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Volume 580: debated on Wednesday 14 May 2014

The Secretary of State was asked—

Budget (Businesses)

1. What assessment he has made of the potential effects of the measures in the 2014 Budget on businesses in Wales. (903928)

The Budget represents the next step in our long-term economic plan with a package of measures to deliver economic security for businesses and people in Wales and across the UK.

I hope that this is not too difficult a question for my right hon. Friend, but does he agree with my Welsh relatives that the best way to help businesses is to reduce taxation?

My hon. Friend is entirely right, which is why we have reduced the rate of corporation tax from 28p in the pound to 21p, with a further reduction to 20% next year. For similar reasons, the Wales Bill makes provision for the Welsh Assembly to call a referendum on a lower rate of taxation for Wales, and I hope that it will seize that opportunity.

Given that the future of businesses in Wales depends on the vibrancy of our young workers, is the right hon. Gentleman encouraged by the fact that the Welsh Government’s policies are clearly working, in that the youth unemployment rate has come down faster and further than anywhere else in the United Kingdom? Will he be less churlish towards the Welsh Government and praise the jobs growth fund and that achievement?

Far from being churlish, I commend Jobs Growth Wales for making an important contribution. Having said that, it is a limited contribution, and the important thing is for the Welsh Government to work closely with the Department for Work and Pensions to ensure that we can drive down even further the unemployment rates.

With businesses in Wales still cautious and a Budget that does little to help the 300,000 people in Wales who are earning less than the living wage, will the Secretary of State now back Labour’s plans to give a tax break to businesses that raise their employees’ pay to at least the living wage, so that work will pay?

As the hon. Lady knows, we have given every business in Wales relief against national insurance contributions of up to £2,000. We have also taken young people up to the age of 21 out of employers’ national insurance contributions altogether. I very much hoped that the hon. Lady would welcome that. It was an excellent Budget for business in Wales.

EU Membership

2. What assessment he has made of the net benefits to people in Wales of the UK’s membership of the EU. (903929)

3. What estimate he has made of the level of trade undertaken by businesses in Wales with countries in the EU. (903930)

4. Whether he has recently discussed the importance of UK membership of the EU with leading employers in Wales. (903931)

The EU remains a vital export market for Wales, together with countries outside the EU, but Wales and the UK would benefit from a renegotiated position within Europe, which is why the Prime Minister has committed to negotiating a new settlement in the European Union, to secure jobs and growth and to enable the EU to become more competitive, flexible and prosperous.

Given that 191,000 jobs in Wales are directly dependent on the EU, that £1 billion came to Wales last year from the EU, and that firms such as Ford in the south and Airbus in the north are committed to maintaining our relationship with the EU, will the Secretary of State join me in saying that the EU is good for Britain? The uncertainty that he is creating should be stopped.

I certainly agree with the right hon. Gentleman that membership of a free trade area is extremely good for Britain. Where I disagree with him, I think, is on the level of intervention and top-down meddlesome interference by the EU. The people of this country clearly want a referendum on Europe and only the Conservative party can and will deliver that referendum.

What Welsh business leaders want from their political leaders is certainty about our future in the European Union. Why is the Secretary of State so reluctant to say that being a member of the European Union is good for Wales? Is he personally committed to this country’s future membership of the European Union?

As I have just made clear to the right hon. Member for Delyn (Mr Hanson), I believe that membership of a free trade area is extremely important for Britain, but what the people of this country want is a say on whether they should remain part of the sort of Europe we have at the moment. It is interesting that the Labour party is not anxious to deliver a voice to the people of Wales.

I am rightly reprimanded, Mr Speaker. I must pay attention.

On the basis that the head of European operations has made it clear that to threaten exit from the EU would be cutting off our nose to spite our face, and that 14,000 jobs in Ford Bridgend and in Dagenham would rely on our not leaving the EU, will the right hon. Gentleman say that he, as the Secretary of State for Wales responsible for protecting those jobs, is personally committed to keeping Wales within the UK and the European Union?

I think that the hon. Gentleman is referring to the director of operations for Ford’s manufacturing operations in Europe, Mr Steve Odell. Mr Odell also said:

“there are absolutely some rules and regulations…that are difficult to take”.

We agree with Mr Odell on that and that is why we want the people of this country to have their say on their future in Europe after renegotiation, which only the Conservative party can and will deliver.

Does my right hon. Friend agree that many people in Wales are deeply concerned about the extra powers that have been given to the European Union, largely by Labour Members, and that it is absolutely right that this coalition Government should seek to renegotiate our position in the European Union and put the results of that negotiation to the people of Wales and the rest of the United Kingdom?

My hon. Friend is entirely right. This Conservative party intends to renegotiate our position within Europe and to put that renegotiation to the British people in a vote by the end of 2017. We think that that is democracy and it is a shame that the Labour party does not share that view.

I absolutely agree with my right hon. Friend that we need to renegotiate and get a better deal from the European Union, but does he not also agree that it is about time we ended the uncertainty and that the only way we can do that is by giving the British people, not just in Wales but across the UK, a say in an in/out vote?

My hon. Friend is right and I applaud his sterling efforts to try to achieve that. We intend to give the people of this country—the whole country—a vote on Europe and we are the only party that can and will do that.

15. Clearly, one opportunity offered by the European Union is that of greater investment in the energy supply in Wales and potential exports to the EU. What conversations has my right hon. Friend had with his colleagues in the European Union on the opportunities for such investment? (903942)

The energy sector is very important for Wales and the Government are investing heavily in energy, including giving support for the new nuclear power station at Wylfa Newydd. The market between this country and Europe is extremely important—a two-way flow—and our energy interventions will ensure that our energy sector is supported.

We know that this Government are out of touch, but listening to the Secretary of State this morning I fear that he is completely out of touch with the views of Welsh business about the European Union. Has he spoken to Ford, GE, Hitachi, Citibank, BMW or Airbus, which are all companies that have expressed their concerns? If he has not, does he know how many jobs in Wales are reliant on our membership of the European Union?

I speak regularly to Welsh businesses—I dare say more frequently than the hon. Gentleman does. What is absolutely clear is that although Welsh businesses value their engagement with Europe, they feel that there is too much regulation and too much meddlesome interference from the European Union. We need to strike a proper balance. That is why we intend to renegotiate our position with Europe and at the end of that process hold a referendum.

I doubt that the Secretary of State is actively talking to those businesses, because when I talk to them, what I hear are their grave concerns about the uncertainty that he is creating. He did not answer the question. In truth, one in seven jobs in Wales is now reliant on EU trade. Does he not accept that the attitude of his Government and the attitude of a Secretary of State who has referred to Europe as “a basket case” is jeopardising those jobs, and does he not realise that it is only Labour that will secure them? That is why a Labour vote next week is a vote for jobs in Wales.

What I recognise fully is that the Labour party is reluctant—in fact, it is refusing—to give the British people a vote on this important issue. So far as business is concerned, the hon. Gentleman ought to understand that 72% of companies interviewed in north America for the Ernst and Young attractiveness survey thought that reduced integration in the EU would make the UK more attractive as a foreign direct investment location. He does not understand that; we do, which is why we can and we will give the people of Wales and Britain a vote on their future in Europe.

With 300,000 people in Wales being paid less than the living wage, what impact does the Secretary of State consider uncontrolled immigration from the EU is having on wage levels in Wales?

These matters will of course have to form part of the negotiation that we propose. We believe that by and large our membership of the EU has been beneficial for Britain, but clearly the form that we have at the moment needs renegotiation.

Because of chuntering from the hon. Member for Lichfield (Michael Fabricant) from a sedentary position, the intervention was of no value—[Interruption.] Order. [Interruption.] Order. Be quiet. Silly man. I call Mr Llwyd.

Farming Unions

The Minister will know that at the last Budget the annual investment allowance was increased to £500,000 until 2015, but that is restricted to plant and machinery. Will he add his voice to the farming unions’ voice and many others that that should be extended to buildings and infrastructure in the coming years? Will he therefore plead that case on behalf of Welsh farmers?

Those are matters for my right hon. Friend the Chancellor of the Exchequer. I will raise his question with Ministers at the Treasury and discuss it further. On the whole, business throughout Wales welcomed the measures in the Budget to increase the investment allowance.

On a more specific matter, the Minister knows about the case that I am about to raise with him, because he has a copy of the letter I wrote to his right hon. Friend in the Department for Environment, Food and Rural Affairs. The Welsh Black species of cattle is not included on the native breeds endangered list in England; it is included in Wales. As a result, people are unable to export pedigree Welsh cattle over the border to England for those who wish to enter the English countryside stewardship scheme. That is a restraint of trade against Wales, it is unfair and it could be actionable. Will he please get DEFRA moving and get it to register appropriately?

I thank the right hon. Gentleman for raising the case with me and for sending me a copy of that correspondence. He raises an entirely fair and sensible point. The Welsh Black is a fine example of Welsh quality produce. There should not be any bureaucratic or policy reasons why it should not be able to be traded in England on an equal basis. I will look into the matter urgently with my colleagues from DEFRA.

Is my hon. Friend aware that on 11 June some of the best produce from Wales will be on display and available for Members to sample in the Jubilee Room when we hold Montgomeryshire day?

I was aware of that, and I encourage right hon. and hon. Members from both sides of the House to make their way to the Jubilee Room on that date and to sample some of Montgomeryshire’s finest produce.

One of the issues that farmers and farming representatives raise with me is the need for clearer and better labelling and traceability. Some good work has been done at all levels, including the European Union. Will the hon. Gentleman join me in calling for even clearer labelling so that people can be confident that they are getting Welsh Black, which could be made in Anglesey, in Wales or in the United Kingdom?

The hon. Gentleman raises an important point, and we have recently discussed labelling on the Floor of the House. We need to be careful about not putting extra burdens on business at this time, but clearly, high-quality labelling which provides good, relevant information for consumers, particularly about country of origin, is an important way of marketing Welsh produce on a wider level.

Transport Investment

6. What discussions he has had with his Cabinet colleagues and others on transport investment in Wales. (903933)

I have regular discussions with my right hon. Friend the Secretary of State for Transport and key stakeholders across Wales and firmly believe that improving transport infrastructure is a key facilitator of economic growth.

Does the Secretary of State agree that the Welsh Assembly Government should do their bit in electrifying the South Wales line, as they promised?

Certainly, the electrification of the South Wales line is important for Cardiff and Swansea and the stations between. We are willing and anxious to perform our part of the bargain that we struck in July 2012. I have had recent discussions with both my right hon. Friend and the Welsh Minister for Economy, Science and Transport, and I hope that we can find a way forward.

The Minister will be aware that the Department for Transport took a decision a few months ago to relocate all driver and vehicle licensing services from Northern Ireland to Swansea. What steps is he taking to ensure, along with his colleague, that the services provided to all motorists throughout the United Kingdom will not be adversely affected by this retrograde decision?

The Driver and Vehicle Licensing Agency has been established in Swansea for many years. It has a high level of expertise and I am entirely confident that it will be able to cope with all the demands that are made upon it.

14. Mid-Wales businesses depend upon good access to the west midlands to maximise their economic opportunities. For those businesses based in Brecon, that means the A438. Will the Secretary of State work with the Welsh Assembly, the Department for Transport and local government to ensure that that route is upgraded, particularly around Hereford, where a bypass is needed to avoid the bottleneck? (903941)

My hon. Friend raises an important issue that has been the subject of discussion for some time. These routes fall partly under the purview of the Welsh Government and partly under that of the Department for Transport. I wrote to my right hon. Friend the Secretary of State for Transport about this very issue only this morning.

The Mayor of London is now making the case for a £30 billion underground orbital road. Crossrail will cost £16 billion and HS2 will cost £50 billion at least. Considering the historically low levels of transport infrastructure investment in Wales, far below our population share, when will the Secretary of State start making the case for a fair share for Wales via the appropriate funding formula mechanism?

HS2, of course, is an extremely important project that will benefit Wales, particular north Wales and mid-Wales. I am speaking to David Higgins of HS2 about that issue this very afternoon.

The Prime Minister promised to electrify the railway line from Paddington to Swansea, and now he is saying that it will go to Cardiff and from Bridgend to Swansea, but not the bit in the middle. When will he listen to Swansea business, withdraw from the Punch and Judy performance between the Welsh and UK Governments, and get the project delivered on time and to budget for the Swansea city region’s jobs?

The hon. Gentleman will know—I have made it clear previously and I make it clear once again—that the Government are entirely willing and anxious to perform their part of the bargain in the electrification of the Great Western main line. We are having continuing discussions with the Welsh Government, and I hope that they will be fruitful.

Defence Operations

7. What discussions he has had with the Secretary of State for Defence on that Department’s operations relating to Wales. (903934)

Wales Office Ministers have regular discussions with colleagues in the Ministry of Defence on their operations in Wales and on how best we can support the armed forces in Wales.

The success of the St Athan enterprise zone is dependent on access to the MOD runway. The Welsh Government seem to have over-promised and under-delivered on the seven-day access. What progress is being made to ensure that they can take responsibility, so that companies based in St Athan can make the most of the opportunities provided by this MOD asset?

I think that my hon. Friend is referring to an incident that took place only this weekend involving Cardiff Aviation. I have discussed the matter with the Welsh Minister for Economy, Science and Transport, Edwina Hart, and raised it with the Ministry of Defence. Clearly we have a shared interest with the Welsh Government in ensuring that commercial operations at St Athan are a success, and that is what we are working towards.

Border Health Care

8. What discussions he has had with his Cabinet colleagues and Ministers of the Welsh Government on patient choice in health care on the Wales-England border. (903935)

Access to high-quality health care is an important issue for people across the UK, and particularly for those in the border areas. Following last week’s discussions on the matter in this House, I have written to the Secretary of State for Health and the First Minister urging swift action be taken to find a solution to the current difficulties.

The Secretary of State will know that a number of my constituents—thousands, in fact—are forced to use the NHS in Wales. They will therefore be very concerned by the report published yesterday, “Trusted to care”, which shows serious failings in the treatment of frail older people at two Welsh hospitals. Even the Labour Minister said he was shocked. Do not the people of Wales and my constituents deserve better?

I think that Members across the House were equally shocked by the contents of the report. I am glad to see that the Welsh Minister of Health has taken some action on the matter, but I repeat that the Government are more than willing to offer our assistance, perhaps by commissioning a Keogh-style inquiry.

The Midland Centre for Spinal Injuries at Gobowen provides the highest quality of care to patients from Wales with spinal injuries. They are concerned about the future of specialist services because of NHS reforms in England. Will the Secretary of State meet me to discuss the concerns expressed to me by my constituents?

I agree entirely that the Gobowen hospital is a world-renowned centre of excellence, and I am concerned about what the hon. Gentleman says. I am very happy to meet him and would be grateful if he contacted my office.

13. Access to cross-border health services is not restricted to the border areas, but access to specialist services is relevant to my constituents. The protocols are not working at the moment. In his discussions with Ministers, will the Secretary of State ensure that cross-border protocols are working for specialist services in particular? (903940)

My hon. Friend is entirely right. Key to this issue is the cross-border protocol. As a consequence of last week’s debate, I have written to both my right hon. Friend the Secretary of State for Health and the Welsh Health Minister, and we will see whether we can improve that protocol.

HMRC (Welsh Language Services)

9. What discussions he has had with his Cabinet colleagues and others regarding the future of Her Majesty’s Revenue and Customs Welsh language services. (903936)

Wales Office Ministers have regular discussions with ministerial colleagues and others, including the Welsh Language Commissioner, on the delivery of Welsh language services by UK Government Departments and public bodies in Wales.

I thank the Minister for that reply. Does he agree that the HMRC office in Porthmadog offers a first-class service in Welsh to private individuals and businesses that work in that language and that closing that office would be a disastrous step?

I am very aware of the excellent work done by the Welsh language specialist team at Porthmadog. I would like to give him an assurance that the wider changes that are happening to the network of inquiry offices will not impact on the Welsh language service, an important service that we are determined to keep operational.

Cost of Living

The Government understand the financial pressures facing many households at this time. That is why we have introduced real practical measures to bring down the cost of living in Wales by freezing fuel duty and raising the personal allowance, taking some of the lowest paid out of income tax altogether. We are putting money back into the pockets of hard-working people in Wales.

Just as in Harlow, the Conservative-led coalition Government have had a relentless focus on helping people with the cost of living, by freezing fuel duty, freezing council tax and cutting tax for lower earners. Will my hon. Friend lobby the Treasury to go ever further and raise the threshold at which lower earners pay national insurance contributions?

I pay tribute to my hon. Friend for the work he does campaigning for those on the lowest incomes. Decisions on national insurance contributions are a matter for my right hon. Friend the Chancellor of the Exchequer, but I share my hon. Friend’s objective. We are determined to return more money to the pockets of hard-working people by taking them out of income tax.

Train fares are high and electrification of the valleys lines is crucial for south Wales. What is the Minister doing to make sure that the Government are making sure that the 2019 electrification timetable will be met?

Improving the rail network in the valleys is an important way of our connecting people in those communities, where unemployment is higher than average, with the new jobs that are being created in Cardiff and Newport. As the hon. Gentleman knows, discussions about electrification of the valleys lines are part of the discussions we are having with colleagues in the Welsh Government and colleagues at the Department for Transport about how we finance that major package of infrastructure improvements for south Wales.