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Comprehensive Spending Review

Volume 467: debated on Wednesday 21 November 2007

2. What discussions he has had with the Chief Secretary to the Treasury on the comprehensive spending review settlements for the Welsh Assembly Government and Wales Office. (164977)

I had constructive discussions with the Chief Secretary during the comprehensive spending review process, which delivered a higher than average settlement for Wales, giving both the Welsh Assembly Government and the Wales Office the resources to deliver on policy priorities.

The capital gains tax changes announced alongside the comprehensive spending review will be a disaster for Wales. Was not the Welsh shadow Finance Minister, Angela Burns, absolutely right to highlight the damage that will be done to the Welsh economy because 98 per cent. of firms in Wales employ fewer than 50 people?

In that case, why do we have one of the best business start-up rates anywhere in Britain? Why do we have the graduate start-up rates that I have just described? Why is the Welsh economy doing much better on exports, economic activity falls and on almost every indicator? I know the Welsh business community, because unlike the hon. Gentleman, I am a Welsh MP. He should talk to Welsh businesses; they say that the Welsh economy is performing better than they can ever recall in their business life. He should talk to them about their prospects rather than try to talk them down.

I welcome the comprehensive spending review as it pertains to Wales, especially alongside the convergence funding that will allow projects in my area to progress. As my right hon. Friend is aware, one such project, supported by the Welsh Assembly Government and Anglesey county council, is the widening of Stephenson’s Britannia bridge across the Menai straits. Will he work with the Assembly Government and the county council to make sure that the project comes to fruition, and that they draw down the correct money so that north-west Wales can enjoy prosperity in the future?

Indeed. I am grateful to my hon. Friend for drawing attention to that important project. I have travelled over the bridge with him from time to time when visiting the constituency he represents so well. It is important that such infrastructure projects are driven forward, especially with the help of the £3 billion-worth of European convergence funding that benefits his constituency and many others in west Wales and the valleys.

The Secretary of State knows that the Labour-Plaid Assembly Government said that the CSR has delivered the worst settlement for Wales since devolution. Over the next few months, has the right hon. Gentleman any plans to give Welsh Assembly Ministers tax-raising powers, in any shape or form, to plug the gap?

I am very pleased that the hon. Lady has asked that question. Not only do I have no power to give tax-varying powers to the Welsh Assembly Government, but the settlement, which was welcomed by the Welsh Assembly Government Finance Minister, speaking on behalf of the whole Welsh Assembly coalition Government, represents spending growth at an annual average real-terms rate of 2.4 per cent. That is higher than the UK average of 2.1 per cent. and higher than for the other devolved Administrations—Scotland is at 1.8 per cent. and Northern Ireland at 1.7 per cent. The hon. Lady should welcome that spending, especially as the Welsh budget is more than double the amount we inherited in 1997.

The Secretary of State knows that this is not my criticism, but that of his Plaid partners in Wales. I suggest that he speaks to his Cabinet colleagues and his Plaid coalition partners, because he is in fact planning to impose taxes on Welsh road users. The Local Transport Bill gives Assembly Ministers power to impose a tax on all drivers using trunk roads in Wales—power to tax Welsh lorry drivers, Welsh farmers and tourists driving in Wales. Those provisions were not in the draft Bill and have been slipped in at the last moment, probably at the request of the Plaid Transport Minister. As the Government have ruled out a national road pricing—

Order. The hon. Lady should shorten the questions in future. [Interruption.] I know that it is a big question. That is what I am saying: she should cut the big questions down.

I regularly speak to Welsh Assembly Government Ministers, and I recommend that the hon. Lady does so too. She might then get her questions a little straighter. The truth is that they have asked for these powers—[Interruption.] Is she seeking to deny the Welsh Assembly Government the powers for which they are asking? In that case, she would be unable to see or support the building of the M4 relief road. Probably the only way that that relief road can be financed is through raising a toll, and having the power to do so. I would have thought that she would support that objective given the traffic problems in the Newport-Cardiff area of the M4, which is often brought to gridlock.

The comprehensive spending review also introduced a £1.1 billion environmental transformation fund for the consideration of new energy projects and technology. Inetec, a company in my constituency, has a wonderful new technology that would use food and packaging waste to generate electricity. It would not use anaerobic digestion, as the Department for Environment, Food and Rural Affairs has proposed. Will my right hon. Friend agree to take the matter up with the Welsh Assembly Government so that that new technology for Wales can be moved forward?

I shall happily do that, and I await further details from my hon. Friend. May I take this opportunity to speak on behalf of the whole House, I hope, in saying how delighted I am to see that the Government have announced the go-ahead for the world’s largest biomass plant at Port Talbot? It will be fuelled by wood chips, and will contribute about 70 per cent. of the Welsh Assembly Government’s 2010 renewable electricity targets and involve 150 jobs. That is a very good project.

Dafydd Wigley said that the Plaid-Labour coalition’s days could be numbered due to a particularly tight comprehensive spending review, which will mean the non-delivery of “One Wales” commitments on first-time buyers, pensioners and free laptops for children. What discussions has the Secretary of State had with Welsh Assembly Ministers about whether the Plaid and Labour commitments to the people of Wales can be delivered with the comprehensive spending review as it stands?

I did speak to the Assembly Finance Minister, Andrew Davies, and he was pleased with the result. I will just say to the hon. Gentleman that I would not rely on quoting Plaid Cymru leaders of any kind. It is not a reliable guide to anything, frankly.