Oral Answers to Questions
Owen Smith Excerpts(9 years, 11 months ago)
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Alun Cairns
As the right hon. Gentleman was part of the previous Government, he should apologise for leaving Wales the poorest part of the United Kingdom. He should further apologise for the fact that wages fell at the sharpest rate between 2008 and 2009. The Government’s long-term economic plan is working for Wales, and wages are rising quicker in Wales than across the rest of the United Kingdom.
Owen Smith (Pontypridd) (Lab)
The Minister knows that low wages and poor jobs affect not just individuals and their families, but the public finances. Will he tell us what has happened to tax receipts and welfare spending in Wales since his Government came to power?
Alun Cairns
We will receive a statement from my right hon. Friend the Chancellor a little later which will cover the UK financial position, but I hope the hon. Gentleman, who is the shadow Secretary of State for Wales, will welcome the progress that the Government are making in reducing unemployment and in growing wages in Wales.
Owen Smith
The Minister does not need to wait for the autumn statement, because the numbers are publicly available. Tax receipts in Wales have fallen by £2 billion since 2010, and benefit spending has gone up by £1.5 billion. That has piled an extra £6,000-worth of borrowing on every Welsh worker, and what have they got for it? They have got a twentyfold increase in food bank usage, the lowest wages in Wales and a cost of living crisis. The Tories have failed on the deficit, failed on the cost of living crisis, and they are failing in Wales once again.
Alun Cairns
The shadow Secretary of State has clearly got his facts wrong. The long-term economic plan is working for Wales. If there has been a reduction in tax receipts from Wales, it is because of our increase in the personal allowance, under which next year the average worker will pay less than £800 as a result, taking 155,000 people in Wales out of income tax altogether by next April.
Government Policies (Wales)
Owen Smith Excerpts(9 years, 11 months ago)
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Owen Smith (Pontypridd) (Lab)
I beg to move,
That this House expresses deep concern at the impact of the Government’s policies on Wales; notes the Government’s real-terms reduction of the Welsh budget by £1.5 billion; notes that Wales currently suffers from the lowest average rates of pay in Britain and has the highest proportion of individuals affected by cuts to social security including the bedroom tax; further notes that Wales suffers the highest energy bills in the UK and that these, along with low pay, have compounded the cost of living crisis in Wales; and calls on the Government to immediately scrap the bedroom tax, freeze energy bills and undertake measures to increase pay rates in Wales.
When devolution was created in 1997-98 by the last Labour Government, it was very much intended as a measure to make Wales more accountable, to give us a greater level of self-determination, and to see autonomy for the Welsh people and bespoke Welsh solutions for Welsh problems. The unspoken motivation behind that, especially in Wales where the miners strike was so fresh in our memories, was to protect the Welsh people from the prospects of a future Tory Government. Pit closures, steel closures, the legacy of de-industrialisation and people shunted on to incapacity benefit to languish there for so many years, were fresh in our minds, and they were absolutely behind the idea that we would, with devolution, have an additional bulwark against the destructive economic philosophy of the Tory party.
David T. C. Davies (Monmouth) (Con)
Is the hon. Gentleman admitting here in this Chamber that one of the reasons Labour supported devolution was not because it wanted to change the constitution, but because it thought that it could control the Welsh Assembly at all times?
Owen Smith
No. We had campaigned for devolution for 100 years, and it was absolutely about changing the accountability to the Welsh people, making all the obvious constitutional changes. However, for many of us on the left in Wales it was also about guaranteeing a Government who would to a greater extent reflect our values and defend Welsh people against the values of the hon. Gentleman’s party and this Government. Four and a half years on from the return of a Tory Government, we now have an opportunity to measure exactly what the impact of that Government has been and, six months from the next election, think hard about how effective those defences have been.
Owen Smith
We would have done, as my hon. Friend knows—he promotes me unduly and unfairly—and perhaps we should have done, but we are always fair-minded and therefore did not do so. However, I think we are convinced that what we did do was afford Wales some extra protection against the ravages of a Tory Government, about which we are about to hear more.
Jonathan Evans (Cardiff North) (Con)
I just want to give the hon. Gentleman an opportunity to correct his statement that the Labour party had campaigned for devolution in Wales for 100 years. I know that he is a great admirer of Aneurin Bevan. I come from the same town as Aneurin Bevan, and I am sure that he did not campaign for devolution.
Owen Smith
I hate to say it, but the hon. Gentleman really ought to study his history a little harder, because Kier Hardie, even when elected in 1895—not as a Welsh MP, but in West Ham—spoke in this House about devolution, and when elected to Merthyr as a Labour MP in 1905 he was absolutely a campaigner for home rule and devolution for Wales. The hon. Gentleman’s history is wrong; mine is perfectly accurate.
Recent history—the past four and a half years—shows that the Labour party is still campaigning for rights for Welsh people and standing up for Welsh Labour valleys. Thus we have seen Jobs Growth Wales, the most effective youth employment programme anywhere in Britain, 1,000 jobs created only last week, and massive increases in inward investment, all positives that have come as a result of devolution and the protection of the Welsh people.
The Secretary of State for Wales (Stephen Crabb)
The shadow Secretary of State mentions Jobs Growth Wales. Of course we applaud any initiative that gets people into work and helps increase opportunities for young people, particularly in Wales, but he must be aware that the independent study of Jobs Growth Wales commissioned by the Welsh Government showed that around 75% of all the young people on the programme would have found work anyway. He needs to answer this question: is that a good use of taxpayers’ money?
Owen Smith
I think that the evidence for Jobs Growth Wales is absolutely clear to us all. It has proven to be the most effective youth employment programme anywhere in Europe. It is succeeding in creating 16,000 opportunities for young people, and it is succeeding in keeping those young people in work beyond the six months. It is widely supported by the business community right across Wales. I cannot imagine for a minute that the Secretary of State should wish to undermine it, especially when it stands in such stark and promising contrast to his Government’s Work programme.
Mark Tami (Alyn and Deeside) (Lab)
Is my hon. Friend as amazed as I am by what the Secretary of State has just said? He has effectively said, “Well, we shouldn’t do anything for young people, because most of them will probably get jobs anyway.”
Owen Smith
Around 750,000 young people in Britain are still unemployed. Although that is fewer than the 1 million who were unemployed just a couple of years into this Government’s time in office, and we welcome that fall, I suggest that 750,000 is an enormous number of people to be left languishing on the dole, but that is what we have come to expect from a Tory Government.
Stephen Crabb
In response to the hon. Member for Alyn and Deeside (Mark Tami), those are not my words, but those of an independent inquiry into the matter. Of course the business community supports Jobs Growth Wales, which has made good inroads into giving opportunities to young people. However, when about 75% of young people are considered to be able to get work anyway without the need for a support programme, we should bear in mind the question of whether it is a good use of taxpayers’ money.
In comparing Jobs Growth Wales with the Work programme, the shadow Secretary of State is comparing apples and pears. The Work programme does not work with bright young graduates who are fresh out of university but with people who face the biggest hurdles in getting back into work—the 200,000 people in Wales who never worked a day in their life under Labour.
Owen Smith
I do not want to belabour the point, but the Secretary of State needs to consider carefully whether he wants to denigrate Jobs Growth Wales, which does not, by and large, work with undergraduates but with youngsters aged 16 to 24, most of whom will not be undergraduates. It has been demonstrably successful in Wales, and he should be welcoming and supporting it, not seeking to undermine it.
David Wright (Telford) (Lab)
As someone who represents a constituency in a border county on the Welsh Marches, let me say that we would like to see more support and help for young people to get them into work, and to follow some of the examples in Wales that have been getting people into work. It is important for the economies of the Welsh Marches and the border counties that Wales has a strong economy. That is why this debate is so important for us all.
Owen Smith
I am grateful to my hon. Friend, who is absolutely right. That is why Labour has said that, unlike the Tory Government, we will learn from Jobs Growth Wales and transplant it to the rest of the UK. Under the next Labour Government, we will see similar success, I am sure, as a result of the measures we will undertake.
Mrs Madeleine Moon (Bridgend) (Lab)
The Secretary of State talked about the people who are not able to get into work. Will he comment on a fantastic course that is being run in Bridgend at The Zone, which is helping people who find it difficult to promote themselves and to deal with going for job interviews? It covers the body language, listening and time management skills that will help them to get into work through Jobs Growth Wales.
Owen Smith
The Secretary of State cannot comment on it yet, but perhaps he can later. I would happily come and see that project in Bridgend, which sounds excellent.
My fundamental point is that devolution has already proved to be something of a protection against the Tory Government. Workers’ rights have been stood up for on blacklisting and on the Agricultural Wages Board, and jobs and services have been protected in Wales in a way that they have not been in England.
Owen Smith
I will make a little more progress and then give way.
However, devolution does not show that, of itself, even with a Labour Government in Wales, it can fully inoculate Wales against the virus of Tory economics. Unfortunately, the “trickle-down” belief of Tory economics that wealth will be spread by favouring the people who already have the most and punishing those with the least is demonstrably leading to lower living standards in Wales. In a moment, I will enumerate some of the symptoms of that virus that we can see right across Wales.
Wayne David (Caerphilly) (Lab)
My hon. Friend knows that today the Welsh Government have published their latest index of multiple deprivation, which shows that Lansbury Park estate in Caerphilly is now the most deprived community in Wales. Does he share my anger at that fact? Does he agree that nothing shows more clearly the real impact of central Government policies on poor communities in the south Wales valleys?
Owen Smith
I do share my hon. Friend’s anger, and I will express it here today. I also express my anger that Government Front Benchers laugh when we hear of the scale of the poverty that is still being visited on people right across the country.
Stephen Crabb
On a point of order, Mr Deputy Speaker. The shadow Secretary of State has just claimed from the Dispatch Box that I was laughing at the news that the ward in Caerphilly is now the most deprived—[Interruption.] Not at all—it is a complete untruth, and I ask him to withdraw it.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am sure that the shadow Secretary of State has taken your comments on board.
Owen Smith
Let us look at some of the symptoms in Wales of the disease of Tory economics, starting with food banks, because they are a useful barometer of this Tory Government’s impact. The volume of food banks in Wales has grown at a faster rate than anywhere else in Britain. In the first six months of this year, 40,000 people in Wales were forced to use them. That is a tenfold increase since 2010, when just 4,000 people used them. By the end of this year, it will have been a twentyfold increase, which is an extraordinary statistic.
Mrs Siân C. James (Swansea East) (Lab)
I am sure that, while congratulating the city and county of Swansea, my hon. Friend will greet with some concern its decision to introduce food collection points across my constituency. It is a sad state of affairs when people have to be encouraged to go along to a council property to drop off food for less fortunate citizens, but they are to be applauded, and I urge everybody to support the food banks.
Owen Smith
The food banks are to be applauded, but the fact that they are required should shame us all, particularly the Government who are presiding over the explosion in their usage. It is very clear why they are required: the Trussell Trust has made it plain that the vast majority of people who use them do so because their benefits have been changed or stopped.
The emerging trend—at 22%, up from 15% last year—is for the recipients of food parcels to be in work. They are earning a living, but it is insufficient to pay for something as fundamental as food. That should surprise none of us, because we now know that, under this Tory Government, 13 million people in Britain are in poverty while in work. They are earning their poverty in this country, and that scandal and disgrace should shame us all.
Owen Smith
I am aware of that, but I am grateful to my hon. Friend for reminding the House about it. Right across Wales, wage inflation last year was just 0.6%, while price inflation was 2.2%. That real-terms fall in people’s wages comes on top of the fact that wages in Wales are already the lowest in Britain. Average weekly earnings in Wales are now just £473.40, compared with the UK average of £518. One in four workers in Wales earns below the living wage, which should shock the House in the 21st century.
Jessica Morden (Newport East) (Lab)
Does my hon. Friend agree that we have not only some of the lowest wages in the UK, but the lowest disposable income, the highest energy bills and the highest levels of energy debt, which are also contributory factors?
Owen Smith
Yes. All those things contribute enormously: they are all symptoms of the widespread, systemic problem in our society and economy, which this Tory Government’s current policies are unfortunately making worse. In fact, the Welsh Government have calculated that by next year, £1 billion will have been taken out of the Welsh economy directly as a result of the welfare changes made by this Tory Government. It is estimated that the average annual loss per working-age adult in Wales will be £500 by 2015-16. The bedroom tax, the most pernicious and cruel example of this Government’s welfare policies, hits Wales harder than anywhere else in the UK. The Department for Work and Pensions statistics confirm as much—more than 40,000 Welsh men and women hit by the bedroom tax, 26,000 of those, disabled.
Chris Ruane
My hon. Friend talks about averages in Wales being about £540. Is he aware that in Rhyl West—until this morning the poorest ward in Wales, but it has been overtaken by a Caerphilly ward—the actual hit for those people, the poorest in Wales, was £1,450, as opposed to the richer ward of Efenechtyd in the south of the county, where it was only £270, so the impact on those poorest people in Wales has been five times greater?
Owen Smith
I am grateful to my hon. Friend for his intervention. Yes, of course that is right. The evidence is right before our eyes: over 50% of Welsh local authorities have had to use top-up discretionary housing payments to deal with the volume of problems created by the changes to welfare in Wales, versus just 27% in England. That is more evidence that Wales is being hit harder on the watch of the Secretary of State and the Minister than anywhere else in the UK.
The Parliamentary Under-Secretary of State for Wales (Alun Cairns)
Will the shadow Secretary of State explain, therefore, why only three of the 22 local authorities have applied for additional discretionary housing payment to help with hardship as a result of the spare room subsidy changes?
Owen Smith
Some 54% of local authorities in Wales have used up most of their discretionary housing spending. The figure for England is 27%. Wales is harder hit than anywhere else and we are having to spend more money. If the Minister seriously suggests that the DWP figures are wrong, and that Wales does not have a greater volume of people hit by the bedroom tax than anywhere else, he can tell us, but I am sure that he will not disagree with the DWP. I am sure that he will agree with me that 40,000-odd people in Wales are affected, 25,000 of whom are disabled.
Alun Cairns
I will happily clarify that Cardiff, Caerphilly and Conwy are the only three local authorities, of the 22 in Wales, that have asked for an uplift in discretionary housing payment to help with hardship. Why did other local authorities around Wales not do so if the situation is as bad as the hon. Gentleman suggests?
Owen Smith
Let me tell the hon. Gentleman something very simple that he could do to stop this back and forth about numbers: he could think about the impact on people in his constituency and mine, and those of all other hon. Members, and he could scrap the bedroom tax tomorrow. That is what Labour will do if we are elected. We will get rid of it in a heartbeat. Frankly, the nonsense about who has applied for which grant demeans this debate, which is a serious debate about the impact on real people.
Chris Bryant (Rhondda) (Lab)
Does not this argument miss the fundamental point, which is that if the Government have to create a system in which there is a discretionary housing payment, which means that some local authorities will be mean at the beginning of the year and generous towards the end of the year, and that some local authorities will be meaner than others, they have completely lost the plot? That is why we have to get rid of the bedroom tax in its entirety.
Owen Smith
Introducing a tax that is reliant on people being able to move to smaller properties was, in and of itself, barmy, because there are not the properties for people to move into. That is why 60% of social housing associations in Wales are struggling to rehouse people.
Of course, it is not just the people who are hit by the cuts to welfare payments that are affected, but the wider population. Sheffield Hallam university produced a report just a few weeks ago that said that the welfare cuts will result in a £1,000 reduction in the incomes of all people across the south Wales valleys eventually, as reductions in aggregate demand, reductions in spending and further job losses—it suggested that 3,000 jobs might be lost across south Wales—result in a less dynamic and resilient economy. It is not just the people who are directly impacted by the welfare cuts who are affected, but the wider economy.
On top of the welfare cuts, ordinary workers who are not in receipt of benefits are losing £1,600 a year. That is why Labour will do something about low wages in Wales. We have made it very clear that we will set the national minimum wage at 58% of median earnings by 2020. That will mean a minimum wage of £8 in Wales and will put an extra £2.50 per week in the pockets of working people. It will mean 60 quid a week or £3,000 a year for hard-working families. [Interruption.] The Secretary of State laughs and giggles once more, as I discuss low wages.
Owen Smith
He is laughing even as he comes to the Dispatch Box. I am talking about low wages in Wales and the Secretary of State is giggling. I do not know what he wants to tell us, but he can have another go.
Stephen Crabb
There is no laughing or giggling, but we can smile because the hon. Gentleman trumpets, in his usual proud, puffed-up way, the idea that the Opposition would increase the minimum wage to £8 an hour. Under the proposals that the Government have put in place, the minimum wage would be higher than that. Why is he proposing a cut in the minimum wage?
Owen Smith
It is nonsense to suggest that we are proposing a cut in the minimum wage. We will increase the minimum wage to £8, which will bring massive benefits for hard-pressed workers in Wales.
Geraint Davies (Swansea West) (Lab/Co-op)
On the income of the poorest workers, should we not bear in mind the impact of the bedroom tax? There simply is not smaller council housing for people to move into. In the event that people move into private housing, their rent goes up and the housing benefit goes up. In other words, it is simply a tax on the poorest for the sake of it. We will take it away when we get in, which will raise their incomes.
Owen Smith
My hon. Friend is of course right. That is why it looks increasingly as though the bedroom tax will cost the Exchequer money, not save it money. It is voodoo economics of the worst kind, because it penalises the most vulnerable people in our society. It is having an even greater impact in Wales, and the Secretary of State should acknowledge that.
Paul Murphy (Torfaen) (Lab)
On the bedroom tax and the discretionary grant, the Secretary of State will know that the grant is given to local authorities, and most of it is made up of local authorities’ own money, not a direct extra grant from central Government.
Owen Smith
My right hon. Friend is entirely right. Of course, it is not only the changes to welfare that are having an impact on people in Wales. A culture of fear and insecurity is increasingly becoming the norm in the workplace, with between 50,000 and 70,000 Welsh workers now employed on zero-hours contracts. Some 200,000 Welsh workers are self-employed. I note that the Secretary of State has said in the press today that those people are effectively entrepreneurs, but the reality is that they are people who are increasingly being forced into bogus self-employed status and counted as entrepreneurs by the Office for National Statistics.
Huw Irranca-Davies (Ogmore) (Lab)
My hon. Friend will know that there has been a rally today of UCATT, Unite and other unions—and I will take no jeering at union members by coalition Members on this issue—on behalf of construction workers. They are now working for bogus, so-called umbrella companies who sanction—take out of—their pay the employer’s national insurance contributions to annual pay, so they go home with a far smaller wage at the end of the week. That is despicable, but I remind coalition Members that it is a function of the sort of economy and the hands-off Government that we have.
Owen Smith
Yes, it is an economy of maximum insecurity for the work force and maximum security and flexibility for employers. Invariably these days the employers are umbrella companies, supply agencies or contract companies, and often people do not even know who is employing them. We do know that the number of self-employed workers in Wales has gone up by 17,000 since the Government came to power, but their incomes have crashed by more than a fifth. Similarly, in Wales there are now 71,000 part-time workers who wish they were working full time. That is up from 54,000—an increase of almost one third under this Government. Those are the hallmarks of the culture of insecurity—the culture of fear—in the workplace that is now affecting Wales and the rest of the country.
Mrs Anne Main (St Albans) (Con)
Is the hon. Gentleman suggesting that Labour would scrap all zero-hours contracts? If so, I would like to know how the NHS and education in Wales would cope without the flexibility of bank nurses and bank teachers.
Owen Smith
No, we have been clear that we will tackle all abuses and exploitation of zero-hours contracts. We will introduce rules to give new rights to employees on zero-hours contracts. We will ban employers from requiring zero-hours workers to be available on the off-chance that there might be work for them. We will stop employees being required to work exclusively for one firm if they are on a zero-hours contract. We will ensure that zero-hours workers who have their shifts cancelled at short notice are recompensed. That is what the next Labour Government will do; that is what this Government could and should be doing.
Owen Smith
I will not give way any more, because I have gone on for quite long enough. I need to wind up my remarks because other hon. Members wish to contribute to the debate—at least on this side of the House.
The reality is that workers’ rights have been eroded under this Government. It is not just wages that have crashed—employees’ rights have crashed. The Government have made it more difficult for workers to take employers to court. They have watered down health and safety legislation and they have bribed workers to sell their rights for shares. They have talked up anti-strike laws, they have halved the consultation period for redundancies in large employers, they have allowed blacklisting to flourish and they have tried to silence campaigning activities by trade unions and others. It is the antithesis of what the Government need to be doing to increase security and loyalty, to increase receipts in our work force and to increase productivity. Fear has become the norm in the workplace. The minimum wage is no longer the minimum: all too often, it is the going rate. Rights have been diminished and wages have fallen.
The next Labour Government will do things radically differently. We will right those wrongs, ban zero-hours contracts, freeze energy bills, fix the rip-off market, increase the minimum wage, and stand up for the Welsh NHS, investing in new doctors and nurses through a mansion tax. We will scrap the bedroom tax and liberate the 26,000 disabled Welsh people from the fear of it. We will cut taxes for the lowest-paid. We will increase taxes for the richest. We will rebuild Wales and Britain on the foundations of fairness, not fear. We will build an economy that works for working people once more, for the many and not the few.
Stephen Crabb
I meet regularly the Farmers Union of Wales and NFU Cymru and I am aware of what they say. I also speak to a lot of individual farmers and, again, I point out that there is a split. There are some strongly held views on both sides, so the Prime Minister's strategy of trying to settle the debate for the long term and get it out of the way is absolutely right.
Time and again over the past four and a half years, the Labour party has got the big calls about the economy wrong. Their dire predictions about increasing unemployment have not materialised. Their prediction that the Welsh private sector was too thin or weak to support the rebalancing of the economy has been proved wrong.
There is, however, one thing about which the shadow Secretary of State has been right, not wrong, and on which we absolutely agree with him. He was recorded saying to activists—at his own party conference, I think—that his leader was not quite up to the job, and that his party had lost touch with its core voters. We entirely agree with his analysis in that instance.
Owen Smith
If the Secretary of State is going to repeat what is frankly nonsense—if he is going to come out with unsourced gibberish like that—he really needs to come up with some corroboration. Otherwise, he can withdraw what he said right now.
Stephen Crabb
Well, I do not know. I read the press, and I see what the press report.
Owen Smith
On a point of order, Madam Deputy Speaker. The Secretary of State has just uttered an untruth in this Chamber. I do not know where he has come up with that untruth, but I ask him to rescind it immediately, and apologise.
Madam Deputy Speaker (Dame Dawn Primarolo)
Order. The Secretary of State will not have deliberately misled the House. If it has been pointed out that he is incorrect, I am sure that he is capable of making the correct entry in the record now.
Owen Smith
I am grateful, because we have to correct these facts. He knows that the volume of people coming from England to Wales has increased over the past few years, whereas the volume of people going from Wales to England has decreased. He also knows that on cancer, for example, the health board he mentions, Aneurin Bevan, performs better than the one over the border, so quite why people would cross the border for worse care, I do not know.
David T. C. Davies
The hon. Gentleman will know that most people on the English side of the border who have been treated in Wales have no choice about that. They are registered with GPs connected with the Aneurin Bevan health board, so they have absolutely no choice in the matter. Many of them have formed action groups of English patients who are treated in Wales and do not want to be because they know they will get a better standard of health care in England. One of those is called Action For Our Health; if the hon. Gentleman has a smartphone, he can look it up. He ought to know about these facts. He talks about cancer. The figures for urgent cases are pretty similar, within a percentage point of each other, but he did not mention diagnostic times, which are significantly worse in Wales than in England, or the cancer drugs fund. It is a pity that he did not want to talk about the NHS in his 40-minute speech.
The hon. Gentleman did not want to talk about education, either. One of the few advantages of the Welsh Assembly is that it has allowed us to make simple comparisons. We can now see the difference between what a Conservative-led coalition Government can offer and what can be delivered by a Labour Government. We know that Wales now has the worst educational rankings in the whole of the United Kingdom after 16 years of Labour domination.
The Labour Government have a terrible record on the economy—that is pretty well known—but they also have a shameful record on public services. I am looking forward to the next general election, so that we can remind people that tax-and-spend Labour cannot be trusted with the economy and cannot be trusted with public services, either. As somebody who used to drive a van—I am glad to say that it was a blue one as well—we will never, ever sneer at hard-working people who want to go out and better themselves, work hard, and pay taxes. We are the true party of working people. At that election, I look forward to fighting alongside the Prime Minister and the Secretary of State for Wales to make sure that next time round we have a truly Conservative Government who can deliver even better policies for the people of Wales.
Oral Answers to Questions
Owen Smith Excerpts(10 years ago)
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Stephen Crabb
My hon. Friend makes a good point. I heard the comments by the First Minister and others, at the end of the Scottish referendum campaign, about wanting home rule for Wales. When I travel round Wales and talk to people and businesses, I find there is an appetite for more devolution, but I do not detect much appetite for home rule. Indeed, support for independence in Wales is at a historic low of just 3%.
Owen Smith (Pontypridd) (Lab)
May I add my welcome to the Secretary of State in his new role, and to the Minister? I also welcome the zeal that the Secretary of State has shown for devolution—unexpected zeal, because of course he used not to be so fond of it. For the benefit of the House, will he confirm today that he no longer thinks that devolution is what he once described as “constitutional vandalism”?
Stephen Crabb
I pay tribute to the internet research skills of the shadow Secretary of State. He is referring to an article I wrote in 2007, at a time when the position of Secretary of State for Wales was reduced to a part-time job; when there was no fiscal devolution; and when there was an unbalanced, unstable devolution settlement for Wales. I am delighted to be part of a Government who are rectifying some of those wrongs.
Owen Smith
I thank the Secretary of State for that clarification. We agree with him that devolution is not constitutional vandalism, but I will tell him what is: a Prime Minister of Britain describing Offa’s Dyke as
“the line between life and death”,
and a Tory Health Secretary hiring the Daily Mail to scuttle around traducing Welsh public services. That is constitutional vandalism and the Secretary of State’s record will be judged not by soft soap and warm words about devolution, but by what he does to condemn the war on Wales.
Stephen Crabb
Not a single Member of Parliament with a Welsh constituency could stand up and honestly say, hand on heart, that, when they get out and speak to people on the doorsteps on a Saturday morning, those people do not tell them that the quality of their health services is the No. 1 issue facing the people of Wales. It is wrong of the Welsh Labour party to seek to shut down debate about and scrutiny of the performance of its Administration in Cardiff when it comes to the most important issue for the people of Wales.
Wales Bill
Owen Smith Excerpts(10 years, 7 months ago)
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Mr Jones
We are skiing somewhat off piste, because that is not within the competence of this Bill, but there is clear correspondence between the Assembly Government and the Department for Transport on how the upgrade would be funded, and it is absolutely clear that the Welsh Government were paying for the upgrade of the valleys lines.
Owen Smith (Pontypridd) (Lab)
Does the Secretary of State wish to deny that he said on several occasions that it was his Government who were paying for the electrification of the railways in Wales, including the valleys lines?
Mr Jones
What I will say is that we made it absolutely clear that this Government were paying, directly and indirectly, for the upgrade of the main line as far as Swansea and for the valleys lines. I think that if the hon. Gentleman has a word with his friend the First Minister, he will find that there was an exchange of correspondence between the two Administrations which made the funding arrangements very clear, as did an e-mail from the Office of Rail Regulation.
Mr Jones
We have made it very clear that we need to rebalance the finances of this country before we will consider that. Let me remind the hon. Gentleman, however, that in October 2012 there was a specific agreement between the Welsh Government and the Treasury that on the occasion of each spending review there would be an assessment of the issue of convergence, and that is indeed what happened on the last occasion.
Owen Smith
The Secretary of State said a moment ago that he would be voting yes and campaigning for a yes vote in a referendum on tax-varying powers. May I take him back to the time when he was a Member of the Welsh Assembly? In his maiden speech, he said:
“We have no tax-raising powers—long may that state of affairs continue.”
When did he change his mind?
Mr Jones
Indeed: a Damascene conversion. The hon. Member for Pontypridd (Owen Smith) is a particular enthusiast—he now believes that 15p should be devolved to the Assembly, whereas as recently as 5 February he clearly stated that he did not believe in any tax devolution at all. He will clearly have some interesting explaining to do later in the debate.
Owen Smith
I think that the Secretary of State has just misquoted me. He will know that what I have said previously in the House on several occasions is that I do not believe in tax competition.
Mr Jones
The hon. Gentleman changes his mind with astonishing regularity. For example, on 5 February, in a Welsh Grand Committee debate, he said:
“I do not believe for a moment that having additional responsibility for tax-varying powers would confer any extra degree of accountability on the Welsh people.”—[Official Report, Welsh Grand Committee, 5 February 2014; c. 18.]
However, during last weekend’s speech to the Welsh Labour party conference, he spoke glowingly of the prospect of devolving 15p in the pound and said that that would
“increase both the accountability of the Assembly and its borrowing capacity too.”
He is clearly a bit at odds with himself, and we look forward to hearing what he has to say later on.
Owen Smith
Will the Secretary of State explain how the indexation method works? Has the Treasury done any analysis on whether the Welsh people would be better or worse off if the rates were not amended at all in Wales? At the moment, that is unclear.
Mr Jones
It should be entirely clear to the hon. Gentleman, because the Under-Secretary of State for Wales, my hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) took the trouble to write to the Chairman of the Grand Committee, the hon. Member for Gower (Martin Caton), on 10 February, setting out these matters in great detail. I know that a copy of that letter was sent to the hon. Gentleman, and he will know, having read it, that the provisions are as follows:
“In the first year of operation (and any transitional years) the block grant adjustment will equal the amount of tax revenue generated by the Welsh rate of income tax set at 10p. It is important to note the following:
This is the amount of income tax forfeited by the UK Government as a result of reducing the main rates of income tax by 10p in Wales. If the Welsh Government sets a rate of 10p then there will be no impact on their budget compared to current arrangements. By setting a rate of, for example, 11p or 9p the Welsh Government can increase or decrease its budget (respectively) compared to current arrangements, as the block grant adjustment will still be based on the 10p forfeited by the UK Government. That means that the higher or lower revenue resulting from a rate of 11p or 9p (rather than 10p) would not be netted off the block grant.”
Mr Jones
Well, the hon. Member for Pontypridd had not read this letter, so I am reading it out to him. It goes on:
“In subsequent years the initial deduction is indexed against movements in the UK NSND”—
that is, not savings, not dividends—
“income tax base. That means that if the UK NSND income tax base contracts by 2%, the block grant adjustment will decrease by 2%; if the tax base grows by 2%, the adjustment will increase by 2%.”
That should have been absolutely clear to the hon. Gentleman, but he clearly did not read the letter, so I am glad to have had this opportunity to acquaint him with its contents. It clearly contains the reassurance that he seeks.
Mr Jones
No, I will not give way.
Subject to the outcome of a referendum, the legislation provides for the introduction of a Welsh rate of income tax. The main UK rates of income tax would be reduced by 10p for Welsh taxpayers, and the Assembly would be able to set a new Welsh rate—a whole number or half a whole number—which would be added to the reduced UK rates. The rest of the income tax structure would remain a matter for this Parliament.
The Silk commission estimated that reducing the Welsh rate of income tax by 1p would cost the Welsh Government around £185 million, without taking account of any gains resulting from people moving to Wales to take advantage of lower tax rates. That is not an insignificant amount of money, but lower rates of income tax would boost the spending power of working people in Wales and bolster growth in the Welsh economy. Stronger economic growth in Wales could deliver a real boost in tax revenues, providing the Welsh Government with more resources to invest in devolved services and infrastructure across Wales.
Some Opposition Members, most notably the hon. Member for Pontypridd, have suggested that the devolution of an element of income tax is some sort of unspecified coalition trap, set to ensnare the Welsh Government.
Owen Smith (Pontypridd) (Lab)
This is an important debate and an important Bill. There are four broad issues under discussion. The Secretary of State has described some of them—some in more detail than others. I shall explain to the House why he glossed over some of them. The four areas I want to discuss are the electoral arrangements, the devolution of the minor taxes, the borrowing powers—the amount of borrowing in particular—and the devolution of income tax varying powers for Wales.
Let me start with electoral arrangements, which the Secretary of State glossed over in just a few phrases. The reason for that will become clear. The changes in the Bill include a reversal of the Government of Wales Act 2006 ban on candidates standing both under first past the post and on the proportional representation list in Wales. The reason that the previous Labour Government decided to introduce that ban ought to be well understood by the Secretary of State, as it stemmed from a Tammany hall-style example of an election that took place in his constituency of Clwyd West in 2003. On that occasion, the winning Labour candidate was elected on first past the post, while the losing Liberal Democrat, Conservative and Plaid Cymru candidates were also all elected, by the back door and on the back list—Tammany hall in Clwyd West. The system was designed by an earlier Labour Government, but we decided that it was clearly at odds with democracy in Wales. We decided that the people of Wales would not understand how losers could become winners.
Jonathan Evans
How can the hon. Gentleman say that that was by the back door? In essence, he is saying that those people who serve on regional lists are lesser Members of the Assembly than constituency members under a system that his Government introduced.
Owen Smith
No, I was not saying that for a moment. I was saying that I thought that the people of Wales looked askance at losers standing on two separate tickets— first past the post and on the list—to get themselves elected. We have seen why the Opposition oppose that; we believe in democracy and we believe in democracy being seen to be done. We also know why the Government want to reintroduce it in Wales and to allow people to stand both under first past the post and on the list. That reason is captured clearly in the explanatory notes to the Bill, which say explicitly that the measure will benefit smaller parties with a smaller pool of candidates—that is, the Tory party in Wales.
Wayne David
Does my hon. Friend agree that the proposed change is in danger of giving the impression that there is somehow a political elite whose members are nevertheless elected even when they lose elections?
Owen Smith
That is precisely the impression that it gives. The rationale, as I say, is very clear. The policy only benefits the minority parties in Wales—the Tory party, of course, is a minority party in Wales. It specifically benefits Leanne Wood, the leader of Plaid Cymru in Wales, who intends to stand under first past the post and on the list. I put it to the Secretary of State that the people of Wales will not look well on his gerrymandering elections in Wales in this fashion.
Hywel Williams
As we have a unified British Labour party, did the hon. Gentleman make those arguments to the Labour party in Scotland, where a Minister was elected on a dual mandate? Did he campaign to get that Minister sacked?
Owen Smith
I am not talking about Scotland today; I am talking about Wales. I am talking about the Clwyd West scandal, which the Secretary of State oversaw. I am talking about the fact that this measure is clearly in the interests of the Tory party and nationalist allies, which is why our nationalist colleagues are so keen to intervene.
Mr Jones
In the first place, let me say that I object quite strongly to the hon. Gentleman’s suggestion that I would ever be involved in gerrymandering, particularly given that it was his party that introduced this atrocity in the first place in the 2006 Act. May I refer him to what Professor Roger Scully said in his written evidence to the Welsh Affairs Committee:
“If parties that are defeated at constituency level can still win representation through the list, then it is difficult to see why that should not also apply to individuals”?
Individuals represent parties; where they happen to be standing makes no difference at all.
Owen Smith
I am just getting over the fact that the Secretary of State referred to what we thought was a fairly simple safeguarding of democracy as an “atrocity”. I am pleased that I let him intervene, because he chose to read out a piece of evidence given to the consultation on the measure. I note, however, that the Secretary of State failed to inform the House that the overwhelming majority of respondents to the consultation were opposed to the measure. Clearly, this is a nakedly partisan reversal by the current Government. Let me be clear with the House: if we get the opportunity to win back power in this place, we will reverse the measure.
Glyn Davies (Montgomeryshire) (Con)
The hon. Gentleman is making the point forcefully against the proposed change. Can he put to us any independent evidence—there is Labour party evidence, yes, but any authoritative independent evidence—that supports what he is saying?
Owen Smith
I put to the hon. Gentleman the impact assessment and the explanatory notes from his own Government. They make it clear that this is a partisan measure that will only benefit the minority parties in Wales, among which we count the Conservative party. That is what this is about.
Chris Bryant
Is it not particularly irritating that Leanne Wood can stand in Rhondda? She has done it before: she stood in 2001 for the parliamentary seat and lost very heavily. The people of Rhondda will, I am sure, return Leighton Andrews in the next Assembly elections, because he is the best Assembly Member in Wales. They cannot prevent Leanne Wood from being elected, however, because they have no means of affecting the order on the Plaid Cymru list. She gets two goes.
Owen Smith
Absolutely. The only thing I would contest in my hon. Friend’s intervention is the suggestion that Leighton Andrews is the best Assembly Member in Wales. That particular accolade goes, of course, to Mick Antoniw, the AM for Pontypridd.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. It is best if in this Chamber we discuss principles, rather than the party political chances of individual candidates.
Owen Smith
I am very grateful to you, Madam Deputy Speaker. I simply point out that the explanatory notes referred to the rationale behind the measure as being to help the party political chances of the minority parties in Wales. That is clearly what this is about.
Mr Harper
This is not on personalities, Madam Deputy Speaker. I just wanted to pick up on the point helpfully made by the hon. Member for Rhondda (Chris Bryant). Will the shadow Secretary of State tell us whether the Labour party is proposing, for both Westminster and Wales, to revert to elections in four-year terms, or whether it will stick to the five years in the Fixed-term Parliaments Act 2011?
Owen Smith
My hon. Friend the Member for Rhondda made Labour’s position clear. We are opposed to the gerrymandering shift from four years to five years to maximise the amount of time the coalition can hang on to power. However, we accept that the First Minister of Wales and the Welsh Government would like to see the term extended to guarantee, as the Secretary of State put it, that there will not be a clash between elections in Wales and Westminster. In explaining Labour’s position, my hon. Friend the Member for Rhondda is entirely right. We still feel that four years is preferable, and that five is far too long and diminishes accountability. That said, we will accept this shift and we will support this aspect of the Bill.
On double-jobbing, the third aspect of the electoral arrangements, Labour has always been clear. It has always had an internal party position whereby it does not support people having dual mandates, standing for election and holding office in the Assembly and in Westminster. We are therefore pleased that the Government are moving into line with Labour on this and we will support this aspect of the Bill.
Ian Lucas (Wrexham) (Lab)
I am interested in my hon. Friend’s observation on double-jobbing. Does he agree that it is inappropriate for Assembly Members to stand as prospective parliamentary candidates while, at the same time, serving as AMs? In particular, is it not inappropriate for them to open up constituency offices in the seats that they are fighting? Will he support an amendment to prevent AMs from standing as prospective parliamentary candidates?
Owen Smith
I will have to look carefully at my hon. Friend’s proposal and take it into consideration. I would not want to discourage Members from moving back and forth between the Assembly and Westminster, which I think is a positive state of affairs that should be encouraged, but I note the point he makes so eloquently.
Owen Smith
That is a very good point that we ought to consider. I would, of course, not support parliamentary or Assembly expenses being deployed for party political reasons.
I will move on to the minor taxes, particularly stamp duty land tax and landfill tax. We heard very little detail from the Secretary of Sport—[Interruption.] Well, there was very little sport there for anyone to have, to be perfectly honest. Hopefully we will have a bit more sport with the Secretary of State now. We will support the devolution of stamp duty land tax and landfill tax to Wales. However, there are many questions about how that will be implemented, so we will seek clarification during the passage of the Bill. Perhaps he will take note of some of these points now so that his Minister can respond to some of them later.
The first point concerns the suggestion that properties on the border between Wales and England would somehow be split, with stamp duty land tax being charged on the English portion and whatever its successor tax is being charged on the Welsh portion. It is an interesting concept. Will the Secretary of State tell us at some point during the passage of the Bill how many such properties there are on the border, given how populous it is? Will he tell us how the Government propose splitting those properties, as in many instances they are houses straddling the border? Will there be a number of bedrooms in England and a number in Wales? We know that the Government are keen on taxing bedrooms.
The second point relates to the cost of devolving that to Wales. We understand from the Bill that the Welsh Government will be asked to pay for the administration of any new tax, which is fair and just, and that that will be offset by any reduction in the cost to Her Majesty’s Government of administering the taxes as they had previously done in Wales. Given that the Secretary of State and the Treasury—this was confirmed by the Exchequer Secretary—have conducted little or no analysis of the impact of those various schemes in Wales, will he tell us how much he thinks it will cost the Welsh Government to administer and how much the offset will be?
On the even more important question of the reduction in the block grant that will come about as a result of the changes—it will be reduced by around £200 million and reviewed periodically—will the Secretary of State comment at some point during the Bill’s passage on the volatility associated with stamp duty land tax, because that figure of £200 million varies radically over time? Will he also tell us how he will calculate any differential in the rise and fall of house prices in England and Wales? By way of illustration, stamp duty land tax revenues in Wales have varied wildly over the past 20 years. They were £20 million in 1997, up to £95 million in 2003 and £130 million in 2005, and then down to £55 million in 2008-09 and £65 million last year. It is an extremely volatile tax, so I would be intrigued to know how the Treasury will account for it in any indexed reduction in the block grant, because that will have a significant impact on both the borrowing powers and, potentially, the revenues of the Welsh Assembly Government.
Geraint Davies
As I am sure my hon. Friend knows, over the past year house price inflation has been 13.2% in London and 6.8% across the UK. As I mentioned earlier, Boris Johnson is asking for stamp duty in London, where historically prices have always gone up faster. Is my hon. Friend at all concerned about the differential impact of stamp duty revenues, which he has alluded to already, plus pressure from elsewhere in the UK to have that tax resulting in a less fair and more complicated and confusing situation?
Owen Smith
That is a legitimate question. I have said previously that although we will support the devolution of stamp duty land tax and landfill tax and the putting of the income tax question to Wales, we remain concerned about tax competition. Over time, that might result in other parts of Britain wishing for similar degrees of autonomy, thereby reducing the ability of the central Exchequer to pool resources, share risk and redistribute from wealthier to less wealthy parts of Britain. That abiding concern of mine needs to be considered.
David T. C. Davies
Will the hon. Gentleman clarify his point? If he believes that the Assembly should have the power to vary income tax by up to 15p in the pound, there will inevitably be some form of tax competition—unless he wants to give the Assembly the power to prevent anywhere else from varying its levels of income tax.
Owen Smith
That is not inevitable at all. I shall discuss the issue later in my speech, when I will answer the hon. Gentleman in full.
Jonathan Edwards
In Scotland, the hon. Gentleman’s party proposes to devolve responsibility for 40% of the Scottish block grant in terms of tax revenues. How does that sit with the doomsday scenario of tax competition that he has just outlined?
Owen Smith
As I will explain later, and as I am sure the hon. Gentleman knows from my speech yesterday, we propose to replicate in Wales what is suggested by my party for Scotland. Wales will have exactly the same powers under a Labour Government. We can trust a Labour Government not to want to cut the top rate of tax and increase the unfairness of our tax system—unlike Plaid Cymru, whose economic adviser, much like the Secretary of State for Wales and the Tory leader in Wales, would like to reduce the top rate of tax.
Stephen Mosley
Tax competition will, of course, have an impact on both sides of the border. That impact will depend on whether the Welsh Assembly Government increase or decrease taxes. Does the Welsh Labour party want higher or lower tax rates in Wales?
Owen Smith
We want fair and equitable tax rates across Britain. That is why we propose to amend the Bill so that, if a Tory Government in Westminster continue to increase the injustice and unfairness of our tax system by making further cuts to taxes on the wealthiest, Welsh values and Welsh beliefs about social justice can implement a decent and equitable rate of taxation.
Owen Smith
No, I am going to move on. If the hon. Gentleman holds his water, I shall come back to income tax later.
Landfill tax is relatively uncontroversial save for the link to borrowing, to which I shall come later. There is also the link to the landfill communities fund. We heard nothing from the Secretary of State about that, but it is paid to communities with landfill sites within their boundaries. Has the Secretary of State done any analysis about the value of that fund to Wales? How much is collected and how much has been spent in Wales? How many landfill sites are there in Wales in comparison with England?
The Secretary of State is proposing that the landfill tax community fund also be devolved to Wales and that Wales should become responsible for meeting the costs of implementing a revised Welsh landfill scheme. Given that elsewhere in the Bill, the Secretary of State proposes that HMRC duties should not be replicated in Wales, why does he think the implementation of the landfill communities fund should be devolved? Is that yet another example of his wishing to pass responsibilities to Wales without there being the requisite resources?
We absolutely support the extension of borrowing powers to Wales. They are vital to make up for the £1.7 billion cut in funding for Wales—an almost 40% cut in capital funds—that the Government have implemented since 2010.
It is crucial that the Welsh Government be given the ability to borrow in order to try to back-fill the enormous holes in their budget left by the Secretary of State and his colleagues.
There are two measures relating to borrowing in the Bill, both with limits of £500 million—one to cover volatility in tax receipts and the other to cover capital. I wish to talk about the latter. The Silk commission, whose recommendations the Secretary of State keeps telling us he has largely stuck to, said that £1.3 billion should be devolved to Wales for capital borrowing, but the Bill limits it to £500 million. The Secretary of State says, as he repeated earlier, that the rationale for that is to draw a connection between the amount of money devolved to Wales—the volume of taxes—and the volume of money that might be borrowed. The Secretary of State says, as does the Command Paper on the Bill, that that is just like the position of Scotland. In fact, the Command Paper goes further than he did in saying that the Bill is generous given that in Scotland over £5 billion of taxes are devolved and £2.2 billion of borrowing is allowed—£220 million each year—and that if a similar ratio were applied to Wales, then Wales would get not £500 million but £100 million.
The problem with that rationale is that it is not true. The Scotland Act does not draw a connection, as the Secretary of State suggests, between the amount of taxes devolved to Scotland and the amount of borrowing. The Command Paper associated with the Scotland Bill said:
“Scottish Ministers will be allowed to borrow up to 10% of the Scottish capital budget any year to fund capital expenditure”—
that is, £230 million of an overall stock of £2.2 billion. The Scotland Act drew a clear correlation between the size of the capital budget and the amount that could be borrowed. The Command Paper for the Wales Bill, which the Secretary of State said was just like that for the Scotland Bill, reads:
“Specifically, the Scottish Government’s capital borrowing limit is £2.2 billion while it is taking on responsibility for tax revenues that are currently worth around £5 billion. Hence the ratio between the two is slightly less than 1:2. Applying the same tax/borrowing ratio in Wales would have given the Welsh Government a limit of around £100 million.”
The crucial question is why the Government have moved the goalposts for Wales. Why cannot Wales have the same rationale for its volume of borrowing as the Scots? That would give us about £1 billion-worth of borrowing—between £1 billion and £1.5 billion—rather than the paltry £500 million on offer.
Moreover, given the volatility of all tax returns, how sensible is it for the Government to draw a direct line between the receipts that Wales receives and the amount it can borrow? What if those receipts declined? What if we were in another recession? We would therefore see, I presume, a reduction in the amount of borrowing that Wales could undertake, which would frankly be economic stupidity.
Geraint Davies
Does my hon. Friend agree that there is a danger of moving the focus from Wales having its fair share of capital investment—for example, on transport, where there is £5,000 per head for transport in London and about £500 in Wales—because as soon as we get more borrowing powers the Government will say, “You pay for the valleys line electrification—you can borrow the money”? Is this not an excuse for making Wales pay out more from less?
Owen Smith
That is absolutely right. That is what we have been most concerned about throughout the passage of this Bill, and we describe it as a trap. The Tory party is seeking to wash its hands of Wales, and it is not interested in funding capital expenditure properly in Wales. We have therefore seen that the valleys line promise was not worth the paper it was written on, and the words of the Prime Minister and the Secretary of State were equally worthless. We are deeply concerned that this will be an excuse for the Tory Government to ask the people with the shallowest pockets in Britain to put their hands deepest into them to fund things that traditionally would have come through general taxation and from the wider benefits of our economic union.
On income tax, let me be clear: we are and remain opposed to tax competition across Britain. We believe in an economic and social union and in the ability of the central state to pool resources, share risk, and share rewards. That is especially true in Wales, as we are a net beneficiary—indeed, the greatest one—of that principle of progressivity and risk-sharing across Britain. That is why we remain opposed to the principle of undercutting one part of Britain with lower taxes in another, which is what the Secretary of State is proposing. We agree with the Government that the principle of progressivity ought to be retained. That is why we agree, broadly speaking, with the notion of the lockstep to tie bands together. But we have deep and abiding concerns about the hidden agenda that the Conservative party has, along with its nationalist colleagues, for greater tax competition in Britain.
We have reason for that concern, because the plans are not terribly well hidden. We have already heard that the leader of the Welsh Conservative group wishes to cut just the top rate of tax and that the economic adviser to the leader of the nationalist party in Wales wishes to do the same, and cut taxes only for the wealthiest in Wales. If we need any further illustration, we simply have to look at this Government’s record: they introduced a millionaire’s tax cut even as they increased VAT, which is paid, regressively, by the least well-off people in Britain.
Owen Smith
I presume the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) is pleased, is he, that the poorest of his constituents in Shrewsbury pay more as a proportion of their income as a result of the VAT increases that his party brought in? Or is he not pleased that they are paying that? [Interruption.] If he wants to intervene, I will happily sit down. I give way to his colleague.
David T. C. Davies
I am genuinely confused by what the hon. Gentleman is saying. On the one hand, at the Labour party conference, he went out and said that a Labour Government would give the Assembly the powers to vary tax by up to 15%, which is 15p in the pound. He also made that point earlier on. But now he is saying that he does not believe in any sort of competition and so one would presume that he does not think that the Assembly should be able to vary taxes at all. Unless he is suggesting that the Assembly should now have the power to tell central Government the level at which to set taxation, I do not see how he can hold those two completely contrasting positions. Will he please explain?
Owen Smith
With the greatest respect to the hon. Gentleman, it is not hard to get him confused—I say that with full respect and friendship, of course.
We have reason for our concern, because of the way in which the Tory Government have cut taxes. Labour believes that taxes should be fair and progressive, and accepts that it is not unreasonable for the Government, as they hand over borrowing powers to Wales, to draw some connection between the amount of borrowing and the amount of taxes devolved to Wales, especially given the massive cut to the capital budget. That is why we have decided that we will support the question of the devolution of taxes being put to the people of Wales, subject to what we have called a triple lock.
First, there must be an agreement that there will be fair funding for Wales, and an acknowledgment that, as Holtham has pointed out, convergence is a disbenefit for Wales. Secondly, we need an agreement that the proposal will leave Wales better off, not worse off. The Secretary of State read out the mechanics of indexation earlier on, but failed singularly to address the question I asked, which was whether the Government have conducted any sort of analysis as to whether Wales will be better or worse off, over time, given the volatility of taxes in both places. I suspect that he has not done that analysis and that is why he could not answer my substantive question of whether Wales will be better or worse off.
Owen Smith
If the hon. Gentleman is going to tell us whether Wales will be better or worse off, I will be very grateful to him.
Mr Harper
I was listening carefully to the shadow Secretary of State about being better off and worse off, particularly with regard to those on lower incomes. In the Budget of my right hon. Friend the Chancellor we increased personal allowances for everyone, including those on the lowest incomes. Why did he and his party vote against those tax cuts for low and middle-income earners?
Owen Smith
We will take not a single lesson from any Government Members about how to provide for the most vulnerable people in Britain, because this Government have left people in Wales £1,600 a year worse off and they have overseen the largest reduction in living standards since the 1870s. The last time living standards fell this far was during the time of the Paris commune and the Franco-Prussian war—that is how disastrously this Government have handled the economy in Wales. We will take no lessons—absolutely none—from them.
Given the opportunity, we would put a different question with regard to income tax varying powers for Wales, and we will seek to amend the Bill in order to do so. It would be different in two regards. First, as several Members have suggested, we would increase the amount of money by which tax might be reduced in Wales from 10p to 15p. The two reasons for doing so are very simple. First, we believe it would increase borrowing, given the causal link the Government are drawing between the volume of taxes and the amount of borrowing. Secondly—I would have thought that Members from the nationalist party in Wales would be pleased with this—it would provide a far neater degree of symmetry between what we are proposing for Wales and what we are proposing for England. We remain concerned that constant chipping and changing of the constitution, which the current Government seem keen to allow to continue, is not in the interests of the stability of Britain or Wales. We will seek to legislate to introduce symmetry between Wales and Scotland, both on the model of devolved powers and on taxation.
Jonathan Edwards
We welcome the fact that the hon. Gentleman is proposing to increase the level of income tax, but my understanding of what he said over the weekend is that he wants to keep the lockstep but remove the ability to vary the rate up or down such that it would only to be able to move up. Would he, therefore, label his new policy “lockstep-plus”?
Owen Smith
No, I would label it as a progressive change and I will explain why we feel the need to introduce such a change.
The second way in which we would change the question relates to our concerns about the fact that this Tory Government and an increasingly right-wing nationalist party in Wales are proposing to cut the top rate of tax. [Laughter.] Nationalist party Members laugh, but the economic adviser to their leader says he wants to cut only the top rate of tax. I do not know what we are meant to conclude from that, but it sounds pretty right wing to me. An alliance between the nats and the Tories in Wales seeks to reduce taxes just for the wealthiest, but we feel that that would be entirely out of step with the progressive values of Wales. That is why we will give the Welsh Government the ability to set a progressive rate for Wales, to guard against further Tory tax cuts for the wealthiest and to ensure that those Welsh values of social justice and fairness in taxation can be preserved by the Welsh people in the event of the Tories wishing to increase the injustice and unfairness of the tax system in Wales and across Britain.
Alun Cairns
The shadow Welsh Secretary is giving out so many conflicting messages that I am finding it difficult to follow him. He says that he wants to extend the tax-varying powers by 15%, but he also says that he is against tax competition, and then he says that he only wants to put taxes up. We can have lots of debates about those inconsistencies, but there is one very serious point: every nation and region of the UK is seeking to attract investment. What sort of message is being sent when the shadow Chancellor—[Interruption.] What sort of message is being sent when the shadow Welsh Secretary, who presumably hopes to be a future Welsh Secretary, says that he wants to increase taxes on higher earners?
Owen Smith
It is not too hard to confuse the hon. Gentleman sometimes, either, but I thank him for the promotion. Our position is very clear: we are not in favour of tax competition; we are in favour of increased borrowing powers. The way in which the Government have framed the Bill to draw a connection between borrowing powers and the devolved amount of money paid in tax means that we favour increasing that amount so as to increase borrowing powers for Wales. However, the progressive rate is only to be put up in the event of a Tory Government choosing to deepen the unfairness by making further cuts to the top rate. We should worry about that because the Tory party has form on it. It has already cut taxes for the wealthiest, and we know that it will continue to do so.
Owen Smith
No, I will not.
Our proposal to allow the Welsh Government to set a progressive rate of taxation in Wales would allow power to be transferred to Welsh people to guard Wales against the damage to social justice done in Britain by a Tory Government who propose to cut taxes further. The motivation is similar to that for devolution in its first inception: a Tory Government in Wales exercising—in the miner’s strike, the poll tax and other measures—a political strategy that reveals how they turn their face against social justice in Britain and use Wales as a means to exercise such injustice. We have recently seen that in the war on Wales, and the way in which Grant Shapps, the chairman of the Tory party, and the Secretary of State—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. [Interruption.] Order. The hon. Gentleman must not appear to be concerned or to question when he is called to order. [Interruption.] Order. I must say that if Conservative Members are not quiet, the shadow Secretary of State will never get to the end of his lengthy speech. In doing so, I trust that when the shadow Secretary of State refers to a Member of this House he does so, as is proper, by their constituency, not their Christian name and surname.
Owen Smith
I am very sorry, Madam Deputy Speaker. I was not, of course, rolling my eyes at your good self, but at the Secretary of State. I put on the record that my inability to recall the name of the constituency of the Minister without Portfolio, might have something to do with the multiple aliases that he deploys outside this House and which make it very difficult to recall how to refer to him within it.
Mr David Jones
I would not want the hon. Gentleman to have wasted his eye rolling. Just for clarification, is it his case that the Labour party wants devolved income tax competence to be able to increase the rate of tax for the 4,000 or so who pay the additional rate of tax in Wales, but not to cut the standard rate of tax for the 1 million-plus who pay the standard rate?
Owen Smith
I have already made that very clear in this House. I take your admonition that I should be coming to the end of my speech in the spirit in which it was intended, Madam Deputy Speaker, although I believe that I have spoken for slightly less time than the Secretary of State. [Interruption.] If it is significantly longer that is perhaps because I have addressed more of the substance of the Bill than the Secretary of State, who glossed over most of the gerrymandering and the other reasons for it.
Let us be very clear that our proposals to allow the Welsh people, if they so choose at a referendum, to give powers to the Welsh Government to set a progressive rate of income tax would guard against a Tory Government with malign instincts reducing the justice of our taxation system in Wales and increasing the outrageous targeting of Wales that has been described and exposed in other areas in recent days. We will not allow such exposure on the economy to be passed on to Wales. We will not allow Wales to be worse off as a result of the measures, and we will scrutinise the Bill extremely carefully.
Mr Hain
I could not possibly comment, but since the Government say that, perhaps it is true on this occasion.
I have quoted a Labour figure, Lord Richard, in support of my case, so I shall now quote a Liberal Democrat. Lord Carlile, the former Welsh Liberal Democrat leader, said in June 2005 that
“many in Wales will welcome...the removal of the absurd dual candidacy opportunity.”
In the same debate in the Lords, the former Conservative Secretary of State for Wales, Lord Crickhowell, said:
“The present arrangements are really pretty indefensible“.—[Official Report, House of Lords, 15 June 2005; Vol. 672, c. 1216-1217.]
A Liberal Democrat, a former Labour Member and a Conservative former Secretary of State all agree with me. I think that that helps my case.
I recall, as Secretary of State for Wales, receiving on 9 January 2006 a press release from Helen Mary Jones, in which she described herself as a Llanelli-based Assembly Member, although she was on the list. In it, she complained about money being spent on a hospital in Carmarthen instead of one in Llanelli. However, as the list Assembly Member for Mid and West Wales, she represented both towns and should really have been supporting both hospitals. Had she been discharging her list Member’s duties properly, she would not have discriminated between the two towns or their hospitals.
Mr Hain
Indeed, why did she? Why, of all the parts of the list area that she represented, did she target the one place where she had only been very narrowly defeated in 2003, invariably describing herself as the Llanelli-based Assembly Member? As it happens, I admire Helen Mary Jones for her ability and commitment, although not for her belief in an independent Wales. The 2006 Act stopped her describing herself as the Assembly Member for Llanelli, because there was one and it was not her. In the meantime, she campaigned hard and won the seat back in 2007.
The list Assembly Member for South West Wales, Bethan Jenkins, is often described as the Neath-based Assembly Member and is more active in the Neath constituency than anywhere else in the region. She has not yet had the courage to stand in the Neath constituency, but if the Bill goes through with clause 2 remaining within it, perhaps she will do so, safe in the knowledge that being defeated in Neath will not prevent her from being elected—[Interruption.] I will not respond to that intervention from the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards).
In a leaked memorandum written in August 2003, a Plaid Cymru list Assembly Member—now the party’s engaging young party leader—Leanne Wood, was embarrassingly blatant in encouraging abuse of the system using taxpayers’ money. Let me quote from that memorandum for the benefit of the House and my case. She urged Plaid Cymru Assembly list Members to concentrate tens of thousands of pounds of their local Assembly office budgets in their party’s target seats. She urged her party’s list Members to do casework only where it might benefit Plaid Cymru in those target seats and to attend civic or other events the constituency only if they thought there were votes in it.
I will now quote directly from that memorandum, entitled “What should be the role of a regional AM?” It perfectly illustrates the problem we faced before the 2006 Act banned dual candidature in Wales. Leanne Wood was hardly shy about her objectives:
“Each regional AM has an office budget and a staff budget of some considerable size. Consideration should be given to the location of their office—where would it be best for the region? Are there any target seats…within the region?”
She went on:
“We need to be thinking much more creatively as to how we better use staff budgets for furthering the aims of the party.”
She finished off with a refreshing burst of honesty:
“Regional AMs are in a unique position. They are paid to work full-time in politics and have considerable budgets at their disposal. They need not be constrained by constituency casework and events, and can be more choosy about their engagements, only attending events which further the party’s cause. This can be achieved by following one simple golden rule: On receipt of every invitation, ask ‘How can my attendance at this event further the aims of Plaid Cymru?’ If the answer is ‘very little’ or ‘not at all’, then a pro forma letter of decline should be in order.”
I could not have presented my case better than she revealingly did.
Geraint Davies
The Prime Minister said that the UK Government would pay for the electrification of the railway lines, which are essentially UK infrastructure. I think that it is disgraceful, frankly, that while £52 billion is to be spent on HS2, the Secretary of State will not even fight for that extra bit of money for Wales. We desperately need it. He should resign.
Owen Smith
I just want to clarify for the House that the Prime Minister said:
“It’s this government”—
I presume he means Her Majesty’s Government—
“that’s putting the money into the electrification of the railway line all the way up to Swansea and, of course, the valley lines.”
Welsh Affairs
Owen Smith Excerpts(10 years, 8 months ago)
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Chris Evans (Islwyn) (Lab/Co-op)
This is the first time that you have called me to speak in a debate, Madam Deputy Speaker, so may I congratulate you, somewhat belatedly, on your elevation to the Chair?
Chris Evans
Thank you very much.
Like my right hon. Friend the Member for Torfaen (Paul Murphy), who is not in his place, I bemoan the lack of the St David’s day debate, which has been held since 1944. When Aneurin Bevan spoke in this place in 1944, he said that there were no Welsh problems, only problems. The wonderful thing about the Welsh day debate that we are missing is that it allows us to bring up issues that usually go unnoticed in this House. Today, I will bring up the issue of truancy in schools.
Truancy is not simply a matter for schools; increasingly, it affects the whole of society. It is a complex issue. It is not simply about pupils skipping school to go to the park with their friends, but is often a sign of deeper problems at home and, in some cases, of abuse. If a pupil truants from school often enough, they will be excluded. They will thereby miss out not only on a worthwhile education, but on the support network that schools provide. That can result in people falling in with the wrong crowd and getting into trouble with the police, making them less desirable to potential employers.
When I visit schools in my constituency, I am always impressed by the level of pastoral care that students receive. Head teachers have told me that for some students, that care is arguably more important than traditional classes. For many students, the support that they receive in school is invaluable. That is why exclusions and truancy are serious issues.
Over the past few years, the Welsh Government have done an incredible amount of work to prevent schoolchildren from being permanently excluded. Just 102 pupils were permanently removed from Welsh schools last year, which is almost 100 fewer than in 2009-10, when there were 200 exclusions. That is a step in the right direction. However, I will focus today on what is known as “soft exclusion”.
The number of temporary exclusions is still too high. There were 17,508 temporary exclusions in 2011-12 in Wales alone. More research and data are needed to explain why that is occurring. In October 2009, my predecessor, Lord Touhig, asked a parliamentary question about what research the previous Government had done on the effects of exclusion on pupils. He was told that no research had been commissioned. Sadly, that is still the case. What do young people do when they are excluded temporarily? Do they miss out on work? In reality, we just do not know.
In preparation for this debate, I read a report by the charity, Barnardo’s, which did some research on the use of unlawful exclusions. That is when schools ask parents to keep their children away from school without providing a formal notification of exclusion. Local authorities know nothing about such exclusions. There is obviously not a huge amount of data in this area, which is unfortunate, but the Barnardo’s study is based on anecdotal evidence.
I shall quote from the report. One parent said:
“From year 7 the head of year would phone me to say he’d been excluded, but no time scale would be mentioned. A letter would arrive two days later telling me how many days it was. There was no work set or given.”
The report heard evidence from parents of a lack of dialogue between schools and families, which leaves the pupils falling behind. One parent said:
“The head of year would ring me and say they were thinking of excluding him. Sometimes there would be a letter. It takes two days or more to arrive and it would say work would be set two days after that, but by then the exclusion time would have passed.”
The police in Blackwood say that the problems in the market area are caused mainly by young people who have been excluded, whether temporarily or permanently. That demonstrates the drain on police resources and the wider effect that this issue has on society. I was even alarmed to find, shockingly and tragically, that pupils with special needs accounted for a little over 60% of all exclusions in Wales in 2012-13, and those with school action and school action plus special educational needs had the highest rate of permanent exclusions at 0.6% per 1,000 pupils. A report by the charity Ambitious about Autism found that four in 10 children with autism had been informally excluded temporarily.
Alun Cairns
Cardiff university is a fantastic university. The funding structure in Wales is starving the university of funding, as compared to its counterparts in England. The question we need to be asking ourselves is this: how can Cardiff university maintain its standards and status when, because of the different funding structure, there is more funding going into higher education in Wales? That is another sign of the reputational damage being caused by the decisions that are being taken.
Owen Smith
The hon. Gentleman says that he wants to show some respect for devolution, but could he be a little more impartial with the facts he employs? Will he tell us, for example, whether he accepts that the Welsh Government should be congratulated on a fall of just 250 in the number of students applying to university in Wales, when the fall in England has been 25,000—a hundredfold difference?
Alun Cairns
That is the sort of response that does not get us anywhere. I am looking for an intelligent debate to accept the reality of the situation. Unless we accept the reality, we cannot take the intelligent decisions needed to make changes.
In the time that remains, I want to mention health. I had hoped that yesterday was a turning point. The right hon. Member for Cynon Valley (Ann Clwyd) made an extremely powerful contribution to the debate yesterday. Two weeks earlier, we had learned of data she had brought to the attention of Professor Sir Bruce Keogh. He wrote to his counterpart in Wales, seeking to probe the data that had been shared with him. The response came from a politician, rather than a clinician, who was furious and said that this was an attempt by the Conservative party to
“drag Welsh NHS through the mud”.
The reality, however, is that Sir Bruce Keogh stated in the e-mail that he did not know enough about it, but thought there was a potential smokescreen. There needs to be an intelligent debate, otherwise its reputation will be damaged further.
Owen Smith (Pontypridd) (Lab)
I congratulate my hon. Friend the Member for Ynys Môn (Albert Owen) on securing this debate today. It has been an extraordinarily wide-ranging debate, as is traditionally the case with St David’s day debates. Many Members rightly highlighted the importance of having time in this House to debate the issues of Wales. I think that we can all agree that in the past three years, insufficient time has been spent on debating Welsh matters. Ignorance of the realities in Wales has perhaps grown in this House as a result. I hope that we have done something today to redress that imbalance and to shed some light on the issues, as I hope to do in my short remarks.
My hon. Friend made a particularly enlightening and topical opening to today’s debate. He talked about the need to reflect the fact that people in Wales have shared identities in that they are both Welsh citizens and British citizens. Indeed, they can play rugby for Wales and for the British Lions—they can captain either team and still feel themselves to be British and Welsh. That is something that I feel very strongly about and that I hope everyone in this House supports. My hon. Friend also said that we need to capitalise on the great economic strengths of our country, and especially on the energy and tourism potential of Wales. I entirely endorse all that he said in that regard.
My right hon. Friend the Member for Torfaen (Paul Murphy) reminded us of the history of the St David’s day debate. He even told us that this was the day of St Colette, the patron saint of pregnant women. At this point, I cannot help but congratulate Kate Groucutt, who is pregnant and leaving my office. She has been the special adviser to the Welsh Affairs team over the past few years.
More importantly, but slightly surreally, my right hon. Friend talked about the problems in his constituency of head shops, which sell legal highs. The problem is massive and growing in communities such as his and mine, and we must get to grips with it notwithstanding the difficulties of legislating in this complicated area.
My hon. Friend the Member for Newport East (Jessica Morden) talked about the economy of Wales, and highlighted two issues in her constituency that have wider implications and ramifications across the UK. The first was the loss of steel jobs at the Orb works, due to the inordinately high energy prices that companies in Britain are paying compared with their European competitors. I am sure that we all understand that we need to get to grips with that matter not just for individual consumers of energy in this country but for vital foundational industries.
The second was the problem of offshore jobs. My hon. Friend highlighted the irony of a Government who claim to be seeking to reshore jobs overseeing the offshoring of Government jobs in the Ministry of Justice shared services centre in Newport. You could not make it up, Madam Deputy Speaker, but it is what is happening.
My hon. Friend the Member for Islwyn (Chris Evans) raised the important issue of truancy and called for improvements in the way in which our schools deal with challenging children in Britain, and I entirely agree with him. My hon. Friend the Member for Blaenau Gwent (Nick Smith) also talked about the economy and threw his weight behind the proposal for a motor sport track and arena in Blaenau Gwent, and I support him on that, as I know the Secretary of State does. My hon. Friend the Member for Bridgend (Mrs Moon) talked about women in Wales and the need for others to promote the talents of women within Wales. She highlighted the fact that the Labour party has done that in the National Assembly, where women make up almost 45% of all groups, and here in Westminster, where the Labour party stands alone in having a significant proportion of female members—32% of the current parliamentary Labour party. We need more, but it is a good start and better than what we are seeing from the Government.
The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) talked about local government and the hon. Member for Arfon (Hywel Williams) talked about devolution and suggested that I should be sophisticated and enlightening when addressing it myself, and I shall seek to do so at an appropriate moment.
Government Members told us that they wanted to be respectful and positive—I think those were the words—about Wales and then failed to offer a single respectful and positive word; that was certainly the case for the Conservative Members. There were a number of positive remarks made by Liberal Democrat Members, such as the hon. Member for Ceredigion (Mr Williams), who congratulated the Welsh Government on their investment in flood defences in Wales; £4 million has been invested, in distinct contradiction to the direction of travel in Westminster where we have seen £97 million cut from flood defences, as confirmed last week by the Office for National Statistics. Perhaps that is why we did not see the same degree of problems in Wales as we did elsewhere.
The hon. Members for Monmouth (David T. C. Davies), for Montgomeryshire (Glyn Davies) and for Vale of Glamorgan (Alun Cairns) were particularly jaundiced in their view of Wales and highlighted the volume of column inches about what they saw as poor public service performance. They bemoaned the fact that Wales was getting such bad press, but they know full well why Wales is getting a bad press and it is not because of the performance of Welsh public services and certainly not a fair representation—
Owen Smith
I am not going to give way—[Interruption.] No, I will not give way, because I—[Interruption.] Okay, I will give way once.
Alun Cairns
I am grateful to the hon. Gentleman for giving way, but mortality rates, cancer waiting times and A and E access are just three examples; diagnostics in the health service are another. Those are fundamental issues that are dominating the UK newspapers because of poor performance in Wales. Is that not a sad situation?
Owen Smith
If the hon. Gentlemen can point to a hospital in Wales in which there are higher levels of unexpected mortality than he thinks there ought to be, I will listen seriously to him. However, he has not offered that—
Owen Smith
He says the Princess of Wales, where risk adjusted mortality indices improved by more than 20% over the past three years. We have seen significant improvements in mortality indices in Wales and he will know that people cannot do what he and his colleagues have done—and worse, what the Prime Minister has done on 29 occasions in this House—and take out of context extraordinarily complex mortality statistics and use them as a means to smear the Welsh NHS. Only this week, I was confronted with the reality of that smear campaign when I was contacted by members of the Welsh NHS work force to ask me—
Owen Smith
No, it was not a union. Somebody working in the NHS contacted me on their own behalf to ask what they could do to stop the Tories’ smear campaign dragging the reputation of the Welsh NHS through the mud. Members do not need to take my word for it; they could take the words of doctors in Wales. The British Medical Association in Wales said very clearly that this was “a wicked”—[Interruption.] The Under-Secretary says from a sedentary position that this is about the trade unions, implying that it is somehow connected to the Labour party. He knows that that is not the case; he knows—[Interruption.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. We do not raise matters from a sedentary position. The hon. Gentleman is about to conclude.
Owen Smith
I am grateful, Madam Deputy Speaker.
The BMA has said that the claims are a “wicked slander”, perpetrated by people in whose interests it is to undermine the NHS, to perpetuate the myth that there is significantly worse performance in the NHS in Wales, compared with England. It is not true, it has not been true in the past and it will not be true in the future. What is true is that Welsh workers and the Welsh people are suffering lower wages, higher job insecurity, higher energy prices and greater difficulties as a result of this Government’s economic mismanagement of this country. In contrast, the Labour Government in Wales have delivered economically. They have delivered a lower unemployment rate in Wales than in the UK as a whole. I conclude by congratulating them on that.
Commission on Devolution in Wales
Owen Smith Excerpts(10 years, 11 months ago)
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Owen Smith (Pontypridd) (Lab)
I thank the Secretary of State for advance sight of his statement on this historic occasion. It is almost a year since the Silk Commission produced its report and 16 years since the last time a Conservative Secretary of State for Wales made a statement in this House—better late than never. Labour Members certainly welcome the acceptance of the Silk recommendations, especially coming from a Secretary of State who once described devolution as constitutional damage.
I would like to thank Paul Silk and his team for their work in producing the report. That report and the Government’s response to it are of enormous significance to the people of Wales—a part of the UK that has been harder hit by this Tory Government than anywhere else. Welsh wages have fallen faster and further than anywhere else in the UK, the Welsh budget has been cut by £1.7 billion by the current Tory Government, and we have seen energy and other bills rise higher and faster than elsewhere. That is the reality of the context of today’s announcement.
Because of those cuts, the Welsh Government have sought borrowing powers and agreed with the Silk recommendations that Wales should be able to exercise those powers, as Scotland and Northern Ireland do at present. We welcome the confirmation that Wales will in future have the capacity to borrow in order to invest in infrastructure, but will the Secretary of State clarify some of the many details that are left outstanding after today’s announcement?
First, will he clarify exactly when he expects that package of borrowing to be in place for the initial tranche of investment in the M4 and other roads? More importantly, will he tell us about the process by which that level of borrowing will be agreed? The Government previously indicated that the devolution of the minor taxes such as stamp duty and landfill tax, which are being devolved today, would be sufficient to trigger significant borrowing powers for the Welsh Government. Today’s statement, however, seems to suggest that that borrowing would now be contingent on income tax-varying powers being taken up in Wales. Will the Secretary of State confirm whether that is the case and say how much borrowing will be released once the minor taxes are devolved? Will he further confirm whether a mechanism, a set of methods and a formula similar to that used in Scotland under the Scotland Act 2012, which affords about £230 million of borrowing to Scotland, would be the method employed in Wales?
We welcome the devolution of the minor taxes—stamp duty and landfill tax—as this gives the Welsh Government the capacity to make some changes to the Welsh economy and to invest in order to grow and create jobs. Prior to the introduction of these new Welsh taxes, we would need to be very clear about whether the Welsh people would be better or worse off. That is our primary concern, so will the Secretary of State explain exactly how the process and methods will be agreed and set for offsetting the block grant by the amount devolved to Wales under the minor taxes?
The most significant aspect of today’s announcement relates to income tax and the proposal that the Government will legislate for a referendum in which the Welsh people may be asked if they want a proportion of income tax to be devolved to Wales. Our position on income tax is that we support the proposal as laid out by Silk on the basis of a “triple lock”, whereby we will judge whether the people of Wales will be worse off, we will see through the referendum whether the people of Wales want to take that responsibility and we will see whether fair funding is agreed for Wales. That remains our position today.
It is a significant that, in making today’s announcement, the Government have rejected Silk’s proposal to devolve the income tax bands independently of one another. Can the Secretary of State confirm why he has rejected that recommendation? The Government’s written statement suggests the reason is that the UK Government have discovered an interest in the progressivity of the UK tax system and are concerned that devolving those bands independently of one another might reduce that progressivity. That is ironic from a Government who have cut taxes for the wealthiest people in Wales. Will the right hon. Gentleman further confirm that the leader of the Welsh Conservatives in Cardiff Bay has said that he would use the tax powers only for the wealthiest by cutting only the 40% band, thus continuing the anti-progressive policies being pursued in Westminster?
I noted from the media today that the Secretary of State, in contrast, would cut all the bands by 1%. He will know that that would result in a £200 million shortfall in the Welsh Assembly’s budget. Will he tell us exactly how he would fill that shortfall, or, alternatively, tell us which services he suggests that the Welsh Government should cut to make the tax cut affordable?
May I ask the Secretary of State about fair funding? Last year the Government said that there was evidence of convergence in funding between Wales and England. Today’s statement commits them to
“review relative levels of funding for Wales and England in advance of each spending review and, if convergence is forecast to resume, to discuss options to address the issue in a fair and affordable manner.”
Will the Secretary of State tell us exactly what the result of those reviews will be? If there is evidence of convergence, will action be taken? Will we see what Paul Silk wanted, namely a review of the Barnett formula?
Without a hint of irony, the statement provides for the Government to give Wales a facility to save any “surplus revenues” that it might have lying around. Given that the Welsh budget has been cut by £1.7 billion over the last three years, can the Secretary of State tell us when that surplus is expected to materialise? Or have we just been given another set of false promises by a Government who do not believe in the Welsh people, and will not deliver for them? Is today another day on which we should beware Tories bearing gifts?
Mr Jones
I am grateful to the shadow Secretary of State for what I think was a welcome for my announcement. However, we heard the predictable preamble about Wales having been hit harder by the Government than any other part of the United Kingdom. In fact, the grant to the Welsh Government has been reduced proportionately less than that of any other Whitehall spending Department. Given that we are living in times of extreme difficulty—caused to no small extent by the last Labour Government—I should have thought that the hon. Gentleman would welcome the support that this Government have given the Welsh Government and the Welsh Assembly.
The hon. Gentleman asked a number of specific questions, the first few of which related to when the borrowing powers would be made available. I am pleased to be able to tell him that, as was announced in my written ministerial statement, the Welsh Government have already been given assurances that they can negotiate with the Treasury for borrowing powers in respect of the M4 and the north Wales expressway to take effect immediately. We will fund that by allowing the Welsh Government’s current borrowing powers to be used without any adverse impact on the departmental expenditure limit.
The hon. Gentleman welcomed the devolution of taxes. The two larger taxes that are being devolved are landfill tax and stamp duty land tax. That will of itself provide a funding stream against which the Welsh Assembly Government can borrow, but we want income tax to be devolved as well. The hon. Gentleman is right: I do support the devolution of income tax. I urge the Welsh Assembly Government to trigger the referendum as soon as they can, because the Conservative party will be campaigning vociferously for a yes vote in that referendum, and, furthermore, for a cut in income tax.
The hon. Gentleman made a point that revealed the poverty of the Labour party’s ambition. We believe that devolution should be used to give a competitive edge to Wales, and that the powers that are devolved should be used to make Wales a more prosperous place. Very far from wanting the tax cuts to apply to the wealthiest people in Wales, we would like them to apply across the board, to everybody in Wales, so that the brightest and best want to come to Wales to set up business, to make their livings and to look forward to a brighter future. That is what differentiates the Labour party from the Conservative party. Interestingly, the Welsh Finance Minister, Jane Hutt, hailed today’s announcement as
“a good deal for Wales, and a big step forward for devolution.”
However, the Eeyore-like shadow Secretary of State prefers to look for a cloud in every silver lining. He is out of step with everybody except himself.
Wales
Owen Smith Excerpts(11 years, 8 months ago)
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Owen Smith (Pontypridd) (Lab)
Last week the Joseph Rowntree Foundation warned that Wales faces a decade of destitution as a result of policies pursued by this Government, and the Welsh Government said that £600 million is being taken out of the pockets of ordinary Welsh people. Is the Secretary of State telling the Prime Minister and his Cabinet colleagues what people are saying about his Government in Wales, or is he just there to cheerlead for policies that are hammering his country?
Elections (National Assembly for Wales)
Owen Smith Excerpts(12 years, 4 months ago)
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Owen Smith (Pontypridd) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my right hon. Friend the Member for Torfaen (Paul Murphy) on securing this useful and important debate. It is a profound matter of regret to me, and to my right hon. Friend, that the Secretary of State is not here to listen to the arguments on both sides, not least because the Minister’s comments, and their further underlining of the clear disagreement between the Prime Minister and the First Minister, are a matter of the utmost seriousness. The word of either the Prime Minister or the First Minister is being called into question, and as the Secretary of State is at the heart of that unfortunate disagreement, it ill behoves her not to engage in the debate today.
It is no surprise, however, that the Secretary of State is not here, because that is in keeping with the ham-fisted, high-handed manner in which she has dealt with the matter over recent weeks. She has accused me of playing games. I put it to her that we are not playing games but merely articulating the views of Opposition Members and, I suggest, the National Assembly, which are already on record. This is a matter of profound significance to the National Assembly and the people of Wales. I ask whether there is any other Welsh issue of this significance being debated in the House this morning. I did not see anything on the Order Paper that should be detaining the Secretary of State. I certainly felt that my attendance here was important enough to warrant my sending my apologies to the shadow Cabinet, which meets as we speak.
I want to make something clear about the debate that we did not have this week. I wrote to the Secretary of State several weeks ago, telling her that I thought this such an important issue that it ought to be debated on the Floor of the House. She did not have the courtesy to write back with her opinion but merely tabled, through the usual channels, a debate in the Welsh Grand Committee. That was why we objected to the debate; it was nothing to do with the timing, but because we felt it ill-considered and ill-judged to debate something of this significance in Committee, and not to expose a constitutional matter to wider discussion.
This is a high-handed and ham-fisted way of going about things. As my right hon. Friend the Member for Torfaen made clear in his eloquent remarks, the Green Paper is highly partisan. It represents a barely veiled political agenda of increasing representation for minority parties in Wales. As my hon. Friend the Member for Caerphilly (Wayne David) said, that agenda is, incredibly enough, there in black and white in the Green Paper. I include among those minority parties the Welsh Tory party and Plaid Cymru, a party that, extraordinarily, is not represented in this debate about the National Assembly for Wales.
Jonathan Evans
Does the fact that the Labour party got 43% of the vote in the Assembly elections not make it a minority party?
Owen Smith
No, it very clearly does not. The Labour party is here today speaking for Wales, and it is a shame that the hon. Gentleman sought earlier to misrepresent the options in the Green Paper. He suggested that on the table was one option of keeping the status quo, and he knows that that is not straightforwardly true. The option is to keep 40-20, but to shift to a more equalised block of constituencies by changing all the constituencies across Wales, with none of the benefits of retaining coterminosity with the parliamentary boundaries. Even that minor change is so significant that the consent of the National Assembly for Wales, as proxy for the people of Wales, ought to be sought.
The Green Paper is partisan, and also arrogant, in that it completely eschews the tradition of seeking consensus on issues such as constitutional change. When in office, the Labour party sought change through cross-party consensus, including when we proposed changes to the National Assembly for Wales in election manifestos. Amusingly enough, even the Tory party is split on this issue, with the party in Westminster taking one position in documents, and the party in Wales, which is perhaps more in touch with the people of Wales, taking an alternative one.
This is essentially an anti-devolution Green Paper, at odds with the spirit, if not the law, of devolution, as my right hon. Friend the Member for Torfaen said. How else can we describe a proposal from a Westminster-based, Tory-led Government for changes to both constituencies and elections to the National Assembly for Wales—a proposal that does not require the consent of the Assembly or the people of Wales? The proposal lacks even a modicum of a mandate, and thus lacks legitimacy, and it should be called out for what it is.
The two options are clear. One is to keep the 40-20 split but change the nature of the boundaries. That has all the disbenefits of reorganisation and none of the benefits of retaining coterminosity. That is why, of course, the Secretary of State is not minded to take the option forward. It is a red herring, designed to deceive. The second option is to shift to 30 on a list and 30 first past the post, increasing the number of Members elected via proportional representation, and decreasing the number directly elected by 10.
No one is suggesting that the nature of the National Assembly should be set in stone or fixed in aspic. Nobody is suggesting that no changes should be proposed and no reforms undertaken. Many people in Wales have lots of ideas—we have heard some suggestions today—about how the National Assembly could be reformed, but few of those people would have the temerity to propose imposing those changes on the National Assembly and the people of Wales without seeking their consent in any meaningful fashion. Fewer still would have the nerve to propose changes without any real evidence or impact assessment of how they will affect voting patterns or election turnout in Wales.
However, our absent Secretary of State proposes to do just that, giving effectively one option, the justification for which is cut and pasted from the Parliamentary Voting System and Constituencies Act 2011, with nothing to back up either that or the alternative except the threat that if the option she favours is not adopted, the other even more destructive and disruptive option will be adopted. So much for the respect agenda.
That is happening despite the fact that in the Select Committee on Welsh Affairs last year, when I suggested that the Secretary of State had precisely such a plan in the back of her mind and warned her not to try to gerrymander the map in Wales, she told me that
“before anything goes forward to do with boundaries there would be a loud, long and large period of consultation”.
Consulting on a flimsy Green Paper for a few months over the summer, and treating the National Assembly as a consultee like any other individual or institutional consultee in Wales, while the Secretary of State for Wales refuses to submit to any meaningful scrutiny, does not constitute a loud, long or large consultation to my mind. It is certainly not appropriate to the changes proposed.
As my right hon. Friend the Member for Torfaen said, consider the contrast between that and the attitude taken by this Tory Government when they sought to introduce changes to the nature of the voting arrangements for Parliament in Westminster. We had a three-month, significantly contested and well-resourced campaign, followed by a national referendum. I am not necessarily suggesting that that is comparable to the changes proposed in the Green Paper, nor am I necessarily suggesting, as some have done, that the changes necessitate a referendum. However, I put it to Members that at the very least, the consent of the National Assembly must be obtained as a proxy for that of the people of Wales if there is to be no referendum on the changes.
Consider, too, the changes mentioned in this debate in respect of the passage of the Scotland Act 2012. This Government explicitly accepted that the Scottish Parliament should have to consent to the views included in the Bill before it could become law in Scotland. Why does this Welsh Secretary, parachuted into Wales, not feel that a similar job should be done for Wales? Why does she treat the National Assembly for Wales with such disdain when her counterpart in Scotland treated the Scottish Parliament with such respect?
All that prompts the question: why these changes, and why now? Like others here, I cannot but conclude that it is about narrow party self-interest for smaller parties that will benefit from an increased proportion of Members in the National Assembly being elected by proportional representation. To proffer a piece of evidence in support of that contention, think back to 1999, when the Labour party was well supported by the people of Wales and did well at the elections, with the Tories winning just one seat by first past the post. What was the impact for them on the list? Eight seats were delivered. I suggest that a similar position might well come about, with similarly happy benefit for Conservative Members, if the proposals are adopted.
One cannot help thinking that the reason why Plaid Cymru is so quiet on the issue is that the party has cooked up a deal with the Conservative Secretary of State to accept the proposals, because it knows that they will benefit Plaid Cymru, too. The people of Wales will note Plaid Cymru Members’ absence from this debate and understand precisely what they are about.
Owen Smith
I find it absolutely amazing that Members from the so-called party of Wales should be absent from a debate on electoral arrangements for the people of Wales alone. It is an absolute dereliction of duty for them not to be here engaging in this debate.
Suspicions only harden when we consider the fact that No. 10 has now been dragged into the debate about Wales. That too strikes me as extraordinary. No. 10 is now reduced to the kind of weasel words that we read in the newspaper this morning and heard repeated by the Minister earlier today:
“the Assembly should be fully engaged in the process of deciding its future electoral arrangements”.
What does “fully engaged” mean? Does it mean consulted with, like any Tom, Dick and Harry in Wales, any public body or any MP? I suggest that that is not full engagement. Equally weaselly is the Prime Minister’s letter to the First Minister. He did not say that the changes in Wales should be decided by the people of Wales, but he certainly said, in the words of the First Minister, that the people of Wales should agree with the changes through the National Assembly. That is a bone of contention to which we will need to return later.
In conclusion, I have some questions for the Minister sent here today by his extremely busy Secretary of State to represent the Wales Office. First, what exactly does No. 10 mean by “fully engaging” with the National Assembly? Does it mean anything more than consulting with it, as with others in Wales?
What weight will the consultation accord the views of the National Assembly? To quote the motion passed there by the Tories, Plaid Cymru and Labour, it has already voted to:
“This Assembly recognises that there is absolutely no mandate to change the current electoral system in Wales and that any future change should be put to the people of Wales.”
Given this Government’s complexion, what notice will be paid in particular to the views of the leader of the Welsh Tories, Andrew R.T. Davies? He said:
“I think the Assembly should determine its own boundaries”.
In another interview, he said:
“I am in favour of the status quo”.
Ultimately, what will this Government do if, as seems likely, the National Assembly holds to its course and continues to submit evidence to the consultation saying that it does not believe that there is a mandate for the changes and does not support them? Will the Secretary of State for Wales continue to drive through the changes in the teeth of clear opposition from the National Assembly? If so, something has gone badly awry in the arrangements between Wales and Westminster. The Minister and his Secretary of State would do extremely well to consider the damage that will be done to that relationship if they press ahead. Devolution was intended not to diminish the voice of Wales within the UK, but to amplify it. It was intended to grant greater control over national affairs to the people of Wales via the National Assembly, within the framework of the UK. That framework is delicate, as events in Scotland are displaying only too clearly. All of us who believe that we in the UK are better together should reflect on that, and on the impact on that delicate framework.
Imposing ill-considered and ill-judged changes from Westminster on the National Assembly will only damage it. I am not playing games; I am simply stating the facts. I hope that the Minister has some answers on behalf of his Secretary of State.
Oral Answers to Questions
Owen Smith Excerpts(12 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mrs Gillan
My distinguished hon. Friend has himself served in the armed forces, and I agree with him entirely. On 2 June I attended the home-coming parade and the reception in Cardiff for the Queen’s Dragoon Guards as part of the Queen’s diamond jubilee celebrations, and I know that the morale of units that are so closely associated with Wales needs to continue.
Owen Smith (Pontypridd) (Lab)
May I first associate myself with the Secretary of State’s remarks about the sacrifice made by all the Welsh men and women who fought for this country? They should never be forgotten in the House or in the country.
I wonder whether the Secretary of State could bring herself to comment on the worrying rumours that, while the Welsh cavalry may well be saved following a campaign across the House, the price that we may pay for that is the loss of one of the battalions of the Royal Welsh, with its 700 jobs in Wales?
Mrs Gillan
Let me just remind the House that the last Labour Government left the MOD budget with a £38 billion black hole, and that it has been brought back into balance for the first time in a generation by this Government. I assure the hon. Gentleman—who is a Johnny-come-lately to this campaign—that I will continue to give my undiluted support to our Welsh regiments, but, as I have said, no decisions have yet been made. There is a great deal of speculation, and I do not think that the hon. Gentleman should make people feel so insecure.
Owen Smith
Despite the bluster, the Secretary of State’s silence on the fate of the Royal Welsh will have been heard throughout the armed forces, including those in Afghanistan, where the 1st Battalion is currently serving. Does she not agree that it will be a truly pyrrhic victory for the QDG if a cap badge is saved in Wales but we lose a battalion with several hundred jobs?
Mrs Gillan
I hear what the hon. Gentleman says, but let me repeat that no decisions have been made. Let me also repeat that I will take no lessons from a party that got rid of the Royal Welch Fusiliers and the Royal Regiment of Wales. I can take advice from much better people than the hon. Gentleman.
Oral Answers to Questions
Owen Smith Excerpts(12 years, 9 months ago)
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Mr Speaker
Order. The House must come to order. We are discussing matters of intense interest, especially to the people of Wales.
Owen Smith (Pontypridd) (Lab)
8. What assessment she has made of the likely change in levels of public sector employment in Wales in the period up to 2017.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
A forecast of public sector job losses was published last November by the Office for Budgetary Responsibility. It was based on UK-wide macro-economic data and no regional breakdown is available.
Owen Smith
As we have heard this morning, it is not only public sector jobs that are at risk in Wales. Does the Under-Secretary agree that the Peacocks jobs in jeopardy in my constituency and throughout the country are at risk largely because of the Government’s economic decisions to choke off consumer demand and raise VAT?
Mr Jones
Of course, I share the hon. Gentleman’s concern about the plight of Peacocks. However, so far as I can see from the reports that I have had to date, it is nothing to do with the Government’s economic policy, but everything to do with Peacocks’ banking arrangements. The Wales Office is intensely concerned about the matter and will continue to express concern.