Steel Industry: Contribution to the UK Economy

Debate between Stephen Doughty and Jessica Morden

Wednesday 25th January 2023 Westminster Hall

[Jessica Morden (Newport East) (Lab)]

I beg to move,

That this House has considered the contribution of the steel industry to the UK economy.

It is a pleasure to serve under your chairmanship, Mr Pritchard, and to lead today’s debate. My hon. Friend the Member for Aberavon (Stephen Kinnock), a Welsh Labour colleague, secured the debate and was due to lead it, but he has been waylaid by his Front-Bench duties on the Economic Crime and Corporate Transparency Bill. He is an excellent chair of the all-party parliamentary group for steel and metal related industries. He represents the UK’s biggest steelworks—in Port Talbot—and I know that he will take a keen interest in today’s debate and wishes that he was here. Before I begin, I declare an interest: I am a member of the Community and GMB trade unions, both of which represent steelworkers in my constituency so ably, as does Unite. I refer Members to my declaration in the Register of Members’ Financial Interests.

I am incredibly proud to represent a steel constituency; for well over a century, the industry has been at the heart of the communities that I serve, and of constituencies represented by Members present. It is good to see interest from Members on both sides of the House. The contribution of the steel industry to the UK economy is the title of the debate, but the immense contribution of this vital strategic industry is, in a sense, undebatable. Our steel sector employs 34,500 people directly in the UK and supports a further 43,000 in supply chains. Steel salaries are 45% higher than the UK national average and 59% higher than the regional median in Wales, Yorkshire and Humberside. It goes without saying, then, that the steel industry should be at the heart of any levelling-up agenda worth the paper it is written on.

The workforce is a winning combination of highly skilled, experienced workers who have honed their expertise over decades of dedicated work, and a healthy influx of younger steelworkers eager to work in an industry that is at the cutting edge of innovation. Even in the face of the considerable challenges that the industry faces, which I will talk about today, steel still has enormous pulling power for young workers who are looking to build up skills that will last them a lifetime. That is clear to see at Tata’s Llanwern steelworks in my constituency, where the average age of the workforce has fallen from 53 to 32 in recent years. There is a new generation of workers who, like so many before them, are hugely proud to be steelworkers. We must look after them.

Directly and through supply chains, the steel sector adds £5.5 billion to UK GDP and makes a £2.4 billion direct contribution to the UK’s balance of trade. It underpins our entire manufacturing base, and steel is an essential material for the construction, energy, aerospace, defence, engineering and packaging sectors. Some 96% of Network Rail’s steel is sourced from British Steel in Scunthorpe; 250,000 tonnes of steel from Celsa in Cardiff will support the building of Hinkley C nuclear power station; and Liberty Steel produces critical parts for aircraft engines and wind turbine gears. Nearly all 1p, 2p, 5p and 10p coins originate from steel made at Tata in Port Talbot, and Tata Llanwern produces world-class automotive steel for the likes of Jaguar Land Rover and BMW.

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

My hon. Friend is making an excellent speech. She rightly mentions the Celsa plant in my constituency and the critical role that steel plays in so many of our industries and in manufacturing. Does she share my frustration that we seem to have been going round the houses for the last 10 years, particularly on the critical issue of competitive energy pricing? We have seen something like 12 steel Ministers during that time. That is not to disparage the current Minister, whom I like immensely on a personal level, but we need consistency and action on the critical issue of energy prices.

[Jessica Morden]

I thank my hon. Friend, who is a champion for steel in his constituency, where Celsa is based. I wholeheartedly agree that we have been going on about energy prices for so long—it is a theme that I will come to later in my speech—and I thank him for his contribution.

--- Later in debate ---

[Jessica Morden]

I thank the right hon. Member for that very important intervention. She gave an example, as did the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), of how we can use our steel in these projects, and I hope that the Minister will refer directly to that point when she responds to the debate.

These interventions prove that we simply cannot decarbonise the economy without decarbonising steel. As Tata has highlighted, almost every aspect of the UK’s decarbonisation plan is steel-intensive, with 10 million tonnes of steel being required over the coming years for offshore wind, solar, nuclear, hydrogen, and carbon capture and utilisation storage projects. The “Britain, we need our steel” campaign was launched by the Community trade union and union partners in 2020. It is not just a slogan; it is a statement of fact.

Today’s debate comes in the context of the recent worrying news from Liberty Steel, which has announced that it will idle its steel plants in my constituency and at the Tredegar site in the constituency of my hon. Friend the Member for Blaenau Gwent (Nick Smith). The primary production plant in the constituency of my hon. Friend the Member for Rotherham (Sarah Champion), who is also an excellent advocate for steel in her area, and the Performance Steel supplier in the constituency of the hon. Member for West Bromwich East (Nicola Richards), are among the other sites affected.

In a written response to me last week, the Secretary of State for Wales mentioned that he had spoken to Cabinet colleagues about the situation at Liberty and what it means for the workforce, and said that the Government stood ready to provide support. Any updates on that written response that the Minister can provide would of course be welcome to us and, more importantly, all those working at the plants, who are worried about the future. We must not underestimate the uncertainty that they will feel following the news about Liberty.

Of course Liberty has its specific issues, and the Community union is seeking answers from the company about how the latest announcement squares with previous commitments to invest in the business and ramp up production in Newport, Tredegar and elsewhere. It is clear, however, that there is a wider context, and that Liberty’s announcement again demonstrates the precarious outlook for the steel industry more widely. Indeed, the company specifically cited energy costs as a factor in the decision that it made this month.

The same is true for British Steel in Scunthorpe, which is paying nearly £1 million a day for electricity, the cost of electricity having risen tenfold since 2021. There is still real uncertainty about the situation of British Steel, and I am sure that the hon. Member for Scunthorpe (Holly Mumby-Croft), who is here, will speak about that shortly. I hope that the Minister can provide updates. It is imperative that talks between the company and the Government continue, and reach a successful outcome that ensures that steelmaking at Scunthorpe continues and decarbonises.

As Community has highlighted, the cost of Government inaction, in terms of job losses, employment support, and the loss of a vital strategic foundation site, is incalculable. The sky-high energy costs facing the steel sector are by no means a new issue, as my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) said. It is one that I and other Members representing steelmaking constituencies have raised with 12 different steel Ministers since 2010, including six in the last three years alone. It is difficult to establish a long-term relationship when our steel Ministers change so often. I also like the Minister personally, but I make that point.

Over recent years, Opposition Members will have lost track of the number of times we have had to highlight the energy cost disparity, which remains a blight on the competitiveness of UK steel producers compared with their continental counterparts, particularly those in France and Germany. Indeed, UK Steel research shows that British steel producers paid twice as much for electricity last year as German counterparts, hitting competitiveness.

The UK Government’s response to this over the years can be described as piecemeal at best. The energy bills discount scheme announced by the Treasury earlier this month confirmed that there would be at least a continuation of energy price support for businesses until April 2024, removing fears of a March cliff edge—an uncertainty that the Government allowed to fester through the tail end of last year.

However, it is important to note that the support for energy-intensive industries outlined by the Exchequer Secretary to the Treasury falls far short of that provided by competitor countries. That is the point. For example, the German Government have guaranteed their steel industry an electricity price of €130 per MWh for 2023. In contrast, the Treasury’s announcement on non-domestic energy support earlier this month provides our steel industry with a discount only to electricity prices higher than £185 per MWh. That means that UK steelmakers will stump up an estimated 63% more than their German counterparts for electricity.

UK Steel has rightly been critical of what the UK Treasury has on offer, saying that its

“reforms significantly narrow the help that Government will provide”,

and that Ministers are

“betting on a calm and stable 2023 energy market, in a climate of unstable global markets, with the scheme no longer protecting against extremely volatile prices.”

For a decade, British steelmakers have continually been asked to compete with one hand tied behind their back. That is why Labour’s £1 billion contingency fund to help energy-intensive industries, such as steel, deal with energy costs is crucial. It goes far further than this Government’s proposals and is vital.

The £800 million toward energy costs that the Minister mentioned in previous meetings is not all for the steel sector. In any case, it is not a new package of support. It relates to a package introduced under the coalition Government between 2013 and 2015, which was pushed largely by the Liberal Democrat-operated Department for Business, Innovation and Skills. In any case, the support referenced is significant less than the £1 billion contingency fund that Labour has suggested.

We need a Government who will support the industry in a move towards decarbonisation. We have read the reports of the £600 million that the Government have pledged, or are reported to have pledged, to Tata and British Steel this week to help with lower-emissions technology. I trust that we will get more details on this from the Minister later. I hope the negotiations continue and progress with urgency, and that any plan to decarbonise will be fully consulted on and agreed with the unions to ensure a just transition for the workforce. However, it is important to note that the support arrived significantly later than the support for other European countries did, and is significant lower. For example, the German Government have already spent €8.5 billion towards greening their domestic steel industry, and the French Government have spent €2.2 billion. British Steel Scunthorpe’s multi-union chair, Paul McBean, put it well in his recent interview with The Yorkshire Post, saying:

“We are the only country being told to go green and (with) no help.”

I look forward to the Minister’s response on that point about the adequacy of what is on offer.

It is clear that the steel sector is committed to the transition to net zero, but needs a long-term policy framework to make that a reality without penalising steelmakers with gargantuan carbon prices in the interim years. As things stand, rising carbon costs are eating into any available capital that steel companies may have to invest in decarbonisation. That is completely counterproductive, and we need the Minister to act on it. That is a key point.

The Government have spoken about a roughly £1.5 billion package of support schemes for the industry. However, it is important to note that those schemes are spread across many industries, so £1.5 billion does not translate into very much direct capital support for the steel sector. In particular, the £1 billion carbon capture, utilisation and storage infrastructure fund is not money provided to steel companies to support CCUS on site, but investment in pipelines and storage that may at some point be used by steel companies—it is far from a certainty. For example, Welsh steel plants will not be using that infrastructure even if they opt for carbon capture, as it is all for the North sea. Let us not forget the £250 million clean steel fund promised by the Government led by the right hon. Member for Maidenhead (Mrs May), which disappeared without trace.

Labour’s proposed £3 billion green steel fund represents a potential way forward—not a sticking-plaster emergency bail-out, but a plan to work with industry, investing alongside it over the next 10 years. If this Government will not take action, we will.

I also urge the Minister to look at proposals for a carbon border adjustment mechanism. The costs of the UK’s emissions trading system have spiralled over the past two years. Compliance costs for the sector reached £120 million last year, which is equivalent to 60% of the average annual capital investment of the sector, and are set to get much worse. A carbon border adjustment mechanism would create a level playing field by applying carbon prices at the border equivalent to those faced by domestic producers, ensuring that imported steel does not have a price advantage. The Community union has highlighted that such a mechanism would also support the decarbonisation of steel production, as it would allow steelmakers to produce low-emission steel without being out-competed by high-emission, lower-cost imported steel.

[Stephen Doughty]

I thank my hon. Friend for her generosity in giving way again. I should also put on record my membership of the GMB, and past interests involving the GMB and Community.

On the subject of that transition to green steel, my hon. Friend will know that the Celsa plant uses an electric arc furnace—it is producing green steel from scrap. Does she agree that if we are switching to scrap-made steel, we need to ensure not only that there are adequate supplies of scrap in the UK, but that we do not suddenly all start producing the same product? Celsa predominantly produces rebar; we also need the flats, the sections, and all the other products that the UK currently provides so excellently.

[Jessica Morden]

My hon. Friend makes an excellent point—I cannot top it, really. I hope the Minister has heard it.

Procurement policies also need to be updated. For every 1,000 tonnes of steel produced in the UK, 4.2 direct jobs are created, with a further 6.6 jobs created in the supply chain. It is understandable, then, that Make UK found that 68% of the UK public think that public infrastructure projects should prioritise the use of UK-made steel wherever possible, yet the Government have a pretty poor track record in this area. The most recent example was last month’s announcement that a £1.6 billion contract for steel for three fleet solid support vehicles was awarded to a Spanish consortium. That is just one case, but there have been too many missed opportunities for the steel industry. We cannot let that carry on.

As I mentioned earlier, green infrastructure projects will need literally millions of tonnes of steel by the end of the decade. The UK Government’s own steel public procurement pipeline data, released last June, states that offshore wind projects alone will require some 5.3 million tonnes of steel within five years. We need the Government to commit now to maximising the procurement of British steel for all those upcoming projects, a move that Make UK estimates could boost the UK economy by as much as £4 billion and support 11,000 British jobs in steel companies and their supply chains. As the Community union’s general secretary Roy Rickhuss has rightly said,

“The green energy revolution presents a huge opportunity to build a robust British supply chain based on the supply of top-quality domestic steel.”

The events of the past two years tell us that Britain cannot rely on fragile global supply networks for strategic goods, and that if we want to go green, it is nonsensical to transport steel from the other side of the world.

On that point, I welcome that the Government themselves have acknowledged that, in the area of energy supply, the country has

“drifted into dependence on foreign sources”.

We agree, and I echo Roy Rickhuss by calling on Ministers to not make the same mistake when it comes to steel, a sector of such vital strategic importance to our sovereign capability and our national security. Alun Davies, a stalwart of Community in south Wales, puts it succinctly:

“There is a clear choice facing this Government—either they back our workforce and our industries or they choose to offshore thousands of good jobs to other countries.”

UK Steel Industry

Debate between Stephen Doughty and Jessica Morden

Monday 14th September 2020 Commons Chamber

[Jessica Morden]

I thank the hon. Member for that intervention and agree entirely.

There are significant opportunities for UK steel as we begin to build back greener. The Prime Minister spoke earlier this year of a new age of opportunity in making the UK a world leader in, for example, electric vehicles. Steel will also play a vital role in the production of other green technologies, such as wind turbines, rail electrification, renewable projects, solar panels and more. If the Prime Minister wishes for the UK to be a world leader in those things, we must have an industrial strategy that puts steel at its centre.

Before its tragic closure earlier this year, Tata’s Orb steelworks in Newport was the only manufacturer of electrical steel in the UK. With the right strategy and the right investment, Orb could and should have played an instrumental part in a move to electric vehicles. We need vision from the Government to work with the industry to do that. While it may be too late for Orb, it is not too late for the Government to produce a Budget that incentivises automotive demand, so that the plants at Llanwern, with world-class steel for the automotive sector, can get involved. Steel that is manufactured in Britain also enjoys a significantly lower carbon footprint than imported steel. Not only does imported steel take more carbon dioxide than sourcing a tonne of steel domestically, but steel produced in Britain is subject to higher environmental standards than steel produced abroad.

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

I absolutely agree with that point. Does my hon. Friend agree that offshoring carbon emissions to China, Turkey and Iran is exactly the way we do not want to go, when we can make that steel in this country in green ways?

[Jessica Morden]

My hon. Friend is absolutely right, and I agree entirely.

It is also vital that the Government recognise developments such as Liberty’s Greensteel hub in Newport, which uses renewable and low-carbon energy to recycle scrap steel to meet the challenges of decarbonisation and growing consumption of steel globally.

Steel can play a vital part in rebuilding Britain after the pandemic. Despite the significant challenges posed by coronavirus, the Government have a unique opportunity to create a 21st-century manufacturing sector that has a revitalised steel sector at its core, so that we can build back. However, the Government must act—something that they have been slow to do in the past. I look forward to the Minister’s comments tonight.

Severn Bridges

Debate between Stephen Doughty and Jessica Morden

Tuesday 31st January 2017 Westminster Hall

[Jessica Morden]

The hon. Gentleman is absolutely right; this issue has ramifications for the whole economy of Wales, in south Wales and beyond, including his constituency. I thank him for being here today and for making that point.

Getting more clarity about the direction of travel is important for my constituents who commute, the businesses that do business across the bridges and those who work on the bridges. In recent years those people have had to suffer the highest toll in the UK, and commuters have just had to absorb the annual increases, however unfair they are. Constituents have had to turn down job offers because the toll is equivalent to nearly an hour on the minimum wage. Just this morning I received an email from a constituent, who said:

“The tolls add a considerable amount to the cost of travel to Bristol, where a lot of attractive jobs for young graduates like myself exist. Many of my friends who have graduated from university recently and are looking for a job fail to look at Bristol because in my opinion, the toll gives…the impression that Bristol is out of reach, even though in actual fact, travel time is not much more than to Cardiff.”

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

I pay tribute to my hon. Friend for securing this debate and for the campaigning she has done on the issue, along with so many of us. She is absolutely right to mention Bristol. I have heard again and again from businesses and individuals in my constituency who trade across the Severnside area, particularly in the creative industries. We have people working in the BBC drama village in Cardiff Bay and the BBC natural history unit in Bristol. Does my hon. Friend agree that sorting out the tolls is absolutely crucial to growing and strengthening that creative economy?

[Jessica Morden]

My hon. Friend is right. House prices in Bristol mean that more and more people are choosing to live in Severnside, Monmouthshire and Newport and to commute. Our local economy is interlinked with Cardiff, but also with Bristol. It is incredibly important that we do all we can to support that growth.

--- Later in debate ---

[Jessica Morden]

The hon. Gentleman makes an important point, which I will come to later when I talk about the debt that the Government say they have to recoup. That is interesting, given the money they have recouped in the past from other sources.

The Minister will say that halving the tolls will allow an assessment of the impact on traffic. The traffic using the bridges has increased and, as recent media coverage shows, many people are choosing to relocate from Bristol and the south-west to Newport and Monmouthshire as a lifestyle choice—a very good choice, as it is an absolutely wonderful place to live. In response, the UK and Welsh Governments need to work on a holistic transport plan that includes the metro, and the Government must help to make up the shortfall from the loss of EU funds. While I am being parochial, the Government should support a new station bid for Magor and provide greater rail capacity, especially on the commuter services from Newport and the Severn tunnel junction, which have been dubbed the “sardine express”—I have had debates on that in the past—and the Welsh Government should look at the matters that are devolved.

[Stephen Doughty]

My hon. Friend is being very generous in giving way. I agree with her point about rail. I and others have been campaigning for a new station at St Mellons Parkway—I hope the Minister will be listening closely, because the decision is going to be taken—and for funding for the south Wales metro. Does she agree that the tolls are not only a tax but a time penalty for Welsh residents, because unlike the Dartford crossing and the M6 toll, which have much faster technology—Dartford has got free flow—we do not have free flow or the faster toll technology on the bridge?

[Jessica Morden]

I absolutely agree, and I will come to the issue of free flow later. The fastest transaction at the moment is the TAG, which takes six seconds, but there is further scope for helping with congestion.

Will the Minister tell us where the figure quoted in the public consultation of a 17% traffic increase over 10 years has come from? How much of that will be in the first year? In fact, it would be particularly helpful if he could publish all the research that the Government have commissioned on traffic modelling in relation to the end of the concessions and the traffic flows. I know that all hon. Members would be grateful for that.

If, as the consultation indicates, the Government decide to continue tolling, the toll level should not exceed the cost of operating the two bridges. Severn River Crossing collects about £90 million-plus each year, and that is going up. Maintenance and operation costs are between £13 million and £15 million. Based on a rough, back-of-the-envelope calculation, that requires a toll of about £1, which means the Government will still be charging three times more for cars and 10 times more for lorries. The Government argue that they will have to recoup a £60 million debt for fixing defects but, as the Welsh Affairs Committee has documented, they have done very well out of the bridges so far: the Treasury has received £154 million-plus since 2003 in unexpected VAT—more than enough to cover the debt and undertake the resurfacing work, which the Government value at £12 million, with a lot left over.

On the point made by the hon. Member for Ceredigion (Mr Williams), why do we have to pay for resurfacing on this stretch of road out of bridge tolls, when for any other stretch of road the cost is taken out of general taxation?

Leaving the EU: Infrastructure in Wales

Debate between Stephen Doughty and Jessica Morden

Tuesday 17th January 2017 Westminster Hall

[Stephen Doughty]

Indeed. It is about the detail of these types of project. I was not aware of that particular one, but it is a very good example. Many of us in Wales have personal family connections to Ireland. We certainly have connections in our constituencies. More importantly, there are crucial connections between our economies, services and infrastructure; my hon. Friend makes a valid point.

The EU’s structural funds over the past 30 years have been vital in supporting regional development and the growth of the Welsh economy. They have supported people into work and training, youth employment, research and innovation, business competitiveness, renewable energy and energy efficiency, connectivity and urban development. The central aim of the current structural funds programmes is to create an environment that will support economic growth and jobs. Obviously, there are huge implications if we are not part of that.

Under the current round of structural funds, which runs from 2014 to 2020, Wales has been allocated almost £2 billion, with £1.6 billion going to west Wales and the valleys and more than £325 million going to east Wales. In total, along with match funding, the current round of structural funds is expected to support total investment in Wales of approximately £3 billion. Indeed, research undertaken by Cardiff University’s Wales Governance Centre prior to the referendum concluded that the £658 million of EU funding for Wales from the common agricultural policy and the European structural funds made Wales a net beneficiary of EU funding. In 2014, the estimated net benefit from the EU for Wales was around £245 million. That is equal to about 0.4% of Welsh GDP—it equates to around £79 per head—in 2014.

I talked about the history of these investments. That is the third time that west Wales and the valleys have qualified for the highest level of structural fund support, which is available to regions in the EU that qualify with GDP per head that is less than 75% of the EU average. I have long supported that principle and am yet to be clear, in any way, what the UK Government’s plan is for replacing those structural funds to reduce some of the inequalities that are built into some of our post-industrial economies in particular and rural areas. The spending has been aimed at supporting projects intended to transform the prospects of the most marginalised and vulnerable, to lead to increases in productivity and growth and to invest in the future of our young people in Wales.

Following the vote to leave the European Union, investment in infrastructure in Wales has already experienced some setbacks, with postponements of some asset sales and a downsizing of some projects, according to ratings agency Standard & Poor’s. In a broader note to clients in September, Standard & Poor’s stated that the biggest risks for infrastructure companies could be a likely reduction in capital investment—both domestic and foreign direct investment.

I want to mention the South Wales metro again. It would be useful to know whether the Minister can add any clarity on this. The metro is crucial to my own constituency and the First Minister, Carwyn Jones, has described it as “a catalyst for transforming” the Welsh economy. He made that clear when he met the Commission in December to seek assurances that it will continue to support the project and that it will not be affected by the Brexit negotiations.

[Jessica Morden (Newport East) (Lab)]

The metro is absolutely crucial for connectivity and economic development in my constituency, too. Does my hon. Friend agree that it would be particularly helpful today if the Minister could be crystal clear that any shortfall is guaranteed by the UK Government, including beyond 2020?

[Stephen Doughty]

Absolutely. We need that sort of clarity, which is clearly absent from the so-called plan that has been put before us today by the Prime Minister and the Brexit Secretary. I emphasise that the metro is far more than just a transport scheme—it is a vehicle for transforming the economic and social prospects of many of our communities. It will deliver jobs and connectivity as well as those faster journey times and more frequent services that we all want to see.

It is also of note that, in addition to the funds I have mentioned, at present both public and private organisations in Wales can bid directly to the European Commission for funding from other programmes such as the Connecting Europe Facility and Horizon 2020, which supports many of our academic research projects. Those can also provide funding for infrastructure projects. The House of Commons Library suggested that it is difficult to quantify the funding from each of the direct funding programmes but, to give an idea of the scale, the CEF fund is worth €30.4 billion in total over the period 2014 to 2020. That covers areas such as transport, energy, and telecoms. CEF projects currently funded in Wales include the South Wales railway electrification studies that were conducted around the electrification programme. The Welsh Government and Welsh ports are also in discussions—here, again, are the links with Ireland—with the Irish Government and Irish ports on access to the “motorways of the sea” funding, which can be used to invest in crucial port infrastructure and hinterland connections to ports.

The Horizon 2020 programme has awarded €40 million of grants to organisations in Wales, as of 23 February 2016, and the predecessor to Horizon 2020—the seventh framework programme—allocated €145 million to organisations in Wales. We absolutely need that certainty. I have spoken to many academics locally who are deeply concerned about their ability to participate in these cross-European infrastructure projects based in the academic sector. The issue is not just what that valuable research and co-operation can engender in terms of knowledge and understanding of crucial issues, but the link to products and the frontline economy. Many businesses in my community, particularly in some of the business parks, have strong links with the high tech and biotech industries that have developed around universities such as Cardiff University.

I mentioned the European Investment Bank. I hope that the Minister can provide some clarity about what Wales’s relationship could be post-2020. The European Investment Bank is a significant source of finance for UK infrastructure projects. In 2015 the lending to the UK amounted to €7.7 billion, of which two thirds was provided for infrastructure. Programmes in Wales included €340 million for Welsh Water to make improvements to water supply and wastewater collection, and €174 million for Wales & West Utilities to upgrade and expand gas distribution networks. This funding is integral not only to those high-profile road junctions and road projects and things such as the South Wales metro, but to the utilities that ensure the functioning of our communities.

Contaminated Blood

Debate between Stephen Doughty and Jessica Morden

Tuesday 12th April 2016 Commons Chamber

[Jessica Morden (Newport East) (Lab)]

I will do my very best to keep my speech within seven minutes, Madam Deputy Speaker.

I pay tribute to my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) and the all-party group for securing the debate, and to the Backbench Business Committee for granting it. I also pay tribute to those members of the campaign who have travelled to be in the Gallery today. I know that many were unable to stay because of the important urgent debate on steel, but many have stayed and I thank them for their patience.

I am speaking today on behalf of my constituents the Smith family and Lin Ashcroft. Janet and Colin Smith lost their son Colin in 1990, when he was just seven. Just a few months earlier, Lin lost her husband Bill Dumbellton. I have spoken about Colin before in these debates, which many hon. Members have called to consider what has been described as the greatest treatment disaster in the NHS.

Colin went to hospital when he was eight months old for a minor ear infection. As a haemophiliac, he received factor VIII, which, following a freedom of information request, the family later learned had come from a batch from an Arkansas prison. He spent his short life fighting illness and died aged seven of AIDS and hepatitis C, although the family did not find out that it was hepatitis C until three years after his death. No parent should have to go through what the Smiths have gone through. As they have said, they want justice so that their son can rest in peace and they want justice for those who remain.

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

That story is just one of the many we have heard from constituents. I heard from a constituent, David, who similarly spoke passionately about his circumstances. He will not even be affected by the consultation that is going on. Clearly, this is a UK legacy issue and a UK historical injustice. We have heard about the difference in Scotland and elsewhere. Does my hon. Friend agree that we need to make sure the UK Government lead on working with the devolved Administrations—in Wales, that means the Wales Office—to ensure that we do not end up with a postcode lottery, with some people potentially in worse situations and some not getting the same justice as others?

[Jessica Morden]

My hon. Friend makes an incredibly valuable point, which I hope the Minister will listen to—I know it will be heard by the large contingent of Welsh campaigners who have come here today to listen to the debate.

Bill, the husband of another constituent, Lin Ashcroft, was one of the first haemophiliacs to treat himself at home with cryoprecipitate. He contracted HIV and hepatitis C from blood, and he lost his job with BT in the 1980s, after telling the occupational health department about his HIV status. Bill had no life cover, as no one would insure “people like him”, as it was put at the time. Following his death, Lin had to grieve and cope with the financial commitment she was left with. She eventually received some support from the Skipton Fund, but she found the process involved absolutely brutal—she felt she was jumping through hoops to get the money.

We have to keep telling these stories, because we have to remember what many people went through. We have to remember that they need a proper settlement because that can help to draw a line under this period, in so far as we ever can. These people have lost their loved ones, and they have lost great friends they have made during the campaign. As they have told me, it just becomes too difficult in the end to attend the constant funerals, as members of the community pass away. These people want proper support for those who are still with us.

Trade Union Bill (Sixth sitting)

Debate between Stephen Doughty and Jessica Morden

Tuesday 20th October 2015 Public Bill Committees

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

It is a pleasure to serve under your chairmanship, Sir Alan, as we return to line-by-line scrutiny of the Bill. When we left, we were discussing the group of amendments about devolution and I was about to set out my case on amendment 11.

By setting balloting thresholds for the range of important services defined by the Bill, we need to be clear that this will impact on public policy areas that are wholly devolved. As a Welsh Member of Parliament, I am concerned that the Bill could breach the devolution settlement in Wales and in Scotland, as well as with regard to the increasing powers of local authorities in England, Mayors and the Mayor of London.

Health services, education of those aged under 17 and fire services are already clearly devolved to Wales, and the Welsh First Minister stated in a recent letter to the Prime Minister:

“It is clear…that significant elements of the Bill relate specifically to public services which in Wales are unambiguously devolved responsibilities. I therefore do not accept the suggestion that the Bill must be regarded as concerned exclusively with non-devolved issues…Policy on how to support, or ‘protect’, the delivery of devolved public services such as health, education and fire is…for the Welsh Government and the National Assembly for Wales. This includes the way the public sector bodies in such devolved services work with trade unions to ensure effective delivery of services to the public.”

That is very important because we regularly hear examples from the Government about services. Most of them seem to relate to London—though, as I have said, we should give the Mayor of London the choice of how to handle these relationships. These examples do not relate to services in Wales, Scotland or elsewhere. I wonder why that is. Given that the devolved Governments have raised a series of concerns in their oral and written evidence, in letters and so on, will the Minister inform the Committee what discussions he and other Ministers in the Department and the Minister for the Cabinet Office have had with Ministers and officials in the devolved Administrations before the Bill was published and subsequent to their concerns being raised?

This is particularly important because the First Minister of Wales specifically pointed out the positive social partnerships that exist in Wales—we have heard similar evidence from Scotland—and the impact that that can have on the positive delivery of public services. The Minister need not accept just the word of the Welsh Government for this, welcome though that would be, as we also have research published by the Royal College of Nursing, which witnesses touched on in oral evidence. The research highlights the benefits of high-trust working relationships between managers and unions in the public sector. In that case, it was related to health in particular. I believe that the Bill and this clause seek to drive a false wedge between them.

We have already heard how Scottish Labour and local authorities run by Scottish Labour have made it very clear that they do not intend to implement the Bill. I have been made aware during the lunch break of a statement released by one of the Welsh councils, and I know that many share this position. I have a statement from Torfaen, a Labour-run authority. Councillor Anthony Hunt has tabled a resolution there, endorsed by the council, which says that the council

“resolves to oppose the introduction of the Trade Union Bill 2015, urges the Government to abandon the Bill and instead make a commitment to work in partnership with the trade union movement”.

There is dissension at many levels.

[Jessica Morden (Newport East) (Lab)]

I refer the Committee to my declaration in the Register of Members’ Financial Interests. We also heard evidence from the Welsh Minister for Public Services about the firefighters’ dispute over pensions, in which a solution was reached and the Fire Brigades Union put off strike action in Wales. Is that not a good example of where Wales is doing things differently?

[Stephen Doughty]

That is a perfect example, which exposes the different industrial relations policies that different Governments across these islands are pursuing and the benefits to the public of avoiding strike action, which is what the Government say that they want to do with the Bill. The example that my hon. Friend just gave stands in stark contrast to the testy relationship that appears to exist, as we heard in oral evidence, between the London fire brigade and the Fire Brigades Union, and the wider context of industrial relations in that city. Surely if the Government’s aim, as they keep repeating, is to reduce industrial action and disruption, particularly in crucial services such as fire, we want to do everything we can to build positive partnerships and come to resolutions, as was the case in Wales.

Amendment 12, in a similar vein to amendment 11, seeks to ensure that the Bill does not interfere with the ability of directly elected Mayors and local authorities in England to manage such services and decide how to manage their relationships with trade unions. It is consistent with the Government’s localism agenda. Amendments 42 and 72 relate to clause 10, on political party fund opt-ins, which we will discuss in due course. Briefly, amendment 42 would ensure that the opt-in requirements for trade union political funds would not apply to public sector employees working in sectors or providing services that are devolved to the Scottish and Welsh Governments. Amendment 72 would ensure that the proposed new opt-in requirements for union political funds did not apply to employees of the Mayor of London or local authorities in England. Again, as a point of principle, we believe that those bodies should be able to make their own decisions about how to manage their relationships with trade unions in those sectors and how those trade unions use their money.

On amendment 51 and 73, I draw the Committee’s attention to a letter dated 10 September 2015 from Carwyn Jones, the Welsh First Minister, to the Prime Minister, expressing his concerns about the Trade Union Bill. In the letter, the First Minister says:

“Similarly, it cannot be right for the UK Government—blind to policy priorities and devolved service delivery reforms in Wales—to specify how much union ‘facility time’ devolved public sector employers should allow. Nor am I convinced that the intention to end ‘check off’ arrangements for trade union subscriptions in the public sector is necessary or appropriate. The Welsh Government operates these arrangements as part of its approach to effective social partnership and is not seeking to change this.”

I know that the Scottish Government are similarly concerned about this matter, and I am sure that my colleagues from the Scottish National party would agree.

These are important policy decisions about relationships and the balance of responsibilities and rights. They are part of the crucial relationship between the Government and public bodies, and those who work in them. Frankly, the Welsh and Scottish Governments have a different approach, and they want to ensure that it is positive.

Severn Bridges (Tolls)

Debate between Stephen Doughty and Jessica Morden

Tuesday 21st July 2015 Westminster Hall

[Jessica Morden (Newport East) (Lab)]

I beg to move,

That this House has considered tolls on the Severn bridges.

It is a pleasure to serve under your chairmanship, Mr Gray. I am grateful for the opportunity to debate probably the No. 1 issue on which constituents approach me. Obviously I am not alone in that, as the monster turnout here on the afternoon of the last day before summer recess shows. We have Members from Llanelli all the way across the M4 corridor to Monmouth, from Northern Ireland, and even the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry). That shows how keenly the issue is felt across south Wales and in other places. I hope that other Members’ contributions will only strengthen the case for lowering the Severn tolls when the Severn river crossings concession comes to an end.

I should be clear from the outset that we pay the absolute highest tolls in the UK on the Severn bridges. With the concession coming to an end in a few years’ time, there is real strength of feeling about the need to reduce the charge to a maintenance-only toll, as recommended by the Welsh Affairs Committee’s excellent reports in the previous Parliament. There was cross-party agreement on the Committee that we could get down to a maintenance-only toll of around £1.50. I commend the Committee’s work over the years under the chairmanship of the hon. Member for Monmouth (David T. C. Davies)—we have looked at the issue in much detail and done a lot of work on it.

There is now a real need for clarity from the Government on the profits, operating costs and so on, and on where we are going in future. We urgently require some kind of strategy for the bridges, because we have only just over two years to go until they return to public ownership. We need to know the Government’s intentions for the future of the bridges. We must have clarity about what discussions the Government are having and what the direction of travel is. I hope that this debate will help us to flesh out those issues a little.

The Government have done incredibly well out of the bridges over the years. I will say a bit more about that later, but people really feel that they have been paying through the nose over the past few years. We need to redress the balance for the future. I know the Minister will argue that the Government are doing something to reduce the tolls—they announced in the comprehensive spending review that they were going to take the VAT off the tolls—but they are doing the absolute minimum. They know that they will have to take VAT off the tolls when the bridges come into public ownership; any Government would have had to do that. They are taking some measures on reducing the costs for cars and vans, but any Government would have had to do that as well. I want to see them go much further.

Along with other Members present, I have spoken in many debates on this issue over the 10 years I have been in the House. I think there have been eight Secretaries of State for Transport over that time, and numerous Transport Ministers. At this point, the Government cannot ignore the need to offer some light at the end of the tunnel for my constituents. Part of the reason why I have called for this debate early in the new Parliament is that, with the Government’s plans for English votes for English laws, who knows where Welsh MPs might be and what say we might have in future negotiations?

Three of the four legs of the Severn bridges are in England, with the other falling in my constituency, Newport East. Control of the Severn bridges and tolling rests falls completely within the remit of the Department for Transport. Aside from the assurances given in last week’s debate on English votes for English laws, I hope that the Government can reassure us today that Welsh MPs will have an equal voice on Severn bridge tolls, not least because the tolls are paid going into Wales and the impact is felt most keenly by Welsh commuters and businesses.

As I said, we have the highest tolls in the UK on the Severn bridges—[Interruption.] I think the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) is demolishing the Chamber. Since the second bridge opened in 1996, the tolls have increased 19 times because of the inflexibility of the concession, which I will come to later. We are now paying £6.50 for a car, £13.10 for a van and £19.60 for coaches and lorries. By comparison, the undiscounted price of a single journey for a car at the Dartford crossing is £2.50, and for the Mersey tunnels it is £1.70. The Humber bridge currently has undiscounted tolls of £1.50 for cars, £4 for medium-sized vehicles and £12 for heavy goods vehicles.

Campaign groups, motorists and businesses have called for the Government to step in and help, but their calls have fallen on deaf ears. There is, however, an example of where the Government have listened to local concerns in the past and stepped in to help: the Humber bridge. In 2011, the Government reduced the debt on the bridge by £150 million, which halved the toll for cars to £1.50. On the Government’s own estimates, the accumulated deficit on the Severn bridges will be £88 million in 2018. Why will the Government not step in for a smaller amount?

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

I wholeheartedly support the case that my hon. Friend is making, as well as the recommendations made by the Welsh Affairs Committee, on which I also sat.

It is not only the disparity in the tolls that is so shocking; there is also the disparity in technologies. We have not seen the introduction of free-flow technology or contactless payment. Those of us who use the tolls regularly know, as do businesses, that a wait in the queue often lasts ages. It is only recently that credit card payments were introduced. Does my hon. Friend agree that the disparities in technologies are also causing problems for businesses and customers in south Wales?

[Jessica Morden]

I agree with my hon. Friend wholeheartedly. As I remember, it took a joke on “Gavin & Stacey” and the approach of the Ryder cup for things to get to where they are now. It was like pulling teeth trying to get the decision taken to accept card payments. I will come back to that point, but I agree that we need to consider free-flow technology, which would help the congestion in the run-up to the plazas.

Over the years, various Ministers have argued in their responses to debates like this that the impact of the tolls on the Welsh economy is not clear, but we know from the Welsh Government’s 2011 report that the total cost to businesses and consumers, once VAT is taken into account, is in excess of £80 million a year. Furthermore, they came to the tentative conclusion that removing the tolls could boost the Welsh economy to the tune of around £107 million.

UK Steel Industry

Debate between Stephen Doughty and Jessica Morden

Wednesday 3rd December 2014 Westminster Hall

[Stephen Doughty]

I share my hon. Friend’s disappointment. I asked the Chancellor a question on that issue, and I was disappointed that he chose to make a political point, rather than engage with the serious issues being raised by many hon. Members.

I want to focus on a number of strategic issues. Whether it is energy prices, taxation, foreign dumping, uncertain future ownership or the lack of clarity in the UK’s industrial and infrastructure strategies, it is crucial for the sake of our future industrial and manufacturing capacity, as well as for jobs across the UK, that the steel industry has urgent, robust and bold action from the Government, not caution and bureaucratic handwringing alongside many warm words that make little difference in practice.

[Jessica Morden (Newport East) (Lab)]

Because of the challenges facing the steel industry, steelworkers have had to adapt, accepting changes to their terms and conditions and rising to the challenge of hitting the targets that companies have set them in difficult times. Does my hon. Friend agree that announcing some support for the steel industry is all very well, but delivering on it is crucial for steelworkers, who have worked so hard in difficult times in constituencies such as mine?

[Stephen Doughty]

That is absolutely the case. My hon. Friend speaks about her constituency; employers at Celsa in my constituency have taken some hard decisions to ensure that the company continues to thrive and go forward. We need that kind of commitment from the Government, too.

The steel industry does not need posturing or the erection of barriers to trade or unjustified protection from fair competition; it is simply asking for action to level the playing field and ensure that we do not offshore carbon emissions or contract out our potential domestic growth generation to such places as China and Turkey.

Severn Bridges (Tolling)

Debate between Stephen Doughty and Jessica Morden

Wednesday 5th March 2014 Westminster Hall

[Jessica Morden]

I strongly agree, and I will say much the same thing in my remarks. The Severn bridge tolls are the most expensive in the UK. It now costs £6.40 for a car to cross the bridge, £12.80 for a van, and £19.20 for a coach or lorry. By comparison, it costs just £1.50 for a car to cross the Humber bridge or £2 to use the Dartford crossing. However, the Dartford crossing is free to use between 10 pm and 6 am, and a scheme was recently launched under which local residents can pay just £20 a year to cross the bridge as often as they like. Those are both examples of the Government stepping in after local campaigns and helping long-suffering road users. If they can help businesses and residents in those areas, why can they not take decisive action to help in the case of the Severn bridges?

The tolls are a cost-of-living issue for my constituents, especially those who commute daily over the bridge, and the cost is a big burden for many businesses that operate out of south Wales. Constituents constantly tell me how hard they find it to absorb the increased tolls each year when pay is frozen, hours are reduced and the cost of living continues to rise. A constituent e-mailed me a few weeks ago to say:

“I’m employed in Yate in Bristol which means I have the daily trip across the bridge. While I had budgeted for the bridge cost, the actual cost of commuting along with the increase in the cost of living is currently causing me great concern. I try to ride an old motorcycle as much as I can”—

a motorcycle can cross for free—

“but I have found the wind protection on both bridges to be unsatisfactory, even in the summer, leading me to balance the cost of taking the car with the danger of taking the motorbike. Therefore, I would really like to take the car every day but the cost is just too high, and as you know the cost has now increased again.”

There is little choice. It costs about £2,400 to commute to Bristol by train using a standard adult ticket. Some of my constituents feel that the yearly toll increases have a knock-on effect on alternative modes of transport, such as the bus or the train, which further restricts their choices. The train service from Severn Tunnel Junction station is frequently full, and commuters are sometimes left standing on the platform at peak times. Those who commute between Bristol and Newport East have a really raw deal, which is a significant barrier to those looking for employment in Bristol. It is one thing to pay the toll once a week or so, but quite another to pay it every day, just to go to work. The local anger and frustration was demonstrated just a few days ago on St David’s day, when 120 local singers re-enacted the Rebecca riots—the men were dressed in traditional women’s clothing, apparently—on the M48 bridge. That shows just how strongly people feel about the matter.

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

I congratulate my hon. Friend on securing an excellent debate on a crucial issue, and I endorse all the points that she has made so far. She has mentioned individuals, but does she agree that we are also hearing increasingly from businesses? In particular, the Freight Transport Association, which has 700 members across Wales—many of them in my constituency—has talked about the impact that the tolls are having on the small margins in its members’ businesses.

[Jessica Morden]

I thank my hon. Friend for his intervention. I was going to praise the Freight Transport Association for its campaign, so I am glad that he mentioned it, and I very much agree with him. The Newport business man I mentioned earlier also told me about the negative impression of the toll:

“the toll has a major effect on recruitment and retention of staff in both directions. The northern fringes of Bristol across to Cardiff are all very commutable (M4 allowing) but having to build in excess of the £30 per week in to commuting costs prevents a lot of skills transfer between the areas. As an example, an employee of one of my clients told me that the bridge tolls have risen nearly 50% in her time commuting, whereas her salary has risen less than 15%.”

Businesses, particularly those in the haulage industry—I make special mention of the Freight Transport Association’s campaign—say that the tolls mean they bear a cost that their competitors across the bridge do not have to deal with. They have to add the cost on to their bottom line, which hits their competitiveness. Some companies pay in excess of £250,000 a year.

A Welsh Government study, of which I am sure the Minister is aware, shows that scrapping the tolls altogether could improve the economic output of south Wales by some £107 million. The report also shows that for a car journey—excluding commuters and business travel—the toll represents approximately 19% of the costs of a trip between Cardiff and Bristol. For light goods vehicles the figure is 23%, and for heavy goods vehicles it is 21%. The total cost of crossing the bridge for businesses and consumers, once VAT is taken into account, is in excess of £80 million a year in 2009 prices.

That is the impact of the tolls, which I am sure other Members will also articulate, but what can the Government do to help? Every year, when it is announced that the tolls will go up, bridge users ask for them to be frozen, and the Government say that they cannot be, because of the concession. However, the Government wrote off £150 million of the £330 million debt on the Humber bridge, so where there is a will, there is a way. The Government could step in and compensate the concessionaire; they just choose not to. Will the Minister address that point when he responds?

Last year, the Welsh Affairs Committee asked the previous Minister, the hon. Member for Lewes (Norman Baker), to look at a scheme for business—for example, a toll-free overnight period that would help businesses with their costs, as well as easing congestion. The current Minister has replied that the concession would have to be extended to pay for that. I will say it again: the Government stepped in to help with the Humber bridge; why not do so here? Will he clarify his remarks about the TAG concession being the limit of the concession that the Government can offer under European law? It would be helpful to have that explained in person.

Will the Minister also give us some answers on what the Government are planning, as regards where we go at the end of the concession, when the bridge returns to public ownership? The Treasury has done pretty well out of the Severn bridges in previous years. In 2000, the European Court of Justice ruled that VAT must be charged on private bridges. Between 2003 and 2012, the Government accrued an unexpected windfall of £121 million as a result of that change. Estimates from the Scrutiny Unit suggest that by the end of 2013, the figure is likely to be nearer to £135 million.

The Finance Act 2007 started the abolition of the industrial buildings allowance, meaning that the Government held on to an estimated £21.2 million, in 1989 prices, which they would never have expected. I understand that in today’s prices, that would be nearer to £40 million. Although the Government argue that they must continue tolling to recoup the £88 million in costs from unexpected repairs to the first bridge, they have actually accrued more than £160 million from both changes, which is more than enough to write off the existing debt. Will the Minister please update those figures and confirm how much to date the Government have received from VAT, and how much has been saved as a result of abolishing the industrial buildings allowance? The Department for Transport does not seem keen to answer my latest parliamentary question, even though we have had the figures before.

Will the Minister confirm that we are still looking at mid-2018—the last date we had—for the end of the concession? Previous Ministers have alluded to the fact that they would like to continue tolling for two years after the concession ends in order to recoup the Government debt that we have discussed previously—that was admitted to the Welsh Affairs Committee a couple of years ago. Is that still the case? Will the Government publish an updated full breakdown of the outstanding £88 million of debt and how and when it was incurred?

What is the current thinking on the level of the toll? The Minister has just written to the Select Committee to say that VAT would not be collected on a public bridge after the concession ends; will the tolls therefore reduce by at least that amount? If not, and the Government maintain the level of the toll, the Freight Transport Association has pointed out that businesses will no longer be able to reclaim VAT and so could effectively face a 20% hike in tolls. A specific answer on that possibility would be helpful, because we do not want businesses to end up in a worse position.

What serious work has been done on concessions for people who live locally? As I mentioned earlier, people who live locally can now cross the Dartford crossing an unlimited amount of times for £20 a year; that sounds extremely good to me. I hope that we do not hear, again, the stock answer to all such questions: “We have made no decisions about the tolling and do not know what the level will be. We are not there yet.” At the heart of the issue is a strong suspicion that the Government see the bridges as a cash cow, or even—as was suggested to me—a river of money. The concessionaire is in a win-win situation, as it can increase the tolls every year and be compensated for any changes. Meanwhile, the Government receive more than they expect through VAT and other income, while the poor old user has to pay more for longer.

In its 2010 report, the Welsh Affairs Committee recommended that, come 2018, tolls be reduced to a maintenance-only level, which would be very much supported by my constituents. We called for transparency on the financial arrangements of the bridges, and for discussions on ownership to be considered. We also asked the Government to consider off-peak rates for businesses, and local concession schemes for residents. Four years on, we have very little detail on anything. May we please have some answers today?

Universal Credit (Wales)

Debate between Stephen Doughty and Jessica Morden

Tuesday 5th February 2013 Westminster Hall

[Stephen Doughty]

Indeed. I agree with the hon. Gentleman’s comments.

Coming on top of two of what my right hon. Friend the Member for South Shields (David Miliband) has called “rancid” measures—the bedroom tax, and the tax on people in work in the Welfare Benefits Up-rating Bill that we saw a few weeks ago—I am deeply fearful about the impact of the changes on many of our most vulnerable constituents, not to mention the organisations that support them.

Let us look at some of the headline figures. On Monday 10 December 2012, the Government published their new impact assessment for universal credit, which showed several very worrying facts. First, 800,000 more people across the UK face lower entitlements. The original assessment, which was published in 2011, said that 2 million people would face lower entitlements under universal credit, but that number has now risen to 2.8 million, with an average loss of entitlement of £137 a month. I will come to the specific statistics for Wales in a moment. Of those losers, 400,000 will be concentrated in the two lowest income groups.

We expect 600,000 more parents to lose out under universal credit. Households will also lose more: the original impact assessment said that only 200,000 families would lose more than £75 a month, but the latest one states that 1.3 million households will lose more than £100 a month and that an incredible 300,000 families will lose more than £300 a month, which amounts to £3,600 a year. The impact assessment points out that higher administrative costs will result from the changes. The Department has also dropped its claim that universal credit will tackle poverty, which has been removed from the 2012 impact assessment.

There have been delays, and we might hear the reasons for some of them when the Minister speaks later. The roll-out of universal credit is already a significant number of months late, and the DWP has been unable to confirm the timetable. Indeed, there is a great lack of clarity on the part of my local authority and others about how universal credit will be rolled out and when.

[Jessica Morden (Newport East) (Lab)]

Does my hon. Friend agree that the Government have still not given any real answers about how those without bank accounts or internet access will be helped to adapt to the new monthly payments? Such answers are long overdue.

[Stephen Doughty]

Absolutely, and I will come on to that point in due course.

It is not only those whom I have spoken to who have sincere worries about universal credit. As we have several times seen in the press, one Cabinet Minister has reportedly said in private:

“The information technology for the new system is nowhere near ready. It’s a disaster waiting to happen.”

Who knows whether such rumours are to be believed, but I understand that a number of Cabinet Ministers share that view, which is perhaps one reason for the delays.

What is the specific impact on Wales? Based on an analysis of the December impact assessment and some rough calculations, we estimate that a staggering 140,000 people across Wales might lose £1,600 a year. That is based on an estimate of the Welsh population that will be affected. I would be grateful if the Minister shared the Government’s figures and estimates about how many will be affected in Wales and how much they will lose. Will he provide a breakdown by local authority to help local authorities prepare for the impact of the changes?

Aside from the raw figures, which are shocking in themselves, I want to share the key fears that people have raised with me about the implementation of universal credit in Wales. First, there is the challenge of budgeting for many families; secondly, as my hon. Friend the Member for Newport East (Jessica Morden) mentioned, there is the digital divide; thirdly, there are power relationships within the home; and, finally, there are the risks posed to local authorities, housing associations and other registered social landlords.

First, on budgeting, the Secretary of State for Work and Pensions frequently appears to suggest that those of us who raise the issue are patronising our constituents. Rather than taking so entirely complacent an approach, I commend the work that organisations such as the citizens advice bureaux, the Cardiff and Vale credit union, housing associations—for example, Cadwyn in my constituency—are doing to support tenants by helping them to set up bank accounts, jam jar accounts and similar facilities in credit unions. I also commend the Welsh Government’s work to support those efforts.

Levels of financial literacy––let alone access to a bank account––are not, unlike this measure, universal, and we need to be realistic about the impact of the changes on many people. Rather than making huge assumptions, perhaps the Minister would tell us what risks he sees in relation to the problems in the area and what his Department is doing to assist. I can certainly tell him that many of the organisations that I have mentioned, let alone individual constituents, have experienced varying or little support from his Department, and that relates only to those who are aware of such support.

I want to touch on direct payments and the data from the direct payment pilots that the Department has conducted. A couple of days ago, “Inside Housing” published an article entitled, “Direct payment pilots report increased arrears”, by the journalist Carl Brown, which states:

“Landlords testing direct payment of benefit failed to collect 8 per cent of rent on average in the first four months of the six pilot projects.”