Support for the Welsh Economy and Funding for the Devolved Institutions

Simon Baynes Excerpts

Tuesday 5th July 2022 Commons Chamber

[Simon Baynes (Clwyd South) (Con)]

It is a pleasure to follow the hon. Member for Cynon Valley (Beth Winter), for whom I have the highest respect. We do not always agree on everything, but having served on the Welsh Affairs Committee with her and various other Members present here on both sides of the House, I echo her words in praising the staff who make the Welsh Affairs Committee run so well. We discussed this debate in the Committee and we all feel, whichever political party we represent, that this important event enables us to bring the affairs of Wales to the Floor of the House, which we all are keen to do.

My own upbringing was in the tourism industry—we have had much talk about it already in this debate—at the Lake Vyrnwy Hotel, which my father ran as a business. It is only a few miles south of my constituency of Clwyd South, which in itself has a wonderful tourism industry with the wonderful heritage, the canal, the steam railway, the beautiful countryside and so on. I will return to that theme later.

With all due respect to the hon. Member for Cynon Valley, I do not recognise her point about the spending review cutting money to Wales. Given the figures that my hon. Friend the Member for Aberconwy (Robin Millar) gave—I will not go back over all those—it seems self-evident that the block grant to the Welsh Government is rising year by year by a generous amount. I do not see how we can dispute that fact. At £18.4 billion rising to £20 billion in the coming year or two, it is the most generous spending review settlement since devolution.

There has also been mention of the fact that the amount of money coming from Europe to Wales will be cut. With all due respect, that simply is not the case. The shared prosperity fund will equalise, if not increase the amount of money that would otherwise have come from the European Union. The hon. Member for Rhondda (Chris Bryant) made the point about the levelling-up fund not being fair. As an MP for north-east Wales, I would argue that the European funding was not fair, because it was concentrated on west Wales and south Wales. North Wales, mid Wales and north-east Wales had little representation in that. My argument is that all parts of Wales need support. My constituency and my neighbouring constituencies have deprivation as well—deprivation is not exclusive to south Wales or west Wales. Therefore, the new shared prosperity fund, and the other funding that is coming through in the levelling-up fund and the community renewal fund, are spreading the money and investment across Wales, which strikes me as being much fairer.

[Hywel Williams]

Does the hon. Gentleman agree that the drawing up of the NUTS—nomenclature of territorial units for statistics—maps that identified west Wales and the valleys as targets of European intervention was an objective process, based on clear metrics? Does he think that the metrics for the levelling-up fund are equal or superior to those that led to the drawing up of those maps?

[Simon Baynes]

Actually, I do think that the way it is being done now is fairer. I could never understand that schematic system, which was rigid in its thought process and implementation, and which meant that areas of deprivation, particularly in north Wales, were simply not going to get the level of funding. I am not saying that there was no European funding—there was some—but it was not anything like the largesse that went to west and south Wales. That simply cannot be right. The new system is much fairer in its thought process and application.

Another point that I feel strongly about is devolution, about which we have heard from several Opposition Members. To my mind, if the granting of money is devolved from the UK Government to local authorities, that is devolution. Why should it go to the Welsh Government, who already get a huge block grant and have plenty of scope within their remit of government to spend that money? It seems that they like devolution if it comes into their coffers, but they do not like it when it goes into the coffers of the local authorities.

[Christian Matheson (City of Chester) (Lab)]

The Government’s form of devolution is different and does not work because it is a beauty parade. Councils are asked to bid and then some get the money and some do not. It is not a fair form of devolution, because it pits one council against another with an opaque mechanism for deciding how councils get the money. At least if it goes to the Welsh Government, it is clear how Wales is getting the money.

[Simon Baynes]

With all due respect, I have been part of that process. As the Member for Clwyd South, I sponsored a bid, which was granted. One point I would make—[Interruption.] Opposition Members can make their point, which I know and which I anticipated, but let us take the world heritage site at the Trevor basin in my constituency, which includes the wonderful Thomas Telford aqueduct. Hitherto, it has never had any public money invested in it by the Welsh or UK Governments. I think that the constituencies of Opposition Members have received money for so long that they do not understand how starved places such as my constituency have been over a long time.

The hon. Member for City of Chester (Christian Matheson) said that the process pitted councils against each other, but that is not how I see it. Let us look at the process, in which I have been involved. Every council can apply, although some Labour councils do not because of a political point of view, which seems a very strange approach when the money and availability are there. It is not really pitting people against each other; it is an application. The Welsh Government are themselves an opaque mechanism for distributing money to regions such as north Wales. Those of us who represent north Wales constituencies are fed up with north Wales being starved of investment and south Wales in particular getting the lion’s share. For us, it is a much fairer system.

The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) referred to the financial problems that are besetting the country. I accept that we have high inflation and so on, but if Wales were independent, how would he get round the fact that its national net fiscal deficit—the gap between total public spending for Wales and public sector revenues from Wales—amounted to £25.91 billion at the financial year end in March 2021? This is about £8,200 per person compared with the UK average of about £4,700 per person. It seems to me that, if we went down the route suggested by Plaid Cymru Members, we would have a huge financial problem in Wales, and we never ever hear any cogent arguments to oppose that point of view. If they are going to vote for independence and to go for independence, they have to prove to the country how they would make the books balance.

[Jonathan Edwards]

I am grateful to the hon. Gentleman for taking an intervention and inviting me to respond to him. Does he not accept that the fiscal deficit is a damning indictment of failed Unionism? That is what it is: it is because of the failure of the Westminster system.

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[Simon Baynes]

I and other Conservative Members refer to the fiscal deficit to make the point that England and the rest of the UK—the UK overall—is supporting Wales to a massive extent. On the hon. Member’s point about the fiscal deficit, Wales simply does not generate the funds for the public sector services we have; they are provided by the overall advantages of being in the United Kingdom, which are massively beneficial to Wales.

[Robin Millar]

I am grateful to my hon. Friend for opening the lid on this complex and important question of devolution. Does he agree that there is a difference between the instruments of devolution—the institutions of devolution that were democratically set up by a referendum—and their political operation, since they were set up, by the Welsh Labour Government? Does he see a distinction?

[Simon Baynes]

Yes, I certainly do. One question the Labour party must ask itself is whether, by going into collaboration with Plaid Cymru, it is actually supporting independence for Wales. How does it guard against that? The agenda is dragging it, day by day, closer to an independence agenda, which it is prepared to risk for the sake of its own political stability.

[Liz Saville Roberts]

One thing we need to consider is how the status quo results in Wales’s current financial position. Carrying on doing the same thing when it has led to failure in the past is the obvious statement—that is something else to be considered. Does the hon. Member agree that, in citing how much Wales receives, we must bear in mind that London receives more public spending per person than any other country of the United Kingdom or region of Wales at £15,490 per head, compared with Wales at £14,222 per head? When we use the argument that Wales receives more than England, we should look at the fact that London and its prioritisation affects the rest of the UK. We in Wales are trying to find a more effective way.

[Simon Baynes]

I thank the right hon. Lady for her intervention, and I have a degree of sympathy in that I believe we should support areas outside London, but the fact of the matter is that London generates the income that it spends. London, regardless of whether she or I like it, is the economic powerhouse. We represent adjoining constituencies in a very beautiful part of Wales, but the truth remains that a large proportion of Treasury finance is generated by London. Overall, the point I wish to make is that public spending in Wales is 20% more per person than it is in England, which shows, to my mind, that the UK Government are providing very strong support for Wales.

I have huge respect for the hon. Member for Cynon Valley and have seen how seriously she takes the cost of living issue, and learned a lot from listening to her in the Welsh Affairs Committee. I suggest that two things may be worth thinking about from the Labour party’s point of view. First, under Labour council tax bills in Wales have soared, while the UK Government have ensured that council tax has fallen in England in real terms by 1.1% since 2010. Over the same period, bills in Wales under Labour soared by 54%, or 17% in real terms. That really hits people in Wales in their pocket.

Secondly—my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) made this point—the Welsh Government now have the capability to use income tax to raise more money, or indeed to reduce income tax, yet we never hear any word of that. I often wonder whether the Welsh Government are scared of using those powers. We see all the time that an easier way to handle things is to complain about the UK Government but take the money, rather than actually thinking about ways to ameliorate the situation through levers that have been put in the hands of the Welsh Government. I also wish to comment on infrastructure, because it seems crazy to me that the Labour-Plaid coalition has suspended all new road building projects, holding back vital infrastructure improvements. If we want to improve the economic performance of Wales, we must improve the infrastructure—everybody knows that—and I hope that the Labour Welsh Government will reconsider that position.

Finally—you will be relieved to hear that, Madam Deputy Speaker—the Labour-Plaid coalition must also think hard about adding 36 more politicians to the Senedd at a cost of over £100 million per Parliament. That is enough money to pay for 780 doctors, 800 nurses, or 740 teachers. Let us consider the Welsh health service performance—I think Opposition Members have also commented on this. For example, the number of people waiting more than two years in Wales is now 68,032—an increase of 887% in a year—and that is more than five times the English figure of 12,735, which is shrinking fast. All I would say is that the Labour-Plaid coalition should think about spending the money that they are going to spend on extra members of the Senedd on improving the health service, which would be to the benefit of everybody in Wales.

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[Stephen Kinnock]

Perhaps if the UK Government had a proper industrial strategy that would grow our manufacturing base, rather than having allowed it to go to the wall since 2010, we would be creating high-paid jobs and adding value to our economy and productivity. We face a productivity crisis in this country, created by successive Conservative Governments since 2010.

There has been a strong performance by the Welsh Government, who have made a commitment that

“no one would be held back or left behind…in a recovery that is built by all of us.”

We have seen the creation of the young person’s guarantee—the offer of work, education, training or business start-up help for all under-25s—and ReAct Plus, which will provide practical and bespoke employment support as unique as the person looking for work. The ReAct Plus programme will offer up to £1,500 for training, £4,500 to help with childcare costs and £300 for travel costs. Welsh Labour is also investing £8 million to continue employment services, helping people recovering from physical and mental ill-health and substance misuse to get back into work and, crucially, remain in work. Through the young person’s start-up grant, Welsh Labour will invest £5 million to support 1,200 young people to start their own business.

That is what Labour in power looks like: a Welsh Labour Government backing Welsh workers, Welsh families and Welsh businesses to thrive, protecting our people from the worst excesses and failures of this Tory Government, who are letting people down with their incompetence and indifference.

[Simon Baynes]

Notable by its absence from the hon. Gentleman’s list is the performance of the NHS in Wales. Without wanting to score cheap political points, I have to say that there is a major issue there. Waiting lists are massively higher in Wales, particularly north Wales, than in England. Perhaps the hon. Gentleman would like to comment.

[Stephen Kinnock]

Madam Deputy Speaker, I am sure that you would love to give me another 10 minutes to talk about the achievements of the Welsh NHS, but unfortunately I am not sure that I would get away with it. The fact is that there is a list of achievements. It has invested more in the recruitment of nurses, which is at record levels. The Welsh NHS vaccine roll-out programme was a tremendous success; I recognise that the roll-out has been a success across the United Kingdom, and I am absolutely delighted about that, but the Welsh NHS really stepped up and delivered. There are so many achievements that we do not have time to discuss today, so perhaps the right hon. Member for Preseli Pembrokeshire would like to secure another debate on the topic.

I feel for the people of England and Scotland, who have not had the support that we have had in Wales. The answer is clearly for them and their fellow British citizens across the UK to vote to replace this pitiful, debased and degraded UK Conservative Government with a Labour Government driven by purpose, patriotism and the national interest, rather than the self-interest and saving of their own skin that we are seeing from the current Government.