Growth and Infrastructure Bill

Jonathan Edwards Excerpts

Monday 5th November 2012 Commons Chamber

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

I think Ministers know that this is a rubbish Bill. We have seen no defence at all against the attacks from the Opposition Benches, particularly from the shadow Secretary of State, who, if I might say so, did a decapitation job on the Bill.

The Bill contains clauses with which I find myself in contention—namely clause 23 and its provisions to diminish workers’ rights—but it also provides us with opportunities to devolve power to the Welsh Government, so that they, too, can promote growth and boost infrastructure. I will focus on those provisions that are not currently in the Bill, but which would improve it in achieving its billing, namely the proposals behind the “Build for Wales” programme, as promoted by my party, which is a far more cost-effective alternative to private finance initiatives. The “Build for Wales” project would establish a Welsh infrastructure investment and management company to tackle the constraints on public sector investment in Wales. A not-for-distributable-profit company limited by guarantee, it would be responsible for the funding and implementation of public sector infrastructure projects, with any profits invested in other Welsh public sector infrastructure.

As the Minister will be aware, despite the fantastically vague announcement made by the UK and Welsh Governments last week, the Welsh Government are still unable to borrow and cannot raise taxes to increase their income. Indeed, if money is unspent at the end of the financial year, the Treasury can claw it back. If memory serves, the amount clawed back in that manner last year was £400 million—money that should have been redirected to the Welsh capital budgets, which have been slashed, with 42% cuts in the current spending review. Were the Welsh Government able to establish a not-for-distributable-profit company, as we have suggested, the Welsh public sector could plan capital expenditure in the long term—a prudent approach normally favoured by the Treasury. It would also lead to the creation of a specialist company with a knowledge base in procurement and negotiation with contractors, which would help to deliver projects efficiently. Finally, the fact that profits would be reinvested in other public sector projects would increase employment in the construction industry and so boost growth in the economy. I plan to table amendments to the Bill at later stages to take those points forward, and I look forward to fruitful discussions with Ministers on these possibilities.

Many clauses in the Bill as it stands evidently aim to speed up infrastructure projects by cutting unnecessary red tape and amending existing legislation. I hope that the Minister will share my view that our “Build for Wales” proposals are very much in the same vein. Clauses 17 and 18 provide powers to vary planning consents for energy infrastructure projects, which gives the UK Government a fantastic opportunity to devolve energy planning powers to the National Assembly—a provision they unfortunately failed to include in their draft Energy Bill earlier this year. As Ministers will be aware, at present the Welsh Government have powers only over proposals for energy generation projects of up to 50 MW on land and 1 MW at sea. This arbitrary set-up means that a generating station that would generate 49 MW is decided on by Welsh local planning authorities, but those generating 51 MW or more must be decided on by the Secretary of State in Whitehall.

The Pen y Cymoedd wind farm in south Wales, for example, will generate an estimated 250 MW, so the decision to grant permission for it was made by the Secretary of State in Westminster, not the democratically elected Welsh Government in Cardiff. In my constituency I have two TAN 8 areas—so-called after technical advice note 8—one of which, area G, is in Brechfa forest. Currently, two planning applications are going through: the Llanllwni project, which is below 50 MW, and the Brechfa West project, which is above 50 MW. Local people are confused—I am confused, and I am their Member of Parliament. It would be far more reasonable to extend the Welsh Government’s remit in line with that of the Scottish Parliament, so that the people of Wales have complete control over how their natural resources are utilised. I have previously argued for exactly that provision in amendments to the Localism Act 2011, during its passage through the Commons last year, and in a ten-minute rule Bill that I introduced last January. I will be tabling similar amendments to that end at later stages of this Bill’s passage.

Clause 22 postpones the next non-domestic rating revaluation, in a bid to allow businesses in England to focus on growth. As the Minister will no doubt be aware, the current situation is disadvantageous to Wales, as the Welsh Government hold no power to alter the non-domestic rates multiplier, which is currently set by the UK Government. Devolving business rates to the Welsh Government, as in Scotland, would allow them to use the rates more strategically to promote growth and incentivise local authorities to expand their economic bases. The recent business rates review, published by Professor Brian Morgan of Cardiff university and commissioned by the Welsh Government, argues for the full devolution of business rates, describing it as

“an anomaly which needs to be addressed.”

I would suggest that the Bill affords the UK Government the opportunity to correct it.

Finally, as the son of a trade union shop steward, I must express my concern about clause 23. It would create a new employment status—“employee-owner”—which would mean workers losing vital employment rights in exchange for shares in their employer’s company. Although we support co-ops and workers’ rights, they should not be transferred in this backhanded way. As my hon. Friend the Member for Dundee East (Stewart Hosie) set out earlier, in return for shares in the company to a value of between £2,000 and £50,000, workers would lose their rights on unfair dismissal, redundancy and flexible working, along with some maternity rights. The Government have rightly been accused of introducing back-door deregulation of the labour market on a huge scale with this provision. Many fear that if it is implemented, employers will use it to get round labour market laws. It is a drastic and retrograde provision, and it must be removed from the Bill.

The Bill as it stands will do nothing to promote growth and investment in infrastructure. I hope that Ministers will engage constructively with some of my suggestions this evening, which will help the Bill to achieve its aims, at least in Wales, by empowering the Welsh Government with the necessary tools to do the job.