Wales: Cost of Living

Lord Bourne of Aberystwyth Excerpts

Monday 2nd December 2013 Lords Chamber

[Lord Bourne of Aberystwyth (Con)]

My Lords, I congratulate the noble Baroness, Lady Morgan, on securing this debate. It is good to see the spotlight on Wales. The noble Baroness and I go back quite a way. I anticipated that there would be some valid points and some party political ones and there were some of both although they did not often coincide, sadly. I thought, first, I would look at some of the points on welfare, secondly, look at the cost of living issues and then, thirdly, try to put it in the context of Wales in general, particularly looking at some of the devolved elements that apply.

The welfare changes have to be seen against the background of the deficit. The noble Baroness did allude to that. The deficit did not suddenly happen. A gaping deficit confronted the country in 2010 as Gordon Brown left office and the coalition Government under David Cameron took over. I think it was common ground among the parties that this deficit needed to be dealt with. Against that background, it was anticipated, and indeed acknowledged, that welfare reform was a key part of that. There have often been warm words from the Official Opposition about the need to tackle welfare reform, but nothing specific, and when any particular reform is put forward they always shoot it down. We need more than warm words. We need some concrete evidence of what they would do.

In the reform process the most vulnerable need protection. We have sought to do that with pensioners. For example, pensioners are now getting a protected pension with a rise in line with the consumer prices index, or average earnings, of 2.5%. That did not happen under the previous Government and there was, on one occasion at least, a derisory increase which was howled down even by people on the Labour side. We need to recognise that pensioners are being protected, as they are on the spare room subsidy. The noble Baroness referred to that welfare reform.

On some of the cost of living issues, first, what has happened on energy bills did not suddenly happen. The noble Baroness is well aware of that, having worked as a director for an energy company for much of the period in which these increases were happening. I am sure that her abilities and talents were being used to try to keep those increases down. But this is not something that suddenly happened and we are seeking to address that, too.

One thing that the noble Baroness did not refer to was the fact that employment has remained strong. Indeed, it has gone up at a time when it was anticipated, certainly by the right honourable Leader of the Opposition, that unemployment would go up. That has not happened. It has gone down in Wales in the past year by 22,000. Some policies have been pursued effectively in Wales by the Welsh Government; for example, on enterprise zones, a policy of the coalition Government, but with a Welsh spin. I declare an interest as a chair of the Haven Waterway enterprise zone in Pembrokeshire. We have seen local unemployment fall in Pembrokeshire and Carmarthenshire over the past several months, which is all to the good. Again, there is agreement among the parties, and this is certainly the case in Wales, that there had to be a move from public sector growth to private sector growth. That has long been anticipated.

Perhaps I may say something in a wider context about the devolved settlement after 14 and a half years of devolution. I strongly support devolution, of course, but that does not mean that I support all the policies that have been pursued in Wales. We have seen Welsh GDP fall back not just against English GDP, although that has been the case over the past 14 years, but as against many parts of eastern Europe. We are now behind them, too. Sadly, that is something to be placed at the foot of the devolved Government. The noble Baroness also referred to increases in council tax, but one reason for those is that the freeze which has happened in England has not happened in Wales. That is because the Welsh Government choose not to use the Barnett money to reduce council tax in Wales. That is their privilege but it has been the main reason that council tax has gone up by so much in Wales. That needs to be recognised.

Lastly, perhaps I may ask the noble Baroness to use her undoubted talents to persuade the Labour Party to embrace the Silk commission on Part 1. Again, I declare an interest as a commissioner on the Silk commission. The power of taxation and the power to borrow money, which largely do not exist in Wales at the moment, would be all to the good. Such powers would strengthen Wales’s hand and the Welsh economy. I hope that we can develop consensus among the four parties so that we are able to bring such powers forward and enhance Wales’s position in terms of economic performance.