Ford in Bridgend

Owen Smith Excerpts

Monday 10th June 2019 Commons Chamber

[Alun Cairns]

Maybe I should answer that question with another question. When will the hon. Gentleman vote for the deal to provide a stable environment in which to continue exporting to the European Union?

[Owen Smith (Pontypridd) (Lab)]

In February 2019, Ford said explicitly that the possibility of a no-deal Brexit was jeopardising its investment in the UK, including at Bridgend. Ford reportedly said directly to the Prime Minister that she must rule out a no-deal Brexit, lest we lose jobs. Just last week, the head of Make UK, representing manufacturing across this country, said that there is now a direct causal link between the threat of no deal by Conservative Members who are vying for the leadership, including the Secretary of State, and the loss of manufacturing jobs. How many more jobs do we need to lose in Wales and elsewhere before he tells the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) that we must never have a no-deal Brexit?

[Alun Cairns]

The hon. Gentleman quotes Ford from February, but I can quote Ford from before each and every meaningful vote in this House. It is strange that he is happy to heed Ford’s calls when it suits him but did not respond to its calls to vote in favour of the deal that the Prime Minister agreed with the European Commission. On job numbers, I point to the record job creation numbers we have seen in Wales in recent times, which compare favourably with when his party was in government.

Oral Answers to Questions

Owen Smith Excerpts

Wednesday 23rd January 2019 Commons Chamber

[Nigel Adams]

There is no greater champion for consumers than my right hon. Friend, but we do not believe that setting up a regulator would be justified, given the costs of doing so. This sector, like every other, is subject to the normal competition and consumer protection law. We are committed to passing on savings to commuters and, due to nine years of fuel duty freezes, the average car driver in Wales and the UK will have saved a cumulative £1,000 by April 2020.

[Owen Smith (Pontypridd) (Lab)]

Can the Minister confirm that 30,000 low-income families in Wales will lose £2,500 a year as a result of the imposition of the two-child policy? Does he think that that is fair?

[Nigel Adams]

The Secretary of State for Work and Pensions has announced that she will not extend the two-child limit on universal credit to children born before April 2017, when the policy first came into effect. That will benefit about 15,000 families, and the decision restores the original intent of the policy, which will give parents in receipt of universal credit the same choices as those in work.

Welsh Affairs

Owen Smith Excerpts

Thursday 2nd March 2017 Commons Chamber

[Mrs Madeleine Moon (Bridgend) (Lab)]

On 8 February, Bridgend College received the Association of Colleges beacon award for the development of transferable skills, in recognition of its amazing initiative “Be all that you can be”. That should almost be the motto of people who live in and around the Bridgend constituency, because Bridgend is a beautiful place. It has beautiful countryside; excellent schools; thriving faith communities; an inventive, creative business community; and wonderful people it is a privilege to live among and represent, and I want to talk about some of them today.

I live on the coast in Porthcawl, protected by our lifeboat station, Coastwatch lookout tower and coastguards, who watch the visitors, who do not know how dangerous the sea can be and who do not know its tides, its moods and its strength. Those visitors include the 31,000 who come for the Porthcawl Elvis festival, which brings in an estimated £6.7 million to our local economy over a weekend. I was never a great Elvis fan, but I must say that I am converting. I urge Members to visit the Porthcawl jazz festival in April and, while there, come along and see the Porthcawl museum, which is thriving thanks to a partnership between the excellent Bridgend Council, the museum, and the arts society. According to “The Source”, the museum’s regular newsletter written by Ceri, the carnival and Christmas swim committees, the Rotary club of Porthcawl and Porthcawl Town Council have all contributed money to make sure that the museum is a huge success. I know that the Secretary of State knows the museum well.

Drive out of town and come and meet another fantastic local character who, again, the Secretary of State knows well—Gwyneth Poacher at Sandville. This determined, dynamic woman brings love, compassion, care and hope into the lives of people who are very seriously ill, many terminally ill. She and her volunteers, taking no money at all from the state, make life in an impossible world worth living. My communities of Cornelly and Kenfig Hill are not “chocolate box”, but if people go to the luncheon clubs in the community centres, go to the churches, and go to KPC Youth & Community, they will see how strong and self-reliant these communities are. Come to Bridgend and see the local market. Meet the very wicked stallholders like Martin Nagell and Tim Wood, and see the quality of their goods.

Come to Wildmill and the meet the fantastic youngsters there, who, thanks to First Great Western, have tickets to come up to see this place. Visit my amazing local schools and see the education that they provide, because they are absolutely inspiring. Come to Bridgend because of our low crime. We have the lowest crime rate across south Wales, and the South Wales police force was today rated as “good”. Come for the Urdd Eisteddfod at the end of May, which is expected to bring in 90,000 visitors. Unemployment is low in my constituency: in January 2017, we had 985 claimants. We have a fantastic prison, Parc prison, rated by everyone as turning round reoffending. Reoffending rates among 80 high-risk families have been cut to 10%.

All those things, one would think, would be central to people’s view of Bridgend, instead of which, over the past 24 hours, most people have talked about the Ford plant. I do not underestimate the problems with the Bridgend Ford plant. The fear of job losses there is huge. There are issues that need tackling here in Westminster, particularly in relation to the value of the pound. The exchange rate change has cost Ford $600 million in lost revenue. The issue of tariffs is absolutely essential for Ford. It is vital to make sure that there is tariff-free access into Europe.

[Owen Smith (Pontypridd) (Lab)]

My hon. Friend is making a very important speech. She will know that the issue of the Ford factory and the prospect of losing 1,100 jobs there will have an impact right across south Wales. Will she join me in urging the Secretary of State to offer Ford whatever assistance he can, including the sort of deal that appeared to be offered to Nissan? Will she further urge him to make sure that we never see World Trade Organisation tariffs imposed on cars going out of the UK, because that would cripple the competitiveness of our car industry?

[Mrs Moon]

I have had assurances that Ford will have the same deal as Nissan. I have asked today for an automotive symposium that will involve the manufacturers, Ministers here in Westminster, the trade unions, and local Members to see whether we can move this forward. I hope the Secretary of State will support that. There are also productivity issues at Bridgend that we must deal with, and the GMB and Unite unions are working on that with the workforce.

Wales Bill

Owen Smith Excerpts

Ping Pong: House of Commons
Tuesday 24th January 2017 Commons Chamber

[Alun Cairns]

I did not hear my hon. Friend’s comments, but should there be any attempt to frustrate the process of exiting the EU by the Welsh Government, the Welsh population would not expect or want it. After all, Wales voted to leave the EU, and it is only right and proper that we act on that instruction and direction, which came from the public in Wales. I would hope that the Welsh Government continue to engage positively in the way that they have.

[Owen Smith (Pontypridd) (Lab)]

Given the respect that the Secretary of State says there is between the institution of the National Assembly and the Government here at Westminster, should he not be disappointed that the Supreme Court has not ruled today that there should be a formal consultation with Wales via the National Assembly?

[Alun Cairns]

We have maintained that the views of the Welsh Government are important, but the views of other stakeholders in Wales are also relevant to the discussion. The Welsh Government will rightly form their view, and the UK Government will come to a conclusion that serves all parts of the United Kingdom, including other stakeholders in Wales, as part of the process. The legal action that the Welsh Government took was a matter for them. We have had the judgment, and we need to respect and act on it.

I shall return to the fiscal framework and the funding settlement for Wales. I have already mentioned Professor Gerry Holtham, but it is appropriate that we pay particular tribute to him for the work that he did. We should also pay tribute to my right hon. Friend the Chief Secretary for the part he played in the negotiations, and to the way the Welsh Government and Mark Drakeford, the Cabinet Secretary for Finance and Local Government, went about the negotiations with my right hon. Friend, whereby two mature institutions discussed serious matters that will have long-term positive consequences for Wales.

North Wales Economic Infrastructure

Owen Smith Excerpts

Wednesday 25th March 2015 Westminster Hall

[Owen Smith (Pontypridd) (Lab)]

It is a great pleasure to serve under your chairmanship this morning, Sir Roger. Also, given the north Wales connections with the aircraft industry, I add my words of condolence to those of my right hon. and hon. Friends on this sad day after the air crash in France.

I, too, congratulate my hon. Friend the Member for Alyn and Deeside (Mark Tami) on securing his second debate on the economic infrastructure of north Wales. I also congratulate all right hon. and hon. Friends on their contributions to the debate—a measure of their continued determination, as it is of all north Wales Members, to see north Wales prosper. We have heard excellent contributions from everyone.

My hon. Friend the Member for Ynys Môn (Albert Owen) said it was a shame that he is the only representative of north-west Wales present; no other parties from the north-west are represented in the Chamber. It is a shame that Plaid Cymru Members are not here—perhaps they have something else on of rather more importance.

That, however, is one of the lone party political points that I want to make today, because the debate has not been party political; it has been a constructive debate with an enormous amount of consensus—

[Chris Ruane]

I did try!

[Owen Smith]

For all my hon. Friend’s attempts, we were largely consensual.

There was a huge amount of agreement in the Chamber about the challenges that face north Wales on the economy and its infrastructural links and what we need to do about energy, transport, rail, road, schools building, housing and so on. My hon. Friend the Member for Alyn and Deeside summed things up when he talked about north Wales as an industrial powerhouse. We have terrific, world-beating companies in all the constituencies represented in the Chamber today. We need to ensure that those companies are nurtured and grow, and that the certainty required in terms of investment is maintained by whoever wins the election in May. Any uncertainties such as those about the future involvement of the UK in Europe need to be eradicated.

Another point made with great force and vigour by my hon. Friend the Member for Alyn and Deeside was the need for investment in education and apprenticeships in north Wales and throughout the UK. The connections that have already been made between companies such as Toyota and Airbus and the local colleges, Coleg Cambria and Glyndwr university, are exemplars for the whole of the UK. We need to ensure that we maintain those connections.

The former Secretary of State for Wales, the right hon. Member for Clwyd West (Mr Jones), made an extremely positive contribution on two key points, first, on the vital cross-border links. I agree that too often in all parties our public dialogue on Wales concentrates on the border. We need to get past that. The next phases of devolution must be about greater partnership and integration, acknowledging the fact that companies do not recognise the border in the way in which public policy often does.

The right hon. Gentleman’s points about connecting the two enterprise zones through the Wrexham to Bidston line, making it a 15-minute journey, and about the benefits that can be derived from thinking more holistically about the whole of Deeside and north-west England as an economic powerhouse and zone were extremely well made, as was his contribution about English votes for English laws. I agree with him wholeheartedly that we must carefully guard against short-term political expediency for some parties getting in the way of the vital need for our constituents, in particular in north Wales, to have a say on services and decisions that affect them as much as they affect people in England.

Those points were well made by the right hon. Gentleman and were reflected in the contribution of my right hon. Friend the Member for Delyn (Mr Hanson). He, too, highlighted the interconnection of our north Wales economy with that of the north-west. For example, on HS2, my right hon. Friend made it clear that in order to derive the full benefits for north Wales we need the Crewe interchange to be delivered and real investment in and understanding of the benefits. Crucially, he made a point about the recent rhetoric from the Chancellor about the northern powerhouse—welcome rhetoric and welcome emphasis on the north of England from a Tory Chancellor.

However, recent comments by Ministers in the Wales Office about creating a north Wales powerhouse are perhaps a bit muddleheaded. We need to think more along the lines of what my right hon. Friend the Member for Delyn said, that north Wales is in many respects connected inextricably to the north-west and the north of England. When we talk about the northern powerhouse, as I suggest whoever succeeds in May must continue to do, we should be thinking about north Wales as an integral part of it; we should not talk simply about something within Wales, of north Wales versus the south.

My right hon. Friend also made some excellent practical suggestions about the need for better transport links between his constituency and north Wales generally and the airports that serve north Wales—not Cardiff Wales airport, but Liverpool and Manchester. Such points of connection are vital. Other practical suggestions included extending Flint train station in order to allow the new trains to continue stopping there.

My hon. Friend the Member for Ynys Môn made a characteristically ebullient and passionate defence of his island, describing it as being at the heart of the whole of the British isles. I would not dare contradict him. He also challenged the Hansard reporters with his excellent pronunciation of Llanfairpwllgwyngyllgogerychwyrn- drobwllllantysiliogogogoch—they can do it twice now, if they would, please. He, too, spoke about the three key challenges: energy, transport—rail and road—and tourism. The Horizon project on Anglesey is supported throughout the House and it will be an enormous benefit to Wales, with 6,000 to 8,000 jobs in construction, as he said, and a further 1,000 jobs to maintain it. Cross-party consensus in support of nuclear energy in Britain is vital, to the benefit of not only north Wales but the whole of the UK and our energy security in insecure times.

My hon. Friend made two unique points in his contribution, one about our ports, and Holyhead to Dublin becoming as important a connection as Dover to Calais. That is a vision to which we should all subscribe. Cross-party consensus on devolving power over ports to the Welsh Assembly Government is important. I anticipate and hope that his suggestion will be picked up. He was also the only one to mention mobile phone coverage, which is enormously important to modern business. Coverage remains far too patchy in Wales, and north Wales is one of the areas in which we must do more.

My hon. Friend the Member for Vale of Clwyd (Chris Ruane) made an excellent contribution. In particular I highlight his description of the benefits to Wales of our continued membership of the European Union. He mentioned Rhyl harbour, Rhyl promenade and the OpTIC research and incubation unit, which are only three examples of the £1.2 billion of investment in Wales as a result of our membership of the EU. He emphasised the risk to the great companies in north Wales—I have mentioned some, such as Toyota and Airbus. As my hon. Friend the Member for Alyn and Deeside said, they would not leave overnight were we to leave the EU, but their continued investment in north Wales and in Britain would inevitably be in jeopardy. The risks to our constituents in north Wales in respect of their security and to the long-term prospects for the economic health of north Wales should be clear to all of us.

My hon. Friend the Member for Vale of Clwyd also highlighted the excellent work of the Welsh Government in recent years in the teeth of big cuts to their budget— £1.5 billion less and 30% of the capital budget removed. That is part of the picture under the UK Government: according to the National Audit Office, there has been a £15 billion reduction in infrastructure investment. However, despite such problems, as my hon. Friend said, £70 million has been invested in schools in Denbighshire. He could also have mentioned the £64 million invested by the Welsh Government and local government in schools in Flintshire or the £30 million invested in schools on Ynys Môn by the Welsh Government. Such schools are also a vital piece of economic infrastructure investment for our future—perhaps more vital than some of the road and rail projects that we have discussed. The schools projects are a testament to the continued dedication of the Welsh Labour Government to investing in the future of our children in Wales, in contrast to—a final party political point—how the Building Schools for the Future programme was cancelled in England.

I shall bring my remarks to a conclusion with a brief reminder that we have an election just 40-odd days away now; in case Members had not noticed, this Parliament is coming to an end. There is a vast amount of agreement that north Wales requires further investment. Whoever wins on 7 May, Welsh Members across the House should put their shoulders to the wheel. I am confident that if, as I hope and believe, we have a Labour Government, we will see proper partnership once more between Wales and Westminster—in contrast to the war on Wales over the past few years under this Tory Government—and a proper contribution to delivering economic success and prosperity for the people of north Wales.

Welsh Affairs

Owen Smith Excerpts

Thursday 5th March 2015 Commons Chamber

[Glyn Davies]

The right hon. Gentleman is a man for whom I have huge respect as a Member of this House. He is retiring, so may I wish him well in the future and say that he has made a wonderful contribution to this House?

This is an area on which I am a bit unsure. To my mind, the win we have tackles that problem. We have virtually eliminated the deficit and if that becomes the Barnett floor, funding can rise but cannot fall below it. That is an absolutely fantastic win, and I would be surprised if the Secretary of State did not go in to a little more detail about it in his speech.

[Owen Smith (Pontypridd) (Lab)]

As ever, the hon. Gentleman is giving a thoughtful and heartfelt speech. I forgive him for suggesting that the deficit has been dealt with, as he put it; it was still £75 billion the last time I looked. However, does he think that Wales would definitely be better off or worse off if we were to have and exercise tax-raising powers? That is the great lacuna in the Tory proposals.

[Glyn Davies]

This is how the antipathy towards being responsible through income tax in Wales manifests itself in questions and comments from the Opposition. There should not necessarily be any difference. We will be responsible just as we are now; it is just that the people of Wales will have a responsibility to know what the Welsh Government are doing. If the Welsh Government want to raise more money, they can suggest it and they can become accountable for what they doing rather than just blaming Westminster for virtually everything that people do not like.

My final point is about the proposal to devolve power over energy projects of up to 350 MW to Wales. I accept the logic of the proposal and supported it during most of my eight years as an Assembly Member, but since 2005 the obscene determination of the Welsh Government to desecrate mid-Wales with hundreds of wind turbines and pylons has made it impossible for me to continue to support it. The behaviour of the Welsh Government, and particularly the First Minister, has been shocking and has demonstrated total contempt for the people of Montgomeryshire, whom I represent. It should be a real concern to every Welsh MP that because the people of Powys have refused to bow down before the Welsh Government’s bullying, the First Minister intends to remove planning powers from local planning authorities and to take them for the Government in an act of power centralisation, to ensure that the Welsh Government can push things through despite any local resistance. The Secretary of State may well want to comment on this anti-devolution tendency.

While we talk about devolution in this place, we have a Welsh Government who are bringing everything back to themselves simply so they can get their own way in the parts of Wales that do not do exactly what they—the Welsh Government—say. In England, we are seeing a drive to devolve powers to city regions and local councils, whereas in Wales we are seeing a centralisation of power in the hands of the Welsh Government.

St David chose Wales as his home. He was a very wise man. He created a hill that, together with thousands of other hills, makes Wales the wondrous landscape that it is today. I was born among those hills, I shall always live among them. We have a duty to protect Wales for our children so that they can enjoy it as much as we have and as we do today.

--- Later in debate ---

[Mr Jones]

The interest is declining—that is the point. Had we not taken those difficult decisions, we would be spending more money on paying interest to banks than on providing services to the people of this country, so my hon. Friend is right.

Five years on from that—

[Owen Smith]

Does the right hon. Gentleman agree that the styled cuts, as he put it, also resulted in a massive increase in in-work poverty, resulting in an extra £9 billion spending on social security under this Government?

[Mr Jones]

The decisions that we took were difficult and, clearly, people have felt pain. But people across the board have felt pain. It is interesting to hear the criticisms from the Labour party. What would have happened if that party had remained in power? Where would we be now? Under this Government 1.85 million new jobs have been created. That is 1.85 million people with the security of a pay packet every week and the dignity that employment brings.

[Owen Smith]

rose—

[Mr Jones]

No, I will not give way. I will continue for a while.

Those new jobs would not have been created, had the hon. Gentleman’s party been in power.

In my constituency, Clwyd West, the improvement is tangible. The last Labour Market Statistics showed that over 12 months, the number of people claiming jobseeker’s allowance or not in work and claiming universal credit fell by 519 over 12 months—an annual decline of 34.5%. Those figures are mirrored right across Wales and right across the UK. In January, the International Labour Organisation measure of unemployment was 1.86 million people, down 486,000 on the previous year.

[Owen Smith]

rose—

[Mr Jones]

No, I will not give way for the moment.

These are strong, substantial changes, which we should all welcome, even the hon. Member for Pontypridd (Owen Smith), while acknowledging the task ahead. [Interruption.] He will have plenty of time to speak.

I would like to focus my attention today primarily on north Wales, which is the part of Wales in which I have lived nearly all my life and which I know best. I was brought up in the village of Rhosllanerchrugog near Wrexham, a very unusual, strange, unique and wonderful village. At the time of my boyhood, most of the working men were employed in coal mines and in the steelworks. Since then, there have been huge changes. We all know that the coal industry has virtually gone and the steelworks in north Wales are much smaller than they used to be. But now, north Wales is the home of dynamic new industries.

The wings of every Airbus aircraft that flies anywhere in the world are made in Broughton, in north-east Wales. Close to Broughton is the Deeside industrial estate, part of which is now an enterprise zone. There, high-tech industries serve customers across the globe. Deeside is one of the most dynamic, forward-looking, thrusting industrial areas of the United Kingdom and we should all take huge pride in it. On the other side of the region of north Wales is the island of Anglesey, where we see the Wylfa nuclear power station, which will soon, I hope, be replaced by a new power station, Wylfa Newydd. That will be a gigantic project employing many thousands of people for many years during the construction phase, and many people for decades after the station is up and running. It will provide the opportunity for the creation of centres of excellence in skills, education and training and I am tremendously pleased that the island of Anglesey has welcomed the developers so warmly.

Wylfa is only one element of what I believe is a bright future for north Wales as an energy hub. Out to sea, we have the Gwynt y Mor, Rhyl Flats and North Hoyle offshore wind farms, one of the largest groupings of offshore wind farms anywhere in the world. Let me be frank: as many hon. Members know, I have never been a huge fan of wind power. I believe that it is unreliable, supplying only intermittent and unpredictable energy, and it is far too heavily subsidised. Furthermore, onshore wind, and to a certain extent offshore wind, blight—as my hon. Friend the Member for Montgomeryshire put it—the spectacular landscapes, both onshore and offshore, of north Wales.

Nuclear power, by contrast, provides predictable and reliable base-load generation, which is precisely what is needed. However, nuclear must be seen as part of an energy mix. Wind is currently part of that mix, but I was extremely pleased when the Prime Minister indicated only a few weeks ago that subsidies for onshore wind farms will be phased out under the next Conservative Government.

A new technology, and one that has been developed in Wales, is that of tidal lagoons. I remember taking evidence on tidal lagoons several years ago when I was a member of the Welsh Affairs Committee. I was immediately struck by what a tremendous opportunity they represented for Wales, given its huge tidal ranges. The technology has been slow in coming, but it appears that it will soon be here. The company Tidal Lagoon Power has not only made an application for development consent for a new lagoon in Swansea, but has ambitions to create a chain of lagoons stretching from Lancashire in the north, right around the coast of Wales, to Somerset in the south. Only a few weeks ago I chaired a meeting in Colwyn Bay to discuss proposals for a huge tidal lagoon there. It would have a potential generating capacity of 4 GW, which is equivalent to a very large nuclear power station.

Lagoons have the advantage of being green—they produce no carbon emissions—but they also have what wind power lacks: they are entirely reliable. Nothing on the planet is more reliable than the ebb and flow of the tide. As a result, each tidal lagoon would have the capacity to generate for 22 of every 24 hours. This is a new technology, and a British technology. Moreover, it could be centred in Wales. I believe that Wales could become a leader in what could rapidly become an important export industry.

Obviously there are environmental issues to consider, not least with regard to transmission infrastructure, which is having a catastrophic effect across Wales. My hon. Friend the Member for Montgomeryshire mentioned the impact that transmission lines would have in Montgomeryshire. Equally, in my constituency of Clwyd West there is now a strong campaign aimed at requiring the transmission lines serving the new Clocaenog wind farm to be buried underground. Saving the planet should not mean at the same time trashing our landscapes and seascapes. I therefore strongly support the proposition that developers of wind farms, which are heavily subsidised, should be required to pay the cost of laying transmission cables underground.

I would like to touch on transport in north Wales. The railways are increasingly important in north Wales, and they are being used increasingly heavily, as is the case across the country. Journey times have improved tremendously. When I was first elected to his House some 10 years ago, the journey back to London from Colwyn Bay on a Sunday took some four and a half hours. As a result of efforts by both the previous Labour Government and this Conservative Government, that has been reduced dramatically—the same journey now takes almost exactly three hours. The fast train, which I hope to take tonight, takes approximately two and three quarter hours.

That is all commendable, and it is a tribute to the work done by Network Rail, but we must look to the future. We know that HS2 will be built and that it will go to Manchester. It is important that north Wales should benefit from it, which is why I believe that the new hub proposed for Crewe should be built and that there should be a fast connection right through to Holyhead. We must bear it in mind that north Wales is very much part of the north-western economic region; economically, the region has always looked to the great cities of the north-west, Liverpool and Manchester. I was therefore delighted when last year the Chancellor announced funding for the reopening of the Halton curve, which will put Liverpool and the expanding Liverpool John Lennon airport within easy travelling distance of north Wales.

In north-east Wales we should seek to maximise the economic benefit we can derive from the new enterprise zone at Deeside by encouraging synergy with the new enterprise zone at Wirral Waters in Birkenhead. There is a railway line linking Liverpool and north Wales, but the difficulty is that passengers have to change at Bidston from an electric train to a diesel one to take them through to Wrexham. I believe that a very good improvement, and one that could be achieved at relatively low cost, would be to electrify that line, certainly between Bidston and Shotton, where a new interchange is proposed. That would mean that the two great enterprise zones at Deeside and Wirral Waters would be within easy commuting distance of each other.

Tourism has always been the mainstay of the north Wales economy, but I believe that more could be done for it. One simple measure that is acquiring support from hon. Members from all parties is to give serious consideration to reducing the rate of value added tax on tourism businesses. That has been tried out in competitor countries, not least Ireland, and has been found to be entirely successful. It has been calculated that the immediate loss of revenue would be made up within four years. The big problem is that, in areas such as north Wales, most tourism businesses are run by small family undertakings that, in order to remain competitive one way or the other, try desperately to avoid being registered for VAT, the consequence of which is that they are deterred from expanding and improving their businesses because they cannot have the benefit of input VAT to set against the cost. Therefore, one measure which should appeal to my right hon. Friend the Chancellor, and to which I hope he will give serious consideration in the impending Budget, is to reduce the rate of VAT for tourism businesses to 5%.

Finally, I want to touch on a matter that is worrying to everybody with a constituency in north Wales, namely health care. I know that the issue is a hot potato in this House and that Government Members are frequently criticised for criticising the Welsh Government’s delivery of health care. The fact is, however, that areas such as north Wales are almost entirely reliant on the north-west of England and the midlands for very specialist medical care. It has been a concern for many years that north Wales patients have to wait considerably longer than their English counterparts for elective surgery in English hospitals, simply because of the way in which the Welsh Assembly Government fund health care.

The situation is getting worse. Yesterday in Prime Minister’s Question Time the hon. Member for Arfon (Hywel Williams) mentioned his constituent, Mr Irfon Williams, who has been obliged to move out of Wales to Ellesmere Port in order to access drugs that he would have got routinely had he been resident in England. He is not by any means a unique example. I have a number of constituents who, because they live in Wales, simply cannot access the medicines they need. They have to go through the most byzantine consenting procedures if they are to have specialist treatment. Frankly, the matter is causing huge distress in north Wales. The situation was compounded recently by the decision of the Betsi Cadwaladr university health board to downgrade maternity care in Glan Clwyd hospital, because it is finding it difficult to attract staff of the necessary calibre and quality.

I believe that that shows that there are structural difficulties with the health care system in Wales under the Welsh Government. It is suggested that the Welsh Government have been subject to cuts, but the fact is that the Barnett formula protects the health budget in Wales. The simple fact is that the Welsh Government, of their own volition, decided to cut the health budget, and the consequence is that patients in my and other north Wales constituencies are suffering.

I am rapidly coming to the view that the Welsh Government are finding it almost impossible to run a decent health system in Wales. Before I sit down, I plead with them to look very carefully at the misery being inflicted on a lot of people in north Wales and to turn to the Department of Health in Westminster for advice. They should not be too proud to do so. Until they do so, I believe that health care in Wales will only continue to decline.

--- Later in debate ---

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

I congratulate the hon. Members for Ynys Môn (Albert Owen) and for Montgomeryshire (Glyn Davies), who were instrumental in bringing this debate to the Floor of the House, and I am grateful to the Backbench Business Committee for granting permission for it.

Ultimately, however, I believe that it is a great shame, as was said by the right hon. Member for Torfaen (Paul Murphy), that the Government have not ensured there is always a St David’s day debate in the calendar. That is especially true this year, given the St David’s day announcement last week, to which I shall turn later. It is right and proper that the Government Command Paper should be debated on the Floor of the House, as it is that Welsh Members should get to debate Welsh matters on or as near as possible to St David’s day each year. It is to the Government’s great shame that such debates have not been secured. By making this plea, I once more hope that somebody somewhere will listen and we can revert to the ordinary processes that used to take place.

I shall talk about the Command Paper, the so-called St David’s day agreement, in greater detail in a moment. Suffice it to say at this stage that the proposals will still leave Welsh devolution far behind that in Scotland and Northern Ireland. The announcement on funding public services still leaves Wales considerably worse off, to the tune of about £1.2 billion per annum, compared with Scotland.

If I may, I will say a brief word about the discussions that led up to the Command Paper. It is almost an open secret that the main obstruction to any meaningful progress during the discussions was, unfortunately, the London Labour leadership, which it seems to me was often at loggerheads with its Cardiff Bay counterpart. In the end, it is the Westminster wing of the Labour party that has the final say over its colleagues in Cardiff, a point which the electorate will do well to heed on 7 May.

[Owen Smith]

I pay tribute to the right hon. Gentleman for his long and excellent service in this House. He sat alongside me in several of the meetings, so he knows that what he has just said is simply not consonant with the facts. Given that the Welsh Labour Government and I, on behalf of the Labour party, have spoken about going further than the current Government on the devolution of the Work programme and policing, what elements of the programme is he suggesting I have blocked?

[Mr Llwyd]

If the hon. Gentleman wants me to tackle him on this, I shall do so. I will throw one in straight away. He argued strongly and vehemently against the devolution of policing.

[Owen Smith]

rose—

[Mr Llwyd]

Just a moment. The Silk commission very strongly suggested that we should devolve policing. The hon. Gentleman said that there was no call for that in Wales.

[Owen Smith]

rose—

[Mr Llwyd]

Let me finish. If the hon. Gentleman had read the evidence to the Silk commission, he would have seen that four of the forces in Wales were in favour of it, and only one police and crime commissioner—Mr Salmon—said that he was not. All the evidence was in favour and the Silk commission strongly suggested it, but the hon. Gentleman vetoed it.

[Owen Smith]

I am grateful to the right hon. Gentleman for giving way again to let me put the record straight. I hesitate to suggest that he is in any way misinforming the House, but that is not my recollection of the conversations we were involved in. My recollection is that we had misgivings about the immediate devolution of criminal justice, but the fact that I announced a fortnight ago at the Welsh Labour conference that we would devolve aspects of policing to Wales—neighbourhood policing and an all-Wales policing plan—gives the lie to what he has just said.

[Mr Llwyd]

No, it does not. I saw the hon. Gentleman sitting next to the First Minister who, while we discussed policing, put his head in his hands when he understood that devolution had been vetoed. We discussed that then, and I made a point of referring to what I have just said in the hon. Gentleman’s presence. It is all very well for him to throw in a sprat later on—some minuscule part of policing—just to salve his conscience and get back on speaking terms with the First Minister, but that is not good enough for me, and it is not good enough for anybody else in the Chamber. I have made the point.

[Owen Smith]

rose—

[Mr Llwyd]

I give way for a final time, because I need to get on.

[Owen Smith]

For the third time, and for the avoidance of doubt, the right hon. Gentleman is not representing matters accurately in the House. I am clear that, and the leader of the Labour party announced at our party conference that, we would be devolving an all-Wales policing plan, including statutory power over neighbourhood policing and the structures of policing, to the Welsh Government. That is the fact, and he cannot gainsay it.

[Mr Llwyd]

Right. Well, I will not go further on that, but the Secretary of State is in the Chamber and he will no doubt make some comments in due course. He was party to those discussions so perhaps his recollection will be useful, to see whether he agrees with me or with the hon. Gentleman. In any event, I will move on.

The Command Paper is not an agreement in the full sense. Obviously, we have all been discussing for some months what should or should not be included in it, and there is a promise to legislate after the election. The proposals would still leave Welsh devolution far behind that in Scotland and Northern Ireland, and despite what the hon. Member for Montgomeryshire said, the announcement of the Barnett floor leaves Wales worse off compared with Scotland. We are unable to celebrate proposals that amount to a row-back on a compromise that already existed in the Silk commission.

--- Later in debate ---

[Owen Smith (Pontypridd) (Lab)]

It is a great pleasure to wind up this important debate on behalf of the Opposition. I join others in congratulating the hon. Member for Montgomeryshire (Glyn Davies) and my hon. Friend the Member for Ynys Môn (Albert Owen) on securing the debate, and I thank the Backbench Business Committee for allowing it.

We have heard many excellent and diverse speeches, to which I pay tribute. The right hon. Member for Clwyd West (Mr Jones) spoke without a trace of irony of his desire for a reduction in the level of VAT applying to Welsh tourism businesses—failing, of course, to mention that he was a member of the Government who raised the level of VAT applying to tourism and, indeed, to everyone in Wales. However, he spoke extremely well about Wales, with great passion and conviction.

I pay tribute to the hon. Member for Ceredigion (Mr Williams), who spoke mainly about the tourism and farming industries in his part of Wales. I also pay tribute to the hon. Member for Monmouth (David T. C. Davies), the Chair of the Select Committee, who spoke with his customary verve and chutzpah, and, with his customary diligence, managed to reprise the “flat earth” speech which is so dear to me and which we have heard so many times in this place. My hon. Friend the Member for Newport East (Jessica Morden) spoke eloquently and passionately about the realities of the world of work in Wales, and my hon. Friend the Member for Bridgend (Mrs Moon) spoke about the problems of heavy industry and remediation of the open-cast works in her constituency and others in south Wales. I hope that when we, as a Labour Government, succeed the present Government, we will pursue that issue with great vigour.

Let me also pay tribute to the Members who are retiring from the House. The right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) is always—well, perhaps a little less so today—a courteous and wholly accurate contributor. [Hon. Members: “Oh!”] I shall explain what I meant by that later. In fact, the right hon. Gentleman is always courteous in contributing to the life of the House. He will be missed when he retires from this place, but I am sure that he will continue to serve Wales extremely well, and I count him as a friend despite our slight contretemps today.

The speech made today by my right hon. Friend the Member for Torfaen (Paul Murphy) was heard with the usual deference and respect, owing to the experience and sagacity that he has brought to his role. He has been a noble and excellent servant of his community, his party and the House during his long time here. He has twice been Secretary of State for Wales, and he has been a great friend to Wales and to me. I know that everyone in the House will join me in paying great tribute to him.

Along with my hon. Friend the Member for Ynys Môn, my right hon. Friend drew attention to what an important event this is. It is, in effect, the St David’s day debate, although it is not actually taking place on St David’s day as it has in the past. The debate is important because it puts Wales in the spotlight, at the heart of our national conversation in our national United Kingdom Parliament. It is important because we are of course a minority nation of just 3 million people among 60 million, and there is always a danger that, as a minority part of the UK state, our voices are drowned out in the babel of voices from other parts of the UK, in particular of course the lion’s share of people who live in and come from England. This Parliament is in institutional terms the greatest expression of this United Kingdom. My right hon. Friend the Member for Torfaen spoke for me and many on the Opposition Benches, and indeed for many on the other side of the House, when he expressed his concerns about the way in which the voice of Wales has been diminished and is at risk of being diminished to an even greater extent as we move forward. The Government have, I fear, played fast and loose with some of the constitutional arrangements in this country, and have engaged in attacks on parts of this country, notably Wales, as a proxy for attacking Labour, and have failed to appreciate the lasting damage they are doing, and will continue to do if they persist with these attacks, on the social and economic union of Great Britain, the most effective and successful social, political and economic union ever created in the world. That is a theme I intend to return to later.

First, I shall do two simple things: I want to reflect on how the last five years of this Tory-Liberal coalition have impacted on Wales—on our people, our prosperity and our public finances; and I want to reflect on how the relationship between Wales and the rest of the UK has evolved under it, both in terms of the business of government and the attitudes of the Welsh people to the governance of our country.

It may have escaped your notice, Mr Deputy Speaker, and it certainly escaped the notice of many people in Wales, that the Prime Minister has been reflecting on the very same theme in this last St David’s week of this Parliament. Perhaps because he was admonished by the Secretary of State, along with his other Cabinet colleagues, for speaking ill of Wales—told to mind his language when talking about the Land of our Fathers—the Prime Minister has been love-bombing Wales in the last week. He came to Cardiff at the weekend to speak at the Tory party conference, singing Sam Warburton’s praises and resisting, I am glad to say, even a glimmer of gloating at the fact that we lost to the English. Then he hosted the St David’s day reception on Monday, which I was unable to attend. I think I am right in saying that it is the first St David’s day reception—the first for a long while—that the Conservative Prime Minister has held at No. 10. [Hon. Members: “More than one!”] If I am wrong, I happily withdraw that. It is certainly the first one to which I and other Labour Members have been invited, shall we say? So it was a pleasant surprise to receive the stiff card, but I am afraid I was unable to attend. Obviously Conservatives have previously been invited, but we were not.

Throughout this period of love-bombing the Prime Minister has been looking back at the relationship between his Government and Wales. Some of it has been pure fantasy. In one speech he was musing about the prospects of Tory candidates winning seats in the valleys, ousting sitting and prospective Labour Members and wishing our candidates a cheery “da iawn” on coming second. The Prime Minister, I am told, even had to have lessons in pronunciation—

[Stephen Crabb]

indicated dissent.

[Owen Smith]

The Secretary of State shakes his head, but, as he ought to know, the speech was released to the media accidentally with the “da iawn” included in it and some suggestions as to how the Prime Minister ought to pronounce that, but if he thinks there is any prospect of Tories in the valleys ousting our Members I have another bit of Welsh for him: “Yn dy freuddwydion,” which means “In your dreams.”

[Alun Cairns]

rose—

[Owen Smith]

I will happily give way. Is the hon. Gentleman about to correct my Welsh?

[Alun Cairns]

May I suggest that, having made such an attempt at Welsh, perhaps the hon. Gentleman needs some lessons in pronunciation?

[Owen Smith]

I would accept that, as a native English speaker and a failed Welsh learner. I am still trying, although I have not reached the same standards as some, but I think that was a fair attempt at “In your dreams.”

Other examples from the Prime Minister have been pure comedy gold—not weak gags like that. We have had some excellent examples from the Prime Minister. He channelled his Welshness in trying to come up with a nickname for the Secretary of State. There is a great tradition of nicknames in Wales—Dai the Milk, Evans the Coal, and we even had Jones the Jag at one point in this place—but so impressed was the Prime Minister at the way in which the Secretary of State has warmed to devolution, indeed undertaken a damascene conversion, I am told that he referred to him as being known now in Tory circles as “Stevolution”. It has a certain ring to it, doesn’t it? I am not sure that it is the ring of truth, however. I am not entirely persuaded that he is now so devo-friendly that he could be known as “Stevolution” in Tory circles.

What certainly does not have the ring of truth are some of the other claims that the Prime Minister has been making on behalf of the Tories. He claimed this week that it was the Tories who brought Pinewood studios to Wales, despite the fact that the UK Government had nothing to do with it—

[Stephen Crabb]

He did not say that.

[Owen Smith]

Well, I am terribly sorry, but I have read the Prime Minister’s speech, and that is precisely what he said, despite the fact that that was nothing to do with the UK Government. It was delivered entirely by the Welsh Government while this Government were slashing arts funding.

The Prime Minister also claimed that the Tories were responsible for Hitachi rebuilding Wylfa power station, despite the fact that it was of course the last Labour Government who signed the contract for that new generation power station. He even claimed credit for Airbus making wings for the A380 in Wales, despite the fact that the company has been making aircraft at Broughton since the second world war. The most shameless in this series of porkies was the suggestion that the Tories had secured the funding for S4C, when in truth they had cut it by a third.

[Stephen Crabb]

The shadow Secretary of State was doing really well up to this point, but he has now let himself down. The important point that the Prime Minister was making when he referred to all those positive things that are happening in the Welsh economy was not that politicians are taking the credit; he was giving the credit to business. That is the crucial difference between our party and the hon. Gentleman’s party: we praise business; Labour attacks it.

[Owen Smith]

I would fully accept that, were it consonant with the facts. The Prime Minister actually said in his conference speech, after listing all those achievements:

“We need to tell everyone who did all this…it’s us.”

This clearly is not true.

A bigger truth is that the Tories have done precious little to help the economy of Wales, but they have done plenty to hinder it. The people of Wales know that. When they hear the Secretary of State and the Prime Minister claiming credit for creating jobs in Wales, they know that 90,000 contracts or jobs in Wales, not 35,000 individuals, but that might also be right—[Interruption.] No, I said “jobs” yesterday. The Secretary of State should read the Hansard. They know that too many of those jobs are Tory-style mini-jobs involving zero-hours contracts, zero security, low wages and low productivity. They also know that a quarter of Welsh workers earn less than the living wage. Wales has the lowest disposable incomes in the UK.

The people of Wales know that these facts give the lie to the notion that there is a Tory-led recovery, as does the fact that we are £68 billion short on tax receipts and spending £25 billion extra on social security. The price of this failure in Wales under the Tories is a tenfold increase in the volume of people using food banks and £1,700 less in the pockets of Welsh families.

In stark contrast, the Welsh Labour Government have shown that they can get Wales working again. Jobs Growth Wales, designed and built in Cardiff, has got 17,000 young people back to work, showing that local solutions with bespoke ideas can deliver jobs in Wales. So it is inexplicable that the Tory party—the “party of real devolution”, as I am told it now calls itself—is still refusing to devolve the Work programme to Wales, as Labour will when we win in May. Inexplicable, too—to many in Wales—is why fair funding for Wales is being promised only if Wales agrees to raise taxes.

Last week, the Welsh Secretary made some important announcements about his Government’s intentions to take forward the recommendations of the cross-party Silk Commission if—heaven forefend—they are back in government next time. The Opposition agree with many of those extra measures. Putting the Welsh settlement on to the same statutory footing and making the Welsh legislature a permanent part of the UK constitution are proposals that we can agree on. We also agree with proposals to give powers to Wales over elections and energy, and additional powers over ports and marine matters. Indeed, we said all those things first. But we will go further. We will give Wales powers over policing, which is why I was disappointed at the mischaracterisation of Labour’s position by the right hon. Member for Dwyfor Meirionnydd. I am sure the Secretary of State will recall our position during those talks, which was, “Reserved and then announced at the party conference for Labour in Wales.”

Lastly, fair funding for Wales was one of the most important aspects of the talks. It is disingenuous of the Secretary of State now to talk about delivering fair funding, given that his Government have cut £1.5 billion from the funding for Wales and he knows that their plans to cut funding to the rest of the UK back to the levels of the 1930s will have a deeply damaging effect on Wales. Cutting spending back to the level it was when the NHS was just a glint in Nye Bevan’s eye would be devastating for Wales. So we agree with the Secretary of State that there should be a funding floor in Wales, but we want to see the detail and to know precisely where they will set that floor. Only then will the people of Wales trust this Tory Government—

[Alun Cairns]

What detail is the hon. Gentleman prepared to put forward on Labour’s funding floor proposal? The shadow Chancellor said in Cardiff today that Labour would be presenting no detail this side of the election.

[Owen Smith]

We will stand on our record of having trebled the funding for Wales during our period in office. While the Under-Secretary has been in office, the spending for Wales has been cut by £1.5 billion. So we will stand proudly on our record and we can rest assured that the people of Wales will understand that we will deliver for Wales.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We do need to bring the Secretary of State on, because we still need two minutes at the end.

[Owen Smith]

Lots of Members in this House today have invoked history in this important debate, and I will do that one more time. The Prime Minister, in his amusing recent speech, said:

“The Welsh dragon is roaring again—and it’s not red, it’s blue.”

I suggest that, historically speaking, we ought to invoke another great Welshman, the first leader of the Labour party and former Member for Merthyr Tydfil and Aberdare, Keir Hardie, the anniversary of whose death we celebrate this year. He said that Wales is represented by “Y Ddraig Goch a’r Faner Goch”—the red dragon on the red flag of Labour. That was true in 1915 and it will be true again, I trust, on 8 May 2015.

Oral Answers to Questions

Owen Smith Excerpts

Wednesday 4th March 2015 Commons Chamber

[Stephen Crabb]

My hon. Friend makes an important point. He knows that I meet Welsh Government Ministers frequently to discuss how we can secure the economic recovery for Wales, because it is a shared enterprise across the two Administrations: they know the efforts that we have made to create a strong foundation for a business-led recovery in Wales, and we need them to play their part in helping to bring unemployment down across Wales.

[Owen Smith (Pontypridd) (Lab)]

May I begin by wishing you a belated happy St David’s day, Mr Speaker, and all Members of the House and by adding my thanks to all the Welsh Members of all parties who are retiring, but particularly my right hon. Friends the Members for Torfaen (Paul Murphy) and for Neath (Mr Hain), both distinguished former Secretaries of State who have served Wales extremely well?

We have heard an impressive array of statistics from the Secretary of State this morning, but will he set aside the spin for one moment and tell us what has really happened to the jobs market in Wales on his watch? How many of those new Tory jobs in Wales are on zero-hours contracts and pay a pittance in wages?

[Stephen Crabb]

Let us remind ourselves of what we inherited in 2010. Under the previous Labour Government, unemployment across Wales had increased by 80%, youth unemployment had increased by 75% and, worst of all, long-term unemployment had increased by more than 150%. That is a scandalous record on jobs in Wales. I am proud to be part of a coalition Government who have created the right foundations for a business-led recovery to turn that around.

[Owen Smith]

I think workers in Wales are heartily sick of this Tory propaganda. The truth is that of the 100,000 new jobs in Wales, as the Office for National Statistics said last week, 90,000 are zero-hours contracts paying, on average, £300 less per week than full-time jobs. As the Institute for Fiscal Studies said this morning, the average family incomes of workers in Wales have declined under this Government. Why does the Secretary of State not say the one thing he can to workers from Pwllheli to Pembrokeshire that would give them hope: vote Labour?

[Stephen Crabb]

If the hon. Gentleman thinks that is any kind of boon for the Welsh economy, I point him to the opinion poll conducted by BBC Wales which this morning shows that a majority of voters across Wales, even in the Labour heartlands—from Rhondda to Cynon Valley, from Caerphilly to Pontypridd—prefer my right hon. Friend the Prime Minister to remain as leader rather than the Leader of the Opposition.

Employment in Wales

Owen Smith Excerpts

Tuesday 27th January 2015 Westminster Hall

[Guto Bebb]

I am constantly amazed at Labour Members’ hatred of the entrepreneurial spirit. The simple fact of the matter is that we need a successful economy to pay for the public services we need. The Labour party has always believed that money derives from thin air; it does not understand how the economy actually works. To have a strong health service, we need a strong economy. To have employment growth, we need a strong economy. To have a strong economy, we need a strong entrepreneurial spirit. This Government understand that simple fact; the Labour party clearly does not.

The key issue we need to look at is employment rates. Employment rates in Wales are notoriously low by UK standards, but they are going in the right direction. I was interested to note from the debate pack that the hon. Member for Vale of Clwyd once tabled a question requesting employment figures for north Wales constituencies. Remarkably, in comparison with the glory days of the Labour Government, the employment numbers for all of them are higher than they were when Labour was in power. We hear rhetoric from the Opposition, but when they are in power we always see failure. Everyone in UK politics knows that not once has a failed Labour Administration left government with unemployment lower than it was when they came to power. That has always been true—[Interruption.] The hon. Member for Pontypridd (Owen Smith) suggests that that is an old chestnut, but he knows that where there is unemployment, there are Labour Members. The eight constituencies represented by the Conservative party in Wales have a lower unemployment rate than the Welsh average. Suffice it to say, the areas of hard-core unemployment are typically represented by the Labour party, which despises enterprise and is not willing to recognise the work that the self-employed do. Labour Members say that they will change things, but vote for exactly the same fiscal position as the Government.

[Owen Smith (Pontypridd) (Lab)]

Will the hon. Gentleman give way?

[Guto Bebb]

I will not give way to the hon. Gentleman, but I will ask him a question. We heard of a litany of cuts that are unacceptable to the hon. Member for Vale of Glamorgan—[Hon. Members: “Vale of Clwyd.”] I apologise. I would not have expected any such nonsense from the Minister, my hon. Friend the Member for Vale of Glamorgan (Alun Cairns).

The hon. Member for Vale of Clwyd gave a litany of complaints about cuts, but I want the shadow Secretary of State to tell us which of the cuts Labour would reverse, because I understand that the Labour party is conducting a zero-sum spending review. That means that there will be no additional spending, and that any cuts that are reversed will be achieved by making cuts to another area of activity. We have been told that local government cuts were the wrong decision—the hon. Member for Vale of Clwyd made that very clear—so where, in the zero-sum spending review, would be the right place to cut to make right the local government cuts that he believes were too great?

Alternatively, is all that we are getting from Labour rhetoric? The truth is that when there was a vote last week on spending plans for the forthcoming Parliament, the official Opposition—fair play to them—recognised the reality and voted to support the Chancellor’s view that £30 billion of additional cuts are needed. Labour Members can claim to represent people who are typically of the view that they have been served by that party, but all their rhetoric is trumped by the reality of their support for the Government changing the economy in the right way.

We should be proud of our record on employment and the re-emergence of entrepreneurial spirit in north Wales. We need a continuity of purpose. The dead hand of Labour has damaged Wales time and again and should not be allowed to derail the economic recovery, which is giving hope of full employment in Wales for the first time in a generation.

--- Later in debate ---

[Owen Smith (Pontypridd) (Lab)]

It is a great pleasure to serve under your chairmanship for the first or second time, Mr Hollobone. I congratulate my great and hon. Friend the Member for Vale of Clwyd (Chris Ruane) on securing this vital debate and on the clarity and passion with which he laid out his case.

This has been a very good debate so far. It has been slightly ill-tempered on occasion, but we have heard an excellent speech from my hon. Friend the Member for Islwyn (Chris Evans) and excellent interventions from my hon. Friends the Members for Caerphilly (Wayne David), for Clwyd South (Susan Elan Jones), for Wrexham (Ian Lucas) and for Alyn and Deeside (Mark Tami). We have also heard equally passionate, albeit slightly misguided, speeches from the hon. Members for Carmarthen West and South Pembrokeshire (Simon Hart), for Aberconwy (Guto Bebb) and for Arfon (Hywel Williams).

I wanted to respond personally to this debate, not only because it was secured by my hon. Friend the Member for Vale of Clwyd but because work and employment are at the heart of our debate in this Parliament, our politics and our economy. The success of working people, what they do with their time and how they exchange their finite time for reward, are, of course, at the heart of not only our economy in Wales but all economies.

Our growth, productivity and dynamism are reliant not on innovation, entrepreneurialism or capital investment—all words that one often hears from Ministers of all Governments—but on the sweat from people’s brows. Hard work and hard graft underpin our economy, and they are key to a successful and stable society. More than an economic driver, work is the key to people’s dignity, security and, indeed, identity. In Wales we know that more than in many other parts of the UK. In Wales, whether it has been colliers and quarrymen, women working in service or people working in steelworks or on the land, our work has been how we have defined ourselves.

[Jessica Morden (Newport East) (Lab)]

Does my hon. Friend agree that what has been ignored by Conservative Members throughout this debate—yes, there is a welcome rise in the number of people in work—is the huge rise in the number of people in temporary employment and the lack of full-time jobs? Underemployment affects 70,000 people in Wales, and a similar number are on zero-hours contracts. The Conservative party is ignoring just how precarious the employment situation is for many people who do not have a guaranteed income.

[Owen Smith]

I agree. That has been the yawning hole at the heart of what we have heard so far from Conservative Members, and I suspect it will not be filled by the Minister. In the past, our work has defined us in Wales, and work is in danger of defining us once more as a low-wage, low-security economy. That is becoming the reality of the world of work for people in Wales, which frankly is not good enough.

I do not expect the Minister to recognise that picture, and I am sure he will talk to us in a moment about the recovery and the extra jobs that his Government have created, but unfortunately the facts do not bear out his arguments or the arguments of the hon. Member for Aberconwy because the statistics are relatively clear. Despite all the rhetoric, the truth is that in May 2010, when the last Labour Government left office, there were in total 1,471,000 economically active people in Wales. Today, on the latest numbers, there are 1,471,000 economically active people in Wales. That is the reality. We have not seen a surge in new jobs in Wales; we have seen a displacement of jobs, often from the public sector to the private sector and absolutely from more secure, more stable, better paying jobs to worse jobs.

The other statistics are even more damning. In Wales, according to the Office for National Statistics labour force survey, the number of economically inactive people has gone up from 989,000 to 1,039,000; the economic activity rate has gone down as a percentage; the employment rate has remained absolutely static at 54.4%; and the economic inactivity rate has gone up from 40.2% to 41.4%, which is in part a reflection of the offsetting effects of public sector job losses in Wales over the period. Some 351,000 people were employed in the public sector at the beginning of the Government’s term; the figure is now 315,000. That is a reduction of 36,000, part of the 1 million public sector jobs that have been lost.

That is the truth of the headline statistics, but let us look a little deeper at the nature of the jobs that people are currently enjoying. There are perhaps more jobs in the private sector, but the truth is that productivity in Wales and in Britain is down; corporate and personal tax receipts in Wales and in Britain are down; investment in Wales and in Britain is down; and consumption in Wales has flatlined.

My hon. Friend the Member for Vale of Clwyd made the point earlier in relation to the respected leader of the CBI, John Cridland, who says that, if we have a low-wage economy with increasing numbers of people who are unable to pay for white goods or even basic services, we will have lower consumption, less productivity and less growth in Britain. Those are the basic economic facts in Wales, and the reason for that is simple: the Conservative party set out to create and—let us give it its due—has succeeded in creating a low-wage, low-security economy in Wales and in the rest of the UK. That has been the Conservative party’s objective—greater flexibility but, unfortunately, at the expense of working people.

It is a reality that wages are down on average by £1,600 per family over this Parliament. It is also a reality that Wales already has the lowest disposable incomes of any part of the UK—just £14,623 versus an average in England of £17,066. The Conservatives have succeeded in overseeing a shift in the nature of our employment from a relatively secure, better paid work force to a less secure, worse paid work force. The facts do not lie. Total temporary employment across Wales has increased by 28%, and in the same period the number of people on permanent contracts in Wales has decreased by 25,000, more than 2%.

There is a direct transfer of people from being full-time employees to effectively being part-time employees. Some of those people are calculated and recorded as FTEs, but that is because of the nature of their zero-hours contracts. There are 300,000 people in Wales on less than a living wage, and far too many of those people—more than 40,000—are currently on zero-hours contracts, which have been the great explosion and change in our economy. That shift from permanent, properly contracted work, in which people have rights to maternity pay, paternity pay and sick leave, towards a low-wage, insecure, zero-hours-driven culture is unparalleled in any other period of modern economic history.

I will give one illustration, involving a young woman in my constituency whom I met a fortnight ago. She is 17, just about to turn 18, and she works in a local pizza restaurant. She goes in to work at 10 o’clock, when she is expected to be there. She has no guarantee of how many hours she will work that day: it might be six, eight or two. The nature of her contract is such that she can be laid off by the company for a period of its choosing during her working day if demand in the pizza restaurant drops below a certain level. She cannot afford to go home and wait for the company to call her to bring her back in, so she sits in the back room of the pizza restaurant for up to four or five hours in the middle of the day, waiting for the volume of customers to pick up later in the evening so she can be taken on.

It is an utter scandal that that sort of practice is going on in Britain—and not just occasionally; it is becoming the norm, just as minimum-wage jobs in Britain are becoming the norm, not the exception. The minimum wage in this country is becoming a ceiling on wages, not a safety net. Governments of all colours must recognise that, and the fact that we must do something about it.

[Jonathan Edwards]

I agree with everything that the hon. Gentleman is saying about the situation in Wales. It is true not least of the care sector in Carmarthenshire, where the Labour council has privatised social care by outsourcing it to private contractors, and many workers are in the same scenario. They are not paid for travelling between calls, so in very rural areas, such as some parts of Carmarthenshire, they can travel for half an hour and not be paid for that working time.

During the recent passage of the Social Services and Well-being (Wales) Bill in the National Assembly, Plaid Cymru tried to deal with that situation by outlawing zero-hours contracts in the social care sector. Can the hon. Gentleman explain why the Labour Government in Wales refused to support that amendment?

[Owen Smith]

As the hon. Gentleman will know, the situation is far more complex than he allows, although I will say straightforwardly that I do not believe that we should have 15-minute calls. One of the areas on which we will absolutely need to concentrate when Labour wins in May is the care sector, in which women are exploited all the time. More than 60% of the women in Gower, Ogmore and the Vale of Glamorgan who work part-time contracts, many of them zero-hours, are paid less than the living wage. That is the truth for many people in this country.

Equally, House of Commons figures show that areas of Wales, including the Rhondda and Dwyfor Meirionnydd, account for the nearly 40% rise under this Government in people shifting into working for the minimum wage or less than the living wage. Those are sea changes in the nature of the economy experienced by working people. Not all those changes started under this Government; we must be honest about that—the stagnation in wages started around 2007-08—but the unprecedented pace of change and the shift to low-wage, high-insecurity work has been exacerbated and compounded under this Government. In my view, that is scandalous.

The Welsh Labour Government have done their best to mitigate those trends. Initiatives such as Jobs Growth Wales have created 12,000 job opportunities for people in Wales, and tuition fees have been capped in order to hold open the door to advancement and social mobility through education. The Welsh Government have stood up for the lowest-paid workers against this Government—by maintaining the Agricultural Wages Board, for instance.

However, the truth is that we still have a significant problem in Wales, and it will take a Government in Westminster with the right policies—and, frankly, the right ideology—to change that. That is what we will see in this country when the Labour party wins in May: a rise in the minimum wage, intervention in our markets to freeze consumer prices for people suffering under high energy bills and the backing of small business through a reduction in tax cuts to large corporations and an increase in benefit to smaller companies.

Crucially, we will deal with zero-hours contracts and scrap the bedroom tax, which perniciously affects the most vulnerable in our society. That is the sort of Government programme that we need to deal with the issues in Wales. It is not what I anticipate we will hear from the Minister, which is why I hope we will see a Labour Government preside over Glamorgan, as well as the rest of Wales, come 8 May.

Oral Answers to Questions

Owen Smith Excerpts

Wednesday 21st January 2015 Commons Chamber

[Stephen Crabb]

I am not familiar with that facility, although I am familiar with Wind street—from what I have read, not from what I have experienced. However, we will certainly look at that project in some detail and I will raise the matter with Health Ministers.

[Owen Smith (Pontypridd) (Lab)]

Since we last met, the Secretary of State has warned his Cabinet colleagues to mind their language when talking about the NHS in Wales. He said:

“I want them to take care how they speak about health services in Wales…I don’t want to hear anyone talking about a second-class NHS in Wales”.

Is he therefore disappointed that the Prime Minister has overruled him in continuing to bad-mouth the Welsh NHS?

[Stephen Crabb]

I am surprised to hear this from the hon. Gentleman. We on this side of the House are not shutting down the debate on, and scrutiny of, the performance of the NHS. We stand on the side of patients in England and in Wales, and it is quite wrong of him to act as some kind of cheerleader for the Labour party by seeking to shut down the scrutiny and the debate on the Welsh NHS.

[Owen Smith]

I take it from that answer that the Secretary of State is disappointed that the Prime Minister has overruled him. I believe that the Prime Minister has done that because talking about the Welsh NHS is his favourite way of distracting people’s attention from the failings of the NHS in England. Given that there is a crisis in hospitals near the border in Telford, in Shropshire, and in Cheltenham and Gloucester, where Welsh patients are traditionally sent, is it not now time for the Secretary of State to renew his efforts to get the PM to stop talking about Offa’s Dyke as though it were a line between life and death?

[Stephen Crabb]

On the subject of health, there are two apologies that we need to hear from the Opposition today. The first is an apology from the hon. Gentleman on behalf of the Welsh Labour party for the way in which its Ministers in Cardiff have run the Welsh NHS into the ground. The second is from the Leader of the Opposition for his disgraceful and inappropriate suggestion that the NHS should be “weaponised”.

Wales Bill

Owen Smith Excerpts

Wednesday 10th December 2014 Commons Chamber

[Stephen Crabb]

My hon. Friend is exactly right and characteristically articulates his point better than anybody else in the House could. Devolution got stuck. The settlement meant that the Welsh Government were essentially a spending Department with no real responsibility for raising money—in fact, local authorities or parish councils probably had more ability to raise revenue than the Welsh Government. The Bill is all about letting Welsh devolution take the next step forward, which is about fiscal devolution, giving responsibility and enhancing accountability to create a more meaningful relationship between the Welsh Government and the people who elect Assembly Members and Welsh Ministers.

[Owen Smith (Pontypridd) (Lab)]

The Secretary of State speaks of the incentives that these powers would give to the Welsh Government. Will he be clear, as his predecessor was, as to how they ought to deploy those incentives? His predecessor thought that they should cut taxes in Wales to lower rates than in England. Does he agree?

--- Later in debate ---

[Stephen Crabb]

I do not dismiss the risk that the hon. Gentleman has outlined, but I think he exaggerates its impact on Wales. Alongside any perception of risk in relation to such fluctuations, there is a powerful opportunity for Wales to take greater control over wealth creation inside the nation of Wales. That is an exciting opportunity for the Welsh people, and it represents the next stage of devolution.

This is all about accountability. The former US President Harry Truman famously had on his desk a card that said, “The buck stops here.” I want to see a Welsh Government who stand up proudly and say, “The buck stops here” rather than “The buck is passed there.” That is what this Bill is all about: it creates that enhanced accountability and enhanced responsibility. I repeat my challenge to the First Minister and the Welsh Government: as soon as this Bill receives Royal Assent, take steps to call the referendum and do it as soon as possible. Let us seize the new tools and powers in this Bill with both hands and move forward.

[Owen Smith]

May I be the second Member of this House to congratulate the Secretary of State on becoming Welsh politician of the year? I think the whole House would agree that anybody who can move from describing devolution as “constitutional vandalism” to being its most ardent supporter on the Government Benches deserves to have his political footwork duly recognised.

These amendments to the Wales Bill best exemplify the damascene conversion that the Secretary of State and his party have undergone on the devolution cause, because they relate to the devolution of income tax varying powers. Just as the Secretary of State used to denounce devolution and has now changed his mind, the Government have performed—he understated the extent of this—a handbrake U-turn on the lockstep.

[Stephen Crabb]

For clarification, the shadow Secretary of State has accurately reported a quote of mine that appeared in an article in 2007, but he should do full justice to the article by adding that in it I set out exactly the same case for fiscal devolution that I have set out today. I have been entirely consistent over a long period as to how fiscal devolution would enhance the devolution settlement for Wales.

[Owen Smith]

I am happy to agree that that is how the article went on, but it did indeed describe devolution as “constitutional vandalism”. I shall not forget that, and nor should the country of Wales, for which the right hon. Gentleman is now Secretary of State.

The Government have undertaken a U-turn on this. Let me refresh the House’s memory. Just a few months ago, the Secretary of State’s party wholly opposed the removal of the lockstep. In fact, his Department and the Treasury produced a substantive Command Paper, Cmd 14, which said:

“The Government is firm in its view that the income tax structure is a key mechanism to redistribute wealth across the whole of the UK, which is why the ‘progressivity’—

a word I think they made up—

“of this system is properly determined at the UK level.

The inclusion of the lock-step is also consistent with the principle that fiscal devolution should not benefit one part of the UK to the detriment of another—this could occur if the Welsh Government is able to set a substantially lower rate for higher/additional taxpayers without needing to change the basic rate”.

That is what the Secretary of State seems to be suggesting —that we set lower rates in Wales than in England.

We do not demur from the sentiment expressed in the Command Paper, but nor do we greatly object to the Government changing their mind on this issue. That is partly because they are reflecting the views of all parties in the National Assembly—it is appropriate and good that the Secretary of State has listened to them on this —and partly in the light of the Smith commission findings, which have shifted the debate significantly by proposing 100% devolution of income tax to Scotland. In fact, it could be argued that there is now a case for going further than is proposed in the Bill. It seems unlikely to me that the people of Wales would find it acceptable to be asked in a referendum about having lesser tax varying powers than those on offer in Scotland.

Many of us in the House now recognise that perhaps one of the mistakes of the previous Government was to allow asymmetry to develop between different parts of the UK in earlier rounds of devolution. That has driven pressure for greater change in Wales to reflect changes in other parts of the country. In fact, the case has now clearly been made for a constitutional convention to consider all the issues in the round and to try to derive a lasting settlement acceptable to all parts of the UK.

The Government have not yet agreed to a constitutional convention, and in its absence we must still consider the Welsh Government’s rationale for taking up powers to raise taxes, if those powers were accepted at a referendum.

[Jonathan Edwards]

Labour’s policy is to have a constitutional convention. Is the hon. Gentleman saying that, in the event that we have a Labour UK Government, there will be a constitutional convention, and if so, would it halt the Smith process and the proposed Bill for Scotland?

[Owen Smith]

No. I am saying that if there were a Labour Government, we would have a constitutional convention to look at the whole of the UK. Therefore, wherever we were in the Smith commission proposals, which will continue on their course, that would need to be fed into the convention. A constitutional convention would not need to slow down or stop further devolution to Scotland, but it would have to take cognisance of what was happening in Scotland.

Whatever further changes are made in Wales should reflect what happens in Scotland, because the willingness to accept asymmetry has diminished in Wales and elsewhere. Many of us feel that such asymmetry inherently leads, over time, to instability in the existing settlement.

In the absence of a convention, we must consider why the Government think that Wales should take up the new powers. I want to start not with Labour, but with the current Government. Why do they now feel that the Labour Welsh Government should have an unfettered ability to raise taxes or to lower them to levels below those in England? The Secretary of State has made a couple of soundbites or comments today to illustrate why he thinks we should do so—he talked repeatedly about accountability and responsibility—but I must say that none of them was quite as blunt and honest as the rationale he gave to the Institute of Welsh Affairs a few weeks ago. He said clearly that his objective in providing the tax varying powers was to

“end the politics of the begging bowl in Wales”—

[Interruption.] The Secretary of State says, “Absolutely,” but I find that quite an offensive position for him to take. He should not describe Wales as, in effect, a supplicant, and nor should he suggest that we are a scrounger or a shirker asking for handouts. It is not for him to suggest that the cure for the

“politics of the begging bowl”,

as he injudiciously puts it, is to force the Welsh people to raise taxes within their own borders. I do not espouse such a dog-eat-dog, race-to-the-bottom version of Britain, and nor should he.

[The Parliamentary Under-Secretary of State for Wales (Alun Cairns)]

The phrase “begging bowl”, as used in this context, originated with former First Minister Rhodri Morgan. Does the shadow Secretary of State completely dissociate himself from that?

[Owen Smith]

It was deployed in an entirely different context. The implication of the Secretary of State’s pejorative use of the phrase was—I am paraphrasing, but this was broadly what he said in the rest of his speech —that the Welsh Government have not been responsible or accountable, but that they would become so for the first time if tax powers were afforded to them. I have never accepted that the Welsh Government are unaccountable —they are as accountable as any elected Government—and I certainly do not subscribe to the view that Wales has ever held out a begging bowl.

[Stephen Crabb]

I think that the shadow Secretary of State is getting slightly bogged down and has now resorted to what he calls “paraphrasing” the speech I made to the IWA, although he is actually misrepresenting it entirely. My strong and clear point is that we have had 15 years of devolution in which the dominant theme of Welsh politics has been discussing how much money handed down through the block grant can be spent in Wales. The Bill and the new shift in devolution are about changing the nature of the debate so that it is not just about how much money we have handed down from London, but about raising money within Wales, growing the economy in Wales and seeing Wales stand on its own two feet.

[Owen Smith]

The Secretary of State makes my point for me because I do not for a minute subscribe to the notion that Wales has money handed down to it from Westminster. That money reflects the taxes paid by Welsh people, and more importantly, in a Union that is meant to be about our ability to share resources, pool risk and redistribute from wealthier to less wealthy parts, it reflects the morality and values of our country. Unfortunately, that morality and that set of values are being undermined by the Secretary of State’s description of the Union as one in which one part is a supplicant and another is handing down money.

[Ian Lucas (Wrexham) (Lab)]

Does my hon. Friend agree that we need to be wary of the politics of the hospital pass in Wales? I am always suspicious of Tories bearing gifts, to mix my metaphors, and I do not trust the Conservative party to defend the interests of my constituents.

[Owen Smith]

Nor do I and, more importantly, nor do the people of Wales—that is why they do not elect Tories in Wales. The very least we owe the Welsh people is that we consider extremely carefully the likely impact of these radical changes to such a cornerstone of the redistributive Union as taxation. They will have an impact on the potential prosperity and well-being of the Welsh people, which is why, although Labour will not oppose the Lords amendments, as we have not opposed the Bill at other stages, we will continue to be clear that we want far more explanation from the Government about how and why they think the powers in question might be deployed in Wales, and what the benefits will be for the Welsh people.

[Sammy Wilson]

In light of the language about money given to the devolved Administrations being “handed down”, rather than the result of tax revenues, and, as the hon. Gentleman said, the redistributive nature of some fiscal policy, does he accept that the danger of the devolution of income tax is that it is an underhand attempt to ensure that less money goes to the devolved Administrations, who will then be forced to raise money through higher taxation in their own jurisdictions?

[Owen Smith]

In a nutshell, the hon. Gentleman, who is expert in this matter, having been the Finance Minister for his own devolved Administration, explains why we are so concerned about the change. We are worried that the Tories are eager to legislate in haste to foist on the Welsh people the power to raise taxes in Wales.

Our concerns are not just obstacles that the First Minister has placed in the way of the change, as the Secretary of State suggested. They are reasoned questions about the nature of the powers that might be deployed and what their impact will be. We have been clear and consistent in saying that the Government need to meet three tests. It is not really for the Opposition to meet them, because we cannot. It is for the Government proposing the changes to meet them, but it is disappointing that they have not done so. The first test, as the First Minister made clear, is on the baseline for funding and the Barnett formula. That will need to be addressed before the changes can ever be accepted in Wales, because we will not recommend the devolution of income tax varying powers to Wales until we know that we will not be locking in a degree of underfunding. Secondly, we want to be clear that even if the Barnett question is resolved, Wales will be better off.

[Mr Mark Williams (Ceredigion) (LD)]

Although I share the Secretary of State’s impatience for the Assembly Government to be speedy in addressing the issue once the Bill is passed, does the shadow Secretary of State agree that the Government need to assess the funding shortfall? One way that could be done would be if the Government here and the Assembly Government again commissioned Gerald Holtham, for example, to assess the level of underfunding before we move forward, which I agree with the Secretary of State that we should.

[Owen Smith]

That is not a bad idea. We have recently heard Government statements about the reduction in the Barnett gap, and one can imagine that there would be such a reduction because public spending in England has been curtailed so dramatically under this Government, although we do not know that for certain. It is beholden on the Treasury to provide evidence of the current gap, and it would be sensible for it to consider making the process independent, not least because I do not think that we would fully trust what it might produce on its own.

[Jonathan Evans]

The hon. Gentleman should be a bit cautious in his dismissal of the Conservative party, given this week’s opinion polls. His argument is the complete antithesis of the position adopted by the Labour party in Scotland—late in the day, it must be said—which is to agree to the devolution of all tax raising powers to Scotland. Against that background, how is his argument in any way consistent with the position adopted north of the border?

[Owen Smith]

To paraphrase the infamous, notorious entry in the Encyclopaedia Britannica, it is not a question of “For Wales, see England”, “For Scotland, see Wales”, or “For Wales, see Scotland”. We have different countries with different demographics, histories and relative tax takes, and on behalf of the Welsh people, we should sensibly take a position that reflects their best interest, rather than talking an ideological perspective across the board. On the prospects of the Tory party in Wales, I would be a little more hopeful that it might do well were it not for those such as the hon. Gentleman not fighting their seats at the next election. We can read into that what we will.

[Jonathan Evans]

It is the same as the right hon. Member for Neath (Mr Hain)

[Owen Smith]

Indeed, but I do not suggest for a minute that there is any prospect of my right hon. Friend being replaced by a Tory. Not now, not tomorrow, not ever. [Interruption.] It will be a cold day in hell before Neath turns Tory, and ditto Pontypridd.

Let me return to my point about whether Wales will be better off with these tax powers. As the hon. Member for East Antrim (Sammy Wilson) said, we can look to last week’s autumn statement to demonstrate that Welsh tax receipts are now £2 billion less than what was planned by the Chancellor in 2010. That is our proportion of the £66 billion shortfall in tax receipts that is a result of our underperforming economy under this Conservative Government. Had these measures applied in 2010, they would have devolved to Wales about £1 billion of that shortfall. That decline makes a mockery of the notion that such powers make the Welsh Government more accountable, because a poor performance across the board by the UK economy would not have been down to the actions of the Welsh Government. That performance would have been wholly down to a Tory Government in Westminster, and there is little that a smaller economy and country such as Wales could have done to mitigate that effect.

The other thing that those numbers illustrate—again, the hon. Member for East Antrim effectively made this point—concerns the volatility of tax receipts across the UK. That volatility has led to a £66 billion shortfall, and traditionally there are greater fluctuations in peripheral and regional parts of the UK economy than at the centre, and especially in London and the south-east. It is difficult to imagine how a country such as Wales with a small economy could manage the risk associated with that greater volatility. That shows some of the benefit of our being part of a wider Union, and it makes clear the dangers and risks associated with disaggregating that Union.

[Jonathan Edwards]

I watched with great interest the hon. Gentleman’s prophecy of doom on “Sunday Politics”. I have also read the OBR report and looked at all the tables on the Welsh devolved figures, and they do not reflect his claims about a £1 billion loss. Indeed, the only table on this issue in the report suggests that the Welsh devolved tax base will increase over the next five years by £500 million. The shortfall that he mentions might be as a result of the raising of income tax personal allowances that has been announced by the UK Government, but the Silk commission made it clear that the indexed deduction method for the partial tax raising arrangement in the Bill means that that would not come into effect. Is not the hon. Gentleman guilty of scaremongering? Project fear is alive and well in Wales once again.

[Owen Smith]

No, it is project reasoned analysis of the numbers, and that project shows clearly a £66 billion shortfall over the past five years and a projected further shortfall across the UK over the next five years. We will see a worse performance in terms of corporate and income tax receipts across the UK as a result of the low- wage, deeply insecure, second-rate economy that the Tory Government are building. Wales has been particularly ill served by what has happened because of the additional fragilities of our economy due to our industrial heritage and the preponderance of low-wage jobs in Wales.

The reality is that—[Interruption.] The Secretary of State shakes his head, but he should think about this. He said earlier that the indexed method cited in Holtham means that Wales would effectively be incentivised to grow its tax base at a faster rate than England’s to enjoy uplifts under these powers. The truth is that over the past five years the Welsh tax base has declined at a faster rate than that of England, as the figure is 4.8% in Wales whereas the UK average is 4.2%. That means that Wales would have been worse off under the indexation had the provisions applied in the last five years, which is a further illustration of the need for the Government to undertake some proper, detailed analysis to let the Welsh people know whether we would be better or worse off.

[Ian Lucas]

In support of that point, is my hon. Friend aware that in Wrexham median wages fell by 7.4% in the last year under this Government? What encouragement does that give for increasing the tax base?

[Owen Smith]

My hon. Friend reinforces my point. We know that the Welsh economy has historic weaknesses because of the decline in heavy industry, and its distance from London and the powerhouse of the south-east. Those are well understood, but they are not reflected in the debate that we are having, which is largely politically motivated.

Some in Wales argue that we do not need a referendum to decide this matter, but we think that the Welsh people should have a debate and ultimately take the decision on what would be a radical change. The debate cannot be driven by the Tory party’s desire to insulate itself against the charge that it has reduced Welsh budgets by 10%, which it has; or by the need to support the Tory objective of reducing public spending to levels we have not seen since the 1930s, as was manifest last week; or even by the wish to sustain a partisan argument of English votes for English laws. All three of those rationales feature as part of the Government’s motivation for this debate, and we are disappointed that they have not provided any real response to these questions throughout the passage of the Bill.

It will now be for the Welsh Labour Government to consider what is best for the Welsh people. I have no doubt that they will do so using Welsh Labour values and thinking about the benefits for the Welsh people, as well as about how we deliver equality and improvements to the lot of working people across the UK.

[Glyn Davies (Montgomeryshire) (Con)]

I am grateful for the opportunity to speak on the occasion of the Bill’s return from the House of Lords in much improved form, if I may say so. In general, I welcome the Bill although I am concerned about some elements. Perhaps it is a Welsh trait that we can never completely agree on things, and I want to touch on one issue where I am not in agreement.

What I welcome in particular is the new reality of the Conservative and Liberal Democrat coalition shaping the process and future of devolution and driving forward, leaving—if I may say so to the shadow Secretary of State—Labour languishing in its wake. He may describe that as a U-turn, but that is the reality today. I want to make just one important point, which is very much a personal view. I disagree with one specific aspect of the Bill, but I would like to emphasise my overall support: it is a very good and welcome Bill.

I would like to put my point in context by painting some background to my personal journey in the devolution debate. I was not in favour of the form of devolution on offer in the referendum on 18 September 1997. It seemed to me to be creating a permanently unstable constitutional settlement. A settlement is the last thing it was. I attended the count in Llandrindod Wells leisure centre, watching the TV coverage as the decision of the voters of Wales came through and they decided in favour of establishing a national assembly for Wales. I drove home knowing that there was no going back. The people had spoken, albeit by a tiny margin of 0.6%. We were now facing an entirely new question: how would devolution work in practice? I concluded immediately that the new Welsh Assembly would eventually become a law-making, tax-raising Parliament based in Wales. That has influenced my thinking on the issue ever since. I did not want to be dragged, kicking and screaming, and trying to refight the 1997 devolution referendum. I preferred to get ahead of the curve and identify where we were going to get to, and move towards that in a positive and smooth way. That was not a change of mind, but a recognition of a new reality.