Finance (No. 2) Bill

Debate between John Redwood and Ben Lake

Committee of the whole House
Wednesday 8th May 2024 Commons Chamber

[Ben Lake]

I could not agree more. We were told that one of the supposed benefits of withdrawing from the European Union would be the liberty to tailor our tax powers; to devolve them to different parts of the UK in a bespoke way, so as to promote growth and better reflect the needs of the people. I agree that it is remarkable that the UK Government have thus far failed to make real the supposed benefits of Brexit. This review of tax policy could touch on those things. It would also be useful given the important link between tax decisions and public spending and, indeed, economic growth.

[Sir John Redwood]

Were a future Parliament to grant these tax powers to Wales, would the hon. Gentleman think that in order to promote faster growth in Wales he should cut taxes below English rates, or would he put them higher than English rates?

[Ben Lake]

I am not one to make up policy on the hoof, but the review could look at that, and if the evidence shows that tax decisions could be made to promote growth and to level up, which I think the right hon. Gentleman is in favour of, we should follow that evidence and do so.

Our continued reliance on the Barnett formula to allocate funds between the UK’s nations is problematic not only due to its flaws, but because of its inconsistent application in recent years, which has meant that Wales has lost out on billions of pounds of much-needed public investment. Members will be familiar with the concerns raised by communities across Wales regarding the way in which HS2 spending has been classified. Although not a single inch of track or rail was to be laid in Wales itself, it was categorised as an England and Wales project under the statement of funding policy, thus depriving Wales of significant consequential funding that the Barnett formula would otherwise have provided. The latest estimates suggest that Wales has lost £4 billion in consequential funding—money that could have transformed the country’s public transport infrastructure.

I understand that there will be reluctance within Government to move away from the Barnett formula, not least because devising a needs-based formula is far from simple. However, if we are to retain the Barnett formula, the funding floor should at the very least be updated to use census data from 2021 rather than the 2001 data it currently uses. I am sure the Minister will agree that much has changed since 2001—when I was actually still in primary school. The needs and population of Wales have changed considerably, so it is only reasonable that the funding floor element of the Barnett formula is at least brought up to date.

Such a consideration could be included in the review that I propose, as well as a review of the implications of UK tax policy in Wales. Again, all of this analysis and information could help inform debate for future tax policy decisions and ultimately ensure that we have a tax system that is fit for purpose and meets the needs of people in Wales.

United Kingdom Internal Market Bill

Debate between John Redwood and Ben Lake

Wednesday 16th September 2020 Commons Chamber

[John Redwood]

I am not pursuing a hard Brexit; I am pursuing the independence of our country which was voted on all too many years ago and which this Parliament, in a previous guise, deliberately blocked, delayed and diluted. I am very proud to belong to a Parliament that is now clearly charged, yet again, by the electorate of the United Kingdom to get on with it and deliver Brexit. The hon. Gentleman should recognise that Mrs Pelosi is not the President of the United States of America. It is the President who leads the negotiating teams for trade deals, and, as I understand it, President Trump and his International Trade Administration are very keen on a trade agreement with the United Kingdom and still negotiating on it. I suspect that the Democrats in the House of Representatives, who will have their own political reasons for what they are doing at the moment, have not quite understood just how important this Bill is for the future of the United Kingdom single market and customs union—because who would want to do a trade deal with the United Kingdom if we did not have this Bill and could not guarantee that we were pledging the whole of our market in the market opening that such a free trade agreement would require? This Bill is fundamental to any success in negotiations that we have with Japan, the United States, maybe the Transatlantic Trade and Investment Partnership in due course, and so forth.

This is a vital piece of legislation to implement the independence of our country in a true Brexit. It is an entirely legal piece of legislation that reflects important statements in the withdrawal agreement and, above all, reflects a sovereignty clause in the EU (Withdrawal) Act that some of us supported and put in with the express purpose in mind that if there was no good faith from the EU we would need to make unilateral arrangements for our future trading. It is crucial for a country that wishes to have much more positive trade relations than the EU has had with a wide range of countries outside the European Union space.

I look forward to the state aid regime and investment regime being used in the interests of the whole country, with the United Kingdom being able to spend more of its own money on its own priorities, with good guidance and advice from Scotland, Wales and Northern Ireland as we go along, but not forgetting the importance of England and the need for us to have good English projects as well. I hope that it will be twinned with an exemplar state aid policy for world trade purposes that may indeed be different from that of the European Union.

[Ben Lake (Ceredigion) (PC)]

It is a pleasure to follow the right hon. Member for Wokingham (John Redwood) and, in particular, the hon. Member for Glasgow Central (Alison Thewliss), whose assessment of the Bill’s deficiencies was exemplary—I very much agree with it. I am conscious that a great many Members wish to contribute to this debate, so I shall keep remarks brief, confining them to clause 46, which extends the powers of UK Ministers to act in policy areas that have been devolved to Wales.

Agriculture Bill

Debate between John Redwood and Ben Lake

Wednesday 10th October 2018 Commons Chamber

[Ben Lake]

I thank my hon. Friend for her intervention, with which I wholeheartedly agree.

On that point, the UK Government have committed to guarantee current levels of funding until 2022, but it is unclear how future levels will be decided or how funding will be allocated across the four countries of the UK. The farming Minister may recall a discussion at a session of the Welsh Affairs Committee some months ago about the fact that these are questions of not only how the cake will be shared, but how big the cake will be in the first place.

Giving as much clarity and stability as possible to the industry must be a priority, and any future funding framework should be based on a seven-year cycle. Ministers have suggested that decisions about future funding will be taken by the UK Government, subject to the Treasury’s budgetary cycle and comprehensive spending review. That would not afford the industry the same certainty as under the present multi-annual financial framework. I appreciate that Ministers are hesitant to make unilateral funding decisions that would bind successive Governments, but if they were to make such a framework subject to the consent of all four countries of the UK—perhaps by means of a dedicated intergovernmental body—they would be at greater liberty to make such commitments to maintain funding for agriculture in the UK and to deliver the support and stability that the industry deserves.

Such an approach would also assist with the inevitable headaches that will emerge about how any funding is allocated across the UK. In fairness, both the Secretary of State and the farming Minister have confirmed that the Barnett formula will not be used to determine allocations. That is to be welcomed, particularly in Wales, but a question remains about how the allocations will be decided. The Secretary of State referred earlier to an imminent review of this process.

[John Redwood]

Will the hon. Gentleman give way?

[Ben Lake]

I will not as time is against me.

What role will the devolved Governments play in the process? How will future disputes be resolved? Only if financial frameworks are developed jointly by all four countries will they be sustainable and reflective of the needs of each. The Welsh and UK Governments believe that policy areas can be managed through non-legislative intergovernmental co-ordination, but I fear that that approach is unrealistic for questions of funding.

I would argue that an intergovernmental body is necessary to address any market distortions that may arise from policy divergence, which is not unlikely when we consider that on direct payments, for example, divergence looks possible between Scotland and Northern Ireland on the one hand, and between England and Wales on the other. Each nation should decide its own agricultural policy, but an intergovernmental body is required to address any issues that cause an imbalance in the market or unfairly disadvantage one country over another. The existing structures are not fit for that purpose.

I conclude by reiterating the need for any future financial frameworks to be agreed, built and maintained in co-operation between the four nations. When the Minister responds to the debate, perhaps he could assure farmers that such decisions will be made on the basis of shared governance and that the unique characteristics of the industries in each country will be supported accordingly. I am afraid to say that, at present, such an assurance is lacking.