Wales Bill

Mark Tami Excerpts

Tuesday 24th June 2014 Commons Chamber

[Owen Smith]

If I understand the hon. Gentleman’s question correctly, the answer is borrowing powers for Wales, because we have seen £1.6 billion cut from the budget for Wales, which is money that could usefully be made up by borrowing. Of course, all the tax powers set out in the Bill—income tax and, more immediately, stamp duty and landfill tax and other minor taxes—are directly associated with those borrowing powers. We are keen to see those borrowing powers afforded to Wales, and therefore to see the Bill passed.

However, we have never said that income tax-varying powers are a Labour priority for Wales. We remain sceptical about the benefits they would afford to Wales. Our scepticism is entirely factually based. The Silk commission’s report looks extensively at the revenues Wales receives from taxes and compares them with expenditure in Wales. It determines, to put it in blunt terms, that Wales currently spends around £35 billion in public moneys and nets in revenues from tax receipts of around £17 billion. That leaves a significant deficit that would need to be made up by a Welsh Government, were they to be reliant to a greater extent on their own tax receipts.

The Minister explained a moment ago that, under the terms of the formula outlined in the Bill and in some of the explanatory material, Wales would of course benefit if the growth of GDP in Wales outstripped that of England, but he also said that it

“would be adversely affected if growth in Wales was slower.”

Although in recent years the rate of GDP growth has been faster in Wales than in England, he will know that historically—if we look at the past 20 years, for example, and certainly over any longer period—the rate has been lower in Wales than in England, for all the obvious demographic and industrial reasons. We need to be certain that Wales would not be worse off, in both the short and the long term. We remain suspicious that tax competition, which seems to be the Government’s driving ideological imperative on the matter, will not benefit Wales, for the reasons I have given.

[Mark Tami (Alyn and Deeside) (Lab)]

As someone who represents a border constituency, I think that my hon. Friend touches on a very important area. Tax competition, which might mean people moving their office across the border to take advantage of where the rate was better, will not do the overall economy in England or Wales any good.

[Owen Smith]

Absolutely. On previous occasions in the House I have outlined the difference between Wales and Scotland, in terms of the populous nature of our border, as well as the far greater problems that we will experience in Wales. I will touch on that later.

--- Later in debate ---

In a close parallel, the UK Government stated that they would electrify the great western line to Swansea and the valley lines, but then reneged on their word. That also revealed the incompetence of the Labour Government in Wales, who completely failed to nail down the Westminster Government on the precise terms of the agreement. All along, the people of Wales are being let down by unionist parties who squabble among themselves and who deliver only mealy-mouthed promises and an economy in Wales that is still languishing.

[Mark Tami]

Will the hon. Gentleman please explain or elaborate on the imperialist nature of the M4, because I am slightly at a loss?

[Jonathan Edwards]

The point I am making is that all the investment seems to be on an east-west basis, rather than on a north-south basis.