Autumn Budget as it Relates to Wales (Morning sitting)

Jonathan Edwards Excerpts

Wednesday 7th February 2018 General Committees

[Alun Cairns]

Rwyf yn ddiolchgar i fy Nghyfaill anrhydeddus am godi’r pwynt. Yn amlwg, dydw i ddim yn gwybod pam nad yw Prif Weinidog y Cynulliad yn fodlon rhoi tystiolaeth i’r Pwyllgor Dethol. Yn amlwg, byddai hynny’n cryfhau’r sylwadau sydd wedi eu gwneud a, hefyd, yn rhoi mwy o fanylion ynglŷn â’r gefnogaeth mae Llywodraeth Cymru yn fodlon rhoi. Yn amlwg, rwyf yn awyddus i gydweithio’n agos gyda Llywodraeth y Cynulliad, fel yr ydym wedi gwneud gyda chymaint o wahanol gynlluniau dros yr amser rwyf wedi bod yn Ysgrifennydd Gwladol a’r rhai sydd wedi bod o’m blaen.

(Translation) I am grateful to my hon. Friend for raising that point. I do not know why the First Minister of the National Assembly is not willing to give evidence before the Select Committee. Obviously, that would strengthen the comments that have been made, and would give further clarity about the support that the Welsh Government are willing to give. I am eager to collaborate with the Welsh Government, as we have done on many schemes during the period that I have been Secretary of State.

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

Rwy’n gallu rhannu rhai o’r pryderon ynglŷn â’r model contracts for difference. Mae’n ffordd ddrud iawn o ariannu prosiectau fel hyn ac mae’r pris, yn y pen draw, yn cwympo ar y defnyddwyr. Pam nad yw’r Llywodraeth yn edrych ar model o ariannu cyfalaf uniongyrchol? Yn y pen draw, mae pobl yn talu naill ai trwy brisiau ynni neu drwy trethi. Byddai’n llawer rhatach i bobl dalu trwy eu trethi na thrwy brisiau ynni.

(Translation) I share some of the concerns about the contracts for difference model. It is a very expensive way of funding such projects, and the ultimate price will fall on the consumer. Why are the Government not looking at a direct capital funding model? People pay either through energy prices or through their taxes, and it is far better that they pay through taxes rather than energy prices.

[Alun Cairns]

Yn amlwg, pa bynnag ffordd mae unrhyw brosiect neu gynllun fel hyn yn cael ei ariannu, mae’n rhaid bod trethdalwyr yn cefnogi’r peth. Dyna’r pwynt sydd yn cael ei wneud, felly mae’n rhaid ein bod yn profi gwerth arian unrhyw fath o gynllun, a byddwn yn tybio bydd yr Aelod dros Ddwyrain Caerfyrddin a Dinefwr yn cefnogi’r peth. Mae’n rhaid ein bod yn cefnogi gwerth yr arian a gwerth unrhyw gynllun a dyna wirionedd y peth yn y pen draw.

Yn ei ddatganiad o’r Gyllideb, nododd fy Nghyfaill anrhydeddus y Canghellor gynlluniau i sicrhau cynnydd o £1.2 biliwn i gyllideb Llywodraeth Cymru. Mae’r cynnydd yn y cyllid yn cynnwys, am y tro cyntaf, mwy na £65 miliwn dros y tair mlynedd nesaf o ganlyniad i wella fformiwla Barnett o ryw 5%, a gytunwyd yn fframwaith cyllidol Llywodraeth Cymru. Mae hyn yn addasu grant bloc Llywodraeth Cymru i adlewyrchu’r ffactor seiliedig ar anghenion a gytunwyd yn ei fframwaith cyllidol.

Mae’r drafodaeth ynghylch cyllid Cymru wedi bodoli ers datganoli—ac ers degawadau—a’r Llywodraeth hon sydd wedi rhoi sicrwydd ariannol tymor hir i Gymru. Ar hyn y bryd, mae Llywodraeth Cymru yn cael £120 am bob £100 cymaradwy sydd yn cael ei wario yn Lloegr.

(Translation) Evidently, whichever way a scheme such as this is financed, taxpayers must support it. That is the point. Therefore, we must test the value for money of any such scheme, and I believe that the hon. Gentleman will support that. That is the truth of the matter.

In my right hon. Friend the Chancellor of the Exchequer’s Budget statement, he set out plans to increase the Welsh Government budget by £1.2 billion. The increased funding includes, for the first time, more than £65 million over the next three years resulting from the 5% Barnett formula boost agreed in the Welsh Government’s fiscal framework, which adjusts the Welsh Government block grant to reflect the needs-based factor, as agreed by their fiscal framework.

Many hon. Members will know that that discussion about the Welsh budget has taken place since devolution and has gone on for decades. This UK Government have given long-term financial security to Wales. The Welsh Government receive £120 for every equivalent £100 spent in England.

--- Later in debate ---

[The Chair]

Order. I am sure that everybody wants to get back to discussing the Budget.

[Jonathan Edwards]

rose—

[Alun Cairns]

Mr Owen, gyda’ch cytundeb, ildiaf i’r anrhydeddus Aelod dros Dwyrain Caerfyrddin a Dinefwr.

(Translation) With your permission, Mr Owen, I will give way to the hon. Member for Carmarthen East and Dinefwr.

[Jonathan Edwards]

O ystyried hoffder y Llywodraeth Prydeinig o drenau dau-danwydd yng nghyd-destun rheilffyrdd Cymru, gallaf gymryd mai trenau dau-danwydd bydd yn rhedeg ar HS2, HS3 a Crossrail 2?

(Translation) Given the Government’s liking for bimodal-fuel vehicles for Welsh railways, may I assume that bimodal trains will be running on HS2, HS3 and Crossrail?

[Alun Cairns]

Rwy’n siwr bydd y Bonheddwr anrhydeddus yn cefnogi edrych ar unrhyw brosiect i ddefnyddio’r dechnoleg orau posib ar gyfer cyflawni’r gwariant a’r gwerth arian sydd ymhob prosiect.

Gaf i symud ymlaen, Mr Owen? Rydym wedi gwella’r cysylltiad yng ngogledd Cymru, gan roi budd i bobl ar ddwy ochr y ffin. Bydd gwasanaethau uniongyrchol o ogledd Cymru i Lerpwl ar gael am y tro cyntaf mewn degawdau, diolch i’r buddsoddiad o £16 miliwn i’r Halton curve. Nawr rydym yn darparu prosiect ail-signalu gwerth £50 miliwn i uwchraddio rheilffyrdd gogledd Cymru. Byddai moderneiddio prif linell rheilffordd arfordir y gogledd yn rhoi hwb sylweddol i gysylltiadau trafnidiaeth y rhanbarth. Mae ein rhaglen moderneiddio Great Western, gan gynnwys ein buddsoddiad o £5.7 biliwn mewn trenau IEP o'r radd flaenaf, yn torri 15 munud oddi ar yr amseroedd teithio o dde Cymru i Lundain.

(Translation) Obviously, I am sure that the hon. Gentleman will be supportive of any project that will use the best possible technology to achieve the expenditure and the value for money that all projects require.

May I move on? We are improving connectivity for north Wales, benefiting people on both sides of the border, and direct services from north Wales to Liverpool will be possible for the first time in decades. That is thanks to our £16 million investment in the Halton curve. We are now delivering a £50 million re-signalling project to upgrade north Wales’s railway, and modernising the north Wales coast main line would be a significant boost to the region’s transport links. Our Great Western modernisation programme, including a £5.7 billion investment in new, state-of-the-art IEP trains, will cut journey times from south Wales to London by 15 minutes. At the Budget—

--- Later in debate ---

[Jonathan Edwards]

Mae’n anrhydedd enfawr i wasanaethu dan eich arweinyddiaeth chi, Mr Owen, yn enwedig yn siarad, am y tro cyntaf, yn iaith y nefoedd. Rwyf yn gobeithio y bydd yr egwyddor yma yn cael ei ymestyn i Bwyllgorau eraill y Tŷ yma—er enghraifft, y Pwyllgor Materion Cymreig dan arweinyddiaeth yr Aelod anrhydeddus dros Fynwy.

Rydym yn cyfarfod i drafod Cyllideb enbyd o siomedig. Roedd dadansoddiad y Swyddfa Cyfrifoldeb Cyllidebol, a ddaeth yr un adeg â’r Gyllideb, yn wirioneddol ddiflas, gyda rhagolygon wedi eu hisraddio ar gyfer buddsoddi gan fusnes, cynhyrchedd a thwf economaidd—a hyn am yr ail Gyllideb yn olynol.

Mae’n glir bod yr athroniaeth o gywasgu ariannol ymledol—expansionary fiscal contraction—a ddilynwyd gan y Trysorlys ers 2010 wedi methu yn llwyr. Holl bwynt llymder a thorri yn ôl ar fuddsoddi cyhoeddus oedd y dylsai fod wedi arwain at gynnydd enfawr mewn menter a buddosddi preifat.

Ynghyd â’r toriadau mewn buddsoddiad seilwaith, y gwrthwyneb sydd wedi digwydd, fel y gwnaethom ni rybuddio dro ar ôl tro—a hyn oll gyda’i gilydd yn arwain at lefel cynhyrchedd cronig. Yn wir, lefelau cynhyrchedd cronig y wladwriaeth Brydeinig oedd prif stori y Gyllideb.

(Translation) It is a huge privilege to serve under your chairmanship, Mr Owen, particularly while speaking the language of heaven for the first time in the House. I hope that this principle will be extended to other Committees of the House, such as the Welsh Affairs Committee, which is chaired by the hon. Member for Monmouth.

We meet today to discuss the dreadfully disappointing Budget. The OBR’s analysis was truly depressing: for the second Budget on the bounce, it downgraded forecasts for business investment, productivity and economic growth. The philosophy of expansionary fiscal contraction pursued by the Treasury since 2010 has completely failed. Austerity and cuts to public investment were supposed to lead to a bonanza in private enterprise and investment—that was the whole point—but of course, as we consistently warned, the reverse happened, together with cuts in infrastructure investment. All that led to chronic productivity levels—indeed, that is main story for the UK.

The chronic productivity challenge that the UK faces was the major issue in the Budget. The situation that we find ourselves in was of course totally foreseeable.

Y canlyniad yn y pen draw yw bod y Trysorlys wedi colli ei dargedau dyled gan filltiroedd. Roedd hyn i fod dan reolaeth erbyn 2015—bwriedid iddo fod yn brosiect bum mlynedd—ond mae’n edrych fel petai cywasgu ariannol pellach am barhau tan ddiwedd y ddegawd nesaf. Ni fydd haneswyr economaidd y dyfodol yn garedig iawn i’r Llywodraeth Brydeinig.

Rydym yn gwynebu cenhedlaeth goll o ran safonau byw, gyda’r wasgfa fwyaf ers rhyfeoloedd Napoleon yn debyg o barhau tan o leiaf 2025, yn ôl y Resolution Foundation. Mae’r sefyllfa yma wedi cael ei greu, wrth gwrs, gan y cwymp mewn sterling.

(Translation) The end result was that the Treasury missed its debt and deficit targets by a country mile. That was all supposed to be under control by 2015. It was supposed to be a five-year project, but it looks like further fiscal contraction will now continue until the end of the next decade. Economic historians of the future will not look kindly on the UK Government. We face a lost generation in terms of living standards. According to the Resolution Foundation, the biggest squeeze since the Napoleonic wars is likely to continue until at least 2025. Of course, that came about as a result of the collapse of sterling.

According to economists, the collapse in the currency represents the least successful devaluation in history. Unlike the devaluation in China, which was driven by the People’s Bank of China to make the manufacturing sector competitive, the devaluation of sterling was a direct result of markets betting against the currency, which does not reflect well on what will happen following Brexit. The fact that there has been no export boom following the devaluation of the currency—as well as the fact that the currency has not rebounded after more than a year of promises, and with the British Government outlining their position on Brexit—does not bode well for the future.

[Simon Hoare]

Is the hon. Gentleman aware that manufacturing output and exports are at their highest for a decade?

[Jonathan Edwards]

The export boom that would be expected from a 20% devaluation in sterling has not occurred. That is the factual reality of the situation. The fact that the currency is not rebounding, despite the British Government apparently outlining what they want from the Brexit negotiations, indicates that the markets are betting against the British Government.

[Chris Bryant]

One of the biggest mistakes that the coalition Government made in 2010 was cutting capital budgets. That meant that we did not have the infrastructure in place that we need for a modern economy. That has hit productivity across the whole country.

[Jonathan Edwards]

Mae’r Bonheddwr anrhydeddus yn gwneud pwynt cywir iawn a byddaf yn dychwelyd i’r pwyntiau hynny yn hwyrach yn fy araith.

(Translation) The hon. Gentleman makes a very valid point, and I will return to the issues he raises.

[Liz Saville Roberts]

A fyddai fy Nghyfaill anrhydeddus yn cydymdeimlo gyda ffermwyr fyddai’n disgwyl gyda’r bunt wan y byddai defaid o faint bach yn gwerthu’n dda ar y cyfandir? Nid dyma’r neges a glywaf gan fy ffermwyr i ym Meirionydd.

(Translation) Does my hon. Friend sympathise with farmers who would expect smaller sheep to sell well on the continent, even though that is not the message that I am hearing from farmers in Meirionnydd?

[Jonathan Edwards]

Mae hynny’n wir. Roeddwn yn darllen rhywbeth ddoe bod disgwyl y bydd pris defaid, yn enwedig, a chig yn syrthio’n ddifrifol os mae Cymru’n ffeindio’i hunan y tu allan i’r undeb tollau. Mae’r peryglon ar gyfer y sector amaethyddol, sydd yn ein gwynebu yn y dyfodol agos, yn beryglus iawn. Mae ein arweinydd seneddol yn codi pwynt dilys iawn.

(Translation) That certainly is the case. I was reading something yesterday that said that the price of sheep, and of meats in general, is expected to fall significantly if Wales finds itself outside the customs union. The risks for the agricultural sector in the very near future are huge. Our parliamentary leader raises a very valid point.

[Susan Elan Jones]

Rwyf yn cytuno gyda’r Bonheddwr anrhydeddus yn llwyr wrth iddo sôn am yr argyfwng ym myd ffermio, ond ydy e’n meddwl hefyd ein bod yn sôn nid am ffermio’n unig ond hefyd am yr economi wledig gyfan ar ôl Brexit? Mae hynny yn drychinebus, i fod yn onest.

(Translation) I agree entirely with the hon. Gentleman about the crisis in agriculture. Does he believe that we are talking about not only farmers, but the broader rural economy, as a result of Brexit? This truly is a crisis, is it not?

[Jonathan Edwards]

Mae’r Foneddiges anrhydeddus yn codi pwynt hollol sylfaenol. Mae amaeth yn ganolog i’r economi wledig. Os yw amaeth yn dioddef, bydd sectorau eraill yn dioddef, megis twristiaeth a phob math o sectorau. Gallen i fynd i fewn i araeth hir iawn am beth sydd angen gwneud i amddiffyn ein sector amaethyddol, ond dwi’n credu byddaf yn mynd ychydig y tu allan i gwmpas y Gyllideb. Rwyf wir yn credu bod Brexit yn bwynt mor ganolog y dylai’r Uwch Bwyllgor yma gwrdd eto yn fuan iawn i drafod polisi’r Llywodraeth. Credaf mai hwn, o bell ffordd, yw’r prif her sy’n ein gwynebu.

(Translation) The hon. Lady raises a fundamental point. Agriculture is a focal point for the rural economy. If agriculture suffers, other sectors will suffer, such as tourism and others. I could make a lengthy speech about what needs to be done to protect our agricultural sector, but that might be outside the scope of the Budget. I truly believe that Brexit is such a fundamental point that this Welsh Grand Committee should meet again very soon to discuss the Government’s policy. That is the major challenge facing the Government.

[The Chair]

Mae’r Llywodraeth wedi clywed y cais. Cariwch ymlaen os gwelwch yn dda.

(Translation) I am sure that the Government will have listened to your words. Please carry on.

[Jonathan Edwards]

I ddychwelyd i’r Gyllideb, mae’r Deyrnas Gyfunol—y wladwriaeth Brydeinig—wedi disgyn o’r pedwerydd i’r chweched safle yn nhabl economaidd y byd. Mae wedi colli’r raddfa credyd A driphlyg a dyma’r economi sydd bellach yn perfformio waethaf yn y G7. Mae’r eurozone—sy’n cael ei ddifenwi mor aml yn y lle yma—yn tyfu ar raddfa y gall economi Prydain ond freuddwydio amdani. Bu i’r economi Gwyddelig yn y trydydd chwarter, flwyddyn ar flwyddyn, dyfu 10.5% y llynedd, lle mae economi Cymru yn gwynebu tyfiant anemig iawn.

Y gwirionedd yw, fel dywedodd yr Aelod anrhydeddus dros y Rhondda, ar ôl y chwalfa yn 2010 ni aethpwyd i’r afael â’r diffygion strwythurol. Beth ddigwyddodd i’r addewid i ymdrin ag anghydraddoldebau cyfoeth sectorol a daearyddol? Dyna beth oedd George Osborne yn siarad amdano dro ar ôl tro yn 2010. Maent yn gronig bellach, ac yn gwaethygu. Does dim rhyfedd nad yw Aelodau’r Meinciau gyferbyn bellach yn sôn am eu slogan y cynllun economaidd hir-dymor: mae’r economi yn gwynebu anawasterau difrifol yn y tymor byr i ganolig.

Wnaf i ddim disgyn i’r demtasiwn o feirniadu Llywodraeth Prydain eto fyth am ddewis y llwybr Brexit mwyaf economaidd niweidiol. Digon yw dweud fod y strategaeth y cytunwyd arni ymlaen llaw o adael y farchnad sengl a’r undeb tollau yn cael ei gofnodi mewn hanes fel gweithred o hunan-niweidio economaidd hollol ddideimlad. Nid dim ond ein masnach gydag Ewrop sy’n cropian at ddibyn trychineb. Os bydd y Deyrnas Gyfunol yn gadael yr undeb tollau, bydd cytundebau masnach newydd yn cael eu trafod gan Lywodraeth y Deyrnas Gyfunol yn hytrach na’r Undeb Ewropeaidd. O ystyried dibyniaeth anghymesur y Ddeyrnas Gyfunol ar wasanaethau ariannol a phŵer lobi Dinas Llundain, mae gwir bosibilrwydd yr aberthir buddiannau diwydiant gweithgynhyrchu ac amaethyddiaeth Cymru er mwyn cael triniaeth mwy ffafriol i fuddiannau Dinas Llundain.

(Translation) To return to the Budget, the UK has fallen from fourth to sixth in the global economic tables; it has lost its triple A credit rating and is the worst-performing economy in the G7. The much-maligned eurozone is growing at a rate that the British economy can only dream of. In the third quarter last year, the Irish economy grew 10.5% year on year, whereas the Welsh economy faces very anaemic growth. As the hon. Member for Rhondda said, following the 2010 crash we did not tackle the structural deficiencies. What happened to the pledges to address sectoral and geographical wealth inequalities? George Osborne talked about that consistently in 2010, but they are now chronic and getting worse. No wonder Conservative Members are no longer parroting their slogan “long-term economic plan”. The truth is that the economy faces serious problems in the short to medium term.

I will resist the temptation to criticise once again the British Government for choosing the most economically damaging Brexit path. The predetermined strategy of leaving both the single market and the customs union will go down in history as an act of callous economic self-harm. It is not just our trade with Europe that will be perilously close to disaster if UK leaves the customs union: new trade deals will be negotiated by the UK Government rather than the EU, and given the UK’s disproportionate reliance on financial services and the power of the City of London lobby, there is a real prospect that the interest of Welsh manufacturing and agriculture will be sacrificed to gain more favourable treatment for the City of London.

Trade negotiations are a bargaining process, a negotiation between two sides. There is no doubt in my mind, looking at the personnel in the Department for International Trade, that their priority in these negotiations will be ensuring maximum access for the London financial sector to the markets of other countries. What will they want? They will want access to our food sector, of course. That will be the obvious trade-off.

A prime example of that is what happened with Chile. There is a European Union trade deal in place at the moment, and despite our protestations that leaving the customs union would result in those third countries wanting to renegotiate their arrangement with the UK, what did the British Government say? “No, it’ll be all the same; it’ll be the status quo, no problem. Nothing will change.” What did Chile want? It wanted enhanced access to our food markets. That is a foretaste of what is facing key sectors of the Welsh economy in Brexit Britannia.

Fel y gosodwyd ym mhapur diweddar Llywodraeth Cymru ar gytundebau masnach, llawer o ardaloedd tlotaf Cymru yw’r rhai sy’n dibynnu fwyaf naill ai ar weithgynhyrchu neu’r diwydiant amaethyddol—ardaloedd sydd debycaf o golli eu gwarchodaeth wrth i Lywodraeth y Deyrnas Gyfunol ffarwelio â hwy wrth chwilio am gytundebau masnach.

(Translation) As was set out in the Welsh Government’s recent paper on trade deals, many of the poorest areas in Wales are the most dependent on either manufacturing or the agricultural industry—areas prime for the UK Government to negotiate away their protections in search of trade deals.

I must make the point that the Welsh Government’s statement on trade yesterday was deeply disappointing, with the First Minister refusing to ensure that the Welsh Government would have a full say in what trade deals were signed in future. The reality that Wales will face as a country is that Wallonia, a region of Belgium, will have greater say over European Union trade deals than Wales will have within the British state over future UK trade deals—

[The Chair]

Order. I think the hon. Gentleman has got a bit ahead of himself and thinks he has been given the second debate on Brexit and the European Union. We need to stick to the Budget.

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[Geraint Davies]

On the Budget’s implications for agricultural trade, is the hon. Member for Carmarthen East and Dinefwr aware that the World Trade Organisation struck down and penalised the EU when it said it would not allow hormone-impregnated beef into the EU? Still, the EU has resisted hormone-impregnated beef. Does he not think that, if we stand alone against the United States and it wants to impose hormone-impregnated beef on Welsh consumers, with the WTO behind it, we will have to like it or lump it?

[Jonathan Edwards]

The hon. Gentleman makes a valid point. The hon. Member for Caerphilly and I were in the United States a few years ago, and we had a very interesting discussion with the food lobby there. I guarantee that it carries a lot of weight, and that is a clear indication of some of the problems we will face in future.

I shall return to the Budget.

Mewn polisi ariannol y mae’r perygl arall. Mae polisi ariannol hynod lac gan y Banc Canolog wedi cynnal yr economi ers 2010, a bydd oes yr arian rhad yn diflannu’n raddol wrth i gyfraddau llog gychwyn ar eu taith tuag at normaleiddio.

Yn ystod y cyfnod hwnnw, daeth twf economaidd i ddibynnu fwyfwy ar wariant gan ddefnyddwyr fel canran o GDP. Bydd methiant i ail-gydbwyso oddi wrth economi a gynhelir gan ddyled cartrefi yn rhwystr sylweddol yn y blynyddoedd i ddod.

(Translation) Monetary policy is another danger. The ultra-loose monetary policy of the central bank has sustained the economy since 2010, and the area of cheap money will gradually be removed as interest rates begin their journey to normalisation. During that period, economic growth has become even more reliant on consumer spending as a percentage of GDP. Failure to rebalance from an economy sustained by household debt will be a significant barrier in years to come.

Personal debt is reaching the level it was at before the great crash of 2008. That should be of great concern to us all.

Mae dirwasgiadau yn dueddol o ddod bob degawd, sy’n golygu, naw mlynedd wedi chwalfa ariannol fawr 2008 ein bod yn nes at ddiwedd y cylch na’i gychwyn. Nid yw’r methiant i neidio’n ôl yn sydyn o’r chwalfa fawr ac i ail-gydbwyso yn sectoraidd a daearyddol, na dibyniaeth yr economi ar beiriant cynnal bywyd polisi arianyddol yn argoeli’n dda at y dyfodol.

(Translation) Recessions tend to come each decade, which means that nine years after the great financial crash of 2008, we are far nearer the end of the cycle than its beginning. The failure to rebound sharply from the great crash, the failure fundamentally to rebalance sectorally and geographically, and the reliance of the economy on the life support of monetary policy do not bode well for the future.

The failure to rebound quickly from the great recession, the failure to rebalance sectorally and geographically, and the decade-long dependence on the life support of ultra-loose monetary policy do not bode well for the future.

O ystyried graddfa’r her, nid yw’r Mesur Cyllid yn addas. Cyn ymdrin â rhai o gymalau’r Mesur hwn, carwn ganolbwyntio ar rai o’r darpariaethau sydd, ysywaeth, ar goll.

Mae model economaidd y Deyrnas Gyfunol a ddilynwyd ers degawdau gan holl bleidiau sefydliad San Steffan wedi ei seilio ar hyrwyddo gweithgarwch a chyfoeth yn Llundain a de-ddwyrain Lloegr. Dylai’r anghydraddoldebau daearyddol o ran cyfoeth fod yn destun cywilydd i wleidyddion San Steffan. Mae naw o’r deg rhanbarth tlotaf yng ngogledd Ewrop yn y wladwriaeth Brydeinig yn ogystal â’r un cyfoethocaf. Yn anffodus, wrth gwrs, mae gorllewin a gogledd Cymru ymysg y tlotaf. Dylai’r Trysorlys fod yn ceisio ymdrin â’r record gywilyddus hon, ac eto does dim yn y mesur cyllid hwn fydd o ddifrif yn mynd i’r afael â’r heriau o’n blaenau.

Efallai mai un o ganlyniadau Brexit fydd y bydd cwmnïau ariannol Dinas Llundain yn adleoli i Baris, Frankfurt a Dulyn. O ystyried hynny, dylai Llywodraeth Prydain ymateb drwy ganolbwyntio ar sectorau economaidd eraill, yn enwedig gweithgynhyrchu. Dylai hyn arwain at symud y pwsylais ymaith o dde-ddwyrain Lloegr i’r cenhedloedd a’r rhanbarthau.

Yn anad dim, dylai Cymru gael y grym cyllidol i lunio ein heconomi ein hunain. Mae’n warthus fod gan yr Alban a Gogledd Iwerddon setliad cyllidol a threthiannol llawer gryfach na Chymru. Oherywdd hyn, bydd economi Cymru dan anfantais sylweddol. Dydw i methu deall pam nad yw gwleidyddion o’r pleidiau Unoliaethol a bleidleisiodd o blaid rhoi mwy o bwerau i’r Alban a Gogledd Iwerddon yn barod i ddarparu ar gyfer ein cenedl ni ein hunain.

Hyd yn oed os ydym yn rhoi i’r neilltu yr anghydraddoldebau cyfansoddiadol, mae’r sefyllfa yn golygu fod Llywodraeth Cymru yn llai abl i ymyrryd yn ein heconomi. Os mai Brexit caled fydd hi, dylid datganoli portffolio cyfan o drethi, gan gynnwys treth teithwyr awyr, treth ar werth a threth gorfforaeth.

Dylai buddsoddi mewn seilwaith gael ei wasgaru’n fwy cyfartal ar draws y wladwriaeth Brydeinig.

(Translation) Considering the scale of the challenge, the Finance Bill is in no way fit for purpose. Before addressing some of the measures in the Bill, I will concentrate on some provisions that are sadly missing. The UK economic model, which has been followed for decades by all the establishment parties in Westminster, is based on promoting activity and wealth in London and the south-east of England. The geographical wealth inequality should be a matter of shame for Labour and all politicians in Westminster. Nine of the 10 poorest regions in northern Europe are in Britain, as well as the richest. Unfortunately, west Wales and north Wales are among the poorest. The Treasury’s overriding aim should be to address that shameful record, but nothing in the Finance Bill will seriously get to grips with the challenges facing us.

One consequence of Brexit might be the relocation of London-based financial companies to Paris, Frankfurt or Dublin. Given that, the British Government should focus on other economic sectors, and manufacturing in particular. That should shift the focus away from London to the nations and regions.

First and foremost, Wales should be empowered to create its own economy. It is disgraceful that Scotland and Northern Ireland have stronger financial settlements than Wales. Given that, the Welsh economy will be at severe disadvantage. I cannot understand why politicians from Unionist parties vote in favour of giving more power to Scotland and Northern Ireland, but are unwilling to do so for our own nation. Putting aside the constitutional imbalances, that means that the Welsh Government are less able to intervene in our economy. If we are to have a hard Brexit, a portfolio of taxes should be devolved, including air passenger duty, VAT and corporation tax.

Infrastructure investment should be more evenly spread across Britain. Why should Welsh taxpayers’ money be spent on English projects?

[Chris Bryant]

We had a vote last week on what we will do about the Palace of Westminster, where lots of people were anxious about us spending so much money in London. Is there not a really important thing we could do for every region of the United Kingdom? After Brexit, we will not have the skills in this country to complete the work on one of our biggest infrastructure projects, so should we not set up a parliamentary apprenticeship scheme so that people can gain those skills in Wales, with every constituency in Wales having someone working on the project here?

[Jonathan Edwards]

Mae’r Bonheddwr anrhydeddus yn codi pwynt dilys. Ces i ddim y cyfle i wneud y pwynt yma yn ystod y ddadl, ond yn bersonnol byddwn i wedi moyn symud y Senedd allan o Lundain. Rydw i’n credu byddai hynny wedi bod yn symbol o’r angen i ddatganoli’n economaidd y Wladwriaeth Brydeinig. O ystyried bod y penderfyniad bellach wedi cael ei wneud—rwy’n llongyfarch y Bonheddwr anrhydeddus ar ennill ar ei welliant—dylem nawr fanteisio ar y cyfle i sicrhau bod y buddsoddiad hynny yn cael ei wasgaru ledled y Wladwriaeth Brydeinig. Rwy’n credu bod yna job wirioneddol i’w wneud ar hynny, ac rwy’n edrych i’r Bonheddwr anrhydeddus i gynnig arweiniad, o ystyried mai fe sydd wedi arwain y ddadl i aros fan hyn—dyna job fach iddo fe dros y blynyddoedd nesaf.

(Translation) The hon. Gentleman raises a valid point. I did not have the opportunity to make this point during the debate, but I wanted to move Parliament away from London, because that would be a symbol of the need to devolve the British states economically, too. Given that a decision has been made—I congratulate him on getting his amendment to that motion through—we should take every opportunity to ensure that that investment is spread across Britain. There is a real job to be done there, and I look to him to give leadership on that over the next few months, given that he has led the debate for remaining here.

[Liz Saville Roberts]

Ar destun yr ardoll brentisiaethau, onid yw’n amser i ni gael mwy o eglurdeb ynglyn â chwmnïau gyda’u prif swyddfeydd tu allan i Gymru a gyda gweithwyr o Gymru, a’r arian sydd yn cael ei drosglwyddo o’r Trysorlys fan hyn i Gaerdydd? Yn enwedig, mae’r ardoll o 0.5% yn cael ei chodi ar gyflogres pedwar Heddlu Cymru, ond nid yw hynny o ddewis Llywodraeth Cymru ac nid ydyw’n cael ei rhoi tuag at hyfforddiant yr heddlu.

(Translation) On apprenticeships, is it not time for us to get greater clarity on businesses that are headquartered outside Wales but have workers from Wales, with respect to the money that is transferred from the Treasury to Cardiff? In particular, the levy is raised on the four police forces of Wales, which can apply to their wage packets, but it does not come under the responsibility of the Welsh Government and it does not reach the police’s training budgets.

[Jonathan Edwards]

Mae hynny’n bwynt hollol deg o ran prentisiaethau plismona. Yn sicr, bydd Aelodau ein plaid ni yn ei godi yn y ddadl ar Lawr y Tŷ prynhawn yma. Y cwestiwn sylfaenol yw: pam y dylid gwario arian trethdalwyr Cymru ar brosiectau yn Lloegr tra bod Llywodraeth Prydain yn gwrthod buddsoddi mewn prosiectau Cymreig ac mewn gwirionedd yn torri addewidion megis trydaneiddio’r rheilffordd i Abertawe? Rydym ni wedi clywed lot yn barod am y pwnc hynny yn ystod y ddadl.

Os yw Llywodraeth Prydain eisiau codi cynhyrchedd mewn ardaloedd daearyddol sydd yn perfformio’n wael, rhaid iddynt ailgyfeirio buddsoddiad i’r ardaloedd hynny yn hytrach na lluchio popeth at Lundain. Mae pawb bellach yn cytuno bod buddsoddiad estynedig, tymor hir mewn seilwaith yn un o ragofynion llwyddiant economaidd. Os edrychwn ar fuddsoddiad o’r fath dros y degawdau aeth heibio, yr hyn a welwn yw cyfran anghymesur o fuddsoddiad o’r fath yn mynd i Lundain a de-ddwyrain Lloegr. Gallwn edrych ar HS1, lein y Jiwbilî, lein Victoria, Crossrail 1, Crossrail 2, yr M25 a HS2. Ni fu buddsoddiad cyffelyb yn unrhyw wlad na rhanbarth arall o’r Deyrnas Gyfunol. Pam? Oherwydd nifer o ffactorau, gan gynnwys agwedd Lundain-ganolog y pleidiau Unoliaethol. Gall hefyd fod oherwydd y modelau economaidd a ddefnyddir wrth werthuso buddsoddiadau o’r fath.

O ystyried y swyddi sydd wedi eu canoli yn Llundain, mae’r elw tymor byr ar bob punt a fuddsoddir mewn seilwaith yn debygol o fod yn uwch yno na mewn rhannau eraill o’r wladwriaeth Brydeinig. Mae hyn yn ei dro yn arwain at sbiral lle mae symiau cynyddol o fuddsoddiad trafnidiaeth yn mynd i Lundain, ac yn eu tro mae’r rhanbarthau tlotaf yn mynd a’r sbiral tuag at i lawr. Mae yma wers inni yng nghyd-destun Cymru. Fel dywedodd fy Nghyfaill anrhydeddus dros Geredigion, mae’r buddsoddiad gan Lywodraeth Cymru wedi’i anelu’n fwyfwy at Gaerdydd a’r de-ddwyrain yn hytrach na chael ei wasgaru ar draws ein gwlad.

Yn 2015-16, yr oedd gwariant cyhoeddus ar drafnidiaeth yn £973 y pen yn Llundain o gymharu â £444 yng Nghymru. Petai lefel y gwariant yng Nghymru yr un fath ag yn Llundain, buasem yn derbyn £1.6 biliwn yn ychwanegol y flwyddyn i’w fuddsoddi. Mae’r anghydraddoldebau cyfoeth mor ddifrifol yn y wladwriaeth Brydeinig fel y dylid anfon swyddogion y Trysorlys i’r Almaen i ddysgu gan yr Almaenwyr sut y gwnaethant ymdrin ag anghydraddoldebau cyfoeth daearyddol yn dilyn cwymp wal Berlin.

(Translation) That is an entirely fair point. Members of our party will return to that point on apprenticeships in policing in this afternoon’s debate on the Floor of the House. The fundamental question we must ask is why Welsh taxpayers’ money should be spent on English projects while the British Government refuse to invest in Welsh projects, and renege on promises such as the electrification of the main line to Swansea. We have heard much about that already. If the British Government want to raise productivity in low-performing areas, they must redirect investment into those areas, rather than throwing everything at London.

It is widely agreed that sustained long-term investment in infrastructure is a prerequisite of economic success. In recent decades, a disproportionate amount of that investment has been made in London and the south-east of England, such as that on HS1, the Jubilee line, the Victoria line, Crossrail 1, Crossrail 2, the M25 and HS2. There has been no comparable investment in any other country or region of the UK. Why? It is due to a number of factors, including the Unionist parties’ London-centric approach. It may also be because of the economic models employed in evaluating such investments.

Given the concentration of employment in London, the short-term return on every pound invested in infrastructure is likely to be higher there than in other parts of the UK. That, in turn, leads to a spiral, in which ever-increasing amounts of investment in transport go to London, and the poorest regions spiral downwards. I believe there is a lesson there for us about the Welsh context. My hon. Friend the Member for Ceredigion made the point that Welsh Government investment is targeted more and more at Cardiff and the south-east, rather than being spread across the nation.

In 2015-16, identifiable public expenditure per capita was £973 in London, compared with £444 in Wales. If the level of spending in Wales were the same as it is in London, we would receive an extra £1.6 billion per annum for investment. The wealth inequalities are so important that Treasury officials should be sent to Germany to learn how it went about addressing the geographical wealth inequalities following the fall of the Berlin wall.

Essentially, Germany made a strategic decision to deal with the wealth inequalities in the reunified Germany, which was based on operating aids and tax incentives for the poorer regions, and the deliberate redirection of foreign direct investment into the poorer parts of the state.

Yn niffyg hynny, rhowch inni yng Nghymru yr arfau i fwrw ymlaen â’r dasg o adeiladu ein gwlad ein hunain, oherwydd dengys hanes nad yw aros am Lywodraethau San Steffan—o ba bynnag liw—i gyflawni pethau ar gyfer Cymru yn debyg o ddelio â’n problemau. Mae Cymru wedi dioddef nid yn unig o ddiffyg sylw a buddsoddiad gan Lywodraeth y Deyrnas Gyfunol ond o flerwch llawer Llywodraeth Lafur yng Nghymru a’u hanallu i gyflawni. Mae eu hymdrech ddiweddaraf i greu strategaeth economaidd yn rhyfeddol am ei bod heb unrhyw ddangosyddion perfformiad allweddol i fod yn ganllaw i’r sawl sydd i fod i weithredu’r strategaeth ac i alluogi’r gweddill ohonom i fesur pa mor llwyddiannus yw’r strategaeth.

Roedd y Gyllideb yn wan iawn. Ystyriwn y gwyliau treth stamp. Dywedodd Pwyllgor Dethol y Trysorlys, Swyddfa Cyfrifoldeb y Gyllideb a’r Sefydliad Astudiaethau Cyllid y bydd polisi’r Llywodraeth o roi gwyliau treth stamp, y buont mor uchel eu cloch yn ei gylch, yn gwthio prisiau tai i fyny o ryw 0.3%, gyda’r rhan fwyaf o’r cynnydd yn digwydd eleni. Yn y Gyllideb, neilltuwyd £3 biliwn yn ychwanegol i gynllunio am Brexit. Felly yn hytrach na £350 miliwn yr wythnos i’r gwasanaeth iechyd, yr ydym yn gwario yn agos i £58 miliwn yr wythnos ar fiwrocratiaid y wladwriaeth Brydeinig—ac nid ydynt hwy, hyd yn oed, fel petaent yn rhoi’r atebion mae’r Llywodraeth eisiau eu clywed i’r cwestiynau nad oeddent eisiau eu gofyn.

Er iddynt gynnig rhyw godiad pitw o £2.8 biliwn i’r gwasanaeth iechyd yn Lloegr dros y tair blynedd nesaf, mae hyn yn edrych fel rhywbeth rhy fach yn rhy hwyr, gan ystyried y storïau yn y wasg dros y misoedd diwethaf. Yng nghanol argyfwng y gaeaf, gwelwn effeithiau tan gyllido cronig yn y gwasanaeth iechyd yn Lloegr. Mae’n amlwg na allwn ymddiried yn y Ceidwadwyr i ofalu am y gwasanaeth iechyd yn Lloegr. Fodd bynnag, dyw record Llafur yng Nghymru ddim llawer gwell. Fel gyda’r rhan fwyaf o bethau, maent yn siarad digon o eiriau teg yn San Steffan, ond lle maent mewn grym, mae’r stori yn wahanol iawn.

Mae’r newidiadau i’r credyd cynhwysol—universal credit—a chynlluniau i wneud i ffwrdd â’r cyfnod cychwynnol o saith diwrnod i hawlwyr pan na fuasent wedi bod yn gymwys i gael budd-daliadau, a lleihau’r cyfnod aros presennol o chwech wythnos i’r rhan fwyaf o hawlwyr i bump wythnos, i’w groesawu. Ond mae hyn yn gyfystyr, mewn gwirionedd, a rhoi plaster ar goes sydd wedi torri. Mae’r ffordd ddi-drefn y cyflwynodd y Llywodraeth y credyd cynhwysol, a’r modd y gweinyddir cynlluniau lles yn ehangach, yn gywilyddus. Mae ymwneud â chwmnïau preifat mewn lles yn anfoesol ac yn anghyfrifol. Ni ddylai cwmnïau fel Capita elwa o drueni pobl eraill. Rydym yn croesawu’r dreth ar werthiannau a gynhyrchir yn y Deyrnas Gyfunol a fydd yn effeithio ar fusnesau digidol mawr fel Apple a Google. Ond unwaith eto, fodd bynnag, gwyddom fod y Torïaid yn gwrthwynebu llawer o newid yn strwythur ein sustem dreth, sydd ar hyn o bryd â thyllau dianc sy’n caniatáu osgoi gwerth £13 biliwn mewn trethi, a pheidio â thalu mwy fyth. Doedd dim ymrwymiad penodol i gynyddu cyflogau gweithwyr y sector cyhoeddus, y rhewyd eu cyflogau—ac a gapiwyd wedyn ar 1%—ers 2010. Diolch i chwyddiant, mae hyn yn golygu fod cyflogau nyrsys wedi eu torri mewn gwirionedd o 14%. Mae Cymru yn dal i dderbyn llai y pen na Llundain. Yn anffodus, mae’r blaid Lafur yn methu gwneud yn iawn am y cam yng Nghymru, er fod ganddynt y pwerau i wneud hyn, fel mae’r Llywodraeth SNP wedi llwyddo i wneud yn yr Alban.

Mae Cymru’n dal yn derbyn llai y pen na Llundain. Yma mae rhai o gymunedau tlotaf Ewrop ac mae toriadau enfawr mewn cyllid o ganlyniad i Brexit. Mae’n her sylweddol i sectorau allweddol ein economi. Ac eto, mae’r Canghellor yn dewis defnyddio ystadegau fyddai’n fwy addas i un o fysiau mawr coch yr Ysgrifennydd Tramor i honni y bydd cynnydd o £1.2 biliwn yng nghyllid cyhoeddus Cymru o Gyllideb yr hydref. Roedd yn ddiddorol iawn yn ystod cyflwyniad yr Ysgrifennydd Gwladol: wnaeth e ddim defnyddio’r ffigwr hynny yn benodol yn ei araith, gan ei fod yn gwybod, fel dywedodd arweinydd Aelodau Seneddol Cymreig y blaid Lafur yma heddiw, bod dros hanner yr arian hwnnw yn fenthyciadau—neu fiscal transactions—y bydd yn rhaid i Lywodraeth Cymru dalu yn ôl.

Doedd dim sôn am drydaneiddio’r rheilfyrdd, sydd wedi ei ganslo er yr addewid a roddwyd; dim sôn am y morlyn llanw ym Mae Abertawe, a dim golwg ohono yn y Gyllideb; a chyllid i wasanaethau datganoledig rhyw £750 miliwn yn is nag ar ddechrau’r ddegawd. Dyna record y Llywodraeth Brydeinig pan mae’n dod at Gymru. Mae stori’r Gyllideb hon yn hollol glir: nid yw San Steffan yn becso am Gymru.

(Translation) Failing that, give us in Wales the tools to move ahead with the job of building our own country. History demonstrates that waiting for Westminster Governments of whatever colour to deliver for Wales is unlikely to address our problems. Wales has suffered not only from the UK Government’s lack of attention and investment, but from successive Labour Governments’ ineptitude in Wales and their inability to deliver. The latest effort to create an economic strategy is remarkable in that the strategy is without any measurable key performance indicators to guide those who are to implement it and enable the rest of us to gauge how successful its implementation is.

Let me turn to some specific aspects of the Budget, which was very weak. The Treasury Committee, the Office for Budget Responsibility and the Institute for Fiscal Studies stated that the Government’s policy of a stamp duty holiday, which they were so vocal about, will push house prices up by 0.3%, and that most of the increase will come through this year. The Budget provided £3 billion to plan for Brexit. Rather than the £350 million for the health service that we were promised, we are spending almost £58 million per week on bureaucracy in the British state. The bureaucrats are not even providing the answers that the Government want to hear.

The minute increase of £2.8 billion for the NHS in Wales is too little, too late, given the stories in the press in the past few months. The winter crisis has shown the impact of the chronic underfunding of the NHS in England. It is clear that we cannot trust the Conservatives to take care of the NHS in England. However, Labour’s record in Wales is not much better. Labour Members speak warm words in Westminster, but when they are in power the story is very different indeed.

The changes to universal credit, including the plan to do away with the initial period of seven days in which claimants cannot receive payments and the reduction of the waiting time from six weeks to five weeks for most claimants, are to be welcomed, but they amount to putting a plaster on a broken leg. The chaotic way in which universal credit was introduced and the way that welfare is administered more generally is disgraceful. The involvement of private companies is immoral and irresponsible. Companies such as Capita should not benefit from the misery of others. We welcome the introduction of a tax on sales generated in the UK, which will affect companies such as Apple and Google, but we know that the Tories are opposed to making changes to our tax structure, which contains loopholes that allow for the avoidance of £13 billion of taxation.

The Budget contained no specific commitment to increase public sector pay, which has been frozen and capped at 1% since 2010. Thanks to inflation, that means that nurses have had a real-terms cut to their salaries of 14%. The Labour party, unfortunately, has not put that right in Wales, as the Scottish National party Government managed to do in Scotland, despite having the power to do so.

Wales still gets less per capita than London. It has some of the poorest communities in Europe, and there are huge cuts to budgets as a result of Brexit, and significant challenges to crucial sectors of our economy. Yet the Chancellor chooses to use statistics that would be more appropriate for one of the Foreign Secretary’s red buses, to claim an increase of £1.2 billion in the Welsh budget emerging from the autumn Budget. It was interesting that the Secretary of State did not use that figure during his opening remarks, because he knows that, as the shadow Secretary of State for Wales said here on behalf of Welsh Labour MPs, more than half of that is fiscal transactions that the Welsh Government will have to repay.

There was no mention of the electrification of rail, which has been cancelled, despite the pledge that was given; there was no talk of the tidal lagoon in Swansea Bay, and no sign of that in the Budget either; and funding for devolved services is lower by some £750 million than it was at the beginning of the decade. That is the record of the British Government with respect to Wales. The story of the Budget is clear: Westminster does not care about Wales.

[The Chair]

Galwaf ar Gadeirydd y Pwyllgor Materion Cymreig.

(Translation) I call the Chair of the Welsh Affairs Committee.