I beg to move,
That this House expresses deep concern at the impact of the Government’s policies on Wales; notes the Government’s real-terms reduction of the Welsh budget by £1.5 billion; notes that Wales currently suffers from the lowest average rates of pay in Britain and has the highest proportion of individuals affected by cuts to social security including the bedroom tax; further notes that Wales suffers the highest energy bills in the UK and that these, along with low pay, have compounded the cost of living crisis in Wales; and calls on the Government to immediately scrap the bedroom tax, freeze energy bills and undertake measures to increase pay rates in Wales.
When devolution was created in 1997-98 by the last Labour Government, it was very much intended as a measure to make Wales more accountable, to give us a greater level of self-determination, and to see autonomy for the Welsh people and bespoke Welsh solutions for Welsh problems. The unspoken motivation behind that, especially in Wales where the miners strike was so fresh in our memories, was to protect the Welsh people from the prospects of a future Tory Government. Pit closures, steel closures, the legacy of de-industrialisation and people shunted on to incapacity benefit to languish there for so many years, were fresh in our minds, and they were absolutely behind the idea that we would, with devolution, have an additional bulwark against the destructive economic philosophy of the Tory party.
Is the hon. Gentleman admitting here in this Chamber that one of the reasons Labour supported devolution was not because it wanted to change the constitution, but because it thought that it could control the Welsh Assembly at all times?
No. We had campaigned for devolution for 100 years, and it was absolutely about changing the accountability to the Welsh people, making all the obvious constitutional changes. However, for many of us on the left in Wales it was also about guaranteeing a Government who would to a greater extent reflect our values and defend Welsh people against the values of the hon. Gentleman’s party and this Government. Four and a half years on from the return of a Tory Government, we now have an opportunity to measure exactly what the impact of that Government has been and, six months from the next election, think hard about how effective those defences have been.
We would have done, as my hon. Friend knows—he promotes me unduly and unfairly—and perhaps we should have done, but we are always fair-minded and therefore did not do so. However, I think we are convinced that what we did do was afford Wales some extra protection against the ravages of a Tory Government, about which we are about to hear more.
I just want to give the hon. Gentleman an opportunity to correct his statement that the Labour party had campaigned for devolution in Wales for 100 years. I know that he is a great admirer of Aneurin Bevan. I come from the same town as Aneurin Bevan, and I am sure that he did not campaign for devolution.
I hate to say it, but the hon. Gentleman really ought to study his history a little harder, because Kier Hardie, even when elected in 1895—not as a Welsh MP, but in West Ham—spoke in this House about devolution, and when elected to Merthyr as a Labour MP in 1905 he was absolutely a campaigner for home rule and devolution for Wales. The hon. Gentleman’s history is wrong; mine is perfectly accurate.
Recent history—the past four and a half years—shows that the Labour party is still campaigning for rights for Welsh people and standing up for Welsh Labour valleys. Thus we have seen Jobs Growth Wales, the most effective youth employment programme anywhere in Britain, 1,000 jobs created only last week, and massive increases in inward investment, all positives that have come as a result of devolution and the protection of the Welsh people.
The shadow Secretary of State mentions Jobs Growth Wales. Of course we applaud any initiative that gets people into work and helps increase opportunities for young people, particularly in Wales, but he must be aware that the independent study of Jobs Growth Wales commissioned by the Welsh Government showed that around 75% of all the young people on the programme would have found work anyway. He needs to answer this question: is that a good use of taxpayers’ money?
I think that the evidence for Jobs Growth Wales is absolutely clear to us all. It has proven to be the most effective youth employment programme anywhere in Europe. It is succeeding in creating 16,000 opportunities for young people, and it is succeeding in keeping those young people in work beyond the six months. It is widely supported by the business community right across Wales. I cannot imagine for a minute that the Secretary of State should wish to undermine it, especially when it stands in such stark and promising contrast to his Government’s Work programme.
Around 750,000 young people in Britain are still unemployed. Although that is fewer than the 1 million who were unemployed just a couple of years into this Government’s time in office, and we welcome that fall, I suggest that 750,000 is an enormous number of people to be left languishing on the dole, but that is what we have come to expect from a Tory Government.
In response to the hon. Member for Alyn and Deeside (Mark Tami), those are not my words, but those of an independent inquiry into the matter. Of course the business community supports Jobs Growth Wales, which has made good inroads into giving opportunities to young people. However, when about 75% of young people are considered to be able to get work anyway without the need for a support programme, we should bear in mind the question of whether it is a good use of taxpayers’ money.
In comparing Jobs Growth Wales with the Work programme, the shadow Secretary of State is comparing apples and pears. The Work programme does not work with bright young graduates who are fresh out of university but with people who face the biggest hurdles in getting back into work—the 200,000 people in Wales who never worked a day in their life under Labour.
I do not want to belabour the point, but the Secretary of State needs to consider carefully whether he wants to denigrate Jobs Growth Wales, which does not, by and large, work with undergraduates but with youngsters aged 16 to 24, most of whom will not be undergraduates. It has been demonstrably successful in Wales, and he should be welcoming and supporting it, not seeking to undermine it.
As someone who represents a constituency in a border county on the Welsh Marches, let me say that we would like to see more support and help for young people to get them into work, and to follow some of the examples in Wales that have been getting people into work. It is important for the economies of the Welsh Marches and the border counties that Wales has a strong economy. That is why this debate is so important for us all.
I am grateful to my hon. Friend, who is absolutely right. That is why Labour has said that, unlike the Tory Government, we will learn from Jobs Growth Wales and transplant it to the rest of the UK. Under the next Labour Government, we will see similar success, I am sure, as a result of the measures we will undertake.
The Secretary of State talked about the people who are not able to get into work. Will he comment on a fantastic course that is being run in Bridgend at The Zone, which is helping people who find it difficult to promote themselves and to deal with going for job interviews? It covers the body language, listening and time management skills that will help them to get into work through Jobs Growth Wales.
The Secretary of State cannot comment on it yet, but perhaps he can later. I would happily come and see that project in Bridgend, which sounds excellent.
My fundamental point is that devolution has already proved to be something of a protection against the Tory Government. Workers’ rights have been stood up for on blacklisting and on the Agricultural Wages Board, and jobs and services have been protected in Wales in a way that they have not been in England.
I will make a little more progress and then give way.
However, devolution does not show that, of itself, even with a Labour Government in Wales, it can fully inoculate Wales against the virus of Tory economics. Unfortunately, the “trickle-down” belief of Tory economics that wealth will be spread by favouring the people who already have the most and punishing those with the least is demonstrably leading to lower living standards in Wales. In a moment, I will enumerate some of the symptoms of that virus that we can see right across Wales.
My hon. Friend knows that today the Welsh Government have published their latest index of multiple deprivation, which shows that Lansbury Park estate in Caerphilly is now the most deprived community in Wales. Does he share my anger at that fact? Does he agree that nothing shows more clearly the real impact of central Government policies on poor communities in the south Wales valleys?
On a point of order, Mr Deputy Speaker. The shadow Secretary of State has just claimed from the Dispatch Box that I was laughing at the news that the ward in Caerphilly is now the most deprived—[Interruption.] Not at all—it is a complete untruth, and I ask him to withdraw it.
Let us look at some of the symptoms in Wales of the disease of Tory economics, starting with food banks, because they are a useful barometer of this Tory Government’s impact. The volume of food banks in Wales has grown at a faster rate than anywhere else in Britain. In the first six months of this year, 40,000 people in Wales were forced to use them. That is a tenfold increase since 2010, when just 4,000 people used them. By the end of this year, it will have been a twentyfold increase, which is an extraordinary statistic.
I am sure that, while congratulating the city and county of Swansea, my hon. Friend will greet with some concern its decision to introduce food collection points across my constituency. It is a sad state of affairs when people have to be encouraged to go along to a council property to drop off food for less fortunate citizens, but they are to be applauded, and I urge everybody to support the food banks.
The food banks are to be applauded, but the fact that they are required should shame us all, particularly the Government who are presiding over the explosion in their usage. It is very clear why they are required: the Trussell Trust has made it plain that the vast majority of people who use them do so because their benefits have been changed or stopped.
The emerging trend—at 22%, up from 15% last year—is for the recipients of food parcels to be in work. They are earning a living, but it is insufficient to pay for something as fundamental as food. That should surprise none of us, because we now know that, under this Tory Government, 13 million people in Britain are in poverty while in work. They are earning their poverty in this country, and that scandal and disgrace should shame us all.
I am aware of that, but I am grateful to my hon. Friend for reminding the House about it. Right across Wales, wage inflation last year was just 0.6%, while price inflation was 2.2%. That real-terms fall in people’s wages comes on top of the fact that wages in Wales are already the lowest in Britain. Average weekly earnings in Wales are now just £473.40, compared with the UK average of £518. One in four workers in Wales earns below the living wage, which should shock the House in the 21st century.
Yes. All those things contribute enormously: they are all symptoms of the widespread, systemic problem in our society and economy, which this Tory Government’s current policies are unfortunately making worse. In fact, the Welsh Government have calculated that by next year, £1 billion will have been taken out of the Welsh economy directly as a result of the welfare changes made by this Tory Government. It is estimated that the average annual loss per working-age adult in Wales will be £500 by 2015-16. The bedroom tax, the most pernicious and cruel example of this Government’s welfare policies, hits Wales harder than anywhere else in the UK. The Department for Work and Pensions statistics confirm as much—more than 40,000 Welsh men and women hit by the bedroom tax, 26,000 of those, disabled.
My hon. Friend talks about averages in Wales being about £540. Is he aware that in Rhyl West—until this morning the poorest ward in Wales, but it has been overtaken by a Caerphilly ward—the actual hit for those people, the poorest in Wales, was £1,450, as opposed to the richer ward of Efenechtyd in the south of the county, where it was only £270, so the impact on those poorest people in Wales has been five times greater?
I am grateful to my hon. Friend for his intervention. Yes, of course that is right. The evidence is right before our eyes: over 50% of Welsh local authorities have had to use top-up discretionary housing payments to deal with the volume of problems created by the changes to welfare in Wales, versus just 27% in England. That is more evidence that Wales is being hit harder on the watch of the Secretary of State and the Minister than anywhere else in the UK.
Will the shadow Secretary of State explain, therefore, why only three of the 22 local authorities have applied for additional discretionary housing payment to help with hardship as a result of the spare room subsidy changes?
Some 54% of local authorities in Wales have used up most of their discretionary housing spending. The figure for England is 27%. Wales is harder hit than anywhere else and we are having to spend more money. If the Minister seriously suggests that the DWP figures are wrong, and that Wales does not have a greater volume of people hit by the bedroom tax than anywhere else, he can tell us, but I am sure that he will not disagree with the DWP. I am sure that he will agree with me that 40,000-odd people in Wales are affected, 25,000 of whom are disabled.
I will happily clarify that Cardiff, Caerphilly and Conwy are the only three local authorities, of the 22 in Wales, that have asked for an uplift in discretionary housing payment to help with hardship. Why did other local authorities around Wales not do so if the situation is as bad as the hon. Gentleman suggests?
Let me tell the hon. Gentleman something very simple that he could do to stop this back and forth about numbers: he could think about the impact on people in his constituency and mine, and those of all other hon. Members, and he could scrap the bedroom tax tomorrow. That is what Labour will do if we are elected. We will get rid of it in a heartbeat. Frankly, the nonsense about who has applied for which grant demeans this debate, which is a serious debate about the impact on real people.
Does not this argument miss the fundamental point, which is that if the Government have to create a system in which there is a discretionary housing payment, which means that some local authorities will be mean at the beginning of the year and generous towards the end of the year, and that some local authorities will be meaner than others, they have completely lost the plot? That is why we have to get rid of the bedroom tax in its entirety.
Introducing a tax that is reliant on people being able to move to smaller properties was, in and of itself, barmy, because there are not the properties for people to move into. That is why 60% of social housing associations in Wales are struggling to rehouse people.
Of course, it is not just the people who are hit by the cuts to welfare payments that are affected, but the wider population. Sheffield Hallam university produced a report just a few weeks ago that said that the welfare cuts will result in a £1,000 reduction in the incomes of all people across the south Wales valleys eventually, as reductions in aggregate demand, reductions in spending and further job losses—it suggested that 3,000 jobs might be lost across south Wales—result in a less dynamic and resilient economy. It is not just the people who are directly impacted by the welfare cuts who are affected, but the wider economy.
On top of the welfare cuts, ordinary workers who are not in receipt of benefits are losing £1,600 a year. That is why Labour will do something about low wages in Wales. We have made it very clear that we will set the national minimum wage at 58% of median earnings by 2020. That will mean a minimum wage of £8 in Wales and will put an extra £2.50 per week in the pockets of working people. It will mean 60 quid a week or £3,000 a year for hard-working families. [Interruption.] The Secretary of State laughs and giggles once more, as I discuss low wages.
There is no laughing or giggling, but we can smile because the hon. Gentleman trumpets, in his usual proud, puffed-up way, the idea that the Opposition would increase the minimum wage to £8 an hour. Under the proposals that the Government have put in place, the minimum wage would be higher than that. Why is he proposing a cut in the minimum wage?
On the income of the poorest workers, should we not bear in mind the impact of the bedroom tax? There simply is not smaller council housing for people to move into. In the event that people move into private housing, their rent goes up and the housing benefit goes up. In other words, it is simply a tax on the poorest for the sake of it. We will take it away when we get in, which will raise their incomes.
My hon. Friend is of course right. That is why it looks increasingly as though the bedroom tax will cost the Exchequer money, not save it money. It is voodoo economics of the worst kind, because it penalises the most vulnerable people in our society. It is having an even greater impact in Wales, and the Secretary of State should acknowledge that.
My right hon. Friend is entirely right. Of course, it is not only the changes to welfare that are having an impact on people in Wales. A culture of fear and insecurity is increasingly becoming the norm in the workplace, with between 50,000 and 70,000 Welsh workers now employed on zero-hours contracts. Some 200,000 Welsh workers are self-employed. I note that the Secretary of State has said in the press today that those people are effectively entrepreneurs, but the reality is that they are people who are increasingly being forced into bogus self-employed status and counted as entrepreneurs by the Office for National Statistics.
My hon. Friend will know that there has been a rally today of UCATT, Unite and other unions—and I will take no jeering at union members by coalition Members on this issue—on behalf of construction workers. They are now working for bogus, so-called umbrella companies who sanction—take out of—their pay the employer’s national insurance contributions to annual pay, so they go home with a far smaller wage at the end of the week. That is despicable, but I remind coalition Members that it is a function of the sort of economy and the hands-off Government that we have.
Yes, it is an economy of maximum insecurity for the work force and maximum security and flexibility for employers. Invariably these days the employers are umbrella companies, supply agencies or contract companies, and often people do not even know who is employing them. We do know that the number of self-employed workers in Wales has gone up by 17,000 since the Government came to power, but their incomes have crashed by more than a fifth. Similarly, in Wales there are now 71,000 part-time workers who wish they were working full time. That is up from 54,000—an increase of almost one third under this Government. Those are the hallmarks of the culture of insecurity—the culture of fear—in the workplace that is now affecting Wales and the rest of the country.
No, we have been clear that we will tackle all abuses and exploitation of zero-hours contracts. We will introduce rules to give new rights to employees on zero-hours contracts. We will ban employers from requiring zero-hours workers to be available on the off-chance that there might be work for them. We will stop employees being required to work exclusively for one firm if they are on a zero-hours contract. We will ensure that zero-hours workers who have their shifts cancelled at short notice are recompensed. That is what the next Labour Government will do; that is what this Government could and should be doing.
I will not give way any more, because I have gone on for quite long enough. I need to wind up my remarks because other hon. Members wish to contribute to the debate—at least on this side of the House.
The reality is that workers’ rights have been eroded under this Government. It is not just wages that have crashed—employees’ rights have crashed. The Government have made it more difficult for workers to take employers to court. They have watered down health and safety legislation and they have bribed workers to sell their rights for shares. They have talked up anti-strike laws, they have halved the consultation period for redundancies in large employers, they have allowed blacklisting to flourish and they have tried to silence campaigning activities by trade unions and others. It is the antithesis of what the Government need to be doing to increase security and loyalty, to increase receipts in our work force and to increase productivity. Fear has become the norm in the workplace. The minimum wage is no longer the minimum: all too often, it is the going rate. Rights have been diminished and wages have fallen.
The next Labour Government will do things radically differently. We will right those wrongs, ban zero-hours contracts, freeze energy bills, fix the rip-off market, increase the minimum wage, and stand up for the Welsh NHS, investing in new doctors and nurses through a mansion tax. We will scrap the bedroom tax and liberate the 26,000 disabled Welsh people from the fear of it. We will cut taxes for the lowest-paid. We will increase taxes for the richest. We will rebuild Wales and Britain on the foundations of fairness, not fear. We will build an economy that works for working people once more, for the many and not the few.
I am delighted to follow the shadow Secretary of State for Wales and to have the opportunity to talk about the record of the UK Government in Wales. I notice that the Opposition changed their minds on the original motion that they sought to table. I believe it was originally entitled “The disastrous effect of Government policies on Wales”. It seems that they no longer believe that to be the case, and quite right too. We are winning the argument and we have not even begun our speeches yet.
We have to ask ourselves why, at this precise moment, the Opposition have tabled such a ludicrous motion and are trying to talk down the Welsh economy and present a black caricature of what is happening inside the Welsh economy when last week was such a successful week for Wales. On Friday, the Prime Minister, Labour’s own First Minister of Wales, business leaders and journalists stood together at Celtic Manor for the UK Investment Summit, rallying together to bang the drum for the huge strides made in the Welsh economy in recent years. Why would Labour choose to have such a debate at this time to talk down the efforts we are all making to secure new investment and new job creation in Wales?
I would applaud any jobs created in my constituency, but I will tell the Secretary of State why we are having this debate today. A guy came into my surgery two weeks ago and showed me his payslip. It was disgraceful. An umbrella company was taking more than £50 from him to contribute to its—the company’s—employer’s national insurance contribution, and deducting £35 as a contribution to his own annual leave. According to HMRC he was employed by the company. Does the Secretary of State condone or condemn such companies?
I condone companies that invest in Wales and create jobs, which is the most important thing in driving up wages. Let us be clear about this on both sides of the House: we acknowledge and recognise that wages are not where we would like them to be in Wales. We want to see real wages going up in Wales. The best hope for workers in Wales to see real increases in wages is more job competition: the creation of more and higher quality jobs. That was exactly the purpose of last week’s investment summit. Welsh Labour Members really need to make up their minds. They say one thing at this end of the M4, but back down the road in Cardiff they say another thing about what is going on inside the Welsh economy. They need to make up their minds on whether they back Welsh business or not.
The Secretary of State is making a strong and forceful case. Will he argue as strongly and as forcefully for the groups of construction workers in my constituency who are now up to £100 worse off, for the youngsters who are at the beck and call of employers on zero-hours contracts with no continuity and no certainty of employment, and the people working in two part-time jobs because they cannot get one full-time job? Would he say that they are benefiting from the economy in the same way?
We feel equally offended by the abuses in the workplace that the hon. Gentleman describes. The record of the coalition Government is actually very positive: increasing penalties for companies that do not pay the minimum wage properly, and consulting on the abuse of zero-hours contracts and taking action.
The Secretary of State will be aware that I have raised several times in the Chamber the case of a person in my constituency who had money deducted from his salary. He spotted that it had been deducted and went to his employer, who said that it was because he was taking too long in the toilet. Will the Secretary of State condemn employers who do not tell employees that they are deducting money from their wages, or those who are making false deductions from salaries on an ad hoc basis when it is not clear that the money has been taken or what it has been taken for?
I am not aware of that specific case, but clearly it does not sound right; it does not sound like an employer that values its employees. However, we should be wary of painting a caricature of the Welsh economy. There are specific abuses, which we will crack down on, and examples of bad practice, which we must not tolerate, but overall the picture is of an improving economy. Wales is getting stronger and its economy is improving, and if Labour Members really value their constituents and want to see opportunities extended to them, which I genuinely believe they do, they should back the general thrust of our policies.
The company would not talk to me, so I asked HMRC to investigate—let it look at the payslips, let it see what is happening—and what did I get? I got a response saying, “We’ll get back to you some time in December.” That is not good enough. I need an assurance that the company will be investigated.
Absolutely, I welcome the fall in unemployment in my hon. Friend’s constituency. During the shadow Secretary of State’s speech, I was looking through Labour Members’ constituencies. Many of them saw increases of 60%, 70% and 80% in unemployment under the last Labour Government, whereas unemployment in those constituencies is now falling.
I have been to the hon. Gentleman’s constituency: I had a fruitful set of meetings with people working at the coal face in terms of supporting people in long-term unemployment and helping them back into work. I realise that there are challenges in the Welsh economy and that sections of Welsh society are still not seeing the full benefits of economic recovery, which is why there is no complacency on the Government Benches, but I must point out that his local authority is working very well with the Department for Work and Pensions, in preparing for the roll-out of universal credit, which will make a difference to the lives of people in his constituency.
Is not the answer to the hon. Member for Caerphilly (Wayne David) that the Lansbury Park estate did not become poor in the last four years, and that throughout all the years he has represented the area, it has been one of the poorest in Wales? It is only since the coalition came to office that unemployment has started falling, whereas when Labour was in office, it went upwards.
Not until every section and geographical part of Wales is sharing in the benefits of recovery will we talk meaningfully about a full economic recovery in Wales. There is no complacency on the Government Benches about that.
To round off the debate about Caerphilly, I must point out that under the last Labour Government, of which the hon. Gentleman was a member, unemployment in his constituency rose by 92%, whereas it has fallen by 31% under this coalition Government. I say with all humility that he should be trumpeting that and welcoming the fact that today there are more men, women, lads and girls going out to work in his constituency than there were under Labour.
The Secretary of State made great play just now about measures being taken to tackle non-payment of the minimum wage. Exactly how many prosecutions have there been for non-payment in Wales, and does he think it an acceptable level, given the experiences of many people, including in my own constituency?
As I am sure the Secretary of State is aware, I was previously the Minister responsible for the national minimum wage. There have not been prosecutions in many cases, but what has been done is far more important—I am sure my right hon. Friend will agree. This Government have ensured that employees who have not received the minimum wage when they should have done have had their money paid back, so they have not lost out as a result. It is far more important that employees get recompense and get their minimum wage.
I will give way a bit later.
Let us remind ourselves that when we formed this coalition Government back in 2010, the coffers were empty, and the previous Chief Secretary to the Treasury was joking that the money had all gone. Wales was in an employment slump, and the Labour party was far too relaxed about the tragedy that 200,000 people in Wales had never worked a day in their lives. What a tragedy that was for Welsh communities and for the individuals who had never worked a day in their lives. This Government are not content to be relaxed about that and we are not shying away from the responsibility for trying to put that right. That is why hard-working people are at the very heart of our long-term economic plan. It is why we have cut income tax for more than a million people in Wales so that people can keep more of what they earn. It is why we have cut national insurance contributions to allow businesses to grow so that they can keep and take on more staff, and why we have introduced the Work programme to provide the best possible support for long-term unemployed people, so that they do not get left behind as they did under the last Labour Government.
We have cancelled Labour’s planned fuel duty increases so that petrol will be 20p cheaper than it would have been under the last Government, saving money for the owners of 1.7 million vehicles in Wales, and we are also taking action to help the relatively high proportion of pensioners we have in Wales. Last year, we increased pensions above inflation by £2.70 a week, on top of the record cash rise of £5.30 in the state pension the year before. In April this year, we increased it again by £2.95, in line with our triple lock. This was the biggest cash increase since the state pension was first introduced. That should be compared with the tiny 75p increase offered by Labour when they were in government. It is not hard to tell which party is on the side of pensioners in Wales.
This debate is about the economy, but it should also be about values. Will the Secretary of State explain to us what values drive him to cut the taxes for the richest people in Wales while putting up VAT, which is paid by everybody, no matter what their income? What values drive him to make benefit cuts such as we have seen with the bedroom tax and to hit the poorest people hardest? As I say, this debate is about values.
I agree with the right hon. Gentleman that it is about values. It is about our values as a Government who are not content to see 200,000 people in Wales who have never worked a day in their lives. That is why I celebrate the fact that there are 38,000 more people in work in Wales since the election and 47,000 fewer households where nobody works. What does that mean in real terms? It means more kids in Wales growing up seeing a mum or dad going out to work. Opposition Members, who go under the name of “Labour”, should be championing that.
Is my right hon. Friend aware that this debate is not about the economy, but about the effect of Government policies on Wales. Does it surprise him that the hon. Member for Pontypridd (Owen Smith), who spoke very entertainingly—I look forward to coming back to it—for nearly 40 minutes did not once mention the national health service or the effect of Government policies on health?
My hon. Friend makes an important intervention and we look forward to hearing more from him later in this important debate. It is about values, but over the last week, the mask has finally slipped—yet another example of Labour’s mask slipping. We saw it last week when a member of the Opposition Front-Bench team saw fit to ridicule someone’s home just because they had a white van parked outside it and were displaying the flag of St George. The Labour party can no longer with any credibility claim to be the workers party. It is the party of the liberal metropolitan elite, that sneers at hard-working people. Today Labour Members should be on their feet championing workers in their constituencies —[Interruption.]
Time and again we see that the Labour party simply does not believe in the people of Wales. It thinks it knows best, it does not believe that people can manage their benefits, it does not believe that businesses are strong enough to play their part in rebalancing the economy and it certainly does not believe that Wales is an ambitious country hungry for success.
I believe those things and so do this Government, from the Prime Minister down. We reject the negativity of the Labour party, which is using this debate to talk Wales down at the very time that it should be backing Welsh businesses and backing the people of Wales who are working so hard to drive the economic recovery forward. Since the election, 46,000 fewer people in Wales are claiming out of work benefits, there are 90,000 more private sector jobs in Wales and 26,000 more small businesses are driving the economy forward. That is all down to the difficult decisions taken by the coalition Government back in 2010 to get the economy moving again. Each one of those decisions was challenged and rejected by Labour.
The Secretary of State mentioned the growth in the small business sector and he also mentioned the employment allowance, which gives a national insurance contribution rebate to businesses. Will he welcome with me the fact that more than 1,000 small businesses in my constituency alone and tens of thousands across Wales have already taken that up, enabling them to invest in their staff through training or higher salaries and even to create new jobs and take on more people?
That is a message I hear consistently from small businesses up and down Wales. Wherever I go, they welcome the efforts the Government have made to give them confidence to hire more workers and to keep staff. The last thing that businesses want to be doing is shedding staff at this time. They know how hard things have been for many families out there in the economy and they are doing everything possible to hold on to staff and grow their work forces. We have been supporting them in that.
The single thing that every business man or woman in Wales has said to me is that they want economic security and certainty about the future if they are going to see investment or to make further investment themselves. What is really worrying them is that the Government are playing fast and loose with our membership of the European Union, hanging the sword of Damocles over the Welsh economy and the UK economy. The uncertainty about whether we will be in or out is surely bad for the Welsh economy.
The uncertainty about the European Union and the doubts and concerns about it are out there anyway. If the hon. Gentleman talks to people in Wales and looks at the public opinion polls, he will see that opinion in Wales is almost equally divided between those who are saying they want to come out of the European Union and those who are saying that they want to stay in. The Prime Minister’s strategy of getting a better deal from Europe as regards our membership and putting it to the people of Wales and the UK, arguing for Britain to stay in on that renegotiated membership, is the best strategy for dealing with this and addressing it head-on. That has to be the best way.
I disagree. I would have a referendum tomorrow. If that is the Secretary of State’s real argument, let us have a referendum tomorrow. The idea of holding off for two years and having some nebulous renegotiation when we have not even set the terms of what we want and are constantly saying to businesses in Wales that we do not know whether will be in or whether the Prime Minister would support staying in the European Union in two years’ time can only be bad not only for big businesses, such as Airbus and General Electric, but for the small and medium-sized businesses that rely on investment through the public funds that come from the EU.
I have a great deal of time and respect for the hon. Gentleman, who knows his stuff on this issue, but I suggest that he look at what the business organisations are saying. They support what the Prime Minister is saying about renegotiating. Businesses themselves in the UK and Wales want a less intrusive, less costly and less burdensome membership of the European Union.
I want to reiterate the point made by the Opposition, but from a farming perspective. Has the Secretary of State listened to the president of the Farmers Union of Wales, who talked about the great uncertainty that this will cause many hundreds of small businesses—that is, the farms of Wales?
I meet regularly the Farmers Union of Wales and NFU Cymru and I am aware of what they say. I also speak to a lot of individual farmers and, again, I point out that there is a split. There are some strongly held views on both sides, so the Prime Minister's strategy of trying to settle the debate for the long term and get it out of the way is absolutely right.
Time and again over the past four and a half years, the Labour party has got the big calls about the economy wrong. Their dire predictions about increasing unemployment have not materialised. Their prediction that the Welsh private sector was too thin or weak to support the rebalancing of the economy has been proved wrong.
There is, however, one thing about which the shadow Secretary of State has been right, not wrong, and on which we absolutely agree with him. He was recorded saying to activists—at his own party conference, I think—that his leader was not quite up to the job, and that his party had lost touch with its core voters. We entirely agree with his analysis in that instance.
Well, Madam Deputy Speaker, I merely pick up what has been reported and discussed in the media.
While the Labour party is busy tearing itself apart, we are cracking on with creating the right conditions to get the economy moving. We are investing in Wales because we believe in Wales. I am particularly delighted to be able to tell the House that the rail electrification projects in south Wales will go ahead. I am sure that the hon. Member for Pontypridd would have preferred us not to meet that challenge, so he would have one more reason to be negative and talk down the economy in Wales, but I am proud of the deal that the Wales Office brokered between the Department for Transport and the Welsh Government, putting Welsh interests right at the heart of the Government’s agenda.
We are delivering this project. We have worked very constructively with the Welsh Government to put the deal in place. We will see trains running on the electrified service to Swansea in 2018, and on the valleys lines in 2022. Obviously, those timetables are subject to how quickly the Welsh Government move in managing the project, but they understand its strategic importance and urgency for people and businesses in south Wales.
I welcome the news of the financial deal and the certainty of the timetable, with a date of 2018 for the Swansea service. However, the economics of austerity and low wages have meant that instead of increasing by 7% this year, income tax receipts are flatlining, and the projected income from national insurance and income tax is £13 billion down, so the Chancellor will not now be able to reduce the deficit by £11 billion. Does the Secretary of State not accept that the politics and economics of low wages and hitting the poor hardest simply are not working, and debt is being driven up?
I am not sure that I follow the hon. Gentleman’s argument. If he is expressing concern about the deficit, let me ask him why, for the last four and a half years, he and his colleagues have pursued policies with the exact objective of increasing the deficit and increasing the debt, and have argued and voted against every measure we have tried to introduce to restore stability and sanity to our national finances.
Effective transport links are a vital part of any modern economy, and few areas in the United Kingdom are more in need of the improved commuter costs, reduced travel times and more frequent train services that electrification will bring than the valleys communities. Yet again, investment has Welsh people at its heart. The Government’s programme of investment in rail infrastructure in Wales and throughout the UK is one of the most ambitious since the development of the rail network in the 19th century. By 2019, we shall have put in place more than 870 miles of electrification, whereas Labour Governments have managed less than eight miles.
Rail electrification is only one example of the constructive and co-operative relationship that we have struck with the Welsh Government to help deliver for the people of Wales. In contrast to the Labour party in Westminster, we do not posture and play silly games; we roll up our sleeves, put partisan interest aside and do our very best to help get Wales moving again.
Opposition Members may recall the NATO summit in Newport just two months ago, which was a stunning success for Wales—a great example of two Governments working in co-operation to deliver for the people of Wales. We hosted the largest gathering of world leaders in Britain’s history, putting Wales on the world stage. We worked with local business, local councils—I pay particular tribute to Newport city and Cardiff city councils—the Welsh Government and the local people, and they all delivered superbly. NATO showcased the excellent hospitality Wales has to offer and created jobs for local people, and this success paved the way for last week’s investment summit—another example of this Government working positively with the Welsh Government in the interests of Wales.
It could not be any clearer: the UK Government are putting business at the forefront of the recovery and they are delivering. I refuse to accept the Opposition’s argument that the private sector in Wales is too weak for the rebalancing of the economy to work, and I certainly refuse to accept the constant bashing the shadow Secretary of State delivers in respect of Welsh businesses.
These two historic events—the NATO summit in September and the investment summit last week—should convince the shadow Secretary of State that Wales can deliver on a scale matching any other nation in the world. Joint working on this scale demonstrates how the Welsh and UK Governments can co-operate and collaborate in the interests of the people of Wales.
Securing good quality jobs for people in Wales is a priority shared by both the UK and Welsh Administrations. Airbus in north Wales continues to be a shining example of the quality of jobs and the skills sets Wales has on offer. I was therefore delighted that investment from both Governments last week has secured 6,000 jobs in the long term at the firm’s factory in Flintshire, in the constituency of the hon. Member for Alyn and Deeside (Mark Tami).
Does the right hon. Gentleman agree that the rise of Airbus, out of the ashes of the closure of Shotton steel works, was down to actions taken by the Labour Government in 1998, when we gave Airbus £500 million in launch aid? That was an example of private and public co-operation.
There is truth in what the hon. Gentleman says. It is an excellent example of European industrial co-operation, but he knows better than anyone else here that at the heart of the success of Airbus in his north Wales constituency are the excellent skills and motivation of the workers, many of whom are in his constituency, but also in other constituencies.
North Wales is at the heart of Wales’s economic growth, and I look forward to seeing more excellent examples of enterprise in Wales’s very own northern powerhouse tomorrow, when I embark on a two-day business tour there. The Labour party here in London at times seems to resist these developments.
If the right hon. Gentleman is visiting north Wales, perhaps he will visit the Wrexham area. I hope he will accept that many of our exporting giants in north-east Wales, such as Kellogg’s and Toyota, export to European markets, and that the international investors who decide where to invest and create new jobs are frightened off by his Prime Minister’s indecision and this Government’s lack of clarity.
Business is not being scared off: quite the opposite. We recognise that the single European market is an enormous strategic prize for the UK, but in fact a greater proportion of Welsh exports go to countries outside the EU than to those inside it, and our trade with countries outside the EU is growing at a faster rate, so the hon. Gentleman should not be so insular and should look at the worldwide dimension, rather than just the European one.
When the Secretary of State is travelling to north Wales, will he stop off in Chester or go to Vauxhall in Ellesmere Port and ask my constituents there how much they value having a voice in this House to represent their interests on matters that are dealt with by the English Government?
Exactly. There is a faint whiff of scaremongering coming from Labour on those issues.
I want the Government to bang the drum for investment into Wales, whether it be the UK Government or the Welsh Government, and I am delighted to be able to say that inward investment into Wales is on the rise. In the past year in Wales alone, 79 projects have got under way—the highest number for almost 25 years. The 13 years of the last Labour Government did nothing for boosting inward investment in Wales, but I have seen for myself what this Government’s policies have done for inward investment—[Interruption.] The hon. Member for Vale of Clwyd (Chris Ruane) says that that is all down to the Welsh Government, but almost all the inward investment projects that we secured for Wales last year involved the active support of UK Trade & Investment and the UK Government.
Just last month I visited Hydro, a company that specialises in water purification using electro-based technology. While I was there, Hydro announced a new £20 million joint venture deal in the United Arab Emirates to assist that country to achieve more effective water treatment solutions. I look forward to hearing the hon. Member for Llanelli (Nia Griffith) congratulating that company and championing the business interests in her constituency when she speaks later in the debate.
The Secretary of State is talking about the contribution of major businesses to the Welsh economy. Does he agree that the steel industry in Wales is facing significant challenges, with Celsa and Tata in particular being affected? It is crucial that the Government act quickly and robustly to deal with the concerns that those companies have raised about energy, dumping from markets in China and Turkey, and the many other matters that he and I have had correspondence on. Does he acknowledge that the Government need to get their act together and move a lot faster on those issues to support the steel industry in Wales?
My ministerial colleagues and I are working hard on those issues, and we have also had correspondence and meetings with Ministers in the Department for Business, Innovation and Skills. We are certainly alive to the concerns of the steel industry and we want to do everything possible to secure the future of that strategic industry in the hon. Gentleman’s constituency and elsewhere in south Wales.
The road network in Wales is another vital element of its infrastructure connections that businesses and communities rely on. That is why we are providing the Welsh Government with increased borrowing powers via the Wales Bill to boost investment in Welsh infrastructure, including work on the M4 upgrade. Congestion on the M4 has long been a concern for south Wales businesses, and an upgrade is grossly overdue. That is another vital infrastructure decision enabled by this Government.
I have a huge amount of sympathy for the hon. Gentleman’s point. Businesses in north Wales make that point to me consistently, and I expect to hear more on that while I am in Wales over the next 48 hours. The Under-Secretary of State for Wales, my hon. Friend the Member for Vale of Glamorgan (Alun Cairns) will shortly be hosting a transport summit in north Wales in order to identify the strategic infrastructure projects that we need to focus on if we are to secure the long-term economic success of the area.
I will bring my remarks to a close shortly. I could have gone on to talk about investment in digital infrastructure and the support that we are giving the Welsh Government for the broadband project. I could also have mentioned the investment in the new prison in Wrexham, which is a really strategic investment for north Wales, along with the many other examples of how this Government are doing everything possible to create the right framework and conditions for Welsh business to succeed, and to create the jobs and wages that we all want to see for all our constituents.
I am very proud of the transformative projects that this Government have achieved in Wales. I am also proud of the people in Wales who are making those policies work to their full effect. I am proud that we have a growing private sector with more people in work and more businesses. I am just dismayed at times that the Opposition cannot bring themselves to welcome that, bang the drum and support it. We have no problem with rolling up our sleeves and working with the Welsh Government in the interests of Wales. Why does the Welsh Labour party at this end of the M4 have a mental and political block that prevents it from being a constructive Opposition in the interests of Wales?
As someone who has run a small business in Wales, I ask the right hon. Gentleman whether he understands that his Government’s policies are doing the economy down. His Government are suppressing demand in the local economy by cutting wages, increasing taxes such as VAT, and preventing people from having enough money to spend to help local business. Does he not understand basic economics?
What I do understand is the way unemployment has been falling in the hon. Gentleman’s constituency. He should be championing the fact that youth unemployment has fallen by 49% in the past four and a half years. That is more lads and more girls in his constituency getting their first jobs and a foot on the jobs ladder. That is what it is all about.
Last Friday, when Opposition Members were working out what clever things they were going to say in this debate and trying to find new ways to talk down the Welsh economy, what were we doing? I will tell them where I was last Friday: I was down in Newport, standing shoulder to shoulder with the UK Prime Minister and the Welsh Labour First Minister. We were all banging the drum for more investment in Wales, banging the drum for more jobs for Wales, together sending a united, strong, positive message from Wales that Wales is coming back. We all need to work together to see that continue.
Order. Given the short amount of time that we have left for this debate, it is necessary to put a time limit on Back-Bench speeches. We are starting with seven minutes. It depends on how many interventions there are whether that limit will be reduced further. So there will be a seven-minute limit on all Back-Bench contributions to this debate, from the next speaker.
I have been called some things over the years in politics, but I have never been called a metropolitan liberal before. I rather fancy that most of my colleagues in the Welsh parliamentary Labour party would never be called metropolitan liberals.
I believe the Secretary of State is genuine and sincere about wanting to work with the Welsh First Minister, and I believe that his attendance at various events is, as I said, something that we can admire, but I fear that his boss is not of the same mind. He might have been standing next to him last week in Newport, but since the last general election, when the Prime Minister said that there would be a respect agenda in Wales and in Scotland, that has effectively collapsed. It collapsed when the Government tried to ensure that the number of Welsh parliamentary constituencies would be unfairly reduced. It collapsed at the time of the Scottish referendum, when the Union itself was under threat, when the Prime Minister came out and said that all that mattered to him now was not to keep the Union going but to diminish and downgrade the presence of Welsh and Scottish Members of Parliament and their responsibilities in this House of Commons.
The Secretary of State went on to talk about us all wanting to talk down Wales and the Welsh economy. For the past 18 months the Government have not stopped talking down the Welsh national health service. What is the difference? Does the right hon. Gentleman not understand that talking down the Welsh health service means that he is demeaning consultants, GPs, nurses and everybody else who works in the Welsh national health service? We cannot have it both ways. Either he says that there is devolution, Wales must go its own way and the Government will accept what happens there, or he intervenes for party political purposes and talks down, in this case, the health service.
The Secretary of State referred to a point made by my hon. Friend the Member for Alyn and Deeside (Mark Tami) about the jobs growth policy of the Welsh Government, and more or less said that that does not matter and that people would have jobs anyway. That is a preposterous thing to say, because the Jobs Growth Wales programme has been a magnificent success, with 16,000 new job opportunities over two years. Only last week, there was an announcement of 350 new jobs in my constituency —good jobs, too. What my colleagues have been saying here in this Chamber is that of course we welcome the reduction in unemployment, but the jobs that people are going into are not of the sort we particularly want them to go into. The new jobs that have come to Cwmbran are precisely the sort of jobs I want my constituents to work in.
The Minister also talked about Europe, responding to a point made by my hon. Friend the Member for Rhondda (Chris Bryant). A great Tory grandee once said that the secret weapon of the Conservative party is loyalty. Over the past few months, the Conservative Back Benchers have erupted over Europe, with the loss of two Members to the United Kingdom Independence party and possibly more to come. What sort of signal does that give to businesses that want to invest in Wales? What sort of signal does it give to firms in my constituency which rely overwhelmingly on our membership of the EU? Component car manufacturers in my constituency would go to continental Europe literally on the day we left the EU.
As always, the right hon. Gentleman is making very considered points. However, will he explain why the Welsh Government have decided to cut the budget for Jobs Growth Wales if it is such a great success?
I fancy it is because of the money that has been cut from the budget generally, because of what the Government here are doing by reducing the amount of money that is coming through the block grant. The Secretary of State actually said somewhere in his speech—he is getting a bit like his boss now, making things up from time to time—that there was no inward investment in Wales in 13 years of the Labour Government. That is rubbish—of course there was inward investment in Wales during those 13 years. As Secretary of State, I went around talking to firms that had benefited from inward investment and so on.
I did not actually say that, and I apologise if I did give that impression. The point I was making was that there was a collapse in the inward investment: compared with what we had seen in the ’80s and ’90s, there was a huge decline over that 13-year period in the amount of inward investment coming to Wales. Thankfully, with the Welsh Government and UK Government working together, we are seeing that go back up.
The Welsh Government are certainly doing it, because foreign investment in Wales has increased by 30% whereas the figure for England is 10%—I rather suspect the work of the Welsh Government has made the difference.
The other issue the Secretary of State has to take into account is the welfare policies of the Government. In effect, those changes in Wales are doing two things that are detrimental to the people of Wales. I agree with reforming the welfare agenda and I agree that we should not have workless families in Wales—we all agree on that—but the great brunt of the cost of these welfare reforms often falls not on those who are out of work but on those who are in work. Those people in work are suffering sometimes more than anybody else.
Last week’s report by Sheffield Hallam university showed graphically how the south Wales valleys have been hit harder by welfare reform than any other part of the United Kingdom. We can talk about the impact on individuals, which is catastrophic, but we can also talk about the sucking out of the local economies the money that would have gone in had these people still been receiving these benefits. The reforms will cost £34 million a year in my constituency alone, and the average loss of income per working age adult in Torfaen is nearly £600 a year—in one ward, Trevethin, the figure is £850. Some 3,000 jobs in the south Wales valleys could have been created but for the impact of these so-called welfare reforms put in place over the past few months and years, which have been pretty botched.
Finally, I wish to refer to the bedroom tax and make no apology for doing so. One of the first things the new Labour Government will do is abolish it, and everybody in Wales will cheer. Not only is it cruel and wicked, but it is not working. Some 20% of housing benefit claimants in my constituency are affected. In the first year of the policy Bron Afon, which runs social housing, had 268 tenants fall into arrears; we are talking about some £63,000 of arrears that people never had before until this came about. That is not helping anybody. It does not help the tenants, the local authority or the social landlords, and it again takes out of the local economy vital money that could be used to boost local businesses, particularly small and medium-sized enterprises. Ultimately, that is why we have seen an enormous increase in the number of people using food banks in both my constituency and the rest of Wales. Until two or three years ago, I never saw a food bank. Now, we visit them time and again. Our churches and our chapels collect for them every Sunday. That increase is a direct result of the Government’s policies in Wales, which will undoubtedly be rejected by the people of Wales next year. We will then have a Government in Cardiff and a Government in Westminster working together for the benefit of the people of Wales.
It is a pleasure to follow the right hon. Member for Torfaen (Paul Murphy). I congratulate the Secretary of State for Wales on his positive and upbeat view of the situation in Wales, which can be contrasted with the doom and gloom from the Opposition. Indeed, I shudder at the possibility of the hon. Member for Pontypridd (Owen Smith) becoming the Secretary of State for Wales. He would be our own version of Private Frazer, going around saying, “We’re all doomed.”
In effect, what is happening in Wales is a success story, and that is hurting the Opposition because that is not what they want to hear. They want to claim that it is only the Government who can make a difference to the people of Wales, but the truth is that it is this Government who are showing quite clearly that it is the people of Wales who can make the difference. It is the people who are willing to take responsibility for themselves and to make a success of their lives. Effectively, this Government are giving the people of Wales that opportunity; they are not saying that they can depend on the Government for hand-outs.
The Opposition should be truly ashamed that they are highlighting figures in relation to poverty levels in Wales. Labour has been in government at a local or national level in Wales for the past 100 years. Where the Labour party is strongest, poverty is at its greatest. It should look at the valleys of south Wales and feel truly ashamed of what it has done to our proud nation. Labour in Wales has failed, failed and failed again. This coalition is giving people a sense of honour and integrity and a belief in their ability to make a difference once more.
I will not take an intervention from the hon. Gentleman. It is about time that the Labour party heard some hard truths about the way it has failed Wales time and again. That failure in Wales is replicated in Scotland. The Scots have seen through the failure of Labour; it is about time that the people of Wales did the same.
The people of Wales should turn to the Conservative party and this coalition, as we are showing people that we can make a difference to their situation. We can ensure that we create employment. In my constituency, unemployment has fallen by 42% since the coalition came to power, and we should welcome that fact. I am proud of every single one of those jobs. My constituency had 13 years of a Labour MP, and it is not hard to guess what happened to the unemployment figures—they went up. With this coalition, unemployment is falling. We have an increase in the number of people employed and self-employed in my constituency, and we should be proud of every single one of those individuals.
The Opposition always say that they can make a difference to Wales, but they believe that the difference lies in the hands of Government. We believe that difference can be made by people setting up their own businesses and making a success of those businesses. Last week, the Under-Secretary of State for Wales, my hon. Friend the Member for Vale of Glamorgan (Alun Cairns), visited two businesses in my constituency. We failed to visit a third because the owner was in London winning an award. That owner is not just the UK butcher of the year but a man who started a business that now employs 60 members of staff—[Interruption.] The Labour party is laughing at entrepreneurial job creation in my constituency. My hon. Friend then visited the Welsh food centre, which was established two years ago and now employs 60 members of staff. It is the largest privately led project in north Wales and has been receiving funding from the European Union. It is a fantastic success story—somebody had a vision; they were willing to implement it and take a risk with their own money. [Interruption.] The hon. Member for Rhondda (Chris Bryant) is chuntering from a sedentary position. He does not understand what running a business means, let alone appreciate the difficulties. It is that type of success story that is changing lives in my constituency.
The success of small businesses in my constituency has been helped by the fuel duty freeze and the cuts implemented by this Government. The Labour party, by contrast, has bled our rural communities dry with its fuel duty escalator. My constituency also has a significant number of people of above-average age, including a lot of pensioners. Despite the economic inheritance that the Labour party gave us, those pensioners have been protected by the triple lock. The degree of respect that they have been shown by the coalition contrasts with the insult of the 75p pension increase provided by the Labour party. Labour Members say that their party looks after the poorest in society, but it was willing to forget our pensioners. In difficult economic times, the coalition has not forgotten our pensioners, and those people will remember that at the general election.
A key point to remember is the way we have tried to be reformist in difficult times. The Government’s introduction of the single-tier pension is immensely important to a constituency such as mine, which has a significant number of self-employed people. In such times, the coalition Government are not scared of taking long-term decisions that will make a real difference to my constituents’ lives. We hear complaints from Labour Members about changes to the welfare state, but we know why: they like a compliant, complicit population. The truth of the matter is that the welfare state in Wales was not working and we needed to ensure that changes were made.
One of the key successes of welfare reform throughout the United Kingdom, although perhaps not so much in Wales, is the Work programme. Its huge success will grow, as National Audit Office reports clearly show. Labour Members often talk about the Work programme supporting the lowest hanging fruit, but no one—not a single individual—accesses the Work programme unless they have been unemployed for at least 12 months. Compare and contrast that with the situation under Jobs Growth Wales which, by the way, I have supported and publicised to my business community. Under that programme, a person can be a graduate today and on Jobs Growth Wales tomorrow, but someone cannot get on the Work programme until they have been unemployed for 12 months, so it genuinely helps the hardest to reach. Jobs Growth Wales has done a good job, but it is not an attempt to support such individuals. We have a success on our hands—
I shall speak about not only the motion, but the effects on Wales of the Treasury’s economic policy. The Chancellor himself said that the UK Government’s austerity policy should be judged against two key benchmarks: eliminating the deficit by the end of this Parliament and preserving the triple A credit rating. He has failed on both terms. The Treasury now plans to eliminate the deficit by 2019, while two of the three credit rating agencies have downgraded the UK’s status.
Plaid Cymru has consistently advocated an alternative fiscal strategy based on increasing infrastructure investment. Indeed, we find ourselves in the slightly uncustomary position of being supported by the International Monetary Fund and the CBI, both of which have advocated a sharp increase in infrastructure investment to boost economic development. That is why securing Barnett consequentials from projects such as High Speed 2 is a key priority for Plaid Cymru. Given that the Institute for Economic Affairs estimates that that project will cost £80 billion, a fair share for Wales would be about £4 billion. Such an investment would revolutionise transport in Wales.
Following a freedom of information request by “Newsnight”, we saw in a KPMG report a full insight into the impact of HS2 on the south Wales economy. It suggested that Wales would be hit hard, with an annual economic loss to south Wales of more than £220 million. However, when we considered the paving Bill, all the Wales-based MPs of the London parties voted in favour, despite there being no promises of a fair share for Wales.
A range of transport infrastructure projects is being promoted, including HS3 at an initial cost of £7 billion and Crossrail 2 at £15 billion. There are plans to extend Crossrail 1 into the home counties and for an underground inner orbital road for London at a cost of £30 billion. Boris Johnson has called for £1 trillion of future infrastructure investment in London by 2050, mainly to cope with the extra demands of HS2. It should be enshrined in law that England-only infrastructure projects that are financed through the public purse result in automatic consequential payments that Wales can invest in its own infrastructure.
As we debate the impact of Government policy on Wales, events in Scotland loom large. The infamous vow made to the people of Scotland on the eve of the independence referendum has implications for Wales. With all three unionist parties now pledged to preserving public funding in Scotland at its current level, they have, for themselves, defined fair funding. If it is good enough for Scotland, it should also be good enough for Wales. Public funding on a Scottish level would provide an extra £1.2 billion to invest in Welsh public services. When challenged on this yesterday in the National Assembly, the Labour First Minister said it was England’s money. This shows how clueless he is. He was more than happy to back the vow for Scotland yet refuses to make the case for Wales.
We also await the Smith commission, which will publish its announcements tomorrow. If the Financial Times and The Guardian are to be believed, the signature recommendation agreed by all the parties will be the full devolution of income tax to Scotland, to be enacted in a Bill early in the next Parliament. Yet the Wales Bill, which completed its passage on Monday, would merely give the Welsh Government control of 10% of income tax receipts, and then only after a referendum. Once again, Westminster is treating Wales like a second-class nation.
I was astounded to read Labour’s attempt to rewrite history regarding the bedroom tax in its motion before the House today. The Tory and Lib Dem Government undoubtedly brought in one of the most ill-thought-out and pernicious attacks on the vulnerable with the bedroom tax. Sixty per cent. of those affected are disabled. Where was the Labour party when it was needed to stand up for the weak? It was nowhere to be seen. It failed to vote against the Welfare Reform Bill on Second Reading, which brought in many of the current damaging cuts to social protection, including the bedroom tax. It was Plaid Cymru, along with the Scottish National party and the Greens, who led the first Opposition Day debate on the bedroom tax here in this House and voted against it. We now find out after the resignation of the former head of the Labour party in Scotland that she wanted to oppose the bedroom tax in public, but was restrained from doing so by the London bosses who wanted to see which way the wind was blowing.
A recent report by Sheffield Hallam university, entitled “The impact of welfare reform in the Valleys”, has been mentioned many times today. It noted that more than £1 billion a year is being lost from the Welsh economy owing to welfare cuts. In some communities it is a loss of up to £1,000 per adult of working age in places such as Maerdy in the Rhondda and Gurnos in Merthyr Tydfil, and £790 in my own constituency in Ammanford. To put it in context, despite west Wales and the valleys qualifying for the highest level of EU funding, welfare reform will remove almost four times as much a year as is received from the EU for regional development, which the Labour party voted to cut when it teamed up with Tory Eurosceptics on the Government Benches.
The Sheffield Hallam study notes that reforms to incapacity benefits are the largest single element in terms of savings the Treasury is seeking to make. These reforms, most notably the changes to work capability assessments, were brought in by the Labour Government in 2008, but are only now taking full effect. One measure that would undoubtedly help remedy the situation is an economic fairness Act that would level up individual and geographical wealth across the UK by prioritising foreign direct investment and infrastructure investment to poorer areas.
Another key measure would be to raise the minimum wage to the level of the living wage. In Wales, which is badly affected by low pay, this would result in a pay rise for 250,000 people. The Labour party should be ashamed of its policy to increase the minimum wage to only £8 an hour by 2020, described as “not at all ambitious” by its own guru, Alan Milburn. Meanwhile, Plaid Cymru is committed to raising the minimum wage to the level of the living wage, a move that is socially just and will leave the Treasury £1.5 billion a year better off, according to Landman Economics.
I see that Labour’s motion talks about its energy price freeze policy, which will unfortunately not affect off-grid consumers, some of the worst affected in many Welsh communities, including my own in rural Carmarthenshire. Again, its policy is a little rich given that it presided over the creation of the big six fix energy market at the beginning of the century. That is why Plaid Cymru has argued for the full devolution of energy policy and the setting up of a publicly owned, not-for-distributable-profit energy generation company in order to deliver lower prices to consumers.
Once again, we have listened for about 40 minutes to the hon. Member for Pontypridd (Owen Smith) treat us to his tales of economic doom and gloom and woe. It must be getter harder and harder for him to maintain that in the light of the ever-better financial news. I had an interesting morning in the run-up to this debate: I decided to read through a few of his previous speeches. I went back to 2010, when he quoted an Oxford Economics report, saying that the coalition Government would be able to create only 4,000 private sector jobs. I wonder whether he remembers saying that. The reality is that so far, over the course of this Parliament, we have created 100,000 private sector jobs in Wales alone. In the same speech he talked about net increases in unemployment continuing until 2025. The reality, of course, is that unemployment is now at its lowest level since 2008.
In a subsequent speech on 11 November 2011, the hon. Gentleman spoke of a 4% contraction in GDP over the course of the Parliament. The reality is that so far over the course of this Parliament we have had a GDP of 7.8%, and I got that figure from the House of Commons Library earlier today. We have the fastest-growing economy in the developed world. I am so proud to be standing here supporting the Prime Minister and the excellent Secretary of State for Wales he has just appointed.
If we are going to talk about speeches that other Members have made, I remember the Prime Minister saying that the deficit would be cut completely by the end of this Parliament. I remember him saying that the debt would be falling. I remember him saying that net migration to this country would fall below 100,000. None of those things has come to pass, so let us talk about the Government’s failures.
If the hon. Gentleman would be kind enough to give way, I will talk about those things. First I will leave him to think about this headline: “UK unemployment rate falls to lowest level since 2008”. That is from The Guardian just a few weeks ago. But let us talk about the debt, because after all, we inherited a debt of around £800 billion.
Yes, it has gone up. We also had a deficit of £160 billion, and we have not managed to do as much as we wanted to do with that. I would have liked to see us do more with it. But the reality is that there has been no coherence from Labour Members, because every time we have suggested ways to cut the deficit further, they have opposed them. They sit there trying to convince the world that they have a coherent economic policy, when they have condemned us for borrowing money while at the same time demanding that we borrow more. That is why people will not trust them with the economy.
The hon. Member for Rhondda (Chris Bryant) talked about immigration. Again, I would have liked to see us go further, but immigration from outside the European Union has been reduced significantly, and we cannot do anything about immigration from within the European Union—he should know, because he is the biggest Europhile in this place. We cannot do anything about freedom of movement, but we are going to offer a referendum on it.
I will give way in a moment.
The motion mentions energy. The hon. Member for Cardiff South and Penarth (Stephen Doughty) made a good point about the impact of carbon taxes on steel production and other manufacturing. What he did not want to say, of course, is that those policies were brought about by the previous Labour Government, who swallowed hook, line and sinker the environmentalist line that carbon dioxide is causing runaway global warming and began imposing billions and billions of pounds in carbon taxes on manufacturing and on home owners. That is one of the reasons why energy bills are so high for home owners and manufacturers. That is why I welcome the fact that the Government have said that they will start rolling them back. I would like to see them rolled back even further, to be honest, but that in no way undermines the enormous support I feel for the Government at the moment or the anger I feel towards those in the UK Independence party—although not those in this House at the moment—who put forward simplistic solutions to very complicated problems. That is why it is important that we have a moderate, centre-right party proposing sensible policies for the people of this country.
Interestingly, even though this debate is about the effect of Government policies in Wales, not once during his 40-minute speech did the hon. Member for Pontypridd mention the effect of Government health policies on Wales. They have had a pretty significant effect, because large numbers of patients in Wales are now trying to get out of the Labour-run Welsh NHS and get their treatment in England, where they will be looked after by the coalition-run NHS.
The hon. Gentleman makes that statement as if there was just a Welsh health service and an English health service; it is a cross-border health service, and that is particularly true in constituencies such as mine. Indeed, the Countess of Chester hospital exists only on the basis that it covers Deeside and Chester, so the whole idea that people are somehow fleeing across the border is based on spurious figures and is totally wrong.
I am not using figures that are totally wrong, because since 2012, in my own area, the Aneurin Bevan university health board has been doing everything possible to treat people in Wales and prevent people who were previously being treated in England from continuing to get treatment there. People are aware of moves such as the cancer drugs fund, which has allowed patients in England to enjoy the benefits of life-extending drugs such as Avastin. That is denied to patients in Wales by the Labour-run NHS. I met some of those patients outside No. 10 Downing street last week when they presented a petition to the Prime Minister about the problems being caused to them by the Labour-run Welsh NHS service. They have had to move—to sell up their houses or move into friends’ houses in England—to get access to the higher standards, lower waiting lists, fewer cuts and better ambulance service response times that are being delivered by this coalition Government.
It is actually not the hon. Gentleman’s health service. There is a health service in England and there is a separate health service in Scotland, in Wales and in Northern Ireland, as a result of devolution. He should be aware of that because his party destroyed the truly national UK health service and brought in regional health services. Of course there are hospitals that serve people in Wales on the English side and hospitals on the English side that serve people coming the other way, and that is a good thing. However, many people’s access is now being prevented, and they certainly do not have the automatic right of access that they would enjoy in England.
I am grateful, because we have to correct these facts. He knows that the volume of people coming from England to Wales has increased over the past few years, whereas the volume of people going from Wales to England has decreased. He also knows that on cancer, for example, the health board he mentions, Aneurin Bevan, performs better than the one over the border, so quite why people would cross the border for worse care, I do not know.
The hon. Gentleman will know that most people on the English side of the border who have been treated in Wales have no choice about that. They are registered with GPs connected with the Aneurin Bevan health board, so they have absolutely no choice in the matter. Many of them have formed action groups of English patients who are treated in Wales and do not want to be because they know they will get a better standard of health care in England. One of those is called Action For Our Health; if the hon. Gentleman has a smartphone, he can look it up. He ought to know about these facts. He talks about cancer. The figures for urgent cases are pretty similar, within a percentage point of each other, but he did not mention diagnostic times, which are significantly worse in Wales than in England, or the cancer drugs fund. It is a pity that he did not want to talk about the NHS in his 40-minute speech.
The hon. Gentleman did not want to talk about education, either. One of the few advantages of the Welsh Assembly is that it has allowed us to make simple comparisons. We can now see the difference between what a Conservative-led coalition Government can offer and what can be delivered by a Labour Government. We know that Wales now has the worst educational rankings in the whole of the United Kingdom after 16 years of Labour domination.
The Labour Government have a terrible record on the economy—that is pretty well known—but they also have a shameful record on public services. I am looking forward to the next general election, so that we can remind people that tax-and-spend Labour cannot be trusted with the economy and cannot be trusted with public services, either. As somebody who used to drive a van—I am glad to say that it was a blue one as well—we will never, ever sneer at hard-working people who want to go out and better themselves, work hard, and pay taxes. We are the true party of working people. At that election, I look forward to fighting alongside the Prime Minister and the Secretary of State for Wales to make sure that next time round we have a truly Conservative Government who can deliver even better policies for the people of Wales.
I wish to talk about the impact of £1.5 billion of cuts on my constituents. There are the social security cuts and the bedroom tax, but the national cuts by the UK Government to the police, the Department for Work and Pensions and taxation are also having a terrible impact on the communities that I represent. The way that that has been translated into local government cuts is now becoming properly known in Vale of Clwyd. The Welsh Government have tried to protect local authorities from the worst impacts of central Government cuts over the past two or three years, but the hatchet has now fallen. I want to give some graphic illustrations of how that is affecting my constituents.
The cuts that Denbighshire county council will discuss next week fall into two categories. The first cuts relate to the quality of life. The cuts include removing subsidies to the Prestatyn Scala cinema and arts centre, the Rhyl Pavilion theatre—a cut of £350,000—and the Ruthin Craft centre. The cuts involve library services, such as free access to books and audio tapes; bus routes that are being reduced or closed so people living in rural isolation cannot access the minimal local services on offer; and flower beds that will be grassed or concreted over. People may say that those are little frivolous things in life that we do not need, but for me life is about allowing such things to flourish, and the cuts to be implemented in Denbighshire will diminish them.
Let us come on to the really meaty cuts that are being discussed in Denbighshire, such as the reduction in street lighting and the stopping of CCTV. Proper lighting and CCTV are two of the most effective anti-crime measures, but they will be dramatically reduced or abolished. There will be a £200,000 cut to the welfare rights unit in Denbighshire county council, despite the fact that it brought £6 million in to the local authority last year and that £35 million has still not been claimed in Denbighshire. The cuts include reducing equipment for disabled children, and charging their parents for facilities and services. The pest control unit will be closed, so we will not be able to put down the rats, mice and vermin that often infest our poorer wards. Grants for school uniforms will be ended, and those for taking children on trips will be cut. There will be cuts to the young people’s counselling service—for children who are going through turmoil—although 32.3% of those aged 15 to 25 have one or more psychiatric condition, and services in schools to help to counter that will be diminished or curtailed. There are cutbacks to the educational psychology team and to music education; library services will be stopped; and 25% of public toilets will be closed or cut back.
Those are the results of the cuts coming from the Conservative party and their Liberal Democrat friends in the coalition. I do not blame the officers of Denbighshire county council. In fact, the chief executive officer, Mohammed Mehmet, is excellent and has helped to turn around Denbighshire. I do not blame the political leadership, because Hugh Evans OBE is a good political leader. The people I blame are now sitting on the Government Front Bench. They are not listening, just as Ministers are not listening at national level.
Those are the impacts on my community, and they affect the poorest. I want to turn to the benefit cuts in my constituency, and I pay tribute to Steve Fothergill and Christina Beatty from Sheffield Hallam university, who have given me bespoke statistics for my constituency. In Rhyl West, which until this morning was the poorest ward in Wales, the actual cuts for working-age people are £1,420 a year. The figure for the richest ward in Denbighshire, Llanfair Dyffryn Clwyd, is £270, so the cuts are almost five times higher in the poorest ward than in one of the richest. This is about values, which we talked about earlier, because it is about punishing and demonising the poor and the disabled. There are five hate crimes, but the one that has increased in recent years is hate crime towards the disabled, because of the way in which they have been portrayed by the Conservative party and its friends in the media. The cuts are absolutely terrible. In Rhyl South West, the council ward in which I was brought up, the cuts to people of working age amount to £860. How are families supposed to cope with that level of cuts? How? Would a Minister like to intervene on that? No—silence once again.
The bedroom tax was supposed to drive single people out of houses with two bedrooms and into smaller houses. In Denbighshire, 700 people qualified for the bedroom tax, but the number who have moved is minimal. People would prefer to take the hit of up to £25 a week than be shunted out of the community in which they have grown up. Relatives of mine who have lived on a council estate for 54 years and who are embedded in the community have been told to leave—to get out of the home that they were born in. I am proud that on day one of a Labour Government next May, the bedroom tax is one of the first things we will get rid of.
The Ministers on the Treasury Bench should take those messages back to the Cabinet and the Prime Minister. They should let them know that it is not just in the Vale of Clwyd that what I have described is happening, but across the country, and it is destroying our British way of life.
I am pleased to say a few words in this debate. Like the hon. Member for Vale of Clwyd (Chris Ruane), I will focus on my constituency. In particular, I will look at some of the challenges that face rural communities. My constituency has some of the most rural communities imaginable. I never lose sight of the fact that there are 600 family farms and 147 villages across the Ceredigion constituency. I will look at the three aspects of the motion: energy prices, jobs and growth in the economy, and, of course, the spare room subsidy or bedroom tax.
Those of us who have concerns describe it as the bedroom tax; others call it the spare room subsidy. I will stick to the bedroom tax, for reasons that will become apparent.
First, I want to talk about energy prices. There is no doubt that my constituents are feeling very short changed, quite literally, by the energy providers. They are aggrieved that there are few alternatives, if any, for people who live in communities that are off grid. They are then told remorselessly that it is simply a matter of switching providers. Most of my constituency is off grid, so most of my constituents remain subject to the monopolistic practices of energy companies. There is simply no option to shop around.
Off-grid customers are left out of many initiatives. Analysis undertaken by Calor Gas showed that most people are merrily—or less merrily—paying £40 a year for energy efficiency schemes, but that they get nothing back through reductions in their bills. Energy companies charge levies on household bills to fund insulation and new boilers in the homes of the vulnerable and those who live in low-income communities where buildings are hard to treat. We know about the history of the housing stock in Wales, and particularly in rural Wales, yet only 1,443 homes out of 1.5 million have benefited from price reductions. Off-grid gas customers are missing out on the promises of new efficient boilers for their homes. Although all customers are subjected to the same charges, the research suggests that the benefits are not reaching rural households. Not only are they not seeing the benefits, but the costs of energy have historically been much higher. I have been making this point for nearly 10 years, including under the last Government, but those of us in rural areas are still waiting and anticipating greater action.
We are told that the key is to boost the collective purchasing power of customers and that we should all join oil syndicates. Many of us have done that. Joining oil syndicates and trying to negotiate reductions in the cost of domestic heating oil is one of the few options available to my constituents in Ceredigion. I have lost count of the number of times constituents have come to my surgery to pose the problem, “How on earth can I afford the minimal amount of oil that I need to put in the tank to heat my home?” That is food for thought for all of us. I commend Ceredigion county council and Ymlaen Ceredigion, which is an excellent organisation, for working with the National Assembly on a project called Club Cosy to develop the system of oil syndicates across the county and for overseeing the 10 syndicates that already exist.
Of course, no one would be against the opportunity of a reduction in bills during the freeze period, but my concern about the Labour policy is that in the immediate period before and the immediate aftermath constituents would face—
If the hon. Gentleman will forgive me, I will not give way because I want to crack on in the little time I have.
I want to talk about fuel duty as it affects drivers. My constituents have no choice about driving their cars. Some of them live in Lampeter and work in Aberystwyth —a 60-mile round journey every day. They do not have the luxury of public transport and taxis are unaffordable. I commend the Government’s actions on the fuel duty escalator, which have meant a 20p per litre reduction over the last five years. But in the very rural communities in Wales, we were hugely disappointed that the policy of derogation from Europe on fuel duty was not carried out across the whole of the country—in fact, no areas in Wales will benefit. The Government need to continue to work on that so that that policy is not isolated to various parts of the Scottish highlands.
As I have said, Ceredigion has 600 family farms, and the farmers are concerned about falls in commodity prices and about common agricultural policy reform, and many other businesses have other concerns. They are the backbone of our economy, and they have commended the Government on the reduction in corporation tax. Some 35,000 businesses across Wales will also benefit from the scheme that will allow employers to reduce national insurance contributions by £2,000. That is important to local businesses, as is the work that the Government are doing to build the infrastructure for broadband and mobile phone reception, which the Secretary of State mentioned. The Government could do more. For example, next week they could reduce VAT on tourism—
My hon. Friend is making a powerful speech about the issues in rural areas. Does he agree that the Welsh Assembly Government do not recognise the expense of delivering services in rural areas? Powys and Ceredigion had the lowest allocation of grant of any of the Welsh local authorities.
My hon. Friend is right. Ceredigion county council has the worst settlement of anywhere in Wales with a reduction of 4.5%, and Powys is not far behind with 4.3%. There is a perception that those of us who work and live in mid-Wales have been penalised in favour of the beneficiaries in the north Wales corridor and the south Wales corridor, although my hon. Friend the Member for Arfon (Hywel Williams) may disagree.
A VAT reduction on tourism would be a huge benefit to many businesses across the UK. It would give a boost to an important sector of the economy in west Wales. I saw an excellent project in Cardigan castle in my constituency a couple of weeks ago. It involved apprenticeships from Cyfle, an organisation that covers Carmarthenshire, Ceredigion and Swansea. It has an innovative scheme in which apprentices are given experiences not just in one company, but in several, so that they can really build up their CVs.
I will not dwell on the issue of Europe, because the Secretary of State had a few exchanges on that subject, other than to say that although west Wales and the valleys are celebrating the fact that many of our communities will benefit from convergence funding, in some ways that is actually a sad indictment of the failure to build our economy.
I voted against the bedroom tax at the start and I am against it in principle now. I am against it because it will never work in rural areas where there is no housing for people to move to, even if it were the role of Government to encourage people to move. That was the wrong principle from which to start, and I agree with the many constituents of mine who have serious anxieties about the application of a policy that could never work. It will cost the country money and cause huge hardship for many of my constituents.
It is a pleasure to follow the hon. Member for Ceredigion (Mr Williams), who is a very valued member of the Welsh Affairs Committee. When I chaired the Committee, he always thanked me for the impartial way in which I did so. In contrast, I say to the hon. Member for Monmouth (David T. C. Davies) in a comradely way, although he may not understand the word, that I look forward to the time when he makes a statement in this House that is impartial and balanced and reflects the unique role of a Chair of a Select Committee.
No, I will not.
I am not afraid to speak on devolved matters, because they are pertinent to issues we are discussing today. I wish to talk about higher education. In doing so, I declare an interest as honorary chair of the college of arts and humanities in Swansea university. I warmly commend my hon. Friend the Member for Pontypridd (Owen Smith) for the way in which he outlined the very difficult circumstances all the people of Wales are suffering as a consequence of the austerity programme. The excellent report by Sheffield Hallam university outlines the severe difficulties that many vulnerable, precarious communities such as Glyncorrwg, Cymmer and Gwynfi in my constituency are now facing, not only as a result of welfare cuts—something the report deals with—but local government cuts being brought forward as a result of UK Government policies.
Despite those difficulties, we have a surviving and prospering steel industry. I am sad that my right hon. Friend the Member for Torfaen (Paul Murphy) is not in his place, because I want to pay him a compliment. The steel industry is prospering in Wales because of the way in which we have developed a partnership. That partnership was pioneered in the immediate post-devolution period by my right hon. Friend when he was Secretary of State for Wales and I was privileged to be his special adviser. He devised a system of partnership between the UK Government and the Welsh Government. People worried about the time when there would be different political parties in power, but we believed genuinely that that partnership would survive different political parties being in power in Cardiff Bay and Westminster. We live in hope that the idea of partnership will be revived and developed.
I want to move on to the subject of higher education without losing the theme of partnership and the respect agenda. Higher education is of course a devolved matter, but decisions taken here in Westminster have a great bearing on macro-economic issues relating to visas, the need for synergy between England and Wales, and research funding. I am pleased to say that, come next September, my old university will be located in my constituency of Aberavon. Members may not know this, but a second Swansea university campus is being built in Aberavon. Perhaps Swansea university ought to be renamed Aberavon university. The major success of this development, which we should be trumpeting, is based on the partnership between the Welsh Government —I commend in particular the role of the First Minister, Carwyn Jones—and the university. I am not sure whether the Secretary of State has visited the campus—his predecessor did—but he should do so in order to see the role of the UK Government and Europe. The European Investment Bank said that this was the best project of its kind it has ever funded in terms of the interface between business and higher education. That is a remarkable compliment to the interface between my local authority—Neath Port Talbot county borough council, led by my friend Councillor Alun Thomas—and the university.
Perhaps most importantly, despite all the difficulties, that development is a Welsh Government achievement. Sir Terry Matthews, a Welsh businessman on the world stage, is now the chair of the Swansea-based city region. He is a Swansea university graduate, a man of considerable experience—
It is a pleasure to follow the measured tones of the hon. Member for Aberavon (Dr Francis). It influences the tone I want to adopt in my contribution. I am not sure that my hon. Friends the Members for Aberconwy (Guto Bebb) and for Monmouth (David T. C. Davies) could have done the same, however, because they both made thunderously good speeches that I think we all enjoyed. I want to make special mention of the Secretary of State’s incredibly positive speech about the future of Wales. It typified what he brings to the role: a willingness to work with the Opposition in Wales, always putting the interests of the people of Wales to the fore. I commend him not just for his speech, but for all the work he does on that front.
Much of the debate has been about the economy, so it is worth pointing out what has happened to the economy in my constituency. I have spent much time working with the hon. Member for Brecon and Radnorshire (Roger Williams) on the mid-Wales economy. We remember it being really depressed. We remember the work we put in. We remember how 20 or 30 years ago, it had to be dragged from the bottom up. The Severn valley is now full of brilliant, buzzing industries, and unemployment has collapsed—I have never seen employment higher. It is a complete transformation, and we have to give credit to the coalition Government over the last four years for transforming the economy of my constituency.
This debate is about the influence of coalition Government policies on Wales. Inevitably, there will be an influence. First, the Welsh Government have no tax-raising powers, so the level of public spending in Wales is influenced by the decisions we take in Westminster. Secondly, because a large percentage of the population lives close to the border, what happens in England has a strong influence in Wales. That is the point I want to make today.
The education system in England is different—it has choice and competition—from that in Wales, and it is attracting sixth-formers to the colleges in Bishop’s Castle and Shrewsbury, which is having a huge impact on sixth forms in Welshpool and Newtown. It might be more obvious in my constituency than elsewhere that English policies are having a significant impact in Wales, and we have to be aware of these policies so that we can deal with them.
The most important issue for my constituents is probably the future of the health service. Most of our services are provided over the border in Shropshire. All Welsh constituencies have specialist services provided in England, which is exactly as it should be, but all our secondary health care services are also provided there. The Shrewsbury and Telford NHS foundation trust serves Shropshire and mid-Wales, so what happens in Shropshire is crucial.
At present—this is incredibly important, but hidden —the Shropshire NHS cannot carry on; it is becoming unsustainable. We are going to see a big change, because there is likely to be an emergency centre surrounded by several urgent care centres—a pattern we might see repeated across much of England. However, any urgent care centre in my constituency would have to be provided by the Welsh Government. Whatever structure is put in place in Shropshire, it will have to be done fairly quickly, because services are already being lost even further away to Wolverhampton, Stoke and Hereford. That is the reality of where we are. It is increasingly difficult to attract consultants to Shropshire, so something has to happen very soon.
There will be a group of urgent care centres, but there is not going to be one in Powys—certainly not at the moment. We must have an urgent care centre in Powys. That is the real message I want to send out today. If we stayed strictly within the structure of the NHS in Wales, as is preferred, that would not happen. My constituents would suffer hugely because of a modern and more responsive service over the border in Shropshire.
There is a small hospital in Bishop’s Castle, a small town right on the border. It would not normally anticipate being given an urgent care centre, but because it seems likely that there will be no such centre in Powys, consideration is being given to putting such a centre in Bishop’s Castle to serve the people of Powys. England will put that centre in place in order to serve us.
My point is that the policies that operate here in England have a big influence and impact on Wales. That may not be the intention but it is often the case, so it is our role and duty as representatives of the affected areas to bring that fact to the attention of this House, so that we always consider how such policies will impact on Wales. That is why I so appreciate and applaud the work of our Secretary of State in developing a close relationship with the Welsh Government, so that these issues can be brought to the attention of both Governments working together for the benefit of Welsh people.
After the earlier fireworks from Government Members, I welcome the measured tone adopted by the hon. Member for Montgomeryshire (Glyn Davies)—one I hope to continue in my contribution.
I welcome this debate because anyone who tuned in to previous Welsh debates might think we were obsessed by constitutional affairs. There seems to be a belief on both sides of the House that constitutional commissions are on the lips of every voter in our country, but that could not be further from the truth. When we talk about Government policy towards Wales, we must look to the future rather than look back.
The world is smaller than it has ever been, and globalisation has brought challenges that would never have been comprehended or conceived of a generation ago. When the children in Islwyn leave school, they will no longer compete only with their contemporaries from Cardiff, London or Manchester, but with those living in Puni, Bangalore and Peking. Equally, the emerging green technologies will lead to those children going into jobs that we cannot currently conceive of. For Government, this presents a challenge: either we embrace globalisation or we turn our backs and hold back the tide. In real terms, it means that we either continue to waste our time tying ourselves up in constitutional knots, which unfortunately we have done for the last 15 years, or we train our people and equip them with the skills to compete in the global economy.
Let us be straight: despite what many people would have us believe, Wales is not some backwater in which people are on the breadline, queuing up in soup kitchens. This view of Wales, and particularly of the valleys I represent, is a distorted picture that is no way helpful to our self-image or self-confidence.
On the site of the last mine to close in Islwyn—Oakdale—stands General Dynamics, a top 100 contractor company, with nearly £20 billion in sales annually. To those who want to paint the Labour party as anti-business, let me point out that it was the last Labour Government and the stable economic conditions that led General Dynamics to choose Wales as its base. It has recently been awarded the contract for the Scout SV vehicle, securing a further 500 jobs. In July this year, I was pleased to open the new Edge centre, which allows it to share its expertise with small and medium-sized businesses—not just in Wales but across the country. It also has partnerships with universities, which means it can access the unique skills and expertise to be found in those universities.
Just down the road, in Newbridge, is Axiom, a large manufacturer whose profits have grown, and which is opening new markets across the world. In an economy still reliant on the public sector, Just Love Food, a nut-free, allergy-free cake manufacturer also based in Oakfield, has contracts with supermarket chains such as Tesco and Sainsbury. Of course, Islwyn is home, too, to the Crumlin Pot Noodle mine and to Brace’s Bakery, known throughout the country not only for its bread, but for its Welsh cakes. I would make a shameless plug to anybody: if they want to relocate or start a business, Islywn is an excellent place to do it. That should be the message from Wales.
I am very grateful to the hon. Gentleman for outlining this wonderful economic news. Did he consult his boss, the shadow Secretary of State for Wales, before he began, as his colleague seems to be earning the epithet of the Eeyore of Welsh politics for the doom and gloom he expounds all the time?
I must commend the hon. Gentleman for his command of English. That was one of the best insults I have heard in the Chamber. I always liked Eeyore; he was my favourite character in the Winnie the Pooh stories.
Success can only pay dividends for so long. In the past four years, unfortunately, we have heard Ministers consistently talk down the Welsh economy—[Interruption.] The hon. Member for St Albans (Mrs Main) laughs, but when the NHS is talked down, what is being talked down is not what Members perceive. They are not talking down the Welsh Government, but the consultants, the doctors, the cleaners, the nurses and the other people who work in the NHS. Every one of those is seen as the NHS, so what message does it send out when those people are being talked down?
Does the hon. Gentleman agree that every week in Prime Minister’s questions the leader of his own party talks down the NHS in Wales? Is it not right that we should be able to challenge policy matters within the NHS without it always being interpreted as an attack on front-line staff? The hon. Gentleman’s party does it, my party does it, and it is legitimate in highlighting failures.
I urge a note of caution. As someone whose mother has just died under the NHS, with an inquiry going on into her treatment, I know there are legitimate concerns and the hon. Gentleman ought to face up to them. That is not to denigrate the nurses; but there are some serious concerns about the health service.
I have full sympathy for the hon. Lady. I lost two people this week who were close to me and I know they were served very well by the NHS.
The challenges we face are greater than they have been for decades. Rising economies in China, Brazil and India and on the African continent are changing the global economy in ways we could not have predicted just 10 years ago. This is a challenge for which we must be prepared. It is vital that businesses are supported and encouraged to grow and that we train our young people for the jobs of the future. Years ago, when my grandfather began working down the mines, it was the muscles in his arms that he had to use. Now, when children leave school and start work they have to use their brains. It is no good standing here and harking back to the past. No politician can reopen a factory or rebuild an industry that has gone. To put it simply, this country has to go back to school.
No one has a job for life any more. In fact, people will change their job seven or eight times throughout their working life. We therefore need a partnership between education and business. Our universities should work with industry to formulate portable skills that can be taken from job to job. Equally, we have to realise that education ultimately produces future employees and employers, yet businesses tell me they have young people who are not equipped for the world of work. For me, business needs to be involved in the educational process from day one, introducing children to the world of work.
I am afraid that the Government are failing Wales. Their policies are sending our communities backwards, not forwards. Where is the business strategy from the UK Government, like that from the previous Labour Government, to encourage more companies such as General Dynamics to locate in Wales? Where is the national infrastructure to ensure that Wales is connected not just to the UK but to the world? We should remember when we talk about electrification of the railways that it was the Ebbw Vale and Maesteg lines that were left out, which are essential transport links to the valleys.
Where is the support and encouragement for entrepreneurs to create new enterprises? Ministers often talk about a long-term economic plan, but I am still not clear what it is. Is it blaming everybody else, talking down the economy and our communities, making people believe that we are all on welfare and failing time and again to work constructively with the Welsh Government to deliver policies that help Wales face new global challenges?
Mr Speaker—I am sorry, I mean Mr Deputy Speaker, but I hope that one day we will refer to you as Mr Speaker. The facts speak for themselves. Youth employment in Wales is down from last year and is 4% lower than in the rest of the UK. The production index has risen by 1.4% less than the rest of the UK, up to the second quarter of 2014. Worst of all, one in three children live in poverty.
The biggest poverty in the Welsh valleys is not a poverty we can measure but a poverty of ambition. It is the belief that university or starting a business is not for us. It permeates generation after generation, and no Government of any colour can change that with one policy. That is why, as I said before, we need to go back to school. We need to introduce children to the types of careers they can enjoy and say to them, to borrow a phrase from across the Atlantic that has fallen into disregard, “Yes we can.” The tragedy is that we know how to solve the problem. According to the Joseph Rowntree Foundation,
“Wales needs job creation to defeat poverty.”
The Labour Administration in Cardiff are pursuing active labour policies, and we need to follow them.
There is no future in a low-skill, low-pay economy. We know that. What we need is a forward-thinking, specialised, high-skilled, connected economy, and, with the political will, we can achieve it.
It is a pleasure to follow the hon. Member for Islwyn (Chris Evans). He was right to defend the NHS in Wales, and he was right to mention a sad loss that was close to him. The wife of his predecessor, Lord Touhig, sadly lost her battle for life a couple of days ago. I am sure that the whole House will join me in sending our condolences to Lord Touhig and his family.
I agree with the Secretary of State about the need for the Government in Cardiff Bay and the Government here at Westminster to work together. It benefits our constituents when we do so. I have worked with this Government, with previous Labour Governments, and with coalition Governments in Cardiff Bay. I have seen marked improvements in my constituency since becoming a Member of Parliament. We have more connectivity—faster, more frequent trains—than we had when I was elected. That is due to investment in the whole railway network. The £9 billion west coast upgrade has benefited my constituents, because when capacity is increased on one side of Offa’s Dyke, the whole of Wales benefits. That is an economic fact in terms of transport.
As the Secretary of State knows, I have been lobbying for more mobile phone coverage in Wales, and I met representatives of the 3 network today. There are too many not spots. There will be improvements, but we must make it clear that the peripheral areas of the United Kingdom, and of Wales, should be treated on the same basis as other parts of Wales. However, there are good projects on the horizon. The Wylfa Newydd development and the new eco park and biomass plant will bring quality jobs to my area.
I welcome the drop in unemployment in my constituency. Before I became a Member of Parliament, I ran a centre for the unemployed. In the 1980s and 1990s, my constituency had the highest level of unemployment in Wales. It was twice the national average in Wales, and much higher than the average in the United Kingdom. I saw a great transformation between 1997 and 2007, but that was followed by the global financial crash, and the recovery has been shaky. Many of the jobs that have been created have been mini-jobs. Many countries, such as Germany, operate a policy of mini-job creation following recessions, but these jobs have involved relatively low pay, and a great many zero-hours contracts that pay below what we now class as the living wage. Many people are finding jobs, but they are under-employed. The economy needs a real stimulus.
The three words that the Prime Minister is frightened to utter in any economic debate are “value added tax”, because VAT is a regressive tax which he promised not to increase but increased at the first opportunity. It is having a huge impact on businesses in my constituency. It is having an impact on consumer spending, which is up by just 2% in my constituency, compared with an average of some 5% in Wales as a whole. Small businesses, whose representatives I meet regularly, have experienced a fall in turnover of some 6%, compared with an increase of 7% in the United Kingdom. Those issues are concerning businesses. According to anecdotal evidence, less secure part-time work and zero-hours contracts are replacing more secure full-time work.
The hon. Gentleman hosted a wonderful Anglesey day when he was able to demonstrate the virtues of his constituency and the pleasures that could be gained from visiting it. Does he agree with my hon. Friend the Member for Ceredigion that a reduction in VAT on tourist attractions and accommodation would be a wonderful thing for rural Wales as a whole?
I do. When the last Government cut VAT temporarily, that boosted the economy, and it could do so again in sectors such as construction and tourism.
I want to talk about a section of society that is very important to us all: younger people. Younger people in Wales and my constituency are finding things extremely difficult because of the zero-hours contracts and because many of them who are self-employed, including members of my family and their friends, are becoming so not out of choice but because their main full-time job has gone. They are taking this step into self-employment, and they are finding it very difficult to get mortgages and to get credit. They are finding it really tough out there.
The Joseph Rowntree Foundation has produced a report on the increase in the young poor in our country. That is a serious issue that we need to tackle. I welcome the growth fund for young people in Wales, getting people into employment, but I want them to go into employment that pays a reasonable living wage so they can spend and contribute to our society in the way we all want.
The hon. Member for Arfon (Hywel Williams) is not here, but he will know that a lot of my constituents work in Gwynedd, and Gwynedd has one of the highest rates of zero-hours contracts in Wales. The number is staggering: some 477 people are on zero-hours contracts. That is the figure for the neighbouring authority. I do not have the figures for my local authority, but some pay on Anglesey is below the living wage. Some adverts in Gwynedd are for pay of £5.87. There is a Plaid Cymru Member present. We hear that party attacking the Labour party and everybody else about the living wage and zero-hours contracts, yet although it only controls two councils in Wales, it has one of the worst records in that regard. These are my near neighbours—in fine fettle.
We want to stimulate the economy, and we can do it through a house building programme that boosts construction by giving companies relief on VAT, so they can build more houses and get more people into the workplace. That is one way forward.
We need greater investment in improved connectivity as well. We can do that by working together, as the Secretary of State said—but working together not just between Wales and the rest of the UK, but between Wales, the UK and Europe. The banging on about Europe that the Prime Minister talked about is having an effect. I know that the Secretary of State is going to my constituency, although I have not been told so officially by his office—the grapevine of Anglesey works much quicker. When he goes there, he will hear from business leaders that the threat of moving towards the exit is having an impact on future investment plans by large companies. I want to see an Anglesey—an Ynys Môn—that is at the heart of the British Isles, and that is a major player in Wales, in the UK and in Europe; the only way we will do that is by being far more positive, and helping our young people in a more positive way than now. I do not want to see the young poor carrying on as they are; I want to see young people with great opportunities for the future.
I am delighted to follow that excellent contribution by my good friend the Member for Ynys Môn (Albert Owen), which struck the right balance between the necessary optimism and the vision we have for a better future and the real challenges.
It has been a passionate debate and I have been as passionate as many with my interventions, but I want to say first that when I speak for my constituents, I speak for all of them. Many of them are in small businesses and micro-businesses—one man or one woman operations that they intend to build up slowly. They drive the economy locally. I also speak, however, for people who work within the set-up of Raspberry Pi down at the old Sony site at Pencoed in my constituency, and who have reinvented a way to take computers forward, so that everybody can pull them apart and put them back together, and use them in schools and for developing nations, and have different applications for them. They are helping our trade balance, and that is a fantastic story, as is the story of Ford Bridgend in the neighbouring constituency represented by my hon. Friend the Member for Bridgend (Mrs Moon). Ford consistently employs and invests in that plant, and takes on many apprentices.
I am pleased that the hon. Gentleman has mentioned the case study of Raspberry Pi. Does he agree that this is a great example of what we now call reshoring? It has brought back the manufacturing of this product from China to the UK, helping the trade balance. It is a great example of what we mean by rebalancing the economy.
I agree. It is an astonishing story, showing how sometimes the coincidence of business and political networks meeting happens, so that an offhand conversation can lead to a company thinking, “Well, why do we have to be out in the far corners of the world? Why don’t we come back here? We have a skilled work force.” Sony Bridgend, which has had difficult times over the past couple of decades, has re-engineered itself as a national award-winning centre of design in manufacturing and production, and that is what attracted the company back. It has been a huge, rip-roaring success, and there are another 20-odd companies on that site that we hope will build up as well.
That is all good, and I welcome every instance of the claimant count dropping, but we also have to look at the other side of the story. As parliamentarians, no matter what seat we represent, we have to look at the kind of jobs that those individuals are going into. As my hon. Friend the Member for Ynys Môn said, we need to ask whether they can get credit or a mortgage. Can they think seriously about setting up a home for a family and a future? Can they rent somewhere?
I am sure that Members on the Government Benches know in their heart of hearts that behind the claimant count drop there are a lot of people who want to be paid a bit more, who want to work a few more hours and who want the certainty of a permanent contract with the protection that any decent employer would surely want to give to a decent worker. That does not involve loading burdens on an employer. Government Members often tell us that we know nothing about this, but I can tell them that I have managed businesses in the public and private sectors. I understand the challenges of balancing a business plan and bringing in the bottom line, but that has to involve treating the workers decently as well.
We cannot achieve this overnight. This is not just a case of extolling the virtues of business and job creation; let us also talk about the quality of those jobs. Let us take businesses, large and small, by the hand and ask what more we can do to lift people up by giving them skills, education and training, a decent wage and decent terms and conditions. That involves making an investment in the worker as well as in the plant. There are many good companies out there. I am trying to avoid using a soundbite, but this is a reflection of the reality in my constituency: it has an M4 catchment. We can travel down into what is still a very good manufacturing centre along the M4. Thanks to Labour’s investment over the years, people can also get on a train in Maesteg—now at a lower price than a couple of years ago, thank goodness—and travel to work in Cardiff or Newport.
Let us take as an example a youngster who has to get a minimum wage job. Getting to work could mean spending £5 a day on a ticket or driving in a clapped-out car that will cost them 50 or 60 quid a week. When they ask me whether it is worth going out to work, I will say, “Of course it’s worth it. It is always worth going out to work, because of all the good things that come from being a valued member of a work force.” I want those people to be valued. I want them to be paid decently. This debate has sometimes seemed polarised, but this is not a question of me, as the MP for Ogmore, standing here and saying that all businesses are horrible. They are not; they create the jobs. We can put some of the framework in place and make it easier for them to create the jobs, but it is the businesses themselves that create and drive those jobs, and the people in those jobs need to be treated decently.
It is not all doom and gloom in my constituency, but when I first became an MP, there was one food bank there. Now, there is not a single village without a food bank. Last week, I went to the setting up of a Christians Against Poverty debt advice centre. We already have a citizens advice bureau, as well as debt advice being given by Valleys to Coast. We have had a tenfold increase in the number of people in work who are taking out payday loans.
Yes, let us welcome job creation, but let us also be honest about what we want out of those jobs. I do not want anyone to be forced into taking two or even three low-paid jobs. They should be able to find an employer who will pay them decently to do a job with good terms and conditions and who will value their contribution. I do not want youngsters or people close to retirement to be told that their only option is a job in retail with no guaranteed hours. I do not want them to be told, “We may or may not call you but, my God, if we do, you’d better come in because if you don’t, there are half a dozen other people who will do the job instead.” I do not want that. It is not a good way to drive an economy.
Let us have some frankness in the debate. If we can say that we want job creation but we also want them to be good jobs, we will have done a good job for our constituents. That, by the way, means tackling one of the biggest scandals that I have come across recently. There has been a massive change since March or April this year, with HMRC’s new rules and its approach to umbrella companies in construction. Constituents are coming into my office, skilled, long experienced construction workers, who are £100 a week worse off. It is there in their pay slips and it is legal. It is due to subcontracting out beyond the original contractor to umbrella companies, which deduct payments from those workers. If one thing comes out of today’s debate, I hope it is that the Minister will condemn that practice and undertake to destroy it.
We have had a wide-ranging debate. I will try to focus my comments on the motion, which is about the UK Government policy and its effect on Wales, but of course I will refer to what many hon. Members have said today.
We are talking about the choice that this Government have made about their tax and welfare policies. That choice means that Ministers have deliberately chosen to place a disproportionate burden on those with the lowest incomes in Wales. As we predicted back in 2011, and as has been shown in a recent study from Sheffield Hallam university, in Wales the Tory-Lib Dem Government’s policies on tax credits and welfare have resulted in £1 billion each year being taken out of the Welsh economy, with the losses falling disproportionately on the poorer areas of our communities.
This Government’s changes to tax credits alone have taken £200 million a year out of the Welsh economy. These cuts have meant a loss of income to some 250,000 households across Wales. These are homes where people are in work, often in thankless tasks, often patching together several jobs to try to make ends meet, and working unsocial hours, yet it is Welsh families like these, the very people least able to afford a drop in income, who are losing income. The average loss of income as a result of the Government’s tax credit and welfare policies amounts to some £550 per working age adult in Wales per year, a greater loss than the average for Britain as a whole, which is £470 per annum.
However, in many of our poorest areas, as we heard from my hon. Friend the Member for Vale of Clwyd (Chris Ruane), the average loss is over £1,000 per working age adult, amounting to some £2,000 for a two-adult family or some £40 a week, which is a huge loss when we consider that these people already have some of the lowest incomes in Wales. That takes into consideration only changes to tax credits and welfare; it does not take into account the effects of, for example, the VAT hike, which further curtails spending power.
Not only is it very unfair to take such a disproportionate amount of money from those with the lowest incomes while at the same time handing tax cuts to millionaires, but it is economic madness. It is not rocket science to perceive that those who earn least spend it most quickly in their local communities. They do this out of sheer necessity, spending the money on everyday essentials, so when they suffer cuts in their household incomes, there is an immediate knock-on effect in the local community. Those with the lowest incomes are the least likely to have the financial means to travel far to spend their money, so it is our very poorest communities that suffer the greatest loss. No prizes for guessing that that means the tops of the valleys, the areas furthest from the wealth-generating opportunities of our cities and our major transport infrastructure.
This loss to the Welsh economy has been quantified by the researchers from Sheffield Hallam university as equivalent to the loss of 7,000 full-time equivalent jobs across Wales, but with the highest concentration of such job losses in the areas of greatest deprivation. In reality, that loss of 7,000 full-time equivalent jobs manifests itself in people having their hours cut and not being able to get as many hours work as they would like, and fewer openings for our young people. There are now 71,000 part-time workers in Wales who would like full-time work, up from 54,000 in 2010, so this Government’s taxation and welfare reform is resulting in the poorer areas of Wales getting poorer. By sucking money out of these areas, the Government are making it ever more difficult for these areas to recover economically, and the gap between these areas and the wealthier parts of the UK is growing.
The hon. Member for Aberconwy (Guto Bebb) rightly pointed out that those with entrepreneurial spirit should be praised and he cited some successful businesses. The problem is that the impact of UK Government policies on the poorest areas makes it doubly hard for small businesses in those areas to succeed. My hon. Friend the Member for Vale of Clwyd explained clearly the impact in real terms of the reduction of the Welsh budget by £1.5 billion and the cuts to services. He also graphically pointed out that his area has one of the highest per working age adult losses—it is some £1,400.
My hon. Friend the Member for Ogmore (Huw Irranca-Davies) gave a good example of the reshoring of jobs, which is much to be welcomed. However, he also pointed out the many problems of insecurity, low pay, unfavourable terms and conditions for workers, and the scandal of umbrella companies where workers are actually paying employer contributions as well as their own contributions, leaving some people as much as £100 a week worse off. He welcomed investment in his local area, but pointed out that it is no good if we are not also looking at what type of jobs are being created.
The hon. Member for Ceredigion (Mr Williams) spoke clearly about off-grid issues, the cost of vehicle fuel and the need for a continued roll-out of broadband. He praised Cyfle, an organisation giving young people apprenticeship opportunities through placements in several different companies, because companies cannot always offer a full-time apprenticeship. That is particularly useful in a rural economy. He also mentioned a VAT reduction for tourism businesses, a campaign which he has pursued vigorously.
My hon. Friend the Member for Ynys Môn (Albert Owen) talked about the success of the economy from 1997 to 2007, mentioning that since the downturn things have become more difficult in terms of the types of jobs being created. He mentioned the many mini jobs, the fact that young people are facing a lot of problems when trying to find work, and self-employment not really being what people want—it is sometimes imposed on them because no other option is available. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) focused on the issue of funding for Wales and possible consequentials on funding for Wales from HS2. He also mentioned that the £1 billion being taken out of the Welsh economy is more than four times the benefit that Wales gets from EU funding.
The hon. Member for Monmouth (David T. C. Davies) gave us a history lesson and his own inimitable view of climate change and green taxes. He also spoke about the dangers of the UK Independence party and about health in Wales.
The hon. Member for Monmouth (David T. C. Davies) would not take an intervention from me at the time, but I wish to correct him on something. He said that the Labour party introduced all these carbon taxes, but I wish to remind the House that this Chancellor introduced carbon floor pricing, the level of which the Government have now had to reduce, and which has had such an impact on manufacturing in Wales.
My hon. Friend rightly says that it was this Chancellor who set that carbon floor price, causing considerable difficulties for our industries. We are still having to go through hoops with those industries to get the relief they need.
My right hon. Friend the Member for Torfaen (Paul Murphy) stressed the importance to our manufacturers of remaining in the EU and the very real fear that the Conservatives’ shilly-shallying over Europe is driving companies to question whether to make new investment here. Let us make no mistake: if the Government are seen to be rushing for the exit from Europe, we will lose those companies, with the loss of thousands of jobs across Wales.
My hon. Friend the Member for Aberavon (Dr Francis) talked about the second campus of the university of Swansea and the importance of partnership working between the university and the steel industry. My hon. Friend the Member for Islwyn (Chris Evans) praised small businesses in his area, said that we should not be obsessed with constitutional issues and talked about the importance of infrastructure linking Wales to the world.
The question is: what is the Minister going to do to tackle the cost of living crisis? Wages in Wales are simply not keeping up with inflation, with wages up by only 0.6% but prices up by more than 2% this year. People in both north and south Wales pay some of the highest prices for our energy and we have some of the hardest-to-heat homes. In addition, many people live off grid and so have more limited options for heating their homes. So what is he going to do to tackle high energy bills? The market is just not working for consumers in Wales.
Labour Members have made it clear that an incoming Labour Government would freeze energy prices for 17 months for both domestic consumers and businesses, during which time we would reform the energy market so that it works for consumers in Wales. We have also taken on board the policy of paying the winter fuel allowance earlier in the year to those who rely on buying in heating oil or liquefied petroleum gas, so that they can buy their supplies more cheaply. That is a simple move, but Ministers have not even agreed to do that. So when are we going to see some action from this Government to address the concerns of the people of Wales by tackling the high energy prices, job insecurity and the low-wage economy?
Will the Minister tell us now that he will match Labour’s energy price freeze? What will he do about low wages? Will he match our pledge to raise the minimum wage to 58% of median earnings? What will he do to tackle insecurity at work in Wales? Will he sign up to Labour’s pledge to tackle the abusive use of zero-hours contracts? I do not mean just banning exclusivity clauses that force workers to work exclusively for one major employer, important though that is. Will he go further than that, as we will? Will he show some humanity and abolish the bedroom tax in Wales? I guess not. He would rather see the people across Wales working longer for less, the poorest areas in Wales getting poorer, and the people struggling with fuel bills. He is happy to give out tax cuts to millionaires and see a recovery for the few, whereas Labour wants to see a recovery for the many.
I thank all Members for their valuable contributions. It is fair to say that the tone of the debate changed somewhat from the negative one that prevailed at the outset to the more measured contributions by the hon. Members for Islwyn (Chris Evans), for Aberavon (Dr Francis) and for Ogmore (Huw Irranca-Davies).
This coalition Government inherited an economy that was on its knees. Throughout the past decade, we have had an unstable model for the economy. There was an over-reliance on the public sector, the financial services sector and economic growth from London and the south-east. In spite of the crocodile tears and the synthetic anger that we saw from the shadow Secretary of State, the situation was even more perilous in Wales. One of the saddest legacies that we inherited from the previous Administration was that Wales was the poorest part of the United Kingdom, and that was after 13 years of control from Labour Members. Ultimately, their economic model came crashing down.
We have a long-term economic plan that is working and delivering the recovery for Wales. It is based on investment in infrastructure—both digital and traditional —the development of skills, welfare reform, and making Wales and the rest of the UK a more competitive environment for business, which is something that some Labour Members have recognised today. I pay tribute to my hon. Friend the Member for Aberconwy (Guto Bebb) for being a strong and doughty champion for small businesses and the self-employed in his constituency.
Does the hon. Gentleman not accept that the British economy grew by 40% in the 10 years to 2008, before the banking crisis? Since then it has virtually flatlined, which is why his party has borrowed more in four years than the Labour party did in 13. It is a disaster.
I will happily repeat that, in 1997, Wales was not the poorest part of the United Kingdom. But between 1997 and 2010, Wales sadly and tragically became so. That was when the hon. Gentleman was a Member for Croydon Central, before he decided to come back home to Wales, so he will have played a part in the policies that led to such a devastating consequence for Wales and the Welsh people, and that is something for which he should apologise. Investing in infrastructure is key to our economic plan, and Wales has rightly received significant sums for some major projects.
I cannot mention railways without paying tribute to my right hon. Friend the Secretary of State for Wales for his hard work and persistence in seeking a solution to secure the electrification of the line all the way to Swansea and of the valley lines as well. That is the largest investment in railways in Wales since Victorian times. Wales was sadly left in the slow lane when it came to railways. After 13 years of a Labour Administration, Wales, Moldova and Albania were the only three countries in Europe that did not have any electrified railways. Wales is now set to benefit from rail investment worth £2 billion. Our north Wales link to Liverpool is being renewed through the Halton Curve, which is welcomed by all businesses in north-east Wales and north-west England. Crewe is becoming a hub station for HS2, which offers new opportunities to the whole of north Wales, ensuring that we all benefit from this major UK strategic investment.
It was 12 months ago that my right hon. Friend the Chancellor announced a funding package to enable the upgrade of the M4 around Newport, which was something for which businesses had been calling across the whole of the south Wales corridor. That project was cancelled by the previous Administration in 1997 after my right hon. Friend, the current Leader of the House, committed to it when he was the Secretary of State for Wales. The project was cancelled by Labour but reinstated by the Conservatives.
I was sorry that the hon. Member for Wrexham (Ian Lucas) did not welcome the £212 million investment for a new prison in Wrexham. Even after it is up and running, its operational activity will involve £23 million being pumped into the economy each year.
Wales is playing its part in our energy infrastructure upgrade after years of neglect that led to the risk of the lights going out throughout the United Kingdom.
The Minister is aware that Wales pays among the highest distribution costs in the whole of the United Kingdom, as is reflected in our bills, so would he support flattening those costs throughout the United Kingdom? Some areas might have to pay a little more, but north-west Wales actually produces energy and we pay too much for it through our bills.
Of course, that is a matter for Ofgem, as an independent organisation. I know that it has made changes and I look forward to its further deliberations. I am sure that the hon. Gentleman recognises the major investment of £20 billion for Wylfa nuclear power station on Anglesey, which will create 6,000 construction jobs alone.
Of course, such activity does not stop at hard infrastructure, and upgrading our digital networks is central to our plans. Wales is benefiting from £69 million of Government investment for superfast broadband to provide access to more than 275,000 homes and businesses, although I did not hear any welcome for that from Labour Members. By spring 2016, 96% of Wales will have access to superfast broadband connectivity. Further digital projects include Cardiff and Newport being part of the Government’s super-connected cities programme. A pilot programme in Monmouthshire to tackle hard-to-reach areas offers exciting prospects, while the mobile infrastructure project to which the hon. Member for Ynys Môn (Albert Owen) referred is a clear plan to start filling the not spots.
As well as dealing with infrastructure, there was a need to reform the benefits system. The historical problems of worklessness in some communities in Wales were another legacy of the previous Labour Administration, but the Work programme is offering new prospects. It has already supported back into work more than 15,000 of those who were furthest away from employment. Universal credit is simplifying the tax and benefit system and increasing the incentive to work. Some 200,000 households in Wales will have higher entitlements under universal credit—on average, £163 more a month—and the poorest claimants will benefit the most. Shotton in Flintshire is already live and the rest of Wales will be online by April 2016. This is a once-in-a-lifetime opportunity to change the benefits system for the better. The changes offer the opportunity of transforming the fortunes and prospects of families and communities. Alongside the benefits cap and other measures, they will make work pay for everyone.
Supporting business is a key part of the long-term economic plan. More than £100 million has been provided to businesses in Wales through the business bank. More than 600 start-up loans have been awarded to businesses in Wales to release the entrepreneurial spirit mentioned by my hon. Friend the Member for Aberconwy. Some 35,000 businesses in Wales have benefited from the employment allowance to help them to grow and take on new workers. We have a disproportionate dependence on energy-intensive industries, and they will benefit from our energy package of £240 million, which I am sure that the hon. Member for Cardiff South and Penarth (Stephen Doughty) will welcome in the light of his interest in the industry in his constituency. Our enterprise zones on Deeside, and at Ebbw Vale and Haven Waterway, will benefit from enhanced capital allowances until 2020, which will give investors incentives and security.
If I had time, I could highlight so many more policy areas where I can show that Wales is coming back. Outcomes are the most important measures. I have been talking about inputs until now. When we combine the impact of these changes as part of our long-term economic plan, there is little wonder that the number of people claiming jobseeker’s allowance has fallen for 20 consecutive months—
Motion made, and Question put forthwith (Standing Order No. 41A(3)),
That, at this day’s sitting, Standing Order No. 41A (Deferred divisions) shall not apply to the Motion in the name of Secretary Theresa May relating to the Prevention and Suppression of Terrorism—(Dr Thérèse Coffey.)
Question agreed to.