Wales Bill

Paul Flynn Excerpts

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

[Alun Cairns]

I am grateful to the hon. Gentleman for the scrutiny he provided at previous stages, and for his comments just now. I will come to the numbers later, but I hope he recognises that there was a mature discussion between two institutions, and he is absolutely right that this measure paves the way for the Welsh Government to use their new borrowing powers to legislate for and finance things that really matter to the Welsh people.

The agreement ensures that, when tax powers are devolved, the Welsh Government will have fair funding for the long term, taking into account Welsh tax capacity and treating population change consistently across tax and spending. In doing so, we are delivering on the independent Holtham commission’s ambition of a long-term fair funding settlement and agreement for Wales.

Indeed, I spoke to Professor Holtham only last week, and he is clear that this is a “very fair settlement” and that there is now no case to argue that Wales is underfunded. The Government previously stated that Wales receives a fair settlement. This cements that in place and enhances the settlement.

[Paul Flynn (Newport West) (Lab)]

Does not the Secretary of State agree that the fiscal framework is already out of date because it is pre-Brexit and we now know that Wales will suffer severely if we come out of the single market? Is it not true that the Bill is just another stepping-stone on the way to a new Bill, which we will get when the terms of Brexit are declared?

[Alun Cairns]

The hon. Gentleman is well aware that we have a positive dialogue with the Welsh Government on the nature and framework of the process and the ultimate outcomes of exiting the EU. I was happy to receive yesterday from the Welsh Government a paper outlining their proposals, and we will of course give it close consideration. It will be subject to a future Joint Ministerial Committee for the European negotiations.

--- Later in debate ---

[Jo Stevens (Cardiff Central) (Lab)]

In the spirit in which the Bill has so far developed, we will this afternoon see something of a rarity in my life: I will, on occasions, agree with the Government and some of the measures they are taking. Before the Secretary of State gets too excited about that, though, it has to be put on record that the Bill has had a chequered history. It started out very badly—so badly that the Government had to take it away and start all over again. The second attempt was better, and we have now reached a point at which although it is still far from ideal, there has been considerable movement by the Government as a result of pressure from the Opposition and in the other place.

I put on record my thanks to my predecessors, my hon. Friends the Members for Llanelli (Nia Griffith) and for Newport West (Paul Flynn), and their Front-Bench teams, for their work during the Bill’s passage. I particularly thank my colleague Baroness Morgan of Ely and our team in the other place for the sterling efforts they made to secure numerous improvements to the Bill through debate and discussions with the Government, who took a largely constructive approach to concessions. We therefore support the Bill in its current, improved form, and will not attempt to frustrate its passage.

I shall not detain the House longer than necessary on matters on which there is agreement, but I wish to make substantial points on the Opposition amendments at the tail end of the selection list, on which I may wish to test the will of the House. We are hopeful that we can make good progress and reach those amendments.

Given the importance of the consequences of Lords amendments 9 and 44, it is right to put something on the record about them. They will raise the Welsh Government’s overall capital borrowing ability to £1 billion, and from April 2019 the annual capital borrowing limit will rise to £150 million—15% of the overall figure. As the Secretary of State pointed out, all that stems from the fiscal framework agreed by the Government here in Westminster and the Welsh Assembly Government. It is welcome news; I congratulate the Welsh Government. Like the Secretary of State, I particularly congratulate the Cabinet Secretary for Finance and Local Government, Mark Drakeford, for working so hard to seal this important deal with the UK Government. I also pay tribute to the Government for moving on this issue.

The increase in borrowing ability is so important because the austerity that successive Conservative Chancellors have imposed on Wales has had severe consequences for the Welsh Government’s ability to invest, particularly in infrastructure. As has been pointed out, with the loss of European funding that Wales will experience once we leave the EU, the ability of the Welsh Government to invest in infrastructure becomes even more critical. Therefore, moves to enhance the Welsh Government’s ability to invest in and develop infrastructure for the future are of course welcome. It is all about investing in Wales and boosting our economy, and this measure will go a significant way towards doing that.

Sensible infrastructure investment led by the Welsh Government will help improve productivity rates in Wales and increase the gross value added of Wales. However, as Members will hear me say several times today, the Government plans do not go far enough. In the other place, my Front-Bench colleague, Baroness Morgan, tabled an amendment to raise the borrowing cap to £2 billion based on the Holtham recommendations. We accept £1 billion as a step forward, but it is clearly not enough to properly meet the demands of the Welsh economy. Before the Minister responds to that point, I caution the Government against viewing the cap as a target. The point is to see the flexibility and dynamism provided by the higher limit, rather than to look at only how much is borrowed.

Many successful businesses do not use 100% of their borrowing facility, but leverage their borrowing to a sensible percentage of the facility based on the economic context in which they are operating. The higher £2 billion that was sought would not necessarily have been used, but would have allowed greater flexibility and freedom for the Welsh Government to invest in a greater number and a greater scale of critical schemes and infrastructure projects.

I make these points to the Minister to put them on record and to push his conversations with the Treasury ahead of the forthcoming Budget, but, as I have said, we do welcome the step forward that Lords amendments 9 and 44 provide and we will not vote against them.

[Paul Flynn]

May I say that it is a matter of some pleasure to see this Bill going through the House? It started off, as my hon. Friend the Member for Cardiff Central (Jo Stevens) said, as a dreadful and ugly Bill. This is not the slap of firm Government, but the timid, limp wrist cringe of a weak, uncertain Government, who do not know in what direction they are going. None the less, the result is generally beneficial, and a step forward—a stuttering step forward and not one of which we can feel greatly proud. We also know that we will have to come back to it because the world has changed after Brexit.

I accept that there has been some improvement in this Bill. I am talking about the £1 billion in the amendment, but it should have been £2 billion. The Welsh Assembly has a very good record of investing in infrastructure and other projects, but we do need more investments in the future. The purchase of Cardiff airport was a great success.

[Craig Williams (Cardiff North) (Con)]

Much has been made of this £1 billion cap, but, as the hon. Gentleman knows, the M4 relief road, which is on his doorstep, has been talked about a lot. Access to borrowing has been available to the Welsh Government to crack on with scheme, but they have done nothing. The £1 billion is a sensible amount. Will he comment on the broader use of these powers?

[Paul Flynn]

The hon. Gentleman well knows why the delays have taken place on that scheme. Obstacles are in the way of the scheme going through the system of appeals and the public inquiry, but, certainly, there is unlimited enthusiasm. It is nice to see him sitting there among half an acre of empty green leather seats today. I noticed that, on a previous reading of this Bill, one party took great advantage, taking a video swipe that showed the Opposition Benches empty, apart from the three Members of Plaid Cymru. The visual image was that the Member who was speaking—a Plaid Cymru Member—was someone who habitually empties these Benches as people stampede to the Tea Rooms whenever he speaks. People should not lie by using these misleading pictures of the House.

What we have before us is an unprecedented challenge to Wales. We must understand what leaving the single market will do for Wales, for Welsh industry, for Welsh farming and for the health service. It will hit us much harder in Wales than in England, and we must make allowances for that. However, we are not doing anything of the kind.

The hon. Member for Cardiff North (Craig Williams) talked about roads, and we do have a great problem there. I am talking about the highway robbery of the Severn Bridge tolls. We have had 52 years of double taxation of local people, and that is set to continue. Perhaps the Welsh Assembly could look into that infrastructure project. It is an outrage that people are paying twice for the tolls: we pay our share of the national road scheme in Wales and the west of England, and we pay over again for the tolls.