and that therefore the simplest thing to do is to put up trade barriers, stop all migration to Britain and leave the European Union. That is the wrong approach as well.

We all know the depth of concern about immigration in our country, but when the Prime Minister claimed, foolishly, that he would reduce net migration to the tens of thousands, “no ifs, no buts”, he did the cause of sensible and progressive immigration reform no good at all, because he has failed. Net migration has not come down to the tens of thousands; it has stuck stubbornly above 200,000 a year. Even the Chancellor has admitted that the Government will not meet their immigration target. Sending ad vans around the country urging immigrants to go home has only undermined their credibility. That is not the right approach on this issue.

We need clear reform on this matter. We need tough new laws to stop agencies and employers exploiting cheap migrant labour to undercut wages and jobs. We need to strengthen our border controls, not weaken them. We need to ensure that people who come to this country can learn English, and we must provide the support to make that happen. We need fairer rules to make sure that people who come here contribute, cannot claim benefits when they arrive and can more easily be deported if they commit a crime. We need to reform the free movement of labour in Europe through longer transitional controls, stronger employment protection and restrictions on benefits. Those are the things that we have to do. We need reform, not posturing and pandering.

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[Mr Osborne]

Funding for lending is now, of course, skewed away from mortgages—a decision taken by the Governor of the Bank of England and me before Christmas—precisely to start to apply some macro-prudential controls to the housing market. It is heavily skewed towards small business lending in order to address the issue of an impaired banking system, still deeply damaged by what went on six or seven years ago. The good news is that a huge amount of progress has been made since this debate last year and since last year’s Mansion House speech; we are undertaking a major restructuring of the Royal Bank of Scotland and, of course, starting to return Lloyds to the private sector. All of that will help make sure that our financial system is functioning properly and supporting businesses that want to grow and expand.

[Ian Lucas]

Will the Chancellor give way?

[Mr Osborne]

Let me make this final point before taking another intervention.

I want to conclude by mentioning a measure that the shadow Chancellor—or, indeed, the Leader of the Opposition, which is pretty revealing—did not mention at all. I refer to the pensions tax Bill, which will give people real choices about what they do with their defined contribution pension pots, and ensure that they get free and impartial guidance on those choices. We have spent the last three months in consultation, and I have met pension providers and many consumer groups. The consultation closed yesterday, and I will announce next month the details of how the freedoms and the guidance will work. We will set out the implications for defined benefit pensions, too.

We want an economy in which effort is rewarded and those who save are trusted with their pension savings in retirement. We will enshrine all this in law; it heralds a revolution in pensions based on this simple principle: “you earned it; you saved it; now you have control over your own money”. Because it is such a simple principle, because it involves trusting people and because that is popular with people, the Labour Opposition have not got a clue about how to respond to it. From the moment that the Leader of the Opposition rose to give his dismal, pre-scripted reply to the Budget, they have been completely pole-axed by it.

[Ian Lucas]

rose—

[Mr Osborne]

Perhaps the hon. Gentleman will tell me whether he will support this Bill in the Division Lobbies.

[Ian Lucas]

Unlike the right hon. Gentleman, I ran my own business in the 1980s, and I remember the pension mis-selling and how many people lost their life savings as a result of reckless Conservative legislation and a lack of proper advice. This is a very serious matter, so rather than taking cheap political pot shots, will the right hon. Gentleman tell me what exactly will be the nature of the advice given to people about their life savings before he asks them to spend it?

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[Ian Lucas (Wrexham) (Lab)]

In his 2010 Budget, the Chancellor said that he would eliminate the budget deficit by the next general election in 2015. On his own terms, he has failed. In the 2010 Budget, the Chancellor said that net borrowing this year would be £37 billion. The latest forecasts from the Office for Budget Responsibility put the figure at close to £100 billion. That is not the Chancellor’s only failure. In 2010, the Chancellor said that he wanted to create

“a new, balanced economy where we save, invest and export”.—[Official Report, 22 June 2010; Vol. 512, c. 167.]

I have already said how catastrophic the Chancellor’s failure has been for the deficit. However, adjusted for dilapidation and depreciation, non-financial private sector investment has fallen from £43 billion in 2008 to £14 billion in 2013. Less investment means less competitiveness and poorer productivity.

To address the desperate politics of their situation, the Tories and the Liberals have sought to revive the economy through various short-term measures. The funding for lending scheme gave incentives to banks to lend to the mortgage market but did little to help small businesses. The Help to Buy scheme was introduced in the 2013 Budget and has helped to fuel the property market in the south-east in particular.

Short-termism is the byword for this exhausted Government. Far from having a long-term economic plan, they are staggering through to the next general election and thereafter the inevitable rate rise will happen. Their re-election would be catastrophic for home owners who are already suffering a cost of living crisis, even with record low interest rates, and for business, which will have to cope with increased costs.

This Government have not addressed the fundamental weaknesses of this country’s economy since the 1980s: over-reliance on the financial sector and over-concentration of wealth and investment in London and the south-east. When the UK economy was at its strongest, it relied on economic growth right across the UK. We had superb regional institutions, such as Halifax building society, Leeds Permanent and Northern Rock, which were destroyed because of Thatcherite dogma. That helped to create the global financial crisis that has beset this country and caused the problems that we have.

As people from right across the political spectrum, but not this Government, are seeing, we need to develop a system of regional finance to support local business and to invest in local economies. We cannot rely on the white-tied individuals in the City of London to support the industry and the businesses that we need. It is time for regional banks. The Government do not even recognise the problem, so they will never provide the solution. Thank goodness this is their last Queen’s Speech.

Wales Bill

Ian C. Lucas Excerpts

Wednesday 30th April 2014 Commons Chamber

[Mr Hain]

I have already dealt with that matter, but I will, if I may, correct the hon. Gentleman. It is not objectionable to my party; it is objectionable to voters. That is the point about this, and we are representing the voters’ will.

Perhaps the great irony of the Government’s proposals is that when they released their Green Paper in 2011, they found what was described as a

“small majority of people opposed to the Government’s proposal to lift the ban”,

and yet they still carried on. The Government, who themselves have a small majority, now seek to overturn a small majority. A former Liberal Democrat leader and a Conservative Secretary of State backed my 2006 ban, as did the chairman of the Richard commission. The commission reported in 2004, recommending extra powers for the Assembly, which my 2006 Act delivered. Lord Richard told the Welsh Affairs Committee:

“There is something wrong in a situation in which five people can stand in Clwyd, none of them can be elected, and then they all get into the Assembly. On the face of it that does not make sense. I think a lot of people in Wales find that it does not.”

The eminent Welsh academic, Dr Denis Balsom, said in his evidence to the Richard commission:

“Candidates use the list as an insurance against failing to win a constituency contest. This dual candidacy can also confuse the electorate, who may wish to consciously reject a particular candidate only to find them elected via the list. It should remain a basic democratic right not to elect a particular candidate or to be able to vote a Member out.”

[Ian Lucas (Wrexham) (Lab)]

Does my right hon. Friend agree that the real objection to dual candidacy is that those individuals who are rejected are then let in by the parties through the back door, and not by the electorate?

[Mr Hain]

My hon. Friend expresses my argument well—indeed better in some respects. One motivation for reversing the 2006 ban expressed by Plaid Cymru was the loss of its unquestionably talented Assembly Member, Helen Mary Jones. On 9 January 2006, when I was Secretary of State for Wales and dual candidature was still permitted, Helen Mary Jones put out a press release in which she described herself as the “Llanelli-based Assembly Member”. In it, she complained about money spent on a hospital in Carmarthen instead of one in Llanelli. However, she should really have been supporting both hospitals. As a list Assembly Member for Mid and West Wales, she represented both towns. If she had really been discharging her list Member duties properly, she would not have discriminated between those two towns or their hospitals. Yet of all the parts of the list area which she represented, she targeted the one place where she had been narrowly defeated in 2003, invariably describing herself as the “Llanelli-based Assembly Member”. The 2006 Act stopped her describing herself as that, although in the meantime she had campaigned hard as the list Member and had won the seat back in 2007, only to lose it again in 2011. As the ban had kicked in by then, she no longer remained the list Member. That has made it much harder for her to win the seat back for the next elections in 2016.

Now I come to the pièce de résistance. If this Bill gets enacted unamended, the Plaid Cymru party leader, Leanne Wood, will be able to implement—indeed quite possibly is already implementing—the comprehensive strategy she laid out in a remarkably candid memorandum in August 2003 when she was a list Assembly Member. My hon. Friend the Member for Pontypridd (Owen Smith) has quoted from that document, so I will not do so—[Interruption.] I can if Members are disappointed.

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[Mr Jones]

It is perfectly clear that the Conservative party’s position was amply stated in the debate in 2006. That position was supported by parties other than the Labour party. It is absolutely clear that we have justice on our side in overturning a fairly straightforward partisan measure introduced by the Labour party.

[Ian Lucas]

The Secretary of State is being generous in giving way. He keeps saying that it is a partisan measure, but will he explain how it applies to the Labour party differently from how it applies to any other party in Wales?

[Mr Jones]

The position is absolutely clear: smaller parties in Wales, as we have said, have a smaller pool of first-class candidates.

[Ian Lucas]

That is nonsense.

[Mr Jones]

It is not nonsense—absolutely not. The measure was put in place to favour the Labour party.

North Wales Economy

Ian C. Lucas Excerpts

Tuesday 1st April 2014 Westminster Hall

[Mr Hanson]

My hon. Friend predicts my thoughts, because I was going to say that although my constituency does not depend on European objective 1 funding, the fact that many businesses in Flintshire such as Toyota and Airbus, and Vauxhall, which is nearby, are able to sell goods to the European market without tariffs is vital to the area’s economic growth. I want the Minister to commit to supporting a strong European Union.

[Ian Lucas (Wrexham) (Lab)]

Does my right hon. Friend agree that uncertainty is the enemy of investment? Even now, the Conservative party’s commitment, for internal party political reasons, to a referendum on EU membership in 2017 is negatively impacting on investment in our communities.

[Mr Hanson]

I absolutely agree with my hon. Friend. We may plan for five-year electoral cycles, but businesses plan investment over longer periods of time. Important business decisions on increasing investment will depend on whether companies see the UK, and north Wales in particular, as part of a vibrant wider Europe. I hope that the Minister can comment on that.

I have mentioned transport and Europe, and I want to touch on the cross-border nature of investment. I sadly could not participate in the Wales Bill’s Second Reading debate yesterday, but I hope that in taking forward the Bill’s proposals, the Minister is cognisant of the fact that the economy of my part of north-east Wales is linked directly to that of north-west England. Development agencies, infrastructure stakeholders, businesses and local councils on the English side of the border should be consulted on the Bill’s measures just as much as those on the Welsh side. The Welsh Assembly and the UK Government should work in tandem to develop both sides of the border. Some 400 of my constituents work for Vauxhall at Ellesmere Port, and it is sometimes quicker to get there than it is to get to places on the Welsh side of the border. We must accept and understand how integrated the United Kingdom is, and its cross-border issues.

The active issue for the Government relates to construction. My hon. Friend the Member for Wrexham (Ian Lucas) will talk about investment in the prison shortly, but there are a couple of other key issues that we should examine. We need a regional plan for north Wales and north-west England, with connectivity across the board; but we also need to think about three other issues that are particularly important. To raise the level of investment and economic activity in north Wales, we should seriously consider working towards a living wage. Local authorities should be involved in that, and we need an active Government to promote it. Money spent locally by people who earn a living wage will help to regenerate high street small businesses in places such as Holywell, Flint and Mold in my constituency. The money will not be lost to north-east Wales but reinvested in local small businesses and shops, and the community. I should welcome a commitment to a living wage; I know that my hon. Friends would give that commitment.

There is also a need for apprenticeships and training. Airbus in north Wales is key to that issue. Tomorrow other hon. Members and I will meet Airbus apprentices in the House of Commons. Capital-led investment by an active Government in colleges, schools and infrastructure will generate business in the economy. That is why I particularly welcome the Labour commitment to invest in new homes and try to build 200,000 of them by 2020. I hope that a future Labour Government will keep to that pledge and invest in public sector homes, and consequentially enable the Welsh Assembly Government to do so too. That will kick-start the construction industry and help people who are not now on the housing ladder.

Labour’s commitment to cut business rates for small firms, for the first two years of a Labour Government if we are elected in May 2015, is also welcome. That would also kick-start the local economy. The Labour party leader, my right hon. Friend the Member for Doncaster North (Edward Miliband), has taken key action on energy prices, which are vital to the cost base of many industries, particularly paper, steel and renewables. The ability to reduce and freeze energy bills will be a great help to the economy of north Wales.

I am pleased to have started the debate. I have tried to talk about some of the many positive aspects of our economy, but we must never be complacent. There are challenges, even with respect to big companies such as Airbus. There is a world out there trying to steal our markets and take our customers. Other parts of the world want to grow their economies, and we must be ever vigilant. There are things that the Government can do—I hope that a future Labour Government will do them—to strengthen transport links, improve infrastructure investment, provide a living wage, and help to secure the continual growth of an economy that is strong and diverse in several key sectors. That economy is of central importance not just to north Wales and the north-west, but to the whole UK.

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[Guto Bebb]

To be fair, it is important that we should reflect on the concerns of the tourism sector in Aberconwy, and Conwy in general, in relation to the wind farm development. The concern was reflected strongly by local representatives of all political parties in Conwy. Denbighshire councillors saw things differently, but the key thing now is to build on those successes.

The successes of north-east Wales are not for north-east Wales alone. Constituents of mine work in the Airbus factories, and people travel from my constituency to Deeside in 30 or 35 minutes on the A55, if there has not been a crash or an overturned caravan. The economies of north-east and north-west Wales are linked, and things work both ways because a significant number of people from north-east Wales are more than happy to spend their weekends in my constituency, and further west in that of the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd).

I think things are moving in a positive direction. My constituency has the highest dependency on small businesses of any constituency in north Wales. If it were not for the small business community, the economic situation there would be dire indeed. We are experiencing confidence, investment, and the willingness of people to invest in their businesses, whether those businesses are new or are being refurbished. There are recent successes that we should all welcome. The one I am most pleased about is a small coffee shop in Llandudno Junction. In terms of economic change, it is not a big issue—four new employees in a small coffee shop in Llandudno Junction—but that business was funded through crowdfunding. It is the first business that I have seen in my constituency that sought crowdfunding because of the reluctance of banks to lend, which continues to be a big problem. That resulted in a brand-new coffee shop employing people in the Junction. That is the type of innovation from young people that will be key to the success of the north Wales economy.

[Ian Lucas]

Will the hon. Gentleman give way?

[Guto Bebb]

I will take one final intervention, because I am aware of the time.

[Ian Lucas]

My interest, which I share with the hon. Gentleman, is in finance for business. Would he support a regional bank for north Wales that was much more attuned to the regional economy, able to understand our local business community and therefore able to make the right decisions on investment?

[Guto Bebb]

There is certainly an argument for that, but let us be fair: our big problem in Wales is the fact that Finance Wales has been such a disastrous failure. Had it stepped into the breach as a lender of last resort supporting businesses, perhaps we would not need a regional bank. Businesses in my constituency, such as those in the Church Walks enterprise hub, which has 40 employees in the high-technology industries, were being charged 7% above base by Finance Wales. That is the type of lending that HSBC and other high street banks have been guilty of charging. When we see a publicly supported bank doing that, I have real concerns.

We are certainly seeing real signs of investment in my constituency. A vital investment has been the refurbishment of the Eagles hotel in Llanrwst. No small town can do without a key hotel, and the closure of the Eagles hotel caused concern about the future of Llanrwst. I welcome its reopening with significant new investment. Furthermore, on Friday, I was in Betwys-y-Coed, reopening the Pont y Pair inn—seven new employees, a significant £150,000 investment and, from what I saw, a guaranteed success. Even better, that investment means that we are selling the local brew, the Conwy Brewery beer; that shows how tourism can interlink with the food and agricultural community. That is the other issue that I want to touch on.

We sometimes forget when talking about the economy of north Wales how important agriculture and the food sector are. In my constituency, we see the links, because there is significant investment in the Bodnant food centre, which is supported by European regional funding; indeed, it is one of the 0.5% of European-funded projects led by the private sector. It is a success; European regional funding might have even greater success if more such projects were led by the private sector, rather than by the dead hand of bureaucracy. The food sector in my constituency is going from strength to strength. The Bodnant food centre is a fantastic success story, but it is building on top of the success of companies such as Blas ar Fwyd and Siwgr a Sbeis. Those companies are delivering for and serving the tourism sector—cafés, restaurants and hotels—and it is as if all the sectors of the economy in my constituency are coming together to give tourists and visitors a distinctly Welsh feel when they come to north Wales.

There is real, large investment in Llandudno, the queen of Welsh resorts, which gave a warm welcome to the Welsh Labour party over the weekend—we were delighted to see them, obviously. For a long time, it has had two large derelict hotels, which have been a stain on the town: the Clarence on Gloddaeth street and the St Tudno hotel, which can link the high street to Parc Llandudno. The good news is that both are being refurbished in multi-million pound investments, and there will be hotels, shops, other retail outlets and cafés in both locations, one at the top end of the high street and the other at the bottom end. They are significant, multi-million pound votes of confidence in the economy of Llandudno. Clearly, we are turning the corner. There will be employment growth and, more importantly, the slight decay that we saw on both sides of the town will be dealt with positively. I pay tribute to Mostyn Estates, to the investors and to the local authority for ensuring that we are dealing with those problems quickly.

The Government are also doing things. They are giving a huge vote of confidence to small businesses. In my constituency, a small partnership business, such as a husband and wife running a guest house, will be able to post a £20,000 profit without paying tax. That money will go back into the business, because running a guest house is like running the Forth bridge—people must keep investing to keep up standards. That tax break of the personal allowance increase is a tax break for businesses, and it makes a big difference in my constituency. The £2,000 rebate on national insurance is another vote of confidence in small businesses that want to employ staff; they will have a tax rebate if they do. Finally, the Welsh Government have seen sense on the small business rate subsidy of £1,000; that was announced by the Chancellor in his autumn statement. It took the Welsh Government four months, but I will not carp about that; I would rather see a correct decision made late in the day than a wrong decision. I welcome the fact that the Welsh Government are following in the footsteps of the Chancellor by ensuring rates relief for small businesses in my constituency.

I will curtail my remarks, having given, I hope, a positive view of how things are developing in my constituency. Of course, Aberconwy is not isolated; it is part of the wider north Wales economy. There are clearly concerns if unemployment figures in some parts of north Wales are increasing. That is not the case in Aberconwy, but we need a successful economy throughout north Wales. We benefit from investment in north-east Wales, just as I am sure that it will benefit from investment in the north-west. The prognosis for the north Wales economy is positive, as long as we have a Government who understand that their responsibility is to support businesses where they can and, most of the time, simply get out of the way.

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[Ian Lucas (Wrexham) (Lab)]

It is a pleasure to follow the poetic rhetoric of my hon. Friend the Member for Ynys Môn (Albert Owen) and it is a pleasure, Mr Hollobone, to serve under your chairmanship. I congratulate my right hon. Friend the Member for Delyn (Mr Hanson) on his speech. I will not repeat many of the things he said because he gave an excellent exposition on north Wales and I accept his speech in its entirety.

Mr Hollobone, you should visit the Pontcysyllte and Chirk aqueducts in the constituency of my good friend—

[Mr Philip Hollobone (in the Chair)]

Order. Several references have been made to the question of whether I have been to north Wales. I have been there many times, and on a Territorial Army exercise I swam across the reservoir at Pontcysyllte and camped on the beach at Penmaenmawr. I know the area extremely well and I recommend that tourists visit it.

[Ian Lucas]

We have an endorsement at the highest level. I will say no more about tourism, except that north Wales is a beautiful part of the world and tourism is an important part of its economy.

Although I promote north Wales as much as any hon. Member, I want to speak about job losses in Wrexham. We have had a difficult six months. We lost more than 500 jobs at Sharp Manufacturing UK in February, only two months ago. We lost 140 jobs at Kellogg’s in Wrexham, and just outside, in south Clwyd, more than 200 jobs were lost at First Milk. This is a positive part of the world and I will talk about the positives, but we must bear in mind the fact that substantial, well-paid and valued jobs that have been there for many years are going in our local economy. We must realise that the type of grant aid that was available in Wrexham, for example, in the 1980s and 1990s and which sometimes led to investment from outside the UK and to inward investment is no longer available.

A strong theme in all parties is that we must grow the economy in north Wales from within and develop local investment—I was interested in what the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) said about banking—and mechanisms to support local businesses. We have excellent local businesses.

Only last week, I visited Magellan Aerospace in Wrexham, which is an important part of the supply chain for Airbus: a positive picture was presented and apprentices are being taken on. I was delighted to meet Mr Darryl Wright, a governor at a local school that encourages apprenticeships in the aerospace industry. We will meet some of those apprentices later this week. I am delighted that in Wales we are doing better with apprentices than anywhere in Europe, including England, with the help of the excellent Minister, Ken Skates—he formerly worked for my good and hon. Friend the Member for Alyn and Deeside (Mark Tami)—whose commitment is showing through and creating an enormous number of apprenticeships.

In our local economy, we must focus on the development not just of physical infrastructure but of colleges such as Coleg Cambria, to support apprenticeships, and Glyndwr university, to develop education within our region. In that way, we can support our local economy and make not just the physical infrastructure but the intellectual infrastructure world beating. The companies that I am talking about—for example, Magellan, which is a Canadian company—do not need to be based in our region and will go there only if it is a world-competitive economy and we provide the infrastructure that enables us to compete.

My right hon. Friend the Member for Delyn made points about the development of the road and rail networks. We absolutely must argue the case for our region at Welsh Government, UK Government and European levels. Unless we do so, we will lose the benefits of those majestic companies that we have in our area. The work being done by the Welsh Government is very positive. One scheme we have not mentioned is Jobs Growth Wales, which is very important. It has been mentioned on many occasions in my constituency by employers. I visited a business the week before last called Fotofire Ltd—I visit businesses a lot in Wrexham and liaise with them closely—and I was told that the scheme had led to the employment of a number of individuals in the business. They had been assessed by the employer, which had then made judgments that they were the right people for the business. That company works in media, in the web industry, and is a home-grown business in Wrexham. It is tremendous to see that sort of business developing. I am pleased that Jobs Growth Wales is making such a positive contribution. If the Minister was to take something on board, he would look at that scheme and consider whether it could be applied across the rest of the UK.

I also want to say a word on finance. A key issue for us is financing the local economy. It is not only about the past five years; it is now seven years since the great economic crash. I attended a meeting last Friday morning of Wrexham business professionals where, again, the issue of access to finance was raised by businesses that are still having problems with our uncompetitive banking system. I have argued over a long period for the development of a model based on the German Sparkassen method, with a banking economy linked to our local industrial economy. Our economy provides 30% of the manufacturing output of Wales. A lot of money and wages is being earned in our local economy, and I believe that the people of north Wales would like to invest in their local economy through models and through a local bank. The Sparkassen method is resilient; it has worked in Germany over many years.

I am delighted that the Labour party has committed itself to regional banking. If we are to have a competitive market that provides finance for local business, I believe that that type of investment needs to come through local banking, with individuals who know the local economy. I wish that the Government would see that current banking methods are not working, that we need to create a more competitive banking system, and that they would look at alternatives that have worked in other places. That would be very welcome for businesses in my constituency and is something I would be keen to promote.

We have a positive picture in north Wales, with some of the caveats that I have indicated. There is an issue relating to wages. I would say that this Government increased VAT—they did not decrease it—taking money out of the pockets of my constituents and putting it straight into the pockets of the Chancellor of the Exchequer, at a centralised level. That had a damaging effect on Wrexham and, I am certain, on other communities in Wales. Increasing VAT is a really bad policy, because it takes money out of local economies, and I hope that such a mistake will not be made again.

[Several hon. Members]

rose—

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

It is a pleasure to serve under your chairmanship, Mr Hollobone, and to follow the hon. Member for Llanelli (Nia Griffith). I congratulate the right hon. Member for Delyn (Mr Hanson) on securing this important debate, and for the positive, constructive and intelligent way in which he set out his case. He emphasised the positive aspects of what is going on in Wales and the need to do more to secure the future of the excellent developments and facilities that he talked about so eloquently.

This morning, more people than ever before in north Wales went out to work. When we came into office in 2010, the overall employment level in north Wales was at a nine-year low. Over the past four years, notwithstanding the remarks of some Opposition Members, we have seen some really healthy growth in the labour market across Wales, but particularly in north Wales. Unemployment across north Wales is 6.3%, which is lower than the Welsh average and lower than the UK average.

One of the pleasures and privileges of my job at the Wales Office is that I get the opportunity to go out across Wales. Some of the most exciting, interesting and encouraging things that I see in the economy in Wales are happening in north Wales, so I concur with all the positive remarks made by Opposition Members about what is happening in the north Wales economy. I underline that we are seeing a sustained fall in unemployment. During the previous Parliament, unemployment in the constituency of the hon. Member for Wrexham (Ian Lucas) increased by 50%, but it has fallen by 10% since 2010. In Delyn, unemployment increased by 110% over the five years of the previous Parliament, but since 2010 it has come down by 17%. Of course, we want that to progress and go further, but the trend is positive. I will say a little more about that in a moment.

The right hon. Member for Delyn made an urgent point about Creative Foods. We are aware of that situation and have had a discussion about it at the Wales Office. In that case, as in the case of First Milk, in the constituency of the hon. Member for Clwyd South (Susan Elan Jones), and of the recent announcement by Avana bakeries in Newport, the Wales Office engaged closely with the companies to see what we could do, in conjunction with Welsh Government colleagues. It is no accident that all three of those companies, which announced significant job losses, are in the food sector. The hon. Member for Clwyd South raised an important question about supermarkets creating vulnerabilities for the food sector in Wales, and that is something that we should explore on another occasion. I reassure the right hon. Member for Delyn that we are certainly engaged on that matter.

Returning to the subject of jobs growth, there is positive growth across Wales, and particularly in north Wales. The right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) said that the important thing was the quality of jobs, not the quantity. In fact, the quantity of jobs is important, because one of the ways in which we can drive up wage levels is by creating more job competition. More competition for job opportunities drives up the wages that employers will offer.

It is worth pointing out that over the past three years, average wage levels in north Wales have increased by more than 6%. They are not back to where we want them to be. There was a huge destruction of value in the economy following the crash of 2008, which happened on the watch of the Labour Government, and that fed through to wage levels. Real wage levels fell for people right across the country. With the recovery, wage levels are starting to creep back up. Of course they are not where we want them to be, but there is progress. Average wage levels in Wales are increasing at twice the rate of inflation, which also happens to be at a four-year low. There is positive growth.

[Ian Lucas]

Since April 2010, real wages for women in Wrexham have fallen by 4.6%. That is on this Government’s watch, and it is having a real effect on our local economy.

[Stephen Crabb]

I am not disputing the fact that the situation as regards wages and jobs across Wales is patchy. Of course it will be, during the early stages of a recovery, but the trend is positive and will continue, bringing in new investment and creating more jobs.

As Members in all parts of the Chamber have highlighted, manufacturing is one of the bright points of the Welsh economy; there is the involvement of companies such as Airbus, Kimberly Clark—in the constituency of the right hon. Member for Delyn—and Kronospan. Growth has not simply been generated by a housing bubble in the south-east, as the hon. Member for Swansea West (Geraint Davies) argued in debate last night. There is real, balanced growth across all sectors in Wales.

On energy costs for manufacturers, the package of measures announced in the Budget by my right hon. Friend the Chancellor of the Exchequer was welcomed widely across the manufacturing sector in Wales, particularly by the energy-intensive industries that are so heavily represented in the Welsh economy. The measures directly address the concerns that the industry has raised with us. Companies such as Kronospan and Kimberly Clark are classified as energy-intensive industries and will benefit directly from that package.

Budget Resolutions and Economic Situation

Ian C. Lucas Excerpts

Wednesday 19th March 2014 Commons Chamber

[Ian Swales (Redcar) (LD)]

This Budget represents another step in dealing with the economic mess left by the Labour party. Everybody at home knows that if they live on borrowings and max out their credit card, they will one day have to cut their standard of living. It is completely disingenuous of the Labour party to pretend otherwise. The Liberal Democrats want a stronger economy and a fairer society. We are proud that our No. 1 manifesto commitment to cut income tax for 25 million people by raising the threshold to £10,000 will be met next month, and that the Chancellor has gone further in this Budget by raising the figure to £10,500.

We hear a lot from the Opposition about tax cuts for millionaires, and they are now complaining about tax rises. Since April 2010, millionaires have paid higher taxes on their income, on their capital gains, on their pension contributions, on their spending and on their private jets, and they have had to engage in less tax avoidance. We know that the Chancellor in the previous Labour Government, the right hon. Member for Edinburgh South West (Mr Darling), put the higher rate of income tax up from 40%—they kept it at that level throughout their time—to 50% on 6 April 2010. That was an important day for two reasons: first, the higher rate went up to 50%; and secondly, Parliament was dissolved. Labour Members were on the Government Benches only for a few hours while the top rate was 50%, so we should not take any lessons from them.

All the Budget documents show that the rich are paying a lot more. [Interruption.] The hon. Member for Wrexham (Ian Lucas) shouts from a sedentary position about VAT, but VAT is on spending, and I have news for him: millionaires spend the most, and they therefore pay the most VAT.

[Ian Lucas (Wrexham) (Lab)]

When the hon. Gentleman sought the votes of the people of Redcar, he assured them that he would not support a rise in VAT, so why did he do so when he went in with the Tories?

[Ian Swales]

When I stood in Redcar, I had not seen the note left by the then Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), saying that there was no money left.

I am pleased that the Government will give further support to apprenticeships. There have been 1.5 million of them in the country, with more than 4,000 in my constituency, and I welcome today’s news about an extra 100,000 apprenticeships. I welcome the cut in beer duty, and I pay tribute to my hon.—he ought to be right hon. one day—Friend the Member for Leeds North West (Greg Mulholland) for his relentless campaigning on the issue. I also welcome the cut in fuel duty, which will help hard-working people all over the country. We would certainly have paid a lot more under the Labour party’s plans.

--- Later in debate ---

[Ian Lucas (Wrexham) (Lab)]

It is a real pleasure to follow the right hon. Member for Chesham and Amersham (Mrs Gillan). As always, she has made a powerful case on behalf of her constituents.

In 2010, the Chancellor had what he called an emergency Budget. There was in fact no emergency. His predecessor’s Budget had already set out the deficit reduction strategy, and that policy was largely supported at the time by the Liberal Democrats. However, the present Chancellor—supported by the Liberal Democrats, who preferred Government to consistency of policy—made a choice and promised in 2010 that he would eliminate the deficit by 2015. On his own terms, he has failed. Today’s Budget is a confirmation of that central fact.

In 2010, when the economy needed stimulus and support, this Government provided neither. Instead, we and our constituents have endured four years of mistaken economic policy, which has resulted in most of the people I represent being £1,600 a year worse off than they were in 2010. Yet the Chancellor stood at the Dispatch Box today and expected plaudits. Following the delayed return of growth in the economy, the Government parties exude an air of complacency, but that is at variance with the views of most of the country and certainly of most of the people I represent in Wrexham.

The Government imposed substantial increases in VAT in 2010, contrary to the assurances given before the general election by both parties. The immediate result was that money was taken out of local economies and paid directly to the Government, suppressing demand in the retail and construction sectors. The long-term result has been a reduction in business activity. Lack of demand locally has been exacerbated by the failure of investment in local business. This Government’s failure to tackle the issue of business investment endures to this day, and is a consequence of their fundamental failure to implement meaningful reform of the banking sector. We heard nothing about that today.

In the early months of this Government, they talked a good game. They even set up an inquiry into high pay, although only in the public sector, not in the private sector. They have done nothing about the issue, however. We hear the occasional bleat from the Secretary of State for Business, Innovation and Skills, but the coalition Government have done nothing.

Again and again, Wrexham businesses tell me about the failure of the banks to provide adequate investment. Based as the banks are in the square mile, and focused as they are on financial services, that is not surprising. Why should those institutions understand the modern manufacturing and retail economy that is Wrexham, when none of their meaningful decisions is made by those who live in our community or have any knowledge of it?

[Guy Opperman (Hexham) (Con)]

rose—

[Ian Lucas]

I will give way to the hon. Gentleman; I know that he takes an interest in this subject.

[Guy Opperman]

The hon. Gentleman must surely accept that it was a mistake for Labour to vote against the provisions in the Financial Services Bill on 23 April 2012. Those provisions would have introduced greater competition, greater choice and a greater degree of local banking.

[Ian Lucas]

The fundamental mistake was the demutualisation of organisations such as Northern Rock by the Conservative Government in 1986 and the years thereafter. The hon. Gentleman should be arguing against such decisions, so that we can start creating institutions like local building societies again.

Our current banking system is not the only model of banking. In Germany, the Sparkassen model was affected much less than most economies by the 2007 recession. Local banks known as Sparkassen operate within geographically restricted areas and provide both retail and business banking there. Notwithstanding the existence of ordinary multinational banks, over 20% of ordinary local residents choose to invest in their local Sparkassen.

I welcome what the Chancellor said today about ISAs, but I believe that people would invest in local banks and institutions that supported the local economy and created jobs for young people. We want to see that happening, which is why we support the development of regional banks. Ever since the Conservative Government started to demutualise in the 1980s, destroying institutions such as Northern Rock, the Leeds Permanent building society and the Halifax building society, the move has been ever more towards centralising investment by the banks in this country. Local economies have suffered as a result.

Business investment has not recovered since 2007, and the City still dominates the economy. The growth that we are seeing in the UK is growth of the kind that led to the problem in the first place. We can all see the train coming down the track. We know what kind of a recovery this is, and we need to do something about it. The people I represent are not benefiting from the recovery at all. Women in my constituency are still earning less than they were in 2010, and men there have also seen a reduction in their incomes since that time.

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

Will the hon. Gentleman give way?

[Ian Lucas]

I must make some progress; I have a particular point that I want to make.

This Government are not even addressing those issues. They do not seem to understand that they exist. Nothing that the Chancellor said today will help the people I represent. They are fed up with inequality in this country, and with the massive support that is given to those in the City and those who earn millions of pounds a year, who are so remote from the lives of my constituents that they can have no understanding of how the rest of the country works.

Believe it or not, there was a time when the Prime Minister supported a move towards greater equality. He quoted “The Spirit Level” in 2009, before he was elected, when he was trying to present a positive face for the Conservative party for the election. Those days are long gone.

We need to take responsibility ourselves. Inequality is the issue of the time. I am a member of the Nationwide building society.

[Alun Cairns]

Will the hon. Gentleman give way?

[Ian Lucas]

I will not give way; I have a particular point to make.

The chief executive of the Nationwide building society was paid £2.3 million last year. I have written to him asking him to support a motion within the society that his salary should be no more than 75 times the rate of the lowest paid employee in the organisation. This is a mutual society that we should all support. He has refused, and I as a member, acting as an individual, intend to present a resolution to the annual conference of the Nationwide building society. A mutual organisation should respect the principles of mutuality and should accept that it is not appropriate for investors’ money to be used for that level of executive pay. If people want executives paid at that level, they can go and bank with Barclays. When I shifted my account to the Nationwide building society, I did so because I believed in mutuals. I want my chief executive’s pay, like that of the chief executive of the John Lewis Partnership, who operates precisely on those terms and has been in his position for many years, to be linked to that of other employees in the organisation.

I am looking for support. Members in all parts of the House can join my campaign. I need 500 signatures by 4 April, and I hope the Chancellor of the Exchequer will consider joining it, if he is a member of the Nationwide building society. We need to ensure that the people we represent know that we understand that this country faces a cost of living crisis and that individuals are worse off now, and that we will not put up with increased executive pay of millions of pounds for people who are not supporting the local economies in our constituencies.

Pub Companies

Ian C. Lucas Excerpts

Tuesday 21st January 2014 Commons Chamber

[Ian Lucas (Wrexham) (Lab)]

The right hon. Gentleman is being very generous with his time. Will he confirm that he now believes that statutory regulation is necessary?

[Vince Cable]

That was the purpose of the Government consultation. Statutory regulation was necessary, and we consulted on how to do it. We are now evaluating the results of that process. The House will soon hear our conclusions on how to take the matter forward.

Let me repeat my appreciation for the work that has been done by Members from all parts of the House. I also thank the Business, Innovation and Skills Committee, whose Chairman is here, and the various campaigning groups for their work on the matter. It would not be amiss to single out Fair Deal For Your Local, which is the campaign that has been mobilised by my hon. Friend the Member for Leeds North West (Greg Mulholland). As part of his campaign, he has brought together CAMRA, the Federation of Small Businesses and the GMB union as well as various other groups. We are talking about local and national groups across industry and across the country.

Banking

Ian C. Lucas Excerpts

Wednesday 15th January 2014 Commons Chamber

[Ian Lucas (Wrexham) (Lab)]

Does my hon. Friend agree that it is very important indeed to establish the amount of money that is being paid to individuals, such as the £5.8 million in the year ending 2010 to the chief executive of RBS and the £5.8 million paid out by Lloyds? Will our constituents not recognise that the Conservative party is saying absolutely nothing about the level of those payments to individuals, and that it is defending them?

[Chris Leslie]

Government Members will have to confront this issue, because it is a decision they will to have to take. Those traders and executives were former colleagues of the Financial Secretary to the Treasury, who was one of the senior bankers at Deutsche bank. Perhaps he can tell us whether, when he was a banker before the election, his bonus was more or less than 100% of his salary. Perhaps he can fill us in with that bit of history.

In our motion, we have made the point about instructing United Kingdom Financial Investments Ltd and making sure that it acts accordingly and turns down this proposal if bonuses come to more than 100% of salaries. That is not fair. Most of the people watching this debate will think, “Well, it would be nice to get any bonus at all. The same amount as my pay? Crikey, that would be phenomenal, but twice the amount of pay is totally unacceptable.” The Chancellor and the Minister will have to confront the anger of the public on this issue if they fail this test.

[Guy Opperman (Hexham) (Con)]

The motion mentions the requirement for greater competition. The hon. Gentleman will be aware that the dozens of challenger banks that have sprung up under this Government since 2010—

[Ian Lucas]

Nonsense!

[Guy Opperman]

I can definitely assure the hon. Gentleman that that is absolutely correct and that many are coming forward. Does the hon. Member for Nottingham East (Chris Leslie) regret voting in April 2012 against greater competition in the banking sector?

--- Later in debate ---

[Sajid Javid]

I agree with the hon. Lady that businesses rely on the banks for the lending that they need. The action that we have already taken through, for example, the funding for lending scheme has ensured that the banking sector has had more money at lower rates to on-lend to small businesses and, indeed, households. We also recently announced a consultation on collecting small and medium-sized enterprises credit lending data, which will help to spur further competition in that sector.

[Ian Lucas]

The Minister is endorsing a noble cause in recommending support for small business and for manufacturing in particular, but given that manufacturing accounts for 10% of the economy, why does only 2.6% of bank debt stock result from lending to it? Why does the Minister not do something about that?

[Sajid Javid]

Part of the answer might be that manufacturing was decimated under the last Government. Its share of the economy fell from about 17% to the 10% to which the hon. Gentleman referred, and, of course, lending fell with it. If the hon. Gentleman were honest and recognised the damage that his party did to the manufacturing sector, perhaps what he says would be taken more seriously.

We need a more stable, resilient, efficient banking sector, and it is on that requirement that we have focused our reforms. As Members will know, back in June 2010 my right hon. Friend the Chancellor announced the establishment of an Independent Commission on Banking, chaired by Sir John Vickers, to explore how the sector should be reformed in the wake of the financial crisis. Last year the House passed the Financial Services (Banking Reform) Act 2013, which has enabled us to implement the commission’s recommendations. The changes will mean that banks must ring-fence the deposits of individuals and small businesses, so that everyday banking can be separated from volatile investment banking.

As all Members, and, indeed. all members of the public will know, the financial crisis saw taxpayers bailing out the banks that got into trouble, but we have taken steps to ensure that that will not be repeated. Our banking reform Act introduces a bail-in tool, as a result of which shareholders and creditors, not taxpayers, will be first in line to bear the costs of future bank failures.

--- Later in debate ---

[Ian Lucas (Wrexham) (Lab)]

It is a pleasure to follow the hon. Member for Bournemouth East (Mr Ellwood), although I am afraid that I shall disagree with a number of the things he said.

The public want a banking system in the UK that works for them. At the moment, they do not have that. As I mentioned earlier, figures from the Investors Chronicle suggest that even now bank lending is massively biased towards the financial sector and against the manufacturing industry. About 20% of the economy in my constituency is based on manufacturing, as is about 10% of our national economy, but only 2.6% of the stock of bank debt is spent on manufacturing. It is absolutely clear that the banking system in this country does not address the need for the creation of a competitive dynamic economy, not just in the south-east and in the square mile that is the City of London, for which Ministers often seem to speak, but in the rest of the country.

We need a banking sector that supports business and manufacturing across Britain. We have a Government who are committed to supporting a banking sector that represents only one part of the economy, the financial sector, and only one area of the country, the south-east of England. That goes back far beyond 2006—it goes back to the 1980s, when we had an economic sector that relied not just on banks but on organisations called building societies. Building societies were extremely dynamic funders of economic activity across the country and they were regional institutions.

When I became a solicitor in 1986, the main lender of mortgages was the Halifax building society. It is gone; it has disappeared. The Leeds Permanent building society was a major source of lending that contributed to the construction sector. I come from the north-east of England, and the hon. Member for Bournemouth East mentioned Northern Rock. When I was born, the Northern Rock building society was where my relatives put money into an account. It was a building society to support people in the north-east in building homes for their children, and it was destroyed by the demutualisation of the 1980s and 1990s.

The centralisation of the banking and building society economy happened as a consequence of the demutualisation and privatisations of the late 1980s. More and more financial power was concentrated in the City of London, away from local communities. Banking and building societies became completely divorced from the communities that they represented. As a consequence, we have the obscenity of bankers’ salaries being paid by such organisations. The chief executives of RBS, which has taken over the Halifax building society, and of the Lloyds Banking Group are paid £5.8 million a year with all the bonuses they receive. Those figures are from the end of 2010. Such salaries are out of step not only with the experience of the poorer people in our communities but with that of the middle classes. They are out of step with the people who become police officers or teachers for £20,000 a year, and with the local businesses that need investment.

The little businesses that need investment cannot access finance because the people who run the financial system in this country know that they can get faster, quicker and easier returns in the short term from the financial sector. As long as that remains the case and we have a centralised banking system, that will lead to a non-competitive economic system. We must remember that our Chancellor told us in 2010 that that economic system would clear the deficit by 2015. He has changed his mind since then; he has failed according to his own terms. He has redefined the rules of the game.

We need a complete change. We do not want to go back to 2006 or 2007; we need to go back to an economic system with devolved power and finance. We need a regional banking system based not on North Korea, but on Germany, where the Sparkassen system—[Interruption.] The hon. Member for Spelthorne (Kwasi Kwarteng), who is a banker, probably does not know anything about the Sparkassen system, because it supports manufacturing industry. If he learns anything from this debate, it should be that the important point is that banks under that system are geographically restricted, which means that they must invest in their local community. Germans choose to invest in Sparkassen—20% of people in each region invest in their Sparkassen, which then invests in its local economy to provide jobs for young people. It is not divorced from business and it creates work for young people.

We must shift power away from those people in the City who pay themselves £5.8 million a year and back to local communities, which will then invest local money in local institutions. That was what the Northern Rock building society was like before Mrs Thatcher got her hands on it. Such organisations would invest in local communities, providing jobs in construction and houses for local people. It is as simple as that.

Part of the problem with the banking industry is that far too many people in it are too clever by half. They think that because they understand what a derivative is, they can tell the whole of the rest of the world how to run the economy. We must go back to the principle that was successful during the industrial revolution, when local banks supported local investment. We must go back to building societies, which even the Business Secretary has said were an important driver of the economy in the 1930s. Unfortunately, we have a Government who are not creating extra competition in the banking sector. They are going back to where we were before the crash happened and, because of that, they are going to fail.

Oral Answers to Questions

Ian C. Lucas Excerpts

Tuesday 10th December 2013 Commons Chamber

[Mr Gauke]

My hon. Friend is absolutely right. It is irresponsible to future generations if we do not take action to reduce the deficit. The approach we had from the party—[Interruption.] The shadow Chancellor has just said that the deficit is going up. He has been saying that all along, and I am afraid he is just plain wrong.

[Ian Lucas (Wrexham) (Lab)]

In 2010, the Chancellor of the Exchequer told us that the deficit would be gone by 2015. Why should we believe him this time?

[Mr Gauke]

This is coming from the party that has opposed every single measure we have taken to reduce the deficit. If we had taken the approach that the Labour party advocated, we would have borrowed a further £200 billion. That is not responsible or fair on future generations; that would put our economy at risk.

National Infrastructure Plan

Ian C. Lucas Excerpts

Wednesday 4th December 2013 Commons Chamber

[Mr Speaker]

I would go so far as to say that the continuing presence of the hon. Member for Kettering (Mr Hollobone) in the Chamber on a daily basis is a vital national interest.

[Ian Lucas (Wrexham) (Lab)]

Solar energy provides hundreds of manufacturing jobs in my constituency. The Government have presided over numerous changes to the investment framework for that industry and another change has been announced today. Will the Chief Secretary provide an assurance that there will be no further changes to the investment framework before the next general election?

[Danny Alexander]

Solar energy plays an important part in helping us to meet our energy obligations. However, I am sure that the hon. Gentleman would not argue that consumers should continue to pay costs at a high level as the costs come down in that sector. The framework that we have set out today will ensure that that does not happen. I hope that it will give a degree of confidence to that industry, which I know creates a lot of jobs in his constituency.