Welsh Affairs

Stephen Crabb Excerpts

Thursday 5th March 2015 Commons Chamber

[Mr Llwyd]

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

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

[The Secretary of State for Wales (Stephen Crabb)]

I am grateful for the incredibly constructive and principle-led way that the right hon. Gentleman engaged in our discussions in the run-up to the St David’s day announcement. He says that the package is not as advanced or radical as he interprets the Scottish package to be, but does he genuinely believe that the people of Wales, given the centre of gravity of Welsh public opinion, want a devolution settlement that is the same as Scotland’s?

[Mr Llwyd]

I would argue yes, because we need to get away from this pattern of asymmetrical devolution, which is complicated, time-consuming and ends up in references to the Supreme Court and so on. I know the reserved powers model will assist there. Yes, I do believe that. The major problem—I say this quite sincerely—is that we are not hitting on a fair funding formula for the future. The right hon. Gentleman knows that we discussed that issue in Committee and that the Barnett floor is of assistance. He also knows, as I have said before, that it is not the be-all and end-all or the ultimate answer to fair funding for Wales.

--- Later in debate ---

[David T. C. Davies]

There we have it. There is money aplenty going in to it from the Welsh Assembly, the British taxpayers and the European Union, but it is still not getting to Monmouthshire. Perhaps we should return to that point. I appreciate the co-operation between members of the Committee. People outside the Committee could perhaps take a lesson on it. I do not want to be too critical of anyone on this Thursday afternoon, but it was interesting that we found in one of our inquiries that there was not quite the co-operation between International Business Wales and UK Trade & Investment that one would like. When the First Minister, or indeed my right hon. Friend the Secretary of State for Wales, goes off to sell Wales, they should go as part of a joint trade mission so that we can show investors from the far east or elsewhere that the Welsh Assembly and the national Government are speaking with one voice on the importance of inward investment. Whether politicans are Labour, Conservative, Liberal Democrat, Plaid Cymru or from some other party, in the Assembly or Parliament, we all agree on the importance of getting investment into Wales.

[Stephen Crabb]

The Chairman of the Select Committee is making an important point about inward investment. It is worth putting it on the record that last year saw the highest level of inward investment in Wales for almost 25 years. The crucial point, which I think is what he is implying, is that almost all the inward investment projects were secured with the backing and support of UKTI. So collaboration between the Welsh Government and UKTI is vital.

[David T. C. Davies]

I accept that. I am trying not to be too critical of members of other parties. I simply make the point that co-operation is important not only in business but in tourism. I was surprised to learn that VisitBritain and Visit Wales do not have that many discussions with each other. I believe that the Welsh tourism Minister has not met senior people in VisitBritain and vice versa. That is disappointing, frankly, because they all have an interest in making sure that when tourists come to London they are told that the Principality of Wales is only two hours away by train and are encouraged to come and have a look at it.

One of the most topical issues that the Committee has looked at and that I suspect whoever chairs the Committee after the election will want to have another look at is the Severn bridge. The money to be returned to Severn River Crossing will have been paid by 2017. At that point the Government, whoever they are, will have to make a decision on whether to carry on using SRC or some other private company to collect the tolls or to bring the bridge back into public ownership.

--- Later in debate ---

[Jessica Morden (Newport East) (Lab)]

Like my hon. Friend the Member for Ynys Môn (Albert Owen), I want to talk about jobs. In part, I want to do so because yesterday at Wales questions the Secretary of State said that Opposition Members were

“peddling a gross caricature of the Welsh economy”—[Official Report, 4 March 2015; Vol. 593, c. 928.]

when we talked about the rise in low-paid insecure work in Wales. I say gently to the Secretary of State that he talks about a recovery bearing fruit, but not for the many of my constituents who come to see me week on week with their experiences of what it is like trying to find work out there. It is harder now to find a job with decent pay, predictable hours and security than it was before the financial crash.

We must of course all welcome unemployment coming down. I certainly do. We all want to see more people in work. However, we should not repeatedly ignore what is certainly the reality for many workers in Wales. We should not kid ourselves that everything is fine. The number of people in temporary employment in Wales since 2008 is up by 28%. The number of full-time jobs is down according to some estimates by about 51,000. There are 100,000 minimum wage jobs in Wales and 260,000 people earning less than the living wage. That is about a quarter of the work force, which is much higher than the UK average.

As we heard earlier, the Office for National Statistics estimated last week that about 1.8 million people were working zero-hours contract jobs, a statistic that could equate to about 90,000 workers in Wales on zero-hours contracts. These are often jobs without holiday pay, sick pay and pension rights. It is not always bad to be on a zero-hours contract—for example, there are students who hope that it will tide them over—but for many others, as my hon. Friend said, it is about financial security and the ability to plan for the future. Many of these jobs pay on average about £300 less a week than other jobs. Figures last week from the Office for Budget Responsibility show that the taxpayer has been hit with a bill of about £90 million for top-ups such as tax credits, because many of the new jobs are so low paid.

[Stephen Crabb]

The hon. Lady is of course absolutely right to describe the insecurity people feel when they are doing jobs that do not give them enough hours, or minimum wage jobs that do not bring home enough money to provide for their families. However, the ONS last week was very clear that the 1.8 million figure refers to the number of contracts in the British economy, not the number of individuals on zero-hours contracts. We have to be very careful. The actual, correct figure—I should have come back to the shadow Secretary of State yesterday on this—for the number of people in Wales on zero-hours contracts is 35,000. That represents less than 3% of all employees.

[Jessica Morden]

But 35,000, even if it is that figure, still represents a huge number of workers in insecure work who cannot plan for the future because they do not know what their weekly income will be.

There is now an extra bill for topping up pay with things such as tax credits because so many of the new jobs in the economy are so low paid. We can debate the figures, but we also need to think about the issues that people bring to me week after week. It is only fair in such debates that I give a voice to some of the people I have seen recently. Last week, a man contacted me about a jobs issue facing members of his family. A Newport company had changed its cleaning contract, presumably to save money, and the new contractors told the staff that they would have to work for six weeks before they were paid, and then they would be paid only for four weeks. That is how they were to keep their just-above-minimum-wage jobs that they had had for 10 years.

I met a graduate who works for a sports shop on a zero-hours contract and who had lots of hours before Christmas but is now being offered one or two shifts a week if she is lucky. She is a graduate who wants a long-term career, but she is having to hang on to that job because that is all there is. A constituent who is in the same boat is working in the care industry on a zero-hours contract. She is struggling to get any kind of mortgage because her weekly take-home pay is so insecure. A construction worker’s pay is being reduced because he is being paid through an umbrella company that is owned by the contractor he is working for, which then deducts unnecessary fees from his take-home pay. I am glad that that practice has been outlawed by the Welsh Government, particularly for the work on the heads of the valleys road, but it should be outlawed more widely, and I hope it is.

I recently spoke to a group who volunteer to work in food banks across south Wales. They said that the rise in the number of people going to food banks is due to welfare changes, but also that they are seeing more people who are in low-paid work. One of the volunteers asked me, quite reasonably, “Why won’t Government Ministers come and talk to us on the front line so that they can see the reasons why people are coming to use food banks and act on it?” I told her about the inquiry by the all-party group on hunger and food poverty, led by the Bishop of Truro. It has produced an extremely comprehensive and readable report called “Feeding Britain” that has come up with some very sensible recommendations. The report said that, yes, welfare changes, sanctions and the bedroom tax are all factors in the rise of food banks, but it is also due to the fact that a quarter of people using them are in low-paid work. I had to say to her that groups like this have been doing this work, and they have gathered the evidence, but the Government are choosing not to hear it.

We need decent work and decent pay. That was recently the subject of a Wales TUC campaign. I hope that a future Labour Government will pledge to take action on the minimum wage, encourage more people to pay the living wage, tackle zero-hours contracts, and begin to put some of this right.

I know that it is nearly time for the main act, but I want to talk about one more thing that I hope we get right in future. It was mentioned by the hon. Member for Monmouth (David T. C. Davies) and is probably one of the few things on which I agree with him. It is the thorny issue of the Severn tolls, which are, as we repeatedly say, the highest tolls in the UK. That is felt most keenly in constituencies such as mine, by commuters, by businesses and by hauliers. The concession has not served us well, and we hope that it will end in 2018. Every time we ask when it will end, the period extends and extends again. That indicates how difficult the issue has been. It is now time for us to start to make sensible decisions about tolling levels in future. We all want the tolls to come down, and I think we should consider creative options such as off-peak travel for hauliers and concessions for people who live locally. The Welsh Affairs Committee has done some excellent work which I think could form the basis of a solution. I hope that we can cut those tolls dramatically, and ensure that high tolls are not used as a cash cow for the Government in the future. That—along with persuading First Great Western to increase its capacity on commuter routes such as the one from Bristol to Cardiff—would go some way towards resolving some of the transport problems in my part of the world.

Let me end by wishing a very happy retirement—well, it is not strictly a retirement, but it is a retirement from the House—to the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd), and also to my right hon. Friend the Member for Torfaen (Paul Murphy), who has given fantastic support to me over the years, both in this place and in my former job. I know that we shall miss him greatly.

[Owen Smith (Pontypridd) (Lab)]

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

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

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

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

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

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

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

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

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

[Stephen Crabb]

indicated dissent.

[Owen Smith]

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

--- Later in debate ---

[Owen Smith]

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

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

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

[Stephen Crabb]

He did not say that.

[Owen Smith]

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

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

[Stephen Crabb]

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

[Owen Smith]

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

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

This clearly is not true.

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

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

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

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

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

--- Later in debate ---

[The Secretary of State for Wales (Stephen Crabb)]

It is a real privilege to speak as Welsh Secretary for the first time in a St David’s day debate. We have had a good debate, with a good selection of contributions from Members from across the parties representative of Wales. We have heard from Members from right across Wales in an interesting and stimulating discussion. It is fitting that we should use this St David’s day debate to draw to a close a good week for Wales and to reflect on what this Government have achieved in Wales during this Parliament. I pay particular tribute to my hon. Friend the Member for Montgomeryshire (Glyn Davies) and the hon. Member for Ynys Môn (Albert Owen) for securing this debate, and it is important that we do have it every year. Of course, the Wright reforms recognised that as we transferred more days in a Session to Back-Bench control, the territorial debates should be part of that. So today’s debate is entirely in keeping with that tradition.

The opening contribution from my hon. Friend the Member for Montgomeryshire was wise and as insightful as ever. One thing that caught my ear was his saying that no one can really understand Wales unless they are Welsh, and I believe he quoted someone as saying that no Englishman truly understands Wales. I happen to think we have a Prime Minister who does get Wales and does understand why it is different. As a result, he understands far better than any of the other UK leaders the importance of the Union and why devolution matters. Perhaps the Prime Minister gave us a hint at his own St David’s day party on Monday night as to why he understands Wales so well. Of course, he revealed that he has Welsh ancestry, and does not have to go that far back to find that one of his forebears was Llewellyn, a tin-plate maker in Glamorgan. So I think all of us in the House this afternoon from Wales will welcome the fact that we are cut from the same cloth as the Prime Minister.

As I look back, I think 2014 was a great year for Wales. I think it was the best year for Wales since the devolution era began. It was a year for Wales to look upwards and outwards, a year of ambition—a year when the Prime Minister brought the NATO summit to Wales. Indeed, he brought the world to Wales, when the largest gathering of international leaders that the UK has ever seen came to Newport and Cardiff in south Wales. It was a year when Wales’s international profile could not have been higher. Two months later, we brought the international investment summit back to the Celtic Manor in Newport, where more than 150 global investors came to look at why Wales is such a great place to invest. It was the year, as I mentioned earlier, when inward investment for Wales was at its highest level for almost 25 years. At that investment summit, we announced our commitment to electrifying the south Wales and the valleys rail lines—a project that has been discussed for years, but which it took a Conservative-led coalition Government to take forward.

Last year was also a year of reaching for the stars, a year of ambition—a year when Team Wales, the Welsh Commonwealth games team, smashed every one of its targets, up at the Commonwealth games in Glasgow. It was indeed a year of reaching for stars—the year when three Welsh companies participated in that amazing project that landed a probe on a comet travelling at 36,000 mph, 300 million miles from earth. We have some great Welsh companies, and as the economy continues to improve in Wales, we are seeing some of the best innovation anywhere in the UK coming out of Wales.

I will return to the economy, if I have time, in a moment, but it is telling that just before this debate started, I was at the First Minister’s own St David’s day reception, which was hosted by the Foreign Office. He too praised the NATO summit coming to Wales, and said it was even better for Wales given that the UK Government were paying the bills for it. The other important point he made at this afternoon’s event was about the improving economy in Wales. We have a First Minister—a Welsh Labour First Minister—who recognises and praises the economic recovery that is happening in Wales. Unfortunately, he has party colleagues in this place who talk down the economic recovery. One of the great themes of the last two years is the way that Welsh Labour in Westminster faces one way, while Welsh Labour in Cardiff faces another when it comes to thinking, reflecting and talking about what is going on inside the Welsh economy.

Now would be a good moment to pay particular tribute to the contribution from the right hon. Member for Torfaen (Paul Murphy), a distinguished former Secretary of State who has achieved an incredible amount in his lifetime, not just for Wales, but for Northern Ireland, the other great country that he has huge knowledge of and passion for. He reflected on his first St David’s day debate, back in 1987, and talked about some of the parallels that he sees in Wales now in respect of funding. Of course, 1987 was also a time when Wales was attracting some 20% of all UK inward investment; a time when the Welsh Development Agency was achieving great things for Wales. We need to get back to some of those strong points about Wales, which he reflected on.

We also had a superb contribution from the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd), who, like the right hon. Member for Torfaen, is standing down at the general election. He used his contribution to talk about devolution. In his view, the St David’s day process was a missed opportunity, because he would have wanted to go further. Of course he would: he is Plaid Cymru; he is a Welsh nationalist. However, I hope he appreciates that we had good, constructive conversations and that this was a good example of politicians from across Wales thinking about things in a way we have not done before, rolling up our sleeves and trying to be pragmatic. I appreciate the spirit in which he participated in that exercise and the contribution that Plaid Cymru made to the process.

My hon. Friend the Member for Ceredigion (Mr Williams) made a great speech. The first Westminster Hall debate that I secured, almost 10 years ago, when I was first elected, was on the future of the dairy industry. He made a powerful contribution in that debate about the dairy industry in Wales. I guess it is sad that we are still focusing on some of those issues, looking at market imbalances and unfair practices in the way suppliers are treated by large processors and large supermarkets. It is a testimony to his tenaciousness that he keeps banging the drum and fighting the fight for dairy farmers, particularly from west Wales, which is such an important part of our economy.

We had a good contribution from the hon. Member for Ynys Môn, who talked about energy production and food production. I am sure he is aware that the food that was served up at the Prime Minister’s St David’s day reception on Monday night was prepared by a team of chefs from north Wales. They were part of the Welsh Culinary Association. [Interruption.] We will make sure that the hon. Gentleman is down for it next year. Some of the ingredients used were indeed from Ynys Môn. He is quite right that the annual Anglesey day has become an event of almost international renown; on display is a superb array of quality.

I probably do not have time to discuss all the contributions. I was particularly struck by what the hon. Member for Newport West (Paul Flynn) said. He gave an incredibly optimistic, upbeat and bright speech about Wales and its future. As he was speaking, I scribbled the words, “Sunshine and daffodils”, which are perhaps not characteristic of his usual contributions. His comments about the paradise of 10th-century Wales were perhaps slightly rose-tinted, but we are grateful to him for the air of daffodils he brought to this debate.

Two issues were mentioned that the Wales Office needs to follow up, the first of which concerns the 2 Sisters Food Group, with which we are currently dealing. The hon. Member for Bridgend (Mrs Moon) has also written to me about a matter we have talked about on at least two or three occasions. I apologise that the Department for Business, Innovation and Skills has not secured the meeting she wanted. We have been pushing on the issue and will continue to do so. I promise to try to make that meeting happen before Parliament wraps up for the general election. I know she has worked hard on what is an incredibly difficult issue, but she has her teeth into it and we wish her every success in getting to the bottom of it.

In the two or three minutes remaining, let me focus on the economy. We have two counter-narratives going on. On the Government Benches, we say not that the job is done or that everything is rosy in the garden, but that really good progress is being made. We say that the fall in unemployment across Wales is remarkable. It is completely contrary to everything that Welsh Labour had been predicting four years ago. We say that the drop of 39,000 in the number of children growing up in a home where neither mum nor dad are working is not just economic transformation but social transformation, and we want that to continue.

I am proud to be part of a Government who are tackling the abuses of zero-hours contracts. That did not happen under Labour’s watch, but under this coalition Government’s. We have taken steps to ban the exclusivity clauses that are the really pernicious parts of zero-hours contracts. If the moral outrage from Labour over zero-hours contracts was genuine, why are so many Labour councils employing people on such contracts? Why do I read in the press all these reports of Labour MPs employing staff on zero-hours contracts? Let us have a little less of that faux moral outrage, and a bit more realistic and honest reflection on what are difficult issues.

I will wrap up now to allow my hon. Friend the Member for Montgomeryshire to sum up the debate that he helped to secure. I think 2014 was the year in which the economic recovery moved up a gear in Wales; 2015 will be the year in which the people of Wales will start to feel it and share in the benefits. What will put it all at risk is the barrage of anti-business negativity and criticism which has become a dominant theme of the Labour party—certainly the party at Westminster.

Oral Answers to Questions

Stephen Crabb Excerpts

Wednesday 4th March 2015 Commons Chamber

[Guto Bebb (Aberconwy) (Con)]

1. What assessment he has made of trends in labour market statistics in Wales since 2010.

[The Secretary of State for Wales (Stephen Crabb)]

I would like to take this opportunity, in the last Welsh Question Time before the general election, to pay tribute to the Welsh Members who have announced their intention to stand down. All eight right hon. and hon. Members have served their constituencies with distinction and played a vital role in making the case for Wales, as I know they will continue to do outside this House. We wish them all the very best.

Across the UK there have never been more people in work. In Wales there are 41,000 more people in work since the election, but we recognise that the job is not yet done, which is why we must stick to our long-term economic plan, which is starting to bear fruit for Wales.

[Guto Bebb]

May I associate myself with my right hon. Friend’s comments on the departing Members?

In my constituency unemployment has fallen by 27% year on year, and it has fallen by over 40% since the height of the recession, a situation that is replicated across Wales. Will my right hon. Friend join me in congratulating the small businesses the length and breadth of Wales that have contributed to the jobs-based recovery, and will he assure me that the policies put in place by this Government will continue if he remains in post after 7 May?

[Stephen Crabb]

I absolutely agree that it is businesses across Wales, and particularly in north Wales, that are leading the economic recovery, creating the jobs that are making such a difference to the lives of families up and down Wales. What puts that at greatest risk is the prospect of a Labour Government with no vision or plan for the Welsh economy.

[Albert Owen (Ynys Môn) (Lab)]

The unemployment figures in my constituency have been coming down for the past 15 years, with the exception of the recession years between 2008 and 2012, but many of those jobs are zero hours, part time and for agency workers. I have written to the Secretary of State about the prospect of between 200 and 300 jobs being lost at 2 Sisters. Will he meet me and a delegation from the company, because it is important to the Welsh and UK food industries?

[Stephen Crabb]

I absolutely will meet the hon. Gentleman, who knows that I take a great interest in job prospects in Ynys Môn, and we will look into the situation in more detail. I caution him against peddling a gross caricature of the Welsh economy, because less than 3% of Welsh workers are on contracts that could be described as zero hours. Opposition Members are quite wrong to peddle this gross caricature of what is a business-led recovery that is bearing fruit.

[Michael Fabricant (Lichfield) (Con)]

The Secretary of State will be aware that the Welsh Government have nationalised Cardiff airport. What discussions has he had with the Welsh Government to ensure that they do all they can to keep employment rates high?

[Stephen Crabb]

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

[Owen Smith (Pontypridd) (Lab)]

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

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

[Stephen Crabb]

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

[Owen Smith]

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

[Stephen Crabb]

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

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

2. What recent discussions he has had with business representatives in Wales on the importance of membership of the EU to the Welsh economy.

--- Later in debate ---

[The Secretary of State for Wales (Stephen Crabb)]

We have made it clear that we remain open to considering any well developed and privately funded proposals that come forward for harnessing the tidal range resource in the Severn estuary. The right hon. Gentleman’s tenacity on this and a great number of other subjects will of course be greatly missed when he leaves this place. I look forward to meeting him next week to talk further about the Severn barrage project.

[Mr Hain]

I am grateful to the Secretary of State. Is he aware that the company now taking forward the Severn barrage—exclusively for any form of renewable energy—requires no consumer subsidy through a contract for difference? That could be a game changer for the Government.

With your indulgence, Mr Speaker, may I thank my Welsh Labour colleagues for their comradeship, especially during my two years as a Welsh Minister and seven years as Secretary of State for Wales? We can be proud that we established a Welsh Assembly, and it has been a privilege to serve.

[Stephen Crabb]

I thank the former Secretary of State for his question. As I said, I look forward to talking to him in more detail about the project, and to understanding how the proposal might have changed since he and his associates last presented the ideas to various Committees. Let me add that I am proud to be part of a Government who believe in major infrastructure investment, and who are delivering strategic infrastructure investment in Wales the likes of which we have never seen before.

[Paul Flynn (Newport West) (Lab)]

As a lifelong advocate of the Severn barrage, I think that we must now reluctantly admit that the time for the barrage has gone and that there is a better alternative in the form of lagoons at Newport, Cardiff and Swansea. Does the right hon. Gentleman agree?

[Stephen Crabb]

The hon. Gentleman makes a good point. He is aware of my enthusiasm for the lagoons project. That is why the Wales Office worked hard to secure the inclusion of the lagoon proposal for Swansea bay in the national infrastructure plan. There is a planning process in place and we need to respect that, but I am proud to be part of a Government who are working constructively and positively with the developers to take the project forward.

[Chris Evans (Islwyn) (Lab/Co-op)]

5. What discussions he has had with Ministers in the Welsh Government on the role of Jobs Growth Wales in tackling youth unemployment in Wales.

[Nick Smith (Blaenau Gwent) (Lab)]

8. What discussions he has had with Ministers in the Welsh Government on the role of Jobs Growth Wales in tackling youth unemployment in Wales.

[The Secretary of State for Wales (Stephen Crabb)]

I am proud of the efforts of this Government that have seen youth unemployment in Wales fall by 46% over the course of this Parliament. I have discussed with the Welsh Government the support that is available to help people into work to ensure that there is a coherent and joined-up approach in Wales.

[Chris Evans]

Jobs Growth Wales has created 12,000 job opportunities for young people across Wales. Why will the UK Government not replicate it?

[Stephen Crabb]

The Jobs Growth Wales scheme has been popular with employers—it is a wage subsidy, so of course employers like it. It is important to recognise that Jobs Growth Wales is for people who are so-called job-ready. An independent evaluation by Ipsos MORI, which was commissioned by the Welsh Government, found that 73% of people who found work through Jobs Growth Wales would have found work anyway. That raises questions about whether it is a good use of taxpayers’ money.

[Nick Smith]

Jobs Growth Wales has created more than 400 jobs for young people in Blaenau Gwent. However, people need to be able to get to the jobs market on the coast in Cardiff and Newport. Given that the funding is now agreed, when will the valley lines electrification be completed?

[Stephen Crabb]

I am pleased that the hon. Gentleman has referred to the valleys electrification project. It was a great achievement of this Government, along with the Welsh Government, to secure a deal to deliver electrification not just of the great western line to Swansea but, crucially, through to the valleys communities as well. We look forward to work starting on that project, subject to the Welsh Government agreeing the details, in 2018-19.

[David T. C. Davies (Monmouth) (Con)]

Does my right hon. Friend agree that it is not just Jobs Growth Wales but the coalition Government’s long-term economic plan that has delivered the unprecedented falls in youth unemployment, and that the binary choice that will be presented to the people of Wales on 7 May is between jobs, growth and prosperity and debt, deficit and dole queues?

[Stephen Crabb]

As ever, the Chairman of the Welsh Affairs Committee is exactly right. He expresses the situation perfectly. What puts at risk all the great progress we have made in cutting long-term and youth unemployment across Wales is the prospect of a Labour Government who have no plan and no vision for the Welsh economy.

[Jonathan Evans (Cardiff North) (Con)]

11. Will my right hon. Friend note that in my constituency unemployment has fallen by more than 30% since my election? Will he take every opportunity to remind the electorate and the House of something that has been true throughout the 23 years since I was first elected to the House, which is that every Labour Government have left office with unemployment higher than when they came to office?

[Stephen Crabb]

My hon. Friend should take pride in his record. On his watch, the falls in unemployment in Cardiff North have been truly impressive over the past five years. I know that Craig Williams, our excellent Conservative candidate in Cardiff North, will carry on the good work through all the excellent contacts he has with businesses across the city.

[Nia Griffith (Llanelli) (Lab)]

Given the 80% success rate of the Labour Welsh Government’s Jobs Growth Wales programme and the Secretary of State’s new-found enthusiasm for devolution, why did he not include in his St David’s day announcement the devolution of the Work programme, which, under his Government, gets only a miserable 10% of clients into work in Wales and is clearly failing people in Wales?

[Stephen Crabb]

I thank the hon. Lady for that question. The crucial point is that the Work programme was brought forward by the coalition Government—the UK Government—and has helped more than 17,000 people in Wales who had been unemployed for the longest periods. Let us not forget how complacent the previous Labour Government were about long-term unemployment in Wales: the rate of long-term unemployment increased by more than 160% on their watch.

[Glyn Davies (Montgomeryshire) (Con)]

6. What discussions he has had with the Welsh Minister for Health on cross-border health care provision.

--- Later in debate ---

[Mr Graham Allen (Nottingham North) (Lab)]

9. What recent discussions he has had with the First Minister on income tax assignment to Wales being carried out on the same basis as applies in Scotland.

[The Secretary of State for Wales (Stephen Crabb)]

I have regular discussions with the First Minister on holding a referendum on the devolution of income tax to the National Assembly for Wales, as provided for in the Wales Act 2014. Following our commitment to a funding floor for Wales there is no reason for the First Minister not to call a referendum in the next Parliament.

[Mr Allen]

Does the Minister accept that Scotland has now set a precedent on income tax assignment that can meet the base load of its expenditure? Will he continue his work to ensure that Wales also has income tax assigned? Will he talk to his colleagues in England to ensure that they understand that the basis of devolution in England must be financial independence by income tax assignment, too?

[Stephen Crabb]

I am a bit surprised by the hon. Gentleman’s question, because the Government have worked really hard to deliver a devolution package for Wales that strengthens and clarifies, and makes devolution fairer for Wales. The negative response from Welsh Labour in Cardiff in recent days speaks more about the divisions between Labour in Westminster and in Cardiff. He really should speak to his own colleagues.

The Prime Minister was asked—

Devolution in Wales

Stephen Crabb Excerpts

Friday 27th February 2015 Written Statements

[The Secretary of State for Wales (Stephen Crabb)]

This Government have a strong record of taking forward devolution in Wales reflecting public opinion. In 2011, we delivered a referendum which saw the National Assembly for Wales acquire full law-making powers across its devolved policy areas. We established the Commission on Devolution in Wales, the “Silk” commission, which delivered two unanimous reports on the future of devolution in Wales. The Wales Act 2014 implemented almost all of the recommendations in the commission’s first report. It devolved a comprehensive package of tax and borrowing powers to the Assembly and Welsh Government, giving them new tools and levers to put Wales in a stronger position to develop as a nation.

The Government are today announcing the outcome of the Wales devolution programme—the “St David’s day” process—on the future of devolution in Wales.

I have led a series of discussions with the four main political parties in Wales and sought the views of others, including business and academic representatives, in order to establish where there is consensus on the future path of devolution in Wales. These discussions have without exception been approached in a positive and constructive way and I am grateful to all participants for their invaluable contributions.

I want to establish a clear devolution settlement for Wales which stands the test of time. The Command Paper I have laid before the House today sets out a blueprint to achieve that, and to make the Welsh settlement clearer, more stable and long-lasting.

Since becoming Secretary of State for Wales I have made clear that I believe in further devolution where there is a clear purpose for devolving additional powers to Wales, and the package I am announcing today is underpinned by that principle.

There are four key Government commitments in the St David’s day package:

i. To implement a reserved powers model for devolution in Wales. This will make devolution in Wales clearer and better defined.

ii. To devolve significant additional powers to the National Assembly and the Welsh Government in areas such as energy, the environment, transport and local government elections. The Assembly will also become responsible for deciding how it conducts its own affairs and regulates its proceedings. These are based on those recommendations in the Silk commission’s second report on which there is consensus.

iii. To consider and analyse the non-fiscal recommendations in the Smith commission agreement for Scotland to decide which might be appropriate for Wales. In two cases, elections to the National Assembly and the licensing of onshore oil and gas extraction, the Government have decided that there is a clear case for devolving these powers, and commit to doing so in the Command Paper.

iv. To introduce a floor in the level of relative funding provided to the Welsh Government. The precise level of the floor, and the mechanism to deliver it, will be agreed alongside the next spending review. The Government have made this commitment in the expectation that the Welsh Government will call a referendum on income tax powers in the next Parliament.

The new borrowing powers for the Welsh Government, set out in the Wales Act 2014, will be extended to enable the Welsh Government to issue bonds to borrow for capital expenditure. In the next Parliament, we will also consider the case and options for devolving further powers to the Assembly over air passenger duty (APD).

Taken together, this is a landmark in the Welsh devolution process and lays the foundation for a clearer, stronger and fairer settlement for Wales. We now have a strong blueprint for a new Wales Bill in the next Parliament.

It is in the best interests of the people of Wales that we have a clear devolution settlement which gives them a stronger voice over their own affairs within a strong and successful United Kingdom. The Command Paper published today sets out the path to achieving that.

[HCWS322]

Supplementary Estimate 2014-15

Stephen Crabb Excerpts

Monday 9th February 2015 Written Statements

[The Secretary of State for Wales (Stephen Crabb)]

Subject to parliamentary approval of any necessary supplementary estimate, the Welsh Government’s (WG) departmental expenditure limit (DEL) net of ring-fenced depreciation and impairments will be increased by £157,433,000 from £15,170,933,000 to £15,328,366,000.

The following changes have been made to the Welsh Government’s departmental expenditure limit:

Devolved Administration Budget Exchange addition of £98,244,000 (£65,733,000 resource, £16,944,000 ring-fenced depreciation and £15,567,000 capital);

A claim on the Reserves for the following:-

Barnett Consequentials for 2014-15 Council Tax freeze for £18,819,000

Blue Lights Charities for £481,000

Coastal Communities Fund for £1,550,000

NATO Costs for £900,000

Structural Funds in West Wales for £3,807,000

Student Loans of £47,000,000;

A DEL adjustment to VAT on legal services of £-106,000;

A budget transfer from the Department of Energy and Climate Change of £1,456,000;

A budget transfer to the Department for Works and Pensions of £-1,000,000;

A budget transfer from DCMS in respect of Broadband UK for £31,275,000 (capital);

Autumn Statement: Barnett Consequentials of £1,344,000;

Business rate Barnett Consequentials of £17,423,000;

A cash management rebate of £184,000.

Within the total departmental expenditure limit (DEL) changes, the impact is set out in the following tables:

Oral Answers to Questions

Stephen Crabb Excerpts

Wednesday 21st January 2015 Commons Chamber

[Karl MᶜCartney (Lincoln) (Con)]

1. What assessment he has made of the effectiveness of steps taken to rebalance the economy in Wales since 2010.

[The Secretary of State for Wales (Stephen Crabb)]

The previous Government were content to allow the British economy to become dangerously imbalanced with far too much reliance on the financial sector in London and the south-east. During this time Wales became poorer and fell to the bottom of the economic league tables, but we are determined to turn that around and achieve a stronger and more geographically balanced economy through a long-term plan, which is already starting to bear real fruit for Wales.

[Karl MᶜCartney]

I thank my right hon. Friend for that answer—and offer him belated birthday wishes.

With regard to the rural economy of Wales, I heard talk when I recently returned to St David’s university college in Llanbedr Pont Steffan of moves to reopen the Carmarthen to Aberystwyth railway line that passes through the Teifi valley. What effect does my right hon. Friend think this would have in reinvigorating the local rural economy, and might it help to rescue my alma mater from the parlous state various vice-chancellors since Lord Morris of Castle Morris have allowed it to descend to?

[Stephen Crabb]

I thank my hon. Friend for his question and his good wishes. I am a believer in investment in infrastructure. I recognise the important role investment infrastructure plays as a driver of economic growth. We have discussed at previous Wales Office questions the reopening of the Aberystwyth-Carmarthen line. He will be interested to know that I will shortly meet the campaign group Traws Link Cymru to discuss the business case for reopening the line and what support we can give, if appropriate.

[Dr Hywel Francis (Aberavon) (Lab)]

I am sure the Secretary of State agrees that one of the best ways of rebalancing the economy is to ensure the interface between universities and the private and public sectors, and I know he recently visited my constituency and the new Swansea university campus at Crymlyn burrows. I am also sure he would wish to join me in congratulating the leader of Neath Port Talbot county borough council, which has developed a wonderful partnership with the university, and Councillor Ali Thomas on the honorary fellowship he will receive next week at Swansea university.

[Stephen Crabb]

I thank the hon. Gentleman for that question, and I absolutely do concur with his sentiments about the role local partners have played in taking forward the bay campus development. I was there on Friday, at the hon. Gentleman’s recommendation, and it is indeed a truly fine example of partnership-working. We know that success in the 21st century will belong to those economies that can harness knowledge and innovation, and having world-class university sites is part of that.

[Mr David Jones (Clwyd West) (Con)]

Has my right hon. Friend noted the recently published report of South Wales chamber of commerce, which notes that confidence in the Welsh economy has been high throughout 2014 and that it looks to remain the same for 2015? Is he as pleased as I am that real business people in Wales are so enthusiastic and keen to talk up the Welsh economy, unlike the hon. Member for Pontypridd (Owen Smith), who devoted his recent article in the Western Mail to talking it down?

[Stephen Crabb]

I thank my right hon. Friend for that question, and he is absolutely right: the sentiment among businesses in north Wales, south Wales and west Wales is very confident and optimistic, and what they tell me every week as I criss-cross Wales talking to them is in stark contrast to the message we hear from the Opposition, who regularly now talk down the Welsh economy and the efforts of Welsh business.

[Mr Peter Hain (Neath) (Lab)]

On the economy, how does the right hon. Gentleman respond to today’s research by the university of Oxford and the London School of Hygiene and Tropical Medicine that only a fifth of claimants who have had their benefits sanctioned and then taken away have found work? Surely this will not rebalance the economy or make it stronger, let alone make it just, and it is diabolically punitive.

[Stephen Crabb]

I have not seen that report so I am not going to get drawn into commenting on the specifics, but I have seen the latest figures for the performance of the Work programme in Wales, which should give us encouragement that we have a set of measures in place that is helping to bring down long-term unemployment.

[Mr Hain]

indicated dissent.

[Stephen Crabb]

The right hon. Gentleman shakes his head, but I encourage him to look at the figures for long-term unemployment in Wales: they are coming down yet again this month, which is positive news. There is much more to be done, but the emerging picture is a very strong and positive one.

[Roger Williams (Brecon and Radnorshire) (LD)]

Tourism is very important to Wales, and to rural Wales in particular. It has been suggested that reducing VAT on visitor attractions and accommodation, as other EU countries have, would stimulate tourism and result in a higher tax-take. Does the Secretary of State agree with that view?

[Stephen Crabb]

I am familiar with the VAT arguments from the tourism sector. Of course these matters are the responsibility of the Chancellor of the Exchequer and he keeps them under review, but I would just point out to my hon. Friend the most recent tourism visitor figures, which showed about an 8% increase last year in international visitors coming to Wales. That has to be a good sign that the tourism sector is on the up in Wales.

[Chris Evans (Islwyn) (Lab/Co-op)]

12. The new year has seen another rise in the tolls on the Severn bridge, and many businesses across Wales tell me that the bridge is now becoming a barrier to business and trade. Will the Secretary of State have urgent talks with the Chancellor of the Exchequer about reducing VAT on the tolls?

[Stephen Crabb]

The hon. Gentleman is right to talk about the burden that the increased tolls place on businesses and on visitors to Wales. We recognise that that is happening. They are, for example, a major burden on the small vans crossing the bridge. I have asked the Under-Secretary of State for Wales, my hon. Friend the Member for Vale of Glamorgan (Alun Cairns), to lead a body of work to look into the options for the Severn bridge, and he is having discussions with the Department for Transport. We also look forward to hearing the views of Members on both sides of the House.

[Glyn Davies (Montgomeryshire) (Con)]

2. What discussions he has had with Ministers of the Welsh Government on waiting times at A and E departments that serve patients from both sides of the England-Wales border.

[The Secretary of State for Wales (Stephen Crabb)]

My ministerial colleagues and I regularly raise concerns with the Welsh Government about the provision of health care along the England-Wales border and we are reviewing the current arrangements to ensure that they meet patients’ needs.

[Glyn Davies]

When my constituents in Montgomeryshire need to attend A and E, they are taken either to hospitals in England, where 87% of patients are seen within four hours, or to hospitals in Wales, where, shockingly, the figure is only 63%. Does my right hon. Friend agree that the Welsh Government and the UK Government should work together constructively to deliver reforms to ensure that only genuine emergencies attend A and E?

[Stephen Crabb]

As ever, my hon. Friend makes a strong and constructive point. At this time of year, the NHS is facing severe pressures across the whole of the UK, and he is right to say that there is a disparity between the outcomes in Wales and those across the border in England. It is right that we should work together to address those disparities, but Welsh Government Ministers in Cardiff should be held to account for the decisions that have led to some of the problems.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Is the Secretary of State aware of the innovative medical centre at the end of Wind street in Swansea, which treats intoxicated people on the spot, freeing up ambulances, police and accident and emergency departments? Will he inform the Secretary of State for Health in England of the success of that venture, and suggest to him that similar facilities here could help to reduce the pressures caused by the removal of walk-in centres?

[Stephen Crabb]

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

[Owen Smith (Pontypridd) (Lab)]

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

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

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

[Stephen Crabb]

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

[Owen Smith]

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

[Stephen Crabb]

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

[Stuart Andrew (Pudsey) (Con)]

3. What assessment he has made of trends in the level of infrastructure investment in Wales since 2010.

--- Later in debate ---

[Mr Mark Williams (Ceredigion) (LD)]

4. What steps the Government are taking to support the dairy industry in rural Wales.

[The Secretary of State for Wales (Stephen Crabb)]

The Government are very aware of the severe pressures currently facing the UK dairy sector. I have discussed the situation in Wales with my ministerial colleagues, as well as with key stakeholders, including numerous dairy farmers. There are major short-term global factors pushing down prices, and we are calling on banks, supermarkets and major processors to show flexibility and understanding at this time.

[Mr Williams]

I thank the Secretary of State for that answer. We all understand the global challenges facing the industry, but will he urgently speak to his Department for Business, Innovation and Skills colleagues about extending the role of the Groceries Code Adjudicator to the whole supply chain—to all dairy producers—and, crucially, enacting the adjudicator’s power to fine? The next review of the role is not expected until 2016, and many of our farmers will not be functioning as farmers unless we have urgent action now.

[Stephen Crabb]

First, I commend the work my hon. Friend does on the dairy sector in Wales; he is a powerful voice on behalf of dairy farmers in his constituency and throughout Wales. We strongly support the work of the Groceries Code Adjudicator. Its jurisdiction is currently limited, but a review will take place next year. I take my hon. Friend’s point about the short-term pressures, so we look forward to receiving information and updates from him on action we can take.

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

As a Member representing Pembrokeshire, the Secretary of State will be well aware that the dairy industry in Wales still contributes about 10% to the whole of the UK’s production, but that since 1999 its level has fallen by 51%. Will he look at yesterday’s report by the Select Committee on Environment, Food and Rural Affairs, which says exactly what the hon. Member for Ceredigion (Mr Williams) says: give the adjudicator greater teeth to tackle unfair pricing?

[Stephen Crabb]

I thank the right hon. Gentleman for his question, and we are looking exactly at that report. A very severe short-term crisis faces the dairy sector at this time. Nobody pretends that expanding the role of the adjudicator will fix the global problems—big market challenges need to be addressed—but we are doing everything we can to work with the dairy industry and protect the supply base.

[Mr Llwyd]

On the market challenges that the right hon. Gentleman refers to, what steps is he taking to urge his Government to work with the Welsh Government to implement policies we have suggested—for example, the dairy equivalent of Hybu Cig Cymru to market Welsh milk, the use of rural development funding to develop supply chains to counteract volatility, and procurement in the local Welsh sector?

[Stephen Crabb]

The right hon. Gentleman might be surprised to hear that we do follow the policy recommendations of Plaid Cymru and I have looked at the recommendation for that new body. When huge global imbalances are putting such severe pressure on dairy farmers throughout Europe, reaching for a bureaucratic solution and setting up a new quango probably will not make that much difference, but we will look at the proposal in further detail and have that discussion.

[Mr James Gray (North Wiltshire) (Con)]

With dairy prices at 20p a litre, First Milk collapsing last week and the discount supermarkets cutting prices day by day, it is hardly surprising that one dairy farmer goes out of business every 10 days. Does the Secretary of State agree that in addition to the efforts of the EU and national Government, we need to see far more action from the Welsh Government? There is a great deal they could do to support Welsh farmers, as well as farmers in North Wiltshire.

[Stephen Crabb]

I thank my hon. Friend for that question and make two points in response. First, First Milk did not collapse last week. It faces some pressures and there are specific impacts for dairy herds, but that co-operative is still very much functioning. Secondly, on the Welsh Government, we work constructively and co-operatively with them on agriculture issues.

[Nia Griffith (Llanelli) (Lab)]

The Secretary of State rightly recognises the severe crisis in the dairy industry, so with the Environment, Food and Rural Affairs Committee’s dairy price report criticising the grocery adjudicator’s role as too narrow and left toothless by this Government’s failure to set the level of fines that she can impose, will he now act with a sense of urgency, push for an immediate review of the adjudicator’s role and give that assurance to Welsh farmers?

[Stephen Crabb]

I am surprised by the tone that the hon. Lady takes. Under the Government that she supported, no progress whatever was made on implementing a code of practice or an adjudicator. As a Government we have been taking forward these measures. We will look at the specific recommendations of the Select Committee report, but we will take no lessons from the Labour party on the dairy sector.

[Michael Fabricant (Lichfield) (Con)]

My right hon. Friend will know that independent grocers such as Spar in Tywyn in Gwynedd stock Welsh milk, which is clearly marked with y ddraig goch—the red dragon. What steps can he take to ensure that people in Wales drink Welsh milk rather than European milk, which will stimulate the market and support Welsh farmers?

[Stephen Crabb]

My hon. Friend is right. Welsh produce is the best in the world, and when it is labelled as such it gives consumers powerful signals, which they respond to. That is one of the ways in which we have been able to boost exports of Welsh agriculture produce in the past two years, but we will look at what further steps we can take to support labelled home-grown produce.

[Ann Clwyd (Cynon Valley) (Lab)]

5. What assessment he has made of the implications for the Government’s policies of the Auditor General for Wales’s report on “Managing the Impact of Welfare Reform Changes on Social Housing Tenants in Wales”, published in January 2015.

--- Later in debate ---

[Stephen Mosley (City of Chester) (Con)]

8. What assessment he has made of the level of growth in the high-tech sector in Wales since 2010.

[The Secretary of State for Wales (Stephen Crabb)]

Wales has the potential to be a beacon of hi-tech excellence and innovation. Since 2010, thousands of new jobs have been created in the advanced manufacturing, ICT and life sciences sectors. The growth in those sectors is contributing to the rebalancing of our economy, which is so vital to future economic success.

[Stephen Mosley]

Does my right hon. Friend agree that it is remarkable that half the world’s mobile phones contain wafer semi-conductor technology that has been made in Wales?

[Stephen Crabb]

My hon. Friend is exactly right. Remarkable transformations are occurring inside the Welsh economy. Much more work needs to be done, but the picture is a positive one. That view stands in stark contrast with what the Labour party would have us believe, as it consistently—week in, week out—talks down the achievements of Welsh business.

[Paul Flynn (Newport West) (Lab)]

9. What recent discussions he has had on increased shared services jobs in Gwent.

--- Later in debate ---

[John Mann (Bassetlaw) (Lab)]

10. What assessment he has made of the prevalence of anti-Semitism in Wales.

[The Secretary of State for Wales (Stephen Crabb)]

Incidents of religious and racial hatred are thankfully very low in Wales. But as we approach Holocaust memorial day, it is right that we look again at the efforts we are making to prevent such incidents and to say with a clear and united voice that anti-Semitism and all forms of racial and religious hatred are not compatible with the freedom values that are cherished by the people of Wales. [Interruption.]

[Mr Speaker]

Order. This question is about Holocaust memorial day and the scourge of anti-Semitism. The House should listen to the question and to the answer.

[Stephen Crabb]

I thank the hon. Gentleman for the question. He is exactly right: no member of the Jewish community anywhere in the UK should have to live in fear. He may be interested to know that tomorrow I shall be meeting Rabbi Michael Rose in Cardiff, to talk about those concerns as they affect Wales.

[Jonathan Evans (Cardiff North) (Con)]

Will my right hon. Friend take the opportunity to remark not only upon Rabbi Michael Rose, but also upon the work done by Mr Saleem Kidwai, Secretary General of the Muslim Council of Wales, who has been working so very hard in Cardiff for good community relations for many years?

[Stephen Crabb]

My hon. Friend will also be interested to know that I am meeting the Muslim Council of Wales tomorrow. We had a remarkable and powerful demonstration of unity on the Sunday evening after the Paris attacks, when Rabbi Rose and the Muslim Council of Wales leader stood hand in hand, in unity, supporting freedom values in Wales.

The Prime Minister was asked—

Wales Bill

Stephen Crabb Excerpts

Wednesday 10th December 2014 Commons Chamber

[The Secretary of State for Wales (Stephen Crabb)]

I beg to move, That this House agrees with Lords amendment 1.

[Madam Deputy Speaker (Dame Dawn Primarolo)]

With this we may take Lords amendments 2 to 13 and 17.

[Stephen Crabb]

Taken together, these amendments remove the so-called lockstep mechanism from the income tax provisions. By removing that mechanism so that the Bill reflects the Silk commission’s recommendation in its part I report, the National Assembly for Wales will be able to set separate Welsh rates of income tax for each band. Subject to a referendum, all three income tax rates would be reduced by 10p, and the Assembly would decide a separate Welsh rate for each band. Those Welsh rates would be added to the reduced UK rates.

The lockstep is probably second only to dual candidacy as the most debated aspect of the Bill; it has been debated at great length in both this House and the other place. I have been clear throughout the passage of the Bill that I have been prepared to listen to all the arguments and perspectives and, if necessary, to take a different approach on the lockstep. That is exactly what I have done. Before I go any further, I would like again to place on the record my thanks to my right hon. Friend the Member for Clwyd West (Mr Jones) for his hard work and perseverance as Secretary of State for Wales in guiding the Bill through its early stages.

On Second Reading, the hon. Member for Rhondda (Chris Bryant) made a point of counting the number of times my right hon. Friend used the word “accountability” in describing the Bill; I believe that he stopped at 15. Frankly, though, my right hon. Friend could have used it 15 times more because the Bill was, and is, all about accountability. By being made responsible for raising a proportion of the money that they spend, and allowing the people of Wales to judge them on how they spend it, the Assembly and the Welsh Government will become more accountable to the electorate.

In removing the lockstep, we are removing what was widely seen to be a deterrent to the Welsh Government’s accepting the devolution of income tax in Wales. Given the other financial provisions in the Bill and the full devolution of business rates, which, as my right hon. Friend the Chancellor confirmed last week, will be implemented as planned next April, the Assembly would become responsible for raising around a quarter of the money that it spends.

Hon. Members will be aware that last week the Office for Budget Responsibility published a forecast of devolved tax revenues for Wales alongside the autumn statement. That showed that revenue from the 10p of income tax that would be devolved to Wales would net the Welsh Government almost £2 billion in 2014-15—about nine times as much as stamp duty land tax and landfill tax combined. The figures show, in black and white, that through the Bill we are providing the Assembly and the Welsh Government the tools to help grow the Welsh economy and take responsibility for raising a significant portion of the money that they spend. The removal of the lockstep makes it even easier for them to do that.

I welcome the First Minister’s statement in the Senedd last week in which he confirmed for the first time that he would accept income tax devolution. That is indeed progress. But—and there is always a “but”—once again he hid behind the self-imposed “barrier” of funding. I have always said that the powers in the Bill should be as far-reaching and flexible as possible, to provide the Welsh Government with the tools to grow the Welsh economy. Where we have committed to removing obstacles, however, the First Minister continues to erect them. He seems intent on denying the people of Wales their rightful say on whether income tax powers should be devolved, rejecting the opportunity to make the Welsh Government more accountable to those who elect them and refusing to accept responsibility for raising more of the money that they spend.

[Sammy Wilson (East Antrim) (DUP)]

The Secretary of State has outlined the advantages of the devolution of those additional powers. Does he accept that giving more tax-raising powers, and hence reducing other income from central Government, exposes the Welsh Government to greater fluctuations in revenue and makes the long-term planning of services much more difficult?

[Stephen Crabb]

Part of devolving any tax—income tax or any other fiscal power—is the creation of an incentive for the devolved Government. They get an extra tool and an incentive, which they never had before, to grow that portion of their own tax base.

Crucially, the devolution of income tax in Wales will be done in line with what the Holtham commission proposed for Scotland: the indexed deduction mechanism. That would effectively shield the Welsh Government from UK-wide economic shocks but give them the incentive of holding on to the extra Welsh revenue that they were able to generate. That works both ways: if Welsh income tax grows at a slower pace than that of the rest of the UK generally, there will be a loss, but that is exactly what provides the incentive for the Welsh Government to seek to grow the tax base. The issue is about economic development.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

My reading of the Office for Budget Responsibility figures, published last week, was that the Welsh devolved tax take is projected to increase by half a billion pounds over the next Parliament. If the powers are not fully adopted by the Welsh Government, what would be the increase in the Welsh block during that period?

[Stephen Crabb]

I cannot provide a specific analysis in line with the question, but I agree with the general thrust of the hon. Gentleman’s point. There are distinct advantages, not only for the Welsh Government, but for businesses in Wales, which want the Welsh economy to grow through the devolution of these taxes.

[Jonathan Evans (Cardiff North) (Con)]

Let me be the first to congratulate my right hon. Friend on his recognition overnight as the Welsh politician of the year.

Does this debate not highlight one of the difficulties with devolution? People only really want half of it—they want the powers, but do not want the responsibilities. There is a statistic showing that a minority of people in Wales recognise that health policy is decided in Cardiff. Does that not illustrate the importance of giving responsibility as well as devolving the powers themselves?

[Stephen Crabb]

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

[Owen Smith (Pontypridd) (Lab)]

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

[Stephen Crabb]

It is entirely up to Welsh Ministers how they choose to use these tools. I am surprised by what the hon. Gentleman says, as I would expect him to be the last person to suggest that the Secretary of State should be directing how these powers are used. I am a Conservative, and, to my core, my aspiration is always to see lower taxes rather than higher taxes. That is a difference in values between Government and Opposition Members. We understand that lower taxes generally create the right circumstances for business growth and for growing wealth in an economy—and all Members, on both sides of the House, should be ambitious to see more of that in Wales.

[Sammy Wilson]

Does the Secretary of State accept, though, that unless we have the correct formula for deciding what are national impacts and what are local impacts on the tax revenue raised, there is a great danger that Wales could suffer as a result of the fact that fluctuations in income over the economic cycle tend to be much greater in the regions of the United Kingdom than in the United Kingdom as a whole?

[Stephen Crabb]

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

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

[Owen Smith]

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

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

[Stephen Crabb]

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

[Owen Smith]

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

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

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

a word I think they made up—

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

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

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

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

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

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

--- Later in debate ---

[Owen Smith]

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

[Stephen Crabb]

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

[Owen Smith]

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

--- Later in debate ---

[Geraint Davies]

That is an interesting point, but it does intrinsically depend on the elasticity of demand. At a time when corporation tax is already the lowest in the G8, I suggest that inward investors are not looking to Britain to lower its corporation tax and making a marginal decision to invest. They are looking at the level of research and development and the prospects of being part of Europe. One issue for inward investors is the uncertainty of a referendum ending up with us as a sort of chip shop England floating out into obscurity with UKIP and the Tories.

In my view, if we cut corporation tax again there will be a net reduction in corporation tax revenues. On the income tax issue, I have an open mind. I am just throwing forward some of the scenarios whereby we can lose out in England and in Wales and making a point, which I ask the Minister to respond to in his summing up. I want to know what analysis has been done of the potential downside to the Exchequer of Wales reducing the top rate of tax and people migrating to Monmouth? What are those numbers and what consideration has he made? My guess is that he has made no consideration, and if so we should not be hurtling ahead in this way.

[Stephen Crabb]

I will be very brief as there is another set of Lords amendments that we need to debate.

We spent most of this debate not debating the specifics of the Lords amendments about the removal of the lockstep. Most of the time has been spent listening to the weight of arguments, largely from Labour Members, against fiscal devolution full-stop. So we end the parliamentary passage of the Wales Bill exactly where we started: with three parties in this Chamber recognising the potential benefits to Wales of devolving a portion of fiscal powers—we are not talking about a full step down the road of full fiscal devolution, but a strong step forward —and one party resolutely digging in, trying to pretend that there is some kind of plot or conspiracy; we have had all those words and that language used before.

[Mr Llwyd]

Will the right hon. Gentleman give way?

--- Later in debate ---

[Stephen Crabb]

I will give way to the right hon. Gentleman, who was rightly recognised last year as the MP of the year.

[Mr Llwyd]

And I am intervening on a Member of even higher status.

Is it not interesting that the excuse being put forward by those on the Labour Front Bench is that they need to sort out Barnett? For the last 20 years or so I have been arguing about the need to sort out Barnett when the Labour party denied that there was a problem.

[Stephen Crabb]

The right hon. Gentleman is absolutely right. We end the parliamentary passage of the Bill exactly as we began it, with Labour trying to place even more hurdles in the way of devolving a portion of income tax. You would have to be Colin Jackson to clear all the hurdles that the Opposition are trying to set up.

[Ian Lucas]

Will the Minister give way?

[Stephen Crabb]

I will not, because there is another group of Lords amendments to discuss.

I should like to finish by paying particular tribute to the contribution made by my hon. Friend the Member for Montgomeryshire (Glyn Davies). He set out some powerful arguments, and has done so from a position of real credibility, having been an Assembly Member. He has been ahead of the curve on many occasions in recognising the strategic direction that Welsh devolution needs to go in and the benefits that can be accrued to Wales by taking sensible, moderate and pragmatic steps forward. On that note, I shall bring my remarks to a close.

Lords amendment 1 agreed to, with Commons financial privilege waived.

Lords amendments 2 to 13 and 17 agreed to, with Commons financial privilege waived.



Clause 13

Proposal for referendum by Assembly

[Alun Cairns]

I beg to move, That this House agrees with Lords amendment 14.

--- Later in debate ---

[Chris Ruane]

I agree entirely, but that should not be left to a short campaign two or three weeks before a referendum; it should be as of right.

I was a teacher for 15 years, admittedly in a primary school rather than a secondary one. We should try to teach these issues at a level that young people will understand. By the age of 18, someone has the right to have a mortgage. We need to make sure that young people are educated, in ways they understand, about mortgage rates, interest rates and student loans.

[Stephen Crabb]

I know that the hon. Gentleman is in no way belittling primary school children, but I should say that I have faced some of my most challenging questions when visiting primary schools, not least about the Chartist movement when I visited a Newport primary school.

[Chris Ruane]

The right hon. Gentleman is absolutely right. I used to delegate the collection of the orange squash money to the brightest child in the class, whose money-counting skills were greater than mine.

We need to educate young people, especially about student loans and VAT, so that when they put their X in the box, they are making an informed decision. They need to know the crucial difference between progressive and regressive taxes.

Oral Answers to Questions

Stephen Crabb Excerpts

Wednesday 3rd December 2014 Commons Chamber

[Glyn Davies (Montgomeryshire) (Con)]

2. What discussions he is having with the Welsh Government on waiting times for cross-border health treatment in Montgomeryshire and Shropshire.

[The Secretary of State for Wales (Stephen Crabb)]

The performance of the Welsh health service is the most pressing issue for the people of Wales at this time. My ministerial colleagues and I regularly raise concerns with the Welsh Government, including on the issue of cross-border services. It is essential that all patients, wherever they live, can access the very best health care that meets their needs.

[Glyn Davies]

Does my right hon. Friend agree that the Welsh Government should follow the UK Government’s example of commitment to the NHS by using the £70 million boost to its budget, which came about as a consequence of increased spending on health in England, on the Welsh NHS?

[Stephen Crabb]

Decisions on how the Welsh Government use Barnett consequentials are a matter for them, but it is true that a great many people in Wales would be baffled, bemused and hugely disappointed if Welsh Ministers chose not to use every single penny of the £70 million that we have made available to them by protecting and increasing NHS budgets here at Westminster.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

3. What assessment he has made of the level of infrastructure investment in Wales since 2010.

--- Later in debate ---

[The Secretary of State for Wales (Stephen Crabb)]

For too long, Wales has suffered from under-investment in infrastructure, so I am proud to be part of a Government who are putting that right. By working closely with the Welsh Government and providing additional economic resources, we have been able to set out a long-term vision for how first-class infrastructure will make Wales a more attractive place in which to invest, benefiting the people of Wales for generations to come.

[Andrew Jones]

I thank my right hon. Friend for his answer and commend him on his work in securing the valley lines electrification. Does he agree that this project will have a transformative effect on those communities that were often left behind by previous Labour Governments?

[Stephen Crabb]

I thank my hon. Friend for his question and his kind remarks. He is absolutely right. It was precisely because we did not want to leave those valley communities behind that we worked so hard with the Welsh Government to secure the full electrification package, electrifying the great western line all the way through to Swansea, plus electrifying those valley lines, which, as he says, will have a transformative economic and social impact for many years to come.

[Jonathan Edwards]

The Welsh Government have published figures on proposed roads expenditure showing that spending per head of population in south-west Wales will be £89, whereas the figure will be £815 for south-east Wales. Carmarthenshire, Ceredigion and Swansea will not have a single penny spent on roads, which means that there will be no money for relief roads for Llandeilo, Ammanford and Pencader in my constituency, and nothing for upgrades to the link between Newcastle Emlyn and Carmarthen. Does the stitch up between the UK Government and the Welsh Government to spend all Wales’s new borrowing capacity on a new M4 relief road not mean that there will be no transport infrastructure for the rest of Wales?

[Stephen Crabb]

With respect to the hon. Gentleman, he has got this wrong. A Plaid Cymru former Transport Minister in the Assembly championed the upgrade of the M4, but could not achieve it, because the money was not available. We are providing the resources for that upgrade. That does not mean that no other project can happen throughout Wales, however, and I agree with the hon. Gentleman that we want more infrastructure investment in west Wales; we share that objective.

[Neil Carmichael]

Does the Secretary of State agree that the Government’s investment in redoubling the Stroud to Swindon railway line, plus the promised investment in the A417 roundabout, add up to much improved links between the midlands and north Wales, which will be excellent for trade, manufacturing and tourism?

[Stephen Crabb]

My hon. Friend makes his point extremely well. There is a broader point: infrastructure investment not necessarily inside Wales, but in border areas, benefits people and businesses across Wales. We should not be insular when considering infrastructure investment throughout the UK because it often delivers real benefits to all parts of Wales.

[Mrs Siân C. James (Swansea East) (Lab)]

Tidal Lagoon Power in my constituency is mentioned in the national infrastructure plan. Will the Secretary of State join me in congratulating that important company on how it has worked with determination and grit to get the project through?

[Stephen Crabb]

I echo the sentiments of the hon. Lady, who is a strong supporter of this important project. The quality of that company’s management, vision and business plan was precisely why I wanted the project to be included in the national infrastructure plan. It is also why I have been working hard with colleagues in the Treasury and the Department of Energy and Climate Change to get this potentially strategic project included in our long-term infrastructure plans.

[Chris Ruane (Vale of Clwyd) (Lab)]

In 2009 I managed to convince my right hon. Friend the Member for Neath (Mr Hain) to allow Denbighshire and Conwy into the objective 1 bid. Since then, those two counties have received about £500 million of EU funding. Will the Secretary of State congratulate the EU on that funding and recognise the danger to Wales of our pulling out of the EU?

[Stephen Crabb]

The biggest danger to Wales, including north Wales, would be to abandon our clear long-term economic plan, which I know Labour Members are calling for. When I spent two days in north Wales on a business tour last week, I visited many Labour Members’ constituencies and saw just how dynamic the private sector is. Businesses in that sector are leading the economic recovery, so they are the ones that we should be saluting.

[David T. C. Davies (Monmouth) (Con)]

I commend my right hon. Friend on his commitment to the M4 relief road. The Severn bridge will link on to that relief road, so will he consider the importance of having a plan for when it returns to public ownership in approximately 2018?

[Stephen Crabb]

My hon. Friend talks about an important issue that has been raised by Members on both sides of the House in recent months. I commend his work personally and that of his Select Committee on examining the impact of Severn bridge tolls on businesses and consumers in Wales. I share his concerns about the levels of the tolls. I want a long-term plan in place, so I look forward to discussing his ideas with him in more detail.

[Nia Griffith (Llanelli) (Lab)]

The Secretary of State says that his Government are investing in the electrification of the railways and building a prison, and now he talks about the tidal lagoon, but is not the reality that they have not yet spent a single penny on any of those projects? They have not laid a brick or a yard of electric rail. In fact, the situation is worse, because his Government have cut the Welsh capital budget by a quarter, and no amount of jam tomorrow can sweeten that unpalatable truth.

[Stephen Crabb]

I am genuinely bemused by the hon. Lady’s question. Let us just remind ourselves that under the Labour Government no work was done to improve the M4, and not a single mile of railway line was electrified in Wales. We are cracking on with a long-term plan for infrastructure investment, and I am very proud to be part of a Government who are doing that.

[Mr Mark Williams (Ceredigion) (LD)]

I very much welcome what the Secretary of State said about electrification in south Wales, but will he turn his sights to the position in west Wales? Is he prepared to meet a delegation from the Traws Link Cymru group, which is campaigning to reopen the Aberystwyth to Carmarthen line? That would benefit our economy immeasurably and open up our part of the world generally. Is he prepared to push that agenda forward?

[Stephen Crabb]

My hon. Friend is a strong voice for improving all transport connections in west and mid-Wales. We are seeing the largest investment in our railway infrastructure since Victorian times, and I want Wales to get the maximum benefit from that. I would very much welcome a meeting with the group that he has mentioned so that we can discuss further how we can make sure that west and mid-Wales benefit from rail infrastructure investment as much as anywhere else.

[Jessica Morden (Newport East) (Lab)]

6. What discussions he has had with the Secretary of State for Transport on cross-border rail services.

--- Later in debate ---

[Nick Smith (Blaenau Gwent) (Lab)]

8. What discussions he has had with the Secretary of State for Transport on when the electrification of the valleys railway line will be completed.

[The Secretary of State for Wales (Stephen Crabb)]

When I became Secretary of State, I made resolving the dispute over funding for the electrification project my No. 1 priority. I have had many discussions with my right hon. Friend the Secretary of State for Transport in recent weeks, and I am delighted that we have settled a deal between the Department for Transport and the Welsh Government to deliver that important project.

[Nick Smith]

Has the Secretary of State considered improving the frequency of trains after electrification? Two or three trains an hour on the valleys line to Cardiff would be a massive boost to my constituents in Ebbw Vale, Llanhillith and the surrounding valley towns.

[Stephen Crabb]

The hon. Gentleman makes an important point. There are frequency issues on those lines, but he must recognise that decisions on the frequency of services will need to be taken by Welsh Ministers, because we are devolving the franchise to the Welsh Government as part of the electrification deal.

[Ian Lucas (Wrexham) (Lab)]

Part of the valleys line package is a contribution by the UK Government to the capital costs involved. In principle, are the UK Government prepared to support capital investment in railways in north Wales?

[Stephen Crabb]

I spent two days in north Wales meeting business leaders and local authorities to talk about how we can drive up the quality of infrastructure in north Wales, and I can tell the hon. Gentleman that we have a long-term plan that will deliver the improvements for infrastructure in south Wales and north Wales too. [Interruption.]

[Mr Speaker]

Order. Let us have a bit of quiet in the Chamber so that Mr Howell can raise the subject of the Newport investment summit.

[John Howell (Henley) (Con)]

9. What discussions he had with business leaders at the recent Newport investment summit.

[The Secretary of State for Wales (Stephen Crabb)]

The UK investment summit in Newport was another important opportunity to focus on all that is good about the Welsh economy at this time. I was proud to stand shoulder to shoulder with my right hon. Friend the Prime Minister, the First Minister of Wales and businesses in Wales to bang the drum for all that is great about our nation. During the summit I met numerous companies that are looking to invest or to expand their investment in Wales.

[John Howell]

Did my right hon. Friend discuss with business leaders the fact that there were 79 foreign direct investment projects in Wales in 2013-14, the highest level in 24 years?

[Stephen Crabb]

My hon. Friend is exactly right; there has been a sharp increase in inward investment in Wales. The important point to note about those projects is that they were all secured with the help of UK Trade & Investment and the UK Government.

[Paul Flynn (Newport West) (Lab)]

13. Does the brilliant success of that second summit, following the NATO summit, not illustrate what a marvellous habitat Newport provides for international conferences —almost certainly the best in the United Kingdom?

[Stephen Crabb]

I am delighted to see the hon. Gentleman stand up and champion business investment in south Wales. He is exactly right that Newport, and the Celtic Manor in particular, provide a superb venue for not only international leaders’ summits, but inward investment conferences. It will be a key player as we look to regenerate and improve the economy of south Wales.

[Roger Williams (Brecon and Radnorshire) (LD)]

15. Business leaders have welcomed the introduction of the employment allowance, which reduces employers’ national insurance bills by up to £2,000 per annum. It has been taken up by 1,200 businesses and charities in Brecon and Radnorshire, but it is estimated that nearly 1,000 of all employers have not applied. What can the Government do to encourage further uptake of that important concession?

[Stephen Crabb]

My hon. Friend is right. The employment allowance has been a huge success for small businesses up and down Wales. There is a responsibility not just on Government but on all of us as Members of Parliament to champion that project and to tell businesses in our own constituencies how they can benefit from the allowance.

[Guy Opperman (Hexham) (Con)]

14. It is clear that the successful investment summit in Newport brought in overseas investors and created jobs as part of the long-term economic plan. Does the Secretary of State agree that we should have a northern powerhouse investment summit—and if they like, the north Welsh can come too?

[Stephen Crabb]

I agree wholeheartedly with my hon. Friend. The northern powerhouse represents an exciting vision for economic and civic renewal in the north of England, and it poses huge opportunities and potential for north Wales too.

[Hywel Williams (Arfon) (PC)]

11. What recent discussions he has had on delivery of the online universal credit application process in the Welsh language.

Government Policies (Wales)

Stephen Crabb Excerpts

Wednesday 26th November 2014 Commons Chamber

[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.

[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.

--- Later in debate ---

[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]

indicated dissent.

[Owen Smith]

You were laughing a moment ago.

[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.

--- Later in debate ---

[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.

[Stephen Crabb]

rose—

[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.

--- Later in debate ---

[The Secretary of State for Wales (Stephen Crabb)]

I am delighted to follow the shadow Secretary of State for Wales and to have the opportunity to talk about the record of the UK Government in Wales. I notice that the Opposition changed their minds on the original motion that they sought to table. I believe it was originally entitled “The disastrous effect of Government policies on Wales”. It seems that they no longer believe that to be the case, and quite right too. We are winning the argument and we have not even begun our speeches yet.

We have to ask ourselves why, at this precise moment, the Opposition have tabled such a ludicrous motion and are trying to talk down the Welsh economy and present a black caricature of what is happening inside the Welsh economy when last week was such a successful week for Wales. On Friday, the Prime Minister, Labour’s own First Minister of Wales, business leaders and journalists stood together at Celtic Manor for the UK Investment Summit, rallying together to bang the drum for the huge strides made in the Welsh economy in recent years. Why would Labour choose to have such a debate at this time to talk down the efforts we are all making to secure new investment and new job creation in Wales?

[Huw Irranca-Davies]

I would applaud any jobs created in my constituency, but I will tell the Secretary of State why we are having this debate today. A guy came into my surgery two weeks ago and showed me his payslip. It was disgraceful. An umbrella company was taking more than £50 from him to contribute to its—the company’s—employer’s national insurance contribution, and deducting £35 as a contribution to his own annual leave. According to HMRC he was employed by the company. Does the Secretary of State condone or condemn such companies?

--- Later in debate ---

[Stephen Crabb]

I condone companies that invest in Wales and create jobs, which is the most important thing in driving up wages. Let us be clear about this on both sides of the House: we acknowledge and recognise that wages are not where we would like them to be in Wales. We want to see real wages going up in Wales. The best hope for workers in Wales to see real increases in wages is more job competition: the creation of more and higher quality jobs. That was exactly the purpose of last week’s investment summit. Welsh Labour Members really need to make up their minds. They say one thing at this end of the M4, but back down the road in Cardiff they say another thing about what is going on inside the Welsh economy. They need to make up their minds on whether they back Welsh business or not.

[Huw Irranca-Davies]

The Secretary of State is making a strong and forceful case. Will he argue as strongly and as forcefully for the groups of construction workers in my constituency who are now up to £100 worse off, for the youngsters who are at the beck and call of employers on zero-hours contracts with no continuity and no certainty of employment, and the people working in two part-time jobs because they cannot get one full-time job? Would he say that they are benefiting from the economy in the same way?

[Stephen Crabb]

We feel equally offended by the abuses in the workplace that the hon. Gentleman describes. The record of the coalition Government is actually very positive: increasing penalties for companies that do not pay the minimum wage properly, and consulting on the abuse of zero-hours contracts and taking action.

[Mrs Moon]

The Secretary of State will be aware that I have raised several times in the Chamber the case of a person in my constituency who had money deducted from his salary. He spotted that it had been deducted and went to his employer, who said that it was because he was taking too long in the toilet. Will the Secretary of State condemn employers who do not tell employees that they are deducting money from their wages, or those who are making false deductions from salaries on an ad hoc basis when it is not clear that the money has been taken or what it has been taken for?

[Stephen Crabb]

I am not aware of that specific case, but clearly it does not sound right; it does not sound like an employer that values its employees. However, we should be wary of painting a caricature of the Welsh economy. There are specific abuses, which we will crack down on, and examples of bad practice, which we must not tolerate, but overall the picture is of an improving economy. Wales is getting stronger and its economy is improving, and if Labour Members really value their constituents and want to see opportunities extended to them, which I genuinely believe they do, they should back the general thrust of our policies.

[Mrs Moon]

The company would not talk to me, so I asked HMRC to investigate—let it look at the payslips, let it see what is happening—and what did I get? I got a response saying, “We’ll get back to you some time in December.” That is not good enough. I need an assurance that the company will be investigated.

--- Later in debate ---

[Stephen Crabb]

If the hon. Lady sends a copy of that correspondence to my office, I promise we will respond quicker than that.

[Guto Bebb (Aberconwy) (Con)]

Instead of the doom and gloom being portrayed by Labour, will my right hon. Friend join me in celebrating the 42% fall in the unemployment rate in my constituency since the coalition came to power?

[Stephen Crabb]

Absolutely, I welcome the fall in unemployment in my hon. Friend’s constituency. During the shadow Secretary of State’s speech, I was looking through Labour Members’ constituencies. Many of them saw increases of 60%, 70% and 80% in unemployment under the last Labour Government, whereas unemployment in those constituencies is now falling.

[Wayne David]

What would the Secretary of State say to my constituents in Lansbury Park, who, because of the policies of his Government, now find themselves living in the poorest ward in Wales?

[Stephen Crabb]

I have been to the hon. Gentleman’s constituency: I had a fruitful set of meetings with people working at the coal face in terms of supporting people in long-term unemployment and helping them back into work. I realise that there are challenges in the Welsh economy and that sections of Welsh society are still not seeing the full benefits of economic recovery, which is why there is no complacency on the Government Benches, but I must point out that his local authority is working very well with the Department for Work and Pensions, in preparing for the roll-out of universal credit, which will make a difference to the lives of people in his constituency.

[Jonathan Evans]

Is not the answer to the hon. Member for Caerphilly (Wayne David) that the Lansbury Park estate did not become poor in the last four years, and that throughout all the years he has represented the area, it has been one of the poorest in Wales? It is only since the coalition came to office that unemployment has started falling, whereas when Labour was in office, it went upwards.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

That was not a point of order, but I am certain that the hon. Gentleman has clarified his position.

[Stephen Crabb]

Not until every section and geographical part of Wales is sharing in the benefits of recovery will we talk meaningfully about a full economic recovery in Wales. There is no complacency on the Government Benches about that.

To round off the debate about Caerphilly, I must point out that under the last Labour Government, of which the hon. Gentleman was a member, unemployment in his constituency rose by 92%, whereas it has fallen by 31% under this coalition Government. I say with all humility that he should be trumpeting that and welcoming the fact that today there are more men, women, lads and girls going out to work in his constituency than there were under Labour.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

The Secretary of State made great play just now about measures being taken to tackle non-payment of the minimum wage. Exactly how many prosecutions have there been for non-payment in Wales, and does he think it an acceptable level, given the experiences of many people, including in my own constituency?

[Stephen Crabb]

I will get back to the hon. Gentleman with the—[Interruption.] Rather than come up with a specific number, I will write to the hon. Gentleman and provide him with a factual answer.

[Jenny Willott (Cardiff Central) (LD)]

As I am sure the Secretary of State is aware, I was previously the Minister responsible for the national minimum wage. There have not been prosecutions in many cases, but what has been done is far more important—I am sure my right hon. Friend will agree. This Government have ensured that employees who have not received the minimum wage when they should have done have had their money paid back, so they have not lost out as a result. It is far more important that employees get recompense and get their minimum wage.

[Stephen Crabb]

My hon. Friend brings some helpful information to this debate, and I commend her for her work as Minister in driving up and improving employment practices for workers in Wales and throughout the United Kingdom.

[Several hon. Members]

rose—

[Stephen Crabb]

I will give way a bit later.

Let us remind ourselves that when we formed this coalition Government back in 2010, the coffers were empty, and the previous Chief Secretary to the Treasury was joking that the money had all gone. Wales was in an employment slump, and the Labour party was far too relaxed about the tragedy that 200,000 people in Wales had never worked a day in their lives. What a tragedy that was for Welsh communities and for the individuals who had never worked a day in their lives. This Government are not content to be relaxed about that and we are not shying away from the responsibility for trying to put that right. That is why hard-working people are at the very heart of our long-term economic plan. It is why we have cut income tax for more than a million people in Wales so that people can keep more of what they earn. It is why we have cut national insurance contributions to allow businesses to grow so that they can keep and take on more staff, and why we have introduced the Work programme to provide the best possible support for long-term unemployed people, so that they do not get left behind as they did under the last Labour Government.

We have cancelled Labour’s planned fuel duty increases so that petrol will be 20p cheaper than it would have been under the last Government, saving money for the owners of 1.7 million vehicles in Wales, and we are also taking action to help the relatively high proportion of pensioners we have in Wales. Last year, we increased pensions above inflation by £2.70 a week, on top of the record cash rise of £5.30 in the state pension the year before. In April this year, we increased it again by £2.95, in line with our triple lock. This was the biggest cash increase since the state pension was first introduced. That should be compared with the tiny 75p increase offered by Labour when they were in government. It is not hard to tell which party is on the side of pensioners in Wales.

[Mr David Hanson (Delyn) (Lab)]

This debate is about the economy, but it should also be about values. Will the Secretary of State explain to us what values drive him to cut the taxes for the richest people in Wales while putting up VAT, which is paid by everybody, no matter what their income? What values drive him to make benefit cuts such as we have seen with the bedroom tax and to hit the poorest people hardest? As I say, this debate is about values.

[Stephen Crabb]

I agree with the right hon. Gentleman that it is about values. It is about our values as a Government who are not content to see 200,000 people in Wales who have never worked a day in their lives. That is why I celebrate the fact that there are 38,000 more people in work in Wales since the election and 47,000 fewer households where nobody works. What does that mean in real terms? It means more kids in Wales growing up seeing a mum or dad going out to work. Opposition Members, who go under the name of “Labour”, should be championing that.

[David T. C. Davies]

Is my right hon. Friend aware that this debate is not about the economy, but about the effect of Government policies on Wales. Does it surprise him that the hon. Member for Pontypridd (Owen Smith), who spoke very entertainingly—I look forward to coming back to it—for nearly 40 minutes did not once mention the national health service or the effect of Government policies on health?

[Stephen Crabb]

My hon. Friend makes an important intervention and we look forward to hearing more from him later in this important debate. It is about values, but over the last week, the mask has finally slipped—yet another example of Labour’s mask slipping. We saw it last week when a member of the Opposition Front-Bench team saw fit to ridicule someone’s home just because they had a white van parked outside it and were displaying the flag of St George. The Labour party can no longer with any credibility claim to be the workers party. It is the party of the liberal metropolitan elite, that sneers at hard-working people. Today Labour Members should be on their feet championing workers in their constituencies —[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I am struggling to hear the Secretary of State. I am sure that we all want to hear him.

[Stephen Crabb]

Time and again we see that the Labour party simply does not believe in the people of Wales. It thinks it knows best, it does not believe that people can manage their benefits, it does not believe that businesses are strong enough to play their part in rebalancing the economy and it certainly does not believe that Wales is an ambitious country hungry for success.

I believe those things and so do this Government, from the Prime Minister down. We reject the negativity of the Labour party, which is using this debate to talk Wales down at the very time that it should be backing Welsh businesses and backing the people of Wales who are working so hard to drive the economic recovery forward. Since the election, 46,000 fewer people in Wales are claiming out of work benefits, there are 90,000 more private sector jobs in Wales and 26,000 more small businesses are driving the economy forward. That is all down to the difficult decisions taken by the coalition Government back in 2010 to get the economy moving again. Each one of those decisions was challenged and rejected by Labour.

[Jenny Willott]

The Secretary of State mentioned the growth in the small business sector and he also mentioned the employment allowance, which gives a national insurance contribution rebate to businesses. Will he welcome with me the fact that more than 1,000 small businesses in my constituency alone and tens of thousands across Wales have already taken that up, enabling them to invest in their staff through training or higher salaries and even to create new jobs and take on more people?

[Stephen Crabb]

That is a message I hear consistently from small businesses up and down Wales. Wherever I go, they welcome the efforts the Government have made to give them confidence to hire more workers and to keep staff. The last thing that businesses want to be doing is shedding staff at this time. They know how hard things have been for many families out there in the economy and they are doing everything possible to hold on to staff and grow their work forces. We have been supporting them in that.

[Chris Bryant]

The single thing that every business man or woman in Wales has said to me is that they want economic security and certainty about the future if they are going to see investment or to make further investment themselves. What is really worrying them is that the Government are playing fast and loose with our membership of the European Union, hanging the sword of Damocles over the Welsh economy and the UK economy. The uncertainty about whether we will be in or out is surely bad for the Welsh economy.

[Stephen Crabb]

The uncertainty about the European Union and the doubts and concerns about it are out there anyway. If the hon. Gentleman talks to people in Wales and looks at the public opinion polls, he will see that opinion in Wales is almost equally divided between those who are saying they want to come out of the European Union and those who are saying that they want to stay in. The Prime Minister’s strategy of getting a better deal from Europe as regards our membership and putting it to the people of Wales and the UK, arguing for Britain to stay in on that renegotiated membership, is the best strategy for dealing with this and addressing it head-on. That has to be the best way.

[Chris Bryant]

I disagree. I would have a referendum tomorrow. If that is the Secretary of State’s real argument, let us have a referendum tomorrow. The idea of holding off for two years and having some nebulous renegotiation when we have not even set the terms of what we want and are constantly saying to businesses in Wales that we do not know whether will be in or whether the Prime Minister would support staying in the European Union in two years’ time can only be bad not only for big businesses, such as Airbus and General Electric, but for the small and medium-sized businesses that rely on investment through the public funds that come from the EU.

[Stephen Crabb]

I have a great deal of time and respect for the hon. Gentleman, who knows his stuff on this issue, but I suggest that he look at what the business organisations are saying. They support what the Prime Minister is saying about renegotiating. Businesses themselves in the UK and Wales want a less intrusive, less costly and less burdensome membership of the European Union.

[Mr Mark Williams (Ceredigion) (LD)]

I want to reiterate the point made by the Opposition, but from a farming perspective. Has the Secretary of State listened to the president of the Farmers Union of Wales, who talked about the great uncertainty that this will cause many hundreds of small businesses—that is, the farms of Wales?

[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.

--- Later in debate ---

[Stephen Crabb]

Well, Madam Deputy Speaker, I merely pick up what has been reported and discussed in the media.

While the Labour party is busy tearing itself apart, we are cracking on with creating the right conditions to get the economy moving. We are investing in Wales because we believe in Wales. I am particularly delighted to be able to tell the House that the rail electrification projects in south Wales will go ahead. I am sure that the hon. Member for Pontypridd would have preferred us not to meet that challenge, so he would have one more reason to be negative and talk down the economy in Wales, but I am proud of the deal that the Wales Office brokered between the Department for Transport and the Welsh Government, putting Welsh interests right at the heart of the Government’s agenda.

[Chris Bryant]

rose—

[Stephen Crabb]

I give way to the hon. Member for Rhondda, who is very excited today.

[Chris Bryant]

No, I am quite calm, actually. This is calm.

Will the Secretary of State tell me precisely when we shall see the electrification of the valleys lines? I have heard successive Ministers make promises about it, but absolutely nothing has happened.

[Stephen Crabb]

We are delivering this project. We have worked very constructively with the Welsh Government to put the deal in place. We will see trains running on the electrified service to Swansea in 2018, and on the valleys lines in 2022. Obviously, those timetables are subject to how quickly the Welsh Government move in managing the project, but they understand its strategic importance and urgency for people and businesses in south Wales.

[Geraint Davies]

I welcome the news of the financial deal and the certainty of the timetable, with a date of 2018 for the Swansea service. However, the economics of austerity and low wages have meant that instead of increasing by 7% this year, income tax receipts are flatlining, and the projected income from national insurance and income tax is £13 billion down, so the Chancellor will not now be able to reduce the deficit by £11 billion. Does the Secretary of State not accept that the politics and economics of low wages and hitting the poor hardest simply are not working, and debt is being driven up?

[Stephen Crabb]

I am not sure that I follow the hon. Gentleman’s argument. If he is expressing concern about the deficit, let me ask him why, for the last four and a half years, he and his colleagues have pursued policies with the exact objective of increasing the deficit and increasing the debt, and have argued and voted against every measure we have tried to introduce to restore stability and sanity to our national finances.

Effective transport links are a vital part of any modern economy, and few areas in the United Kingdom are more in need of the improved commuter costs, reduced travel times and more frequent train services that electrification will bring than the valleys communities. Yet again, investment has Welsh people at its heart. The Government’s programme of investment in rail infrastructure in Wales and throughout the UK is one of the most ambitious since the development of the rail network in the 19th century. By 2019, we shall have put in place more than 870 miles of electrification, whereas Labour Governments have managed less than eight miles.

Rail electrification is only one example of the constructive and co-operative relationship that we have struck with the Welsh Government to help deliver for the people of Wales. In contrast to the Labour party in Westminster, we do not posture and play silly games; we roll up our sleeves, put partisan interest aside and do our very best to help get Wales moving again.

Opposition Members may recall the NATO summit in Newport just two months ago, which was a stunning success for Wales—a great example of two Governments working in co-operation to deliver for the people of Wales. We hosted the largest gathering of world leaders in Britain’s history, putting Wales on the world stage. We worked with local business, local councils—I pay particular tribute to Newport city and Cardiff city councils—the Welsh Government and the local people, and they all delivered superbly. NATO showcased the excellent hospitality Wales has to offer and created jobs for local people, and this success paved the way for last week’s investment summit—another example of this Government working positively with the Welsh Government in the interests of Wales.

It could not be any clearer: the UK Government are putting business at the forefront of the recovery and they are delivering. I refuse to accept the Opposition’s argument that the private sector in Wales is too weak for the rebalancing of the economy to work, and I certainly refuse to accept the constant bashing the shadow Secretary of State delivers in respect of Welsh businesses.

These two historic events—the NATO summit in September and the investment summit last week—should convince the shadow Secretary of State that Wales can deliver on a scale matching any other nation in the world. Joint working on this scale demonstrates how the Welsh and UK Governments can co-operate and collaborate in the interests of the people of Wales.

Securing good quality jobs for people in Wales is a priority shared by both the UK and Welsh Administrations. Airbus in north Wales continues to be a shining example of the quality of jobs and the skills sets Wales has on offer. I was therefore delighted that investment from both Governments last week has secured 6,000 jobs in the long term at the firm’s factory in Flintshire, in the constituency of the hon. Member for Alyn and Deeside (Mark Tami).

[Chris Ruane]

Does the right hon. Gentleman agree that the rise of Airbus, out of the ashes of the closure of Shotton steel works, was down to actions taken by the Labour Government in 1998, when we gave Airbus £500 million in launch aid? That was an example of private and public co-operation.

[Stephen Crabb]

Airbus is deeply appreciative of the efforts of Governments of all party shades, and is particularly appreciative at the moment of the way the Governments in London and Cardiff are working together to strengthen it and see it secure for the long term.

[Mark Tami]

rose—

[Stephen Crabb]

I give way to the Member in whose constituency Airbus is located.

[Mark Tami]

Does the right hon. Gentleman accept that Airbus is a European partnership and it works because we are in Europe, and if we were not in Europe that relationship would be endangered, along with thousands of jobs?

[Stephen Crabb]

There is truth in what the hon. Gentleman says. It is an excellent example of European industrial co-operation, but he knows better than anyone else here that at the heart of the success of Airbus in his north Wales constituency are the excellent skills and motivation of the workers, many of whom are in his constituency, but also in other constituencies.

North Wales is at the heart of Wales’s economic growth, and I look forward to seeing more excellent examples of enterprise in Wales’s very own northern powerhouse tomorrow, when I embark on a two-day business tour there. The Labour party here in London at times seems to resist these developments.

[Ian Lucas]

If the right hon. Gentleman is visiting north Wales, perhaps he will visit the Wrexham area. I hope he will accept that many of our exporting giants in north-east Wales, such as Kellogg’s and Toyota, export to European markets, and that the international investors who decide where to invest and create new jobs are frightened off by his Prime Minister’s indecision and this Government’s lack of clarity.

[Stephen Crabb]

Business is not being scared off: quite the opposite. We recognise that the single European market is an enormous strategic prize for the UK, but in fact a greater proportion of Welsh exports go to countries outside the EU than to those inside it, and our trade with countries outside the EU is growing at a faster rate, so the hon. Gentleman should not be so insular and should look at the worldwide dimension, rather than just the European one.

[Mr Hanson]

When the Secretary of State is travelling to north Wales, will he stop off in Chester or go to Vauxhall in Ellesmere Port and ask my constituents there how much they value having a voice in this House to represent their interests on matters that are dealt with by the English Government?

[Stephen Crabb]

I will take the opportunity to have exactly those conversations, and I expect that all those people will tell me resoundingly just how important the right hon. Gentleman’s voice is in representing their interests.

[Guto Bebb]

The Opposition are very keen to express their concern that our policy on Europe is dangerous for business investment, but does my right hon. Friend agree that that is contradicted by the investment that was made in north Wales last week?

[Stephen Crabb]

Exactly. There is a faint whiff of scaremongering coming from Labour on those issues.

I want the Government to bang the drum for investment into Wales, whether it be the UK Government or the Welsh Government, and I am delighted to be able to say that inward investment into Wales is on the rise. In the past year in Wales alone, 79 projects have got under way—the highest number for almost 25 years. The 13 years of the last Labour Government did nothing for boosting inward investment in Wales, but I have seen for myself what this Government’s policies have done for inward investment—[Interruption.] The hon. Member for Vale of Clwyd (Chris Ruane) says that that is all down to the Welsh Government, but almost all the inward investment projects that we secured for Wales last year involved the active support of UK Trade & Investment and the UK Government.

Just last month I visited Hydro, a company that specialises in water purification using electro-based technology. While I was there, Hydro announced a new £20 million joint venture deal in the United Arab Emirates to assist that country to achieve more effective water treatment solutions. I look forward to hearing the hon. Member for Llanelli (Nia Griffith) congratulating that company and championing the business interests in her constituency when she speaks later in the debate.

[Stephen Doughty]

The Secretary of State is talking about the contribution of major businesses to the Welsh economy. Does he agree that the steel industry in Wales is facing significant challenges, with Celsa and Tata in particular being affected? It is crucial that the Government act quickly and robustly to deal with the concerns that those companies have raised about energy, dumping from markets in China and Turkey, and the many other matters that he and I have had correspondence on. Does he acknowledge that the Government need to get their act together and move a lot faster on those issues to support the steel industry in Wales?

[Stephen Crabb]

My ministerial colleagues and I are working hard on those issues, and we have also had correspondence and meetings with Ministers in the Department for Business, Innovation and Skills. We are certainly alive to the concerns of the steel industry and we want to do everything possible to secure the future of that strategic industry in the hon. Gentleman’s constituency and elsewhere in south Wales.

The road network in Wales is another vital element of its infrastructure connections that businesses and communities rely on. That is why we are providing the Welsh Government with increased borrowing powers via the Wales Bill to boost investment in Welsh infrastructure, including work on the M4 upgrade. Congestion on the M4 has long been a concern for south Wales businesses, and an upgrade is grossly overdue. That is another vital infrastructure decision enabled by this Government.

[Hywel Williams (Arfon) (PC)]

Does the Secretary of State agree that successful exporting businesses such as Siemens in my constituency would be even more successful if the A55 were upgraded from its present woeful state?

[Stephen Crabb]

I have a huge amount of sympathy for the hon. Gentleman’s point. Businesses in north Wales make that point to me consistently, and I expect to hear more on that while I am in Wales over the next 48 hours. The Under-Secretary of State for Wales, my hon. Friend the Member for Vale of Glamorgan (Alun Cairns) will shortly be hosting a transport summit in north Wales in order to identify the strategic infrastructure projects that we need to focus on if we are to secure the long-term economic success of the area.

I will bring my remarks to a close shortly. I could have gone on to talk about investment in digital infrastructure and the support that we are giving the Welsh Government for the broadband project. I could also have mentioned the investment in the new prison in Wrexham, which is a really strategic investment for north Wales, along with the many other examples of how this Government are doing everything possible to create the right framework and conditions for Welsh business to succeed, and to create the jobs and wages that we all want to see for all our constituents.

I am very proud of the transformative projects that this Government have achieved in Wales. I am also proud of the people in Wales who are making those policies work to their full effect. I am proud that we have a growing private sector with more people in work and more businesses. I am just dismayed at times that the Opposition cannot bring themselves to welcome that, bang the drum and support it. We have no problem with rolling up our sleeves and working with the Welsh Government in the interests of Wales. Why does the Welsh Labour party at this end of the M4 have a mental and political block that prevents it from being a constructive Opposition in the interests of Wales?

[Ian Lucas]

As someone who has run a small business in Wales, I ask the right hon. Gentleman whether he understands that his Government’s policies are doing the economy down. His Government are suppressing demand in the local economy by cutting wages, increasing taxes such as VAT, and preventing people from having enough money to spend to help local business. Does he not understand basic economics?

[Stephen Crabb]

What I do understand is the way unemployment has been falling in the hon. Gentleman’s constituency. He should be championing the fact that youth unemployment has fallen by 49% in the past four and a half years. That is more lads and more girls in his constituency getting their first jobs and a foot on the jobs ladder. That is what it is all about.

Last Friday, when Opposition Members were working out what clever things they were going to say in this debate and trying to find new ways to talk down the Welsh economy, what were we doing? I will tell them where I was last Friday: I was down in Newport, standing shoulder to shoulder with the UK Prime Minister and the Welsh Labour First Minister. We were all banging the drum for more investment in Wales, banging the drum for more jobs for Wales, together sending a united, strong, positive message from Wales that Wales is coming back. We all need to work together to see that continue.

[Several hon. Members]

rose—

--- Later in debate ---

[Paul Murphy]

I fancy it is because of the money that has been cut from the budget generally, because of what the Government here are doing by reducing the amount of money that is coming through the block grant. The Secretary of State actually said somewhere in his speech—he is getting a bit like his boss now, making things up from time to time—that there was no inward investment in Wales in 13 years of the Labour Government. That is rubbish—of course there was inward investment in Wales during those 13 years. As Secretary of State, I went around talking to firms that had benefited from inward investment and so on.

[Stephen Crabb]

I did not actually say that, and I apologise if I did give that impression. The point I was making was that there was a collapse in the inward investment: compared with what we had seen in the ’80s and ’90s, there was a huge decline over that 13-year period in the amount of inward investment coming to Wales. Thankfully, with the Welsh Government and UK Government working together, we are seeing that go back up.

[Paul Murphy]

The Welsh Government are certainly doing it, because foreign investment in Wales has increased by 30% whereas the figure for England is 10%—I rather suspect the work of the Welsh Government has made the difference.

The other issue the Secretary of State has to take into account is the welfare policies of the Government. In effect, those changes in Wales are doing two things that are detrimental to the people of Wales. I agree with reforming the welfare agenda and I agree that we should not have workless families in Wales—we all agree on that—but the great brunt of the cost of these welfare reforms often falls not on those who are out of work but on those who are in work. Those people in work are suffering sometimes more than anybody else.

Last week’s report by Sheffield Hallam university showed graphically how the south Wales valleys have been hit harder by welfare reform than any other part of the United Kingdom. We can talk about the impact on individuals, which is catastrophic, but we can also talk about the sucking out of the local economies the money that would have gone in had these people still been receiving these benefits. The reforms will cost £34 million a year in my constituency alone, and the average loss of income per working age adult in Torfaen is nearly £600 a year—in one ward, Trevethin, the figure is £850. Some 3,000 jobs in the south Wales valleys could have been created but for the impact of these so-called welfare reforms put in place over the past few months and years, which have been pretty botched.

Finally, I wish to refer to the bedroom tax and make no apology for doing so. One of the first things the new Labour Government will do is abolish it, and everybody in Wales will cheer. Not only is it cruel and wicked, but it is not working. Some 20% of housing benefit claimants in my constituency are affected. In the first year of the policy Bron Afon, which runs social housing, had 268 tenants fall into arrears; we are talking about some £63,000 of arrears that people never had before until this came about. That is not helping anybody. It does not help the tenants, the local authority or the social landlords, and it again takes out of the local economy vital money that could be used to boost local businesses, particularly small and medium-sized enterprises. Ultimately, that is why we have seen an enormous increase in the number of people using food banks in both my constituency and the rest of Wales. Until two or three years ago, I never saw a food bank. Now, we visit them time and again. Our churches and our chapels collect for them every Sunday. That increase is a direct result of the Government’s policies in Wales, which will undoubtedly be rejected by the people of Wales next year. We will then have a Government in Cardiff and a Government in Westminster working together for the benefit of the people of Wales.

--- Later in debate ---

[Huw Irranca-Davies (Ogmore) (Lab)]

I am delighted to follow that excellent contribution by my good friend the Member for Ynys Môn (Albert Owen), which struck the right balance between the necessary optimism and the vision we have for a better future and the real challenges.

It has been a passionate debate and I have been as passionate as many with my interventions, but I want to say first that when I speak for my constituents, I speak for all of them. Many of them are in small businesses and micro-businesses—one man or one woman operations that they intend to build up slowly. They drive the economy locally. I also speak, however, for people who work within the set-up of Raspberry Pi down at the old Sony site at Pencoed in my constituency, and who have reinvented a way to take computers forward, so that everybody can pull them apart and put them back together, and use them in schools and for developing nations, and have different applications for them. They are helping our trade balance, and that is a fantastic story, as is the story of Ford Bridgend in the neighbouring constituency represented by my hon. Friend the Member for Bridgend (Mrs Moon). Ford consistently employs and invests in that plant, and takes on many apprentices.

[Stephen Crabb]

I am pleased that the hon. Gentleman has mentioned the case study of Raspberry Pi. Does he agree that this is a great example of what we now call reshoring? It has brought back the manufacturing of this product from China to the UK, helping the trade balance. It is a great example of what we mean by rebalancing the economy.

[Huw Irranca-Davies]

I agree. It is an astonishing story, showing how sometimes the coincidence of business and political networks meeting happens, so that an offhand conversation can lead to a company thinking, “Well, why do we have to be out in the far corners of the world? Why don’t we come back here? We have a skilled work force.” Sony Bridgend, which has had difficult times over the past couple of decades, has re-engineered itself as a national award-winning centre of design in manufacturing and production, and that is what attracted the company back. It has been a huge, rip-roaring success, and there are another 20-odd companies on that site that we hope will build up as well.

That is all good, and I welcome every instance of the claimant count dropping, but we also have to look at the other side of the story. As parliamentarians, no matter what seat we represent, we have to look at the kind of jobs that those individuals are going into. As my hon. Friend the Member for Ynys Môn said, we need to ask whether they can get credit or a mortgage. Can they think seriously about setting up a home for a family and a future? Can they rent somewhere?

I am sure that Members on the Government Benches know in their heart of hearts that behind the claimant count drop there are a lot of people who want to be paid a bit more, who want to work a few more hours and who want the certainty of a permanent contract with the protection that any decent employer would surely want to give to a decent worker. That does not involve loading burdens on an employer. Government Members often tell us that we know nothing about this, but I can tell them that I have managed businesses in the public and private sectors. I understand the challenges of balancing a business plan and bringing in the bottom line, but that has to involve treating the workers decently as well.

We cannot achieve this overnight. This is not just a case of extolling the virtues of business and job creation; let us also talk about the quality of those jobs. Let us take businesses, large and small, by the hand and ask what more we can do to lift people up by giving them skills, education and training, a decent wage and decent terms and conditions. That involves making an investment in the worker as well as in the plant. There are many good companies out there. I am trying to avoid using a soundbite, but this is a reflection of the reality in my constituency: it has an M4 catchment. We can travel down into what is still a very good manufacturing centre along the M4. Thanks to Labour’s investment over the years, people can also get on a train in Maesteg—now at a lower price than a couple of years ago, thank goodness—and travel to work in Cardiff or Newport.

Let us take as an example a youngster who has to get a minimum wage job. Getting to work could mean spending £5 a day on a ticket or driving in a clapped-out car that will cost them 50 or 60 quid a week. When they ask me whether it is worth going out to work, I will say, “Of course it’s worth it. It is always worth going out to work, because of all the good things that come from being a valued member of a work force.” I want those people to be valued. I want them to be paid decently. This debate has sometimes seemed polarised, but this is not a question of me, as the MP for Ogmore, standing here and saying that all businesses are horrible. They are not; they create the jobs. We can put some of the framework in place and make it easier for them to create the jobs, but it is the businesses themselves that create and drive those jobs, and the people in those jobs need to be treated decently.

It is not all doom and gloom in my constituency, but when I first became an MP, there was one food bank there. Now, there is not a single village without a food bank. Last week, I went to the setting up of a Christians Against Poverty debt advice centre. We already have a citizens advice bureau, as well as debt advice being given by Valleys to Coast. We have had a tenfold increase in the number of people in work who are taking out payday loans.

Yes, let us welcome job creation, but let us also be honest about what we want out of those jobs. I do not want anyone to be forced into taking two or even three low-paid jobs. They should be able to find an employer who will pay them decently to do a job with good terms and conditions and who will value their contribution. I do not want youngsters or people close to retirement to be told that their only option is a job in retail with no guaranteed hours. I do not want them to be told, “We may or may not call you but, my God, if we do, you’d better come in because if you don’t, there are half a dozen other people who will do the job instead.” I do not want that. It is not a good way to drive an economy.

Let us have some frankness in the debate. If we can say that we want job creation but we also want them to be good jobs, we will have done a good job for our constituents. That, by the way, means tackling one of the biggest scandals that I have come across recently. There has been a massive change since March or April this year, with HMRC’s new rules and its approach to umbrella companies in construction. Constituents are coming into my office, skilled, long experienced construction workers, who are £100 a week worse off. It is there in their pay slips and it is legal. It is due to subcontracting out beyond the original contractor to umbrella companies, which deduct payments from those workers. If one thing comes out of today’s debate, I hope it is that the Minister will condemn that practice and undertake to destroy it.

Oral Answers to Questions

Stephen Crabb Excerpts

Wednesday 22nd October 2014 Commons Chamber

[Glyn Davies (Montgomeryshire) (Con)]

1. What steps he is taking to ensure that the Welsh Government remain fiscally accountable following the next stage of the devolution process.

[The Secretary of State for Wales (Stephen Crabb)]

May I first pay tribute to my predecessor as Secretary of State, my right hon. Friend the Member for Clwyd West (Mr Jones), who worked tirelessly for Wales, particularly over the past year, working behind the scenes to ensure that last month’s NATO summit was such a success for Wales?

The Wales Bill devolves tax and borrowing powers to the Assembly and the Welsh Government, ensuring that they raise some of the money they spend. The new income tax powers are a tool to help the Welsh economy become more dynamic and make the Welsh Government more accountable. I call on the Labour party today to support holding a referendum as soon as possible.

[Glyn Davies]

I congratulate the Secretary of State on his much deserved elevation. Does he agree that the Welsh Government cannot be regarded as a genuinely fiscally accountable governing body until they are responsible for raising public money as well as spending it, and does he accept that this step forward in the devolution process is much more important than devolving power in any other policy areas?

[Stephen Crabb]

I very much agree with my hon. Friend’s comments on fiscal devolution. I believe that this represents the next step for devolution in Wales. Devolving a portion of tax responsibility to the Welsh Government and the Welsh Assembly will create dynamic opportunities for the people of Wales and the Welsh economy, and I believe that the Welsh Government should seize those opportunities as soon as possible.

[Mr David Hanson (Delyn) (Lab)]

When the Welsh Government raise money and spend it, they will potentially be spending some of it on hospital services in Chester, Clatterbridge hospital or the Christie hospital, which are local to me. What does the Secretary of State think about the fact that under his proposals I, as a Welsh Member of Parliament, will have no say about services that affect my constituents?

[Stephen Crabb]

The right hon. Gentleman is referring to proposals for English votes on English laws. There are important cross-party issues, but they also work in reverse. For example, constituents on this side of the border do not have a say in the Welsh Assembly about policies that affect services they use. He has to recognise that we currently have a hopelessly lop-sided devolution arrangement, as he and I, as Welsh MPs, and also Scottish MPs, have a say on laws affecting schools and hospitals in England, but English MPs have no equivalent say on services in Scotland and Wales. That must be addressed.

[Roger Williams (Brecon and Radnorshire) (LD)]

I, too, welcome the Secretary of State to his post and look forward to working with him. I also welcome the Government’s concession on the lockstep in the other place. With that in mind, does he agree that every step forward increases the accountability and maturity of the Welsh Assembly?

[Stephen Crabb]

I agree with my hon. Friend. Giving the Welsh Government fiscal powers for the first time means that they have to raise money as well as spend it, which I think will lead to a much healthier political debate down in Cardiff on real responsibility. It is about not only deciding how to spend the money, but taking responsible decisions on how it is raised, and I think that is a big step forward in the political development of Wales.

[Jessica Morden (Newport East) (Lab)]

2. If he will estimate the potential effect of increasing the minimum wage rate by £1.50 on the economy in Wales.

--- Later in debate ---

[Bob Blackman (Harrow East) (Con)]

8. What discussions he has had with ministerial colleagues on the effects of the Scottish referendum result on government policy on further devolution for Wales.

[The Secretary of State for Wales (Stephen Crabb)]

This Government are putting Wales at the heart of the debate on devolution across the UK. I am a member of the new devolution committee chaired by my right hon. Friend the Leader of the House, and I have already met the party leaders from Wales here in Westminster to discuss how we might take forward devolution in Wales as we work towards a fair and lasting settlement.

[Albert Owen]

I, too, welcome the Secretary of State to his new position. I also welcome his moving from being an anti-devolutionist to a pragmatic devolutionist. May I encourage him to go further and become a real devolutionist? When he has discussions with colleagues and others, will he look at moving Government Departments and Government business away from central London to parts of Wales such as north-west Wales so that we can have real devolution and real jobs in those areas of the United Kingdom, and have a more balanced UK?

[Stephen Crabb]

I agree with the hon. Gentleman’s sentiments about the need for real devolutions not only to rebalance the economy of the UK but to rebalance our politics. It is also worth pointing out that the current Welsh Administration in Cardiff is probably one of the least devolutionary Administrations that we have across the UK—they are centralising more in Cardiff. We need devolution within Wales as well as from the UK to Wales.

[Bob Blackman]

I am a big supporter of the Government’s devolution programme and of giving responsibility to the lowest possible level. Does my right hon. Friend agree that there is a concern that certain Labour and Liberal Democrat MPs want home rule for Wales, which would run contrary to the Government’s agenda?

[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.

[David T. C. Davies (Monmouth) (Con)]

12. Does my right hon. Friend agree that in Wales we have longer waiting times, missed accident and emergency targets since 2009, the worst ambulance response times in the United Kingdom, no cancer drugs fund and a 7% real-terms cut in funding? That is what Labour delivers for the NHS. Does my right hon. Friend agree that only the Conservatives can be trusted to run the national health service?

[Stephen Crabb]

I do not want anybody holding up any part of Welsh economic and social life as a bad comparator. I want Wales to be leading and people to be holding up Wales as a good example to follow. The truth is—I think the shadow Secretary of State would admit this in private—that the Labour Health Minister in Cardiff needs to get a grip, get on top of this issue and really deliver for the people of Wales.

[Mr Mark Williams (Ceredigion) (LD)]

To return to the theme of devolution, one of the great successes of the Scottish referendum was the participation of 16 and 17-year-olds in the process. Yesterday the National Assembly spoke with one voice when it voted on returning electoral arrangements to itself. Does the Secretary of State believe that this is an issue that deserves attention? Increasingly, many young people believe it does.

[Stephen Crabb]

I thank my hon. Friend for his question. I visited Scotland several times during the referendum campaign and saw for myself the enthusiasm with which teenagers were engaging in the discussion. I have yet to be convinced on the argument for reducing the voting age for all elections in the UK, but it is clear that such issues will need to be considered in the future.

--- Later in debate ---

[Stephen Mosley (City of Chester) (Con)]

5. What assessment he has made of trends in manufacturing in Wales since 2010.

[The Secretary of State for Wales (Stephen Crabb)]

Under the previous Labour Government, 83,000 manufacturing jobs were lost in Wales. Our long-term economic plan has made a good start in reversing this decline, with 12,000 manufacturing jobs created since the election. I was delighted recently to visit ConvaTec and Toyota in north Wales to see for myself how two global manufacturers really value Wales as a great place to come and do business in.

[Stephen Mosley]

I welcome my right hon. Friend to his post, and I congratulate him and the Government on the success of the NATO summit this summer. In recent weeks, Airbus has announced a $26 billion deal for 250 new aircraft with India’s largest airline, IndiGo, and a deal for 70 aircraft with a Chinese leasing company. The fact that all those aircraft will have wings built in Deeside in north Wales will generate thousands of jobs, including many hundreds in my constituency of Chester. Will he join me in congratulating the company and its employees?

[Stephen Crabb]

One of my early visits as Secretary of State was to Airbus in Broughton, where I saw for myself just what a fantastic plant that factory is. I spoke to senior management there, but not just that: I got a chance to meet the apprentices and see for myself just what a contribution they are making to Airbus’s success at this time.

[Chris Evans (Islwyn) (Lab/Co-op)]

The Secretary of State will know that General Dynamics in my constituency recently signed a contract for the Scout specialist vehicle platforms. Will he now pay tribute to the previous Labour Government, who were instrumental in bringing General Dynamics to Oakdale, creating hundreds of high-tech, high-spec jobs?

[Stephen Crabb]

General Dynamics is another superb Wales-based company that I have had the pleasure and privilege of visiting in recent weeks. I am very happy to join the hon. Gentleman in paying tribute to whoever was responsible for securing the inward investment.

[Ian Lucas (Wrexham) (Lab)]

When Robin Southwell, the chief executive of EADS, which owns Airbus, addressed the Labour party conference this year, he stressed the importance, from Airbus’s point of view, of Britain remaining a member of the European Union. Does the Secretary of State agree on the importance of that, or does he know better?

[Stephen Crabb]

Being part of Europe is important for Wales-based manufacturers—there is no question about that—but when I talk to businesses all across Wales, they also tell me that our current membership of the European Union imposes burdens and costs. That is why they support the Prime Minister’s strategy to renegotiate our membership with the European Union and get a better deal for Welsh and UK business.

[Huw Irranca-Davies (Ogmore) (Lab)]

6. What recent discussions he has had with Ministers in the Welsh Government on improvements to the rail network in south Wales.

[The Secretary of State for Wales (Stephen Crabb)]

Electrification of the great western main line to Swansea and the valley lines is a transformational project that would deliver a much needed boost to the Wales economy. I am determined to find a way forward for this important scheme, and I am leading discussions with Cabinet colleagues and Welsh Government Ministers to secure this vital investment for Wales.

[Huw Irranca-Davies]

I thank the Minister for that answer. He might not be aware that the two lines with the greatest passenger growth into Cardiff in the past couple of years have been the Chepstow to Cardiff and the Maesteg to Cardiff lines, which have far outstripped other valley lines. Is he surprised to know that there is no Sunday service on the Maesteg line for people who want to get to work or to get into our capital city? Will he discuss this with Arriva Trains Wales?

[Stephen Crabb]

I was aware of that point, and I want to raise that issue with Arriva Trains Wales. The growth in usage of the valley lines is one of the reasons why we need to press ahead and create new capacity and make improvements to all the valley lines.

[Nick Smith (Blaenau Gwent) (Lab)]

Will the delay in the delivery of the electrification of the valley lines mean that the final cost will go up?

[Stephen Crabb]

I hope that there will be no delay in delivering the electrification project for the Great Western line and the valley lines. We are involved in productive and constructive discussions with Ministers in London and in the Welsh Government to find a way to crack on and deliver that important project for south Wales.

[Paul Flynn (Newport West) (Lab)]

7. What discussions he has had with businesses in Wales on the effects of energy prices on their international competitiveness.

--- Later in debate ---

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

11. What assessment he has made of difficulties facing the agricultural sector in Wales.

[The Secretary of State for Wales (Stephen Crabb)]

Agriculture is a key industry in Wales, and I recognise the challenges that many Welsh farmers have faced this year. That is why the Government fought hard to achieve the best deal for Wales in the negotiations on the common agricultural policy, and why I welcome the forecast of an increase in Welsh farm income for 2013-14.

[Jonathan Edwards]

What discussions has the Secretary of State had with the Welsh Government and the Department for Environment, Food and Rural Affairs about an action plan to help Welsh farmers, who are being hit by a supermarket price war and Russian sanctions?

[Stephen Crabb]

The Government recognise that Welsh agriculture produces some of the best quality products in the UK. That is why we have talked to farming representatives throughout the summer, and why my right hon. Friend the Prime Minister became the first ever serving Prime Minister to visit the Royal Welsh show this summer. We stay in close contact with farming organisations. We are clear that supermarkets need to work with the farming industry to deliver better returns for farmers.

[Mr Speaker]

There is an opportunity for a free hit on the agricultural sector in Wales. If nobody wishes to seize it, and as we are all present and correct, we will move on to questions to the Prime Minister.

Wales Bill

Stephen Crabb Excerpts

Monday 31st March 2014 Commons Chamber

[Albert Owen]

That is the hon. Gentleman’s position. I have made my position clear: when there are major changes on taxation, there should be a referendum. I am therefore supporting that measure in the Bill. We would lose most of the people of Carmarthen and Ynys Môn if we started talking about the lockstep. The serious problem we have is that when we eventually go to the people of Wales on a taxation referendum, we have to boil it down—[Interruption.] If he stops chuntering from a sedentary position, I will try to give an answer on a simple question that we understand in the first place. The beauty of a referendum is that we need to boil things down. The question as it is framed now would not be easy, which is what we have to work towards. That is where I am coming from on this issue.

It is very logical that the Bill proposes borrowing powers for the National Assembly for Wales. The hon. Member for Ceredigion talked about the abilities of community councils and town councils to borrow in a way that the Assembly cannot, so this is a natural progression. Many things such as stamp duty and landfill tax can produce the revenue streams to help with that borrowing. It is eminently sensible that that happens.

I repeat that we need to consult the people of Wales and have a referendum on the income tax issues in the Bill, so I support that approach. Not having those things would be out of sync with what we have done in the past, when we set up the Assembly and when we had a referendum on increasing its law-making powers. I supported both those referendums and I would support this one, too, but we have to get it right. I am as confused as anybody who has spoken in this debate about exactly what we are going to be telling the people of Wales. I know this is only a Second Reading and it is right that we debate these issues, but in Committee—that is the place to do it—we shall deal with the nitty-gritty of what the taxation actually means. The figures produced in the explanatory notes and in the Government’s various Command Papers are not easy to digest, so we need to have that scrutiny, which this House of Commons does best, before we finalise things.

There has been much debate about the position outlined by my Front-Bench team, and on that I agree slightly with the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards); those details need fleshing out just as much as any others. The purpose of parliamentary democracy is to have that debate and that parliamentary scrutiny, so that is the way we need to move forward. I have been consistent on the referendums issue, and I believe we must have a referendum if we are to move to being able to vary income tax powers or whatever the end result is of this Bill going through both Houses of Parliament.

I wish to discuss the electoral arrangements, as I am slightly confused as to why these provisions have been bolted on to this financial measure, other than to suit a deal done between the coalition parties and Plaid Cymru to try to get the Bill through. We have heard about the Government of Wales Acts. I supported doing away with the dual candidacy because I thought it was unfair and undemocratic that a person who stands for election in a seat and loses, often comfortably, can then arrive in that democratic institution through another means—that is fundamentally wrong.

When we had a debate in this House some time ago—I cannot cite the Hansard reference—the Under-Secretary told us about the consultation exercise, when people were in favour of keeping the ban on dual mandates.

[The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)]

rose—

[Albert Owen]

I am happy to take an intervention if the hon. Gentleman wishes to be helpful.

[Stephen Crabb]

I am glad the hon. Gentleman will take an intervention on that. He will be as aware as anybody that a significant number of the people responding to that consultation saying they were in favour of the ban were Labour Welsh Assembly Members.

[Albert Owen]

I do not know who the people were. The hon. Gentleman may well be right, but Labour is obviously the biggest party in Wales and has a strong voice there, unlike some other parties. It was a consultation exercise—[Interruption.] I am getting chuntering remarks from the hon. Member for Carmarthen East and Dinefwr again, but perhaps Plaid Cymru should also have had enough intelligence to do standard letters to put its view across in this open consultation. The point I am making is that this coalition proposal, supported by Plaid Cyrmru, is on the wrong side of the argument. These parties are doing it for their own political reasons. Nobody has said to me, “Wasn’t it terrible what you did in 2006 when you banned the dual mandate?” Nobody has raised the issue and it is right to leave things as they are. I shall be voting against the measure when the time comes, for the reasons I have given.

Individuals have been mentioned, which is wrong, but I must mention the leader of Plaid Cymru who, when she was elected, made a bold statement that she was not going to stand on the list. She made the brave decision to go before the electorate as an individual and leader of her party. She chose the seat for Rhondda, which she had every right to do, but now she has the jitters. She no longer feels secure in her statement, so she wants the lifeboat of a list place to get her into the Assembly for Wales; that is what this is all about. That is why I point to a deal being done. I smell a dirty deal here between the coalition parties and Plaid Cymru.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)]

It is a pleasure to close this important debate and it is good, as ever, to follow the hon. Member for Llanelli (Nia Griffith), who on this occasion gave an uncharacteristically churlish speech. I want to call her out on her comments about the contribution by my hon. Friend the Member for Forest of Dean (Mr Harper), who is always the model of courtesy and graciousness in his contributions in this House. His remarks about Wales were based on evidence and truth and were carefully made, so I commend him. He is a former Cabinet Office Minister, so he is familiar with issues pertaining in particular to fixed-term Parliaments. This debate has been enriched by his participation. It has also been enriched by the speeches of not one, but two former Secretaries of State. It was good that the right hon. Member for Neath (Mr Hain) and my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan), who is no longer in her place, both gave very thoughtful contributions on issues about which they have a lot of experience.

We also heard from the Chairman of the Welsh Affairs Committee, which did a fantastic job in scrutinising the draft Wales Bill. The speech by my hon. Friend the Member for Monmouth (David T. C. Davies) in fact attracted not just praise from Liberal Democrats, but a slightly backhanded compliment from the right hon. Member for Neath, who described him as having “sincere and intelligent extremism”. As I am sure the right hon. Gentleman knows better than most hon. Members in this House, extremism in the defence of liberty is no vice at all.

We have had a fascinating and wide-ranging debate during the past few hours on matters directly, and sometimes indirectly, related to the Wales Bill. There were excellent speeches from both sides of the House, and I thank all hon. Members for their speeches.

I will limit my remarks to the Bill, but I first want to say that, regardless of points of disagreement, there has been a broad measure of consensus on and support for the Bill by all parties in the House. Just as a Dulux colour sheet has different shades, there have been different shades of support—ranging from frosty and cold by my hon. Friend the Member for Monmouth to rather grudging and unenthusiastic by Opposition Members through to warm by my right hon. Friend the Member for Chesham and Amersham. There has been support for the Bill and, as we go into Committee, we should not forget that this wide-ranging Bill enjoys broad support from hon. Members and parties across the House.

The vast majority of hon. Members clearly support the Government’s move towards achieving a strong measure of fiscal devolution that will give the National Assembly for Wales control of devolved taxes for landfill and land transactions, and enable the Welsh Government to borrow for capital investment. I hope that such a positive position continues as the Bill progresses.

I should perhaps start with the lockstep, a term that few hon. Members had probably heard before the Silk commission did its work, but one with which we are certainly becoming increasingly familiar. I know that the Government’s proposals to allow the Assembly to vary income tax rates uniformly—in other words, in lockstep—subject to a referendum, concern some hon. Members on both sides of the House. Let me be clear that this Government believe that the structure of income tax is a key mechanism to redistribute wealth across the whole of the United Kingdom, including Wales and, as such, that wealth redistribution is properly determined at UK level. The lockstep is consistent with the principle that fiscal devolution should not unduly benefit one part of the UK at the expense of another, which would result in what at least one hon. Member has called a race to the bottom. I am pleased that that position is one that now seems to enjoy the support of Labour Front Benchers, although that was not clear when we last discussed it in the Welsh Grand Committee.

There would be a real risk of a so-called race to the bottom if the Welsh Government were able to set substantially lower rates for higher or additional rate taxpayers without needing to change the basic rate. Far from making the income tax powers unusable, as some hon. Members have suggested, the lockstep makes the powers very usable, as my right hon. Friend the Secretary of State explained at the start of the debate. Devolving income tax would give the Welsh Government a crucial lever to reduce taxes across the board in Wales to make it a lower-tax economy and put money back into the pockets of hard-working people across Wales.

If electors in Wales decide in a referendum in favour of income tax devolution, the Welsh Government would become responsible for almost half the income tax generated in Wales. In reducing the tax burden on working people in Wales, the Welsh Government would reap the benefits of a growing Welsh economy and gain access to a significantly larger revenue stream to finance further borrowing. With vision and foresight, the Welsh Government could grasp that virtuous circle with both hands.

Some Opposition Members, not least the right hon. Member for Neath, raised concerns about how the application of devolved income tax will work in practice. There was some discussion of that in the last sitting of the Welsh Grand Committee, when there was a lot of confusion about whether Welsh budgets would be detrimentally affected by the devolution of 10p of income tax. Following the Welsh Grand Committee, I circulated a letter to all members of the Committee explaining, with a practical example, how that would work. I would therefore hope there would be some clarity, but the right hon. Member for Neath said that there is a risk that Wales will be cast adrift. Let me explain to him that the system of income tax devolution we are proposing protects Welsh funding in two ways. First, the lockstep retains the redistributive structure of income tax across the UK, as I have just described. Secondly and crucially, the block grant adjustment mechanism, which we are calling indexed adjustment, means that Wales is protected from UK-wide shocks. For example, if the UK tax base were to decline, the block grant adjustment will be reduced accordingly. Reducing the block grant adjustment thereby increases the Welsh block grant. Therefore, the finances of the Welsh Government are protected through that mechanism.

[Mr Hain]

I am grateful for the Minister’s views. Is he saying that, if the Welsh Government raise less, Westminster will compensate more?

[Stephen Crabb]

That is not what I am saying. A key principle of the mechanism is creating the incentive for the Welsh Government to create the conditions for the economy in Wales to grow, so that they can reap the fruits and benefits of a growing Welsh economy. The protection kicks in when there are shocks and changes that affect the overall UK tax base. When changes would otherwise have a detrimental impact on Welsh Government revenues, Welsh Government revenues are protected because of the indexation. I shall circulate further information to right hon. and hon. Members.

[Geraint Davies]

Is the Minister saying that there are only upsides? Is he saying that, if the Welsh Government do well and grow the Welsh economy, they get a greater share of overall UK revenue, and if things go the wrong way from their point of view or the UK point of view, they still get that share or more and it never goes down? I cannot believe that.

[Stephen Crabb]

There is a lot of upside in the proposals, which I hope Opposition Members have the intelligence and foresight to recognise. In fact, the Silk commission calculated that Wales would have been better off under the system we are proposing had it been in place in the past decade. That answers the question asked by the right hon. Member for Neath—he asked whether Wales will be better off. The Silk commission estimated that, had the system been in place in the past 10 years, the people of Wales would have been better off. I hope that that also provides assurance to the hon. Member for Swansea West (Geraint Davies), who sees the Bill as a nasty plot and conspiracy.

Some Opposition Members have sought to link the devolution of income tax to so-called fair funding. That is another diversion they are throwing up, and another barrier they are erecting, so that they do not have to contemplate greater and truer accountability for the Government in Cardiff Bay, which they would prefer not to contemplate. The joint statement from the UK and Welsh Governments in October 2012 established a clear process to review relative levels of funding for Wales and England in advance of each spending review. The announcement recognised that levels of funding for Wales relative to England were not currently converging, but that, if convergence in funding is forecast to resume during the period, both Governments are committed to discussing a sustainable and fair solution. The fair funding mechanism agreed with the Welsh Government in 2012 worked very well in practice ahead of the last spending review. I hope that that, too, reassures hon. Members.

Current funding levels are well within the parameters recommended as fair by the Holtham commission. Safeguards are in place to address convergence if and when it resumes. Therefore, the funding regime for Wales should not be seen as a barrier to income tax devolution. That is one more smokescreen the Opposition are throwing up to disguise their basic opposition to, and dislike of, fiscal devolution.

A number of hon. Members mentioned borrowing powers for capital investment. There is clearly a broad consensus on all sides in favour of giving the Welsh Government the ability to borrow to invest in Wales’s infrastructure. Some Opposition Members want the Welsh Government to be able to borrow more than the £500 million permitted under the Bill—some suggested they should be able to borrow a virtually unlimited amount. The UK Government have set the limit considerably higher than we would have if we had used the tax and borrowing ratios we used in the Scotland Act 2012. Had we done that, the borrowing limit would be closer to £100 million, based on the taxes devolved in the Bill. We have set a higher capital borrowing limit of £500 million initially, but with flexibility for that limit to be increased if the Welsh Government gain access to further independent streams of funding, such as an element of income tax. If Opposition Members want to see the Welsh Government have a greater borrowing capacity, they should join us in campaigning for a yes vote in an income tax referendum.

What we are not prepared to accept is reckless borrowing without the means of paying that money back. Borrowing must be commensurate with the independent revenue streams. The Government have not worked hard over the last four years to build a reputation for financial prudence and competence, and tackling Britain’s deficit effectively, only to throw away that hard-earned reputation by allowing the Welsh Government to borrow beyond their means.

The hon. Member for Swansea East (Mrs James) said that she would welcome sight of the “workings-out”—I think that was the phrase she used—to help her to understand how we arrived at the £500 million borrowing limit. I suggest that she looks at pages 26 and 27 of the Command Paper that was published alongside the Bill, which is clear on the rationale and the basis for deciding on the £500 million figure. It is higher than would have applied if we had stuck closely to the Scottish ratios, and that is because we want the Welsh Government to crack on with the job of improving the M4. That was agreed with Welsh Ministers, and it gives them the tools to make progress quickly and to tackle that major infrastructure problem.

The hon. Lady also asked why Northern Ireland’s position was different. Northern Ireland is not a good benchmark for hon. Members to use in comparing borrowing regimes. The Northern Ireland Executive exercise many of the powers and responsibilities that are exercised by local authorities in other parts of the UK. In particular, they collect the equivalent of council tax and business rates and have borrowing powers similar to those held by local authorities.

Opposition Members did not talk much about borrowing, which will have a huge, transformational impact in allowing the Welsh Government to invest in new infrastructure in Wales, and nor did they talk much about the impact of lowering taxes in Wales, creating a low-tax economy and creating new jobs. They saved most of their energy and time for discussing the ending of the ban on dual candidacy. In fact, the right hon. Member for Neath used large chunks of a speech he made in 2006, if my memory serves me right. It has been like “Groundhog Day” as Opposition Members—although I am sure they were reflecting the concerns they have heard in their constituencies—manned the barricades to oppose a sensible measure—

[Albert Owen]

Is the Minister criticising Opposition Members for referring to a measure in the Bill? Surely it is the purpose of a Second Reading debate to talk about the measures in the Bill.

[Stephen Crabb]

I am criticising Opposition Members on two counts. One is the amount of time that they took talking about a relatively minor issue, when they could have used their time to better effect by talking about the real, everyday concerns of the people of Wales who will be affected by the measures in the Bill. I also criticise Opposition Members on this issue because they are wrong. They are in the minority. All other parties support the measure. Wales is the only country with such a ban on dual candidacy.

[Wayne David]

Will the Minister give way?

[Stephen Crabb]

I have been very generous with my time, and I am not giving way again.

The Bill provides the Welsh Government with the means to take active steps to improve the lives of hard-working people in Wales. It will allow the Welsh Government to tailor devolved taxes to best fit the specific needs of Wales; it will make them accountable for some of the money they raise, not just the money they spend; and it will give them the tools to grow the Welsh economy. It also provides them with the means to make much needed investment in critical infrastructure in Wales and, if they choose, to call a referendum to devolve a portion of income tax. It is a Bill I am pleased to commend to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Wales Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Wales Bill:

Committal

The Bill shall be committed to a Committee of the whole House.

Proceedings in Committee

(2) Proceedings in Committee of the whole House shall be completed in two days.

(3) The proceedings shall be taken on the days shown in the first column of the following Table and in the order so shown.

(4) The Proceedings shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.

[Jonathan Edwards]

On a point of order, Mr Speaker. I appreciate that you were not here at the time, but the hon. Member for Llanelli (Nia Griffith) made an unjustified and improper comment about me and refused to take an intervention during her winding-up speech. Is it in order for the hon. Lady to make such a comment? What advice could you give me about securing a withdrawal and what advice would you give the hon. Lady?