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Volume 573: debated on Wednesday 8 January 2014

The Secretary of State was asked—

Block Grant

1. If he will estimate the cumulative real-terms change to the Welsh block grant over the present Parliament. (901763)

On what is a sad morning for the House, I am sure that colleagues on both sides would also wish me to mention the passing in December of the right hon. Lord Roberts of Conwy, who served the Welsh Office with such distinction for so many years. He was a doughty champion for Wales and the Welsh language, and I am sure that many Members on both sides will regret his passing.

The protections placed on health and education have insulated the Welsh Government’s resource budget from the extent of reductions faced by many UK Departments. In addition, the Welsh Government’s capital budget will increase in real terms by 8.4% next year and 2.4% the year after.

Does the Secretary of State not recognise that the Welsh Government’s budget has been cut by 10% since 2010—a cut of £1.6 billion? Their capital budget to date has been cut by a third, which has impacted horrendously on front-line services. In my Bridgend constituency alone, that has meant £30 million-worth of cuts in front-line services. Does the Secretary of State not recognise the damage of these cuts to the people of Wales?

All parts of the United Kingdom are having to bear their part in repairing the economic damage that was sustained as a result of the downturn in 2008. However, I am sure the hon. Lady would recognise that since 2010 the United Kingdom Government have provided an additional £737 million to the Welsh Government, and it is up to the Welsh Government to live within their means.

Given that the UK Government have given extra money in cash terms to the Welsh Assembly in the form of its block grant, does the Secretary of State find it as extraordinary as I do that the Welsh Assembly has imposed drastic cuts on local authorities across Wales that are bound to lead to increases in council taxes and reductions in public services?

That is ultimately a matter for the Welsh Government, but it is noteworthy that, whereas council taxpayers in England are benefiting from a council tax freeze, that is not happening in Wales. Perhaps that is something the Welsh Government should be attending to.

May I first associate myself fully with the words of tribute to the late, greatly respected right hon. Member for Wythenshawe and Sale East (Paul Goggins), and to the late Lord Roberts of Conwy?

I am sure that the Secretary of State will agree that reform of the Barnett formula is still an issue about which we are all very concerned. We in Plaid Cymru have campaigned about it for more than 25 years. It is interesting that the Labour party is now in favour of reforming Barnett, which it did nothing about for 13 years. In fact, when it was in government, it denied the existence of the problem. Does the right hon. Gentleman have any views on that issue?

It is generally recognised that the Barnett formula does not have an indefinite duration. However, it is the priority of this Government to ensure that the public finances are stabilised, and that is what we intend to do.

Which does the right hon. Gentleman think is worse—the self-serving preconditions set by the Labour party to block further devolution, or the failure of his Government to propose the full tax-varying powers contained in the cross-party Silk commission recommendations?

Barnett consequentials and, indeed, funding from the European Union have been key components of spending in Wales for many years. What representations has the Secretary of State made about Barnett consequentials and European funding to address the devastation that has occurred in recent days along the Welsh coast, not least in Ceredigion, but also in the constituencies of many other hon. Members?

I have had many conversations with my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs. Clearly, Aberystwyth has suffered extreme damage as a consequence of the storms of the past few days, and I assure my hon. Friend that, if any additional funding is provided, Barnett consequentials will follow in the usual manner.

Renewables (Jobs)

This Government’s recent announcements on strike prices aim to make the UK, including Wales, one of the most attractive places to invest in renewable technologies. Our reforms will ensure that more than 30% of our electricity comes from renewables by 2020, attracting £110 billion of investment and supporting up to a quarter of a million jobs.

May I associate myself with the kind remarks of the Secretary of State relating to both Paul Goggins and Lord Roberts, who was a true servant of north Wales and a lovely man?

On renewables, I am very disappointed that the Minister did not refer to Sharp solar in Wrexham, which as recently as 2011 was expanding and providing more jobs. I spoke to the chief executive of Sharp solar in Wrexham before Christmas, when he told me that this Government’s catastrophic and chaotic renewables policy had contributed to its decision not to continue manufacturing in Wrexham, with the loss of 600 jobs. Will the Minister break the Wales Office’s silence and apologise to the people who have lost their jobs as a result of incompetence?

I recognise the hon. Gentleman’s disappointment for his constituents. The news about the Sharp job losses was a bitter blow just before Christmas. I have been in touch with Sharp, and we at the Wales Office have spoken to them. It is just not correct to associate the decision taken by Sharp with the changes to the feed-in tariff policy. If he speaks to industry experts who are knowledgeable about these issues, they will tell him that it is much more to do with the wave of cheap Chinese imports of solar panels that have come into Europe and flooded the European market, so making domestic production very challenging indeed.

Whether power is generated from renewable or non-renewable sources, there is an increasing problem in Wales and the rest of the country in getting new power sources connected to the grid because of the shortage of power engineers. Will my hon. Friend work with the Department of Energy and Climate Change and the Welsh Assembly Government to see how this issue can be tackled in Wales?

As ever, my hon. Friend raises a very pertinent issue, of which both we in the Wales Office and, more importantly, the Welsh Government, who have devolved responsibility for skills, are aware. We are in discussions with the key players and stakeholders in Wales about how we can raise up a new generation of power engineers to take forward the changes that we are trying to effect.

The loss of the Sharp solar panel factory in Wrexham, which was the biggest solar panel factory in western Europe, was a devastating blow to the Welsh economy. What can the Minister do to mitigate the closure, in which his Government are complicit? Specifically, can he help to draw down UK research funding to the solar research institute in Optic Glyndwr in St Asaph?

I thank the hon. Gentleman for his question. I am very aware of the important work being done at Glyndwr university, and we are in close touch with the university about its work. On what we can do to mitigate the job impact in Wrexham, I encourage both him and his hon. Friend the Member for Wrexham (Ian Lucas) to give full-throated support to the £250 million that the Government are putting into Wrexham to create a new prison—something for which we have yet to hear full support from Opposition Members.

Labour has called consistently for the devolution of energy consents for projects of up to 100 MW. I pay tribute to my hon. Friend the Member for Ynys Môn (Albert Owen) for the amendment, which was not supported by the Government, that he tabled to the Energy Bill. Why are the Government opposed to the devolution of energy, which would allow the Welsh Government and the National Assembly for Wales to make their own decisions on energy and renewable energy in particular?

I am surprised by the hon. Gentleman’s question, because there has been nothing consistent about Labour’s approach to energy policy either in government or in opposition.

Living Standards

3. What assessment he has made of the effects on living standards in Wales of the measures announced in the autumn statement. (901765)

7. What assessment he has made of the effects on living standards in Wales of the measures announced in the autumn statement. (901769)

The autumn statement set out further measures to ensure that there is a responsible economic recovery. That is the only way to achieve the sustained rise in living standards in Wales and across the UK that we all want to see.

May I associate myself with the tributes that have been given?

I thank the Minister for his answer, but many of us are dismayed that the autumn statement did little to address issues related to poverty. Does the Secretary of State really believe that it is right that food bank usage in Wales has gone up 1,400% since 2010? Surely that is not acceptable.

We know that the Labour party discovered food banks only in 2010. Before that, Labour Members denied that they even existed. In the autumn statement and at the end of last year, we saw average wages in Wales increasing at double the rate of inflation and personal disposable income in Wales increasing. The situation is still very challenging for many households in Wales, but the overall picture is positive, and the hon. Lady should support that.

In my constituency of Aberavon, real wages have fallen by £2,000 in recent years and some 5,000 households have witnessed a reduction in their working tax credits. That comes against the background of rising energy prices, which are higher in south Wales than anywhere else in Britain. Does the Minister agree—as a reasonable person, I am sure that he does—that the best way to address the squeeze in living standards on the people of my constituency and of Wales is to endorse Labour’s proposal of a freeze in energy prices, which would benefit 30,000 households in my constituency?

We are going further than that by delivering a reduction in energy prices of about £50 per household. One of the best ways in which we can equip households in the hon. Gentleman’s constituency and throughout Wales to face these challenging times is by returning more money to their pockets. We are taking 130,000 people in Wales out of income tax altogether and freezing fuel taxes, so that petrol prices are 20p per litre lower than they would have been under Labour’s plans. That is the way to help households meet the cost of living.

As the only Welsh Conservative MP who had the privilege of serving alongside Lord Roberts of Conwy, may I associate myself with the Secretary of State’s remarks? May I also associate myself with your remarks, Mr Speaker, about Paul Goggins, whose untimely death has come as such a shock to us all?

On living standards, will my hon. Friend confirm that the cumulative effect of the autumn statement will be that petrol prices will be 20p per litre lower than they otherwise would have been and that the average taxpayer will pay £700 less?

My hon. Friend is exactly right. The Government are taking those practical steps to help people on the lowest incomes in particular. We are determined that this should be a recovery for all sections of society in Wales.

The autumn statement contained very welcome measures to reduce the burden of business rates on small businesses in England. What efforts will the Minister make to ensure that the Welsh Government follow suit, to support small businesses in Wales?

In the autumn statement, we made resources available to the Welsh Government to take exactly the same action as the Government in Westminster have taken to help small businesses with their business rates. I was pleased that the Welsh Minister announced yesterday that they would take forward the cap on business rates in Wales. We have yet to hear whether they will deliver the £1,000 discount for small businesses that we are delivering.

11. May I associate myself with your words, Mr Speaker, on Paul Goggins, who was a great friend, and with the Secretary of State’s words on Lord Roberts, who was a great Anglesey man? Wales is a net producer of energy, a major electricity generator and a major terminal for imported gas, but people in Wales are paying some of the highest prices in the United Kingdom for gas and electricity. Will the Minister look closely at the distribution companies that are passing on extra costs to the Welsh consumer to ensure that there is a level playing field on prices? (901773)

The hon. Gentleman raises an important issue for his constituents and people throughout Wales. At the Wales Office, I regularly meet companies such as Western Power Distribution and National Grid to discuss why many consumers in Wales are paying those higher costs, and for all kinds of reasons. If he has specific questions that he would like me to follow up, I would be happy to meet him to do that.

May I, too, associate myself with the Secretary of State’s remarks about Lord Roberts and in particular express my sadness at the passing of our friend and comrade Paul Goggins? I worked with Paul at the Northern Ireland Office, and I can say from personal experience that he was a wonderful Minister, a lovely man, and a hugely dedicated Member of the House. All our thoughts are with his family; everybody who knew Paul will miss him greatly.

A moment ago, the Minister said that measures in the autumn statement would cut energy bills for families in Wales by £50. That was one boast made by the Chancellor in that statement, and it came to fruition in Wales this morning with the announcement by SSE—Wales’s biggest energy supplier—that it was helping families with a price cut. Will the Minister confirm what that announcement actually means for families in Wales?

The action that we are taking across a broad range of measures—energy, fuel prices, income tax thresholds—means that we are helping people on the lowest incomes in Wales with the challenges of the cost of living at the moment. The hon. Gentleman does not refer to the fact that we are seeing improvements in wages in Wales and in personal disposable income, and he should welcome the overall positive picture that is emerging in Wales.

I had hoped that the Minister would have made a new year’s resolution to be a little more straightforward with the Welsh people. The truth is that the announcement by SSE this morning, following the announcement by the Chancellor that bills will be cut by £50, is actually that bills will rise in Wales this year by £70. It is a con trick, plain and simple, and the Minister should admit that and urge his colleagues to adopt Labour’s price freeze as the only way to curb these profiteering energy companies.

I am sorry to say this to the hon. Gentleman, but if he talks to people in industry out there who understand the economics of energy, they will all tell him that what the Labour party has proposed for energy does not make sense at all and has no credibility. The Government are taking real practical action that helps families at difficult times, and the picture that we are seeing in Wales overall is positive.

Draft Wales Bill

4. If he will publish an impact assessment of the effect of the draft Wales Bill on cross-border areas. (901766)

The Government published a summary impact assessment with the draft Wales Bill, which examines the effects of the Bill’s provisions on cross-border areas. We intend to introduce the Bill in the fourth Session, subject to agreement of the fourth Session programme, and a full impact assessment will accompany the Bill on introduction.

I thank the Secretary of State for that answer, but the draft Bill provides for a lock-step approach to varying income tax bands, against the wishes of all political parties in the Assembly and against the advice of the Silk commission. The reason given is concern about overall progressivity in the UK tax system. Will the Secretary of State elaborate on what he means by progressivity and say why he is adopting that approach?

As the Government have made clear, they believe that the progressivity of the UK tax system should remain at Westminster. That is why those provisions have been inserted in the draft Bill.

15. One damaging consequence of devolution has been the abandonment of investment in cross-border road improvement in mid-Wales because the Department for Transport—quite reasonably—sees no economic benefit to England in improving access to mid-Wales. In the response to the Silk commission report, will my right hon. Friend rectify that damaging consequence of devolution for mid-Wales? (901777)

My hon. Friend is quite right, and cross-border road routes are one unfortunate consequence of devolution, in that no overarching arrangement is in place. I have specifically asked the Silk commission to consider that issue, and I hope that it will address it in its report.

I am sure that the Secretary of State will agree that certainty on taxation policy is key to boosting economic confidence in Wales. Although he has told us of his vision to use the Wales Bill for a 1p cut to all income tax bands in Wales, the leader of the Conservative party in Wales has said that he would cut only the top band of tax. Will the Secretary of State clear up that complete muddle about his Government’s position on taxation in Wales?

We have made it absolutely clear that we believe a competitive Welsh economy would depend to a large extent on a competitive rate of tax. However, I must remind the hon. Lady that devolution of income tax is a matter for the Welsh Government, in that it would be the Welsh Government who would have to put forward a referendum to the Welsh Assembly.

Universal Credit

5. What recent assessment he has made of the potential effect of the roll-out of universal credit on people in Wales. (901767)

The roll-out of universal credit will reduce the historic dependency on benefits for the people of Wales by making the system simple and more flexible, and by increasing the incentive to work.

Is it not a fact that repeated promises to deliver the project on time and on budget have been broken yet again? Officials are warning of further delays and more wasted taxpayers’ money, and Ministers are arguing among themselves while families and children in Wales live in poverty. What way is this to run a country?

What universal credit represents for the country, including Wales—I think Opposition Members recognise this as well—is a generational opportunity to change the welfare system better to support those who need it. It is exactly right that we take the time necessary to get the systems and processes right to ensure that we get the outcomes right for people in Wales.

Department for Work and Pensions Ministers have assured me that the online application process in Welsh will be consistent with the Welsh Language Act 1993. What discussions has the Minister had with DWP colleagues to ensure that it is also consistent with the new Welsh language standards?

I thank the hon. Gentleman for that question. I regularly meet Lord Freud, the Minister for welfare reform, to discuss the impact of the complete welfare reform agenda in Wales. The Welsh language, specifically, is an issue that I have discussed with him. We want to see high-quality Welsh language availability for the people who need it.

Transport Infrastructure

This Government are investing more in transport infrastructure in Wales than any other in the last century, and Wales is set to benefit directly and indirectly from almost £2 billion of investment. I will be meeting my right hon. Friend the Secretary of State for Transport next week to see how we can take this investment further.

Like me, the Secretary of State is a regular user of the Holyhead branch of the west coast main line. The Department for Transport is setting up a taskforce to look at electrification of the line between Crewe and Chester. Does he agree that the taskforce should look beyond Chester and consider electrifying the north Wales main line?

I agree entirely with my hon. Friend. The proposed hub for High Speed 2 at Crewe would considerably strengthen the case for electrification of the railway line beyond Crewe and, I would hope, as far as Holyhead.

One of the most important pieces of transport infrastructure for Wales is the Severn bridge. After decades, tolls have now gone up again: £6.40 for motorists, and double and treble that for vans and lorries. Is it not time to recognise, after all these decades, that this tax on the south Wales economy is a toll too far?

The hon. Gentleman will know that the franchise of Severn crossings will continue until 2017-18. After that, the maintenance of the bridge will have to be considered, but I know that the Department for Transport is keenly aware of the issues he raises.

14. Good transport links are essential to provide opportunities for investment into Wales. Will my right hon. Friend update the House on the discussions he has had with the Welsh Assembly Government on updating road and rail links into north Wales, especially upgrading the A55? (901776)

I have regular discussions with both the Welsh Government and my right hon. Friend the Secretary of State for Transport on this issue. A business case is already being worked up, I hope, for electrification of the north Wales coast line, and I have already referred to the issue of roads.

When it comes to the Wrexham-Bidston line, the Secretary of State is all talk and no action. When can we expect some action?

It is rather rich of the hon. Gentleman to say that. In 13 years, his Government did absolutely nothing about that line. He should be aware that we already have a taskforce looking at this issue, and I hope the business case will be developed shortly.


8. What discussions he has had with the First Minister on increasing tourism opportunities in Newport in the light of the NATO summit in Celtic Manor in 2014. (901770)

Hosting the NATO summit in Newport later this year allows us to showcase Wales on a global stage, and I—and the First Minister, I am sure—will do everything possible to ensure that Wales capitalises on the tourism opportunities it should bring.

The delegates will be guests in what is probably the best hotel in Britain, the Celtic Manor. Will they have the chance to visit the other major attractions of Newport—the Roman remains at Caerleon, the magnificent transporter bridge and the splendid Tredegar house—so that they can have a rich and unforgettable experience in Newport?

I agree entirely with the hon. Gentleman that Newport—and, indeed, the whole of south-east Wales—has a huge amount to offer. As I have said, I believe that the NATO summit will do a massive amount to showcase that part of Wales to the whole world.