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Volume 708: debated on Wednesday 9 February 2022

The Secretary of State was asked—

Inflation: Households and Businesses

1. What recent steps the Government have taken to tackle the impact of inflation on households and businesses in Wales. (905481)

2. What recent steps the Government have taken to tackle the impact of inflation on households and businesses in Wales. (905482)

8. What recent steps the Government have taken to tackle the impact of inflation on households and businesses in Wales. (905489)

12. What recent steps the Government has taken to tackle the impact of inflation on households and businesses in Wales. (905493)

The Chancellor announced a £9.1 billion energy bills rebate last week. This includes a £200 energy bill discount for households across the UK, including Wales, as well as an additional £175 million to the Welsh Government.

On Monday, this Conservative Government imposed a real-terms cut to social security benefits and pensions of approximately 4%. This is on top of the hike in national insurance contributions, the rise in the energy price cap and cuts to universal credit and working tax credit, which the Bevan Foundation in Wales has estimated will take approximately £286 million out of the Welsh economy. People in Wales are genuinely fearful of the impact that these cuts are going to have on living standards, so I ask the Secretary of State: how can he justify voting for these measures, which will not only exacerbate existing poverty but drive more and more people into hardship and poverty?

The hon. Lady has constituents, as we all do, who are of course concerned about the cost of living challenges ahead, but I hope I can reassure her by naming, as I have already done, a few of the measures we are putting in place. They include the substantial additional money via the Barnett formula for the Welsh Government, but also the universal credit taper is worth £1,000 per household, the increase in the living wage is also worth £1,000 a year for those in receipt of it and there are the warm home discounts. Of course, the main thrust of what we are trying to do is create the right circumstances for a jobs-led recovery.

Tesco’s boss says that food inflation will hit 5%. Families across Wales will struggle to cope, so how will the Secretary of State help people in food poverty?

I can only refer the hon. Member to my earlier comments. We want to be extremely sure, just like him, because Conservative Members have a similar dynamic in our own constituencies, that we are putting in place everything we can, whether that is the universal credit taper, the increase in the living wage, an increase in the tax threshold, or indeed the jobs-led recovery I have mentioned. The fact is that the economic prospects for the UK, including Wales, are actually growing at a reasonable pace, although it can always be faster and greater. I am hoping I can reassure his constituents, just as I am attempting to reassure mine, that we have their best interests at heart when it comes to food poverty.

People do understand the need to provide more money for health and social care, but Welsh businesses and workers—they now face rampant inflation, bringing escalating costs and reduced consumer spending power—are angry that the UK Government are hitting them with the national insurance rise while the Chancellor has simply written off billions. What talks has the Secretary of State had with Cabinet colleagues about implementing concerted efforts to recover the £5 billion of taxpayers’ money taken fraudulently by criminals in covid support, and about engaging with companies that were vastly overpaid by the UK Government for personal protective equipment contracts on recognising their corporate social responsibility and returning excess profits, rather than hitting workers and businesses across Wales with this national insurance rise?

The hon. Lady raises an important point about fraud. All I can tell her is that the Treasury is a world leader in tracking down, eliminating and reducing the risk of fraud, and I think she should give it some credit for the remarkable work that it has already done in that respect.

An 80-year-old constituent of mine has contacted me to say that he and his 78-year-old wife currently pay £68 a month on energy bills and they just about manage, but they have been told that that will go up to nearly £3,000 for the year. Meanwhile, BP has announced its highest profits in years. The Government’s answer is to hand out loans, but Labour has a plan to make energy companies pay. My constituent is worried and angry, and he wrote to me asking me to shout and scream at the Secretary of State. I do not think that will work, but what does he expect me to say to my constituent?

What I hope I could pass on to the hon. Lady’s constituent is that deploying the usual Labour response to pretty well every problem in the world, which is to find somebody and tax them, is not the right answer, because that would have a knock-on cost that would then be picked up by the very constituent she mentioned. The idea that tax is anything other than a disincentive in this particular instance is a myth. Much more important are our attempts to make sure that families in the position her constituent points out are looked after to the best of our ability.

As my right hon. Friend has mentioned, the Chancellor has announced that 80% of English households will receive a £150 council tax rebate with effect from April this year. As a consequence, the Welsh Government have received an additional £175 million under the Barnett formula. Is it a matter of regret to him, as it is to me, that the Welsh Government have not yet announced that that money will be passed on to Welsh council tax payers, who are entitled to precisely the same benefits as their English counterparts?

My right hon. Friend makes an important point. The Treasury was explicit in what the Barnett consequentials were for the Welsh Government, and I agree with him. I do not understand why families and businesses in Wales are still unclear about how that money will be used.

People in rural areas will be at a particular disadvantage during the upcoming energy price crisis. About two thirds of my constituents are not connected to the gas grid and are therefore not covered by the protection of the energy price cap. Does my right hon. Friend agree that as rural areas will experience particular hardship, the Welsh Government have a responsibility to act fast to get the £175 million that they have just received out the door as quickly as possible?

Absolutely. I refer to my earlier answer. That is critical, because we probably have a higher proportion of people in Wales in that position than almost anywhere else in the UK. So this is urgent, and I urge Labour Members to put as much pressure as they can on their colleagues in Cardiff to make it happen.

Will my right hon. Friend join me in welcoming the increase in and extension of the warm home discount, which will shield the most vulnerable across the UK from the impact of inflation?

I certainly will. There is a contrast worth highlighting, as the Government’s solutions to these problems are to provide direct and positive interventions for families across Wales rather than defaulting to the lazy position of finding an energy producer and taxing it, as if that would resolve the problem.

It is not just record inflation that is hitting Welsh households hard. Rents in Wales have increased by nearly 10% in the last year, the third highest rate in the United Kingdom outside London and Northern Ireland. When it comes to paying bills, the Digital, Culture, Media and Sport Secretary thinks that a monthly saving on the BBC licence fee of 87p over two years is

“one of the few direct levers we have in our control as a Government.”—[Official Report, 17 January 2022; Vol. 707, c. 39.]

Is that really the extent of the Government’s ambition to help people in Wales cope with a Conservative cost of living crisis?

I am grateful—I think—for the hon. Lady’s question, but she seems to overlook the numerous examples that I have already given, and I have an even longer list of ways in which the UK Government have stepped in, during covid in particular. We have helped protect 470,000 jobs and 60,000 Welsh businesses, dished out £2.4 billion in business loans, increased the living wage and adapted the universal credit taper—I could go on, if only you would allow me, Mr Speaker. She needs to reflect on the long list of positive things to which Labour has contributed almost nothing by way of assistance.

Well, people across Wales are facing the biggest drop in living standards in 30 years under the Secretary of State’s watch. Inflation is at a 10-year high and rising, national insurance levels are increasing by more than 10%—another Tory broken manifesto promise—energy bills are up 54% and rents in Wales are up 10%. Wales is bearing the brunt of the incompetence and chaos not just at No. 10 but at No. 11, while the Secretary of State sits at the Cabinet table and lets it all happen, does he not?

No. The hon. Lady seems to have forgotten that there has been something called a pandemic in the last two years, and that has had a significant effect on the global economy. She also seems to have forgotten that her party is responsible for a number of the standard of living issues in Wales, yet we never hear so much as a squeak of criticism about Welsh Labour’s performance in Cardiff. I urge her again to reflect—perhaps through Hansard tomorrow—on the comments that I have made and the numerous ways in which the Government have intervened in some of these economic challenges, the result of which is that more people are now on the payroll than before the pandemic began and the UK economy is the fastest growing in the G7. Perhaps she should reflect on those facts before raising the issues that she has.

Can my right hon. Friend confirm that the lowest paid in Wales will benefit from our increase in the national living wage, protecting them from the impact of rising inflation?

I certainly can. In answering that question, it is also worth reflecting on the fact that the Labour solution around VAT—an interesting recognition of a Brexit dividend—would not have that effect. The Treasury analysis is that Labour’s proposal would unduly hit the families our proposals are designed to help.

Young Audiences Content Fund

3. What assessment he has made of the potential impact of closing the young audiences content fund on Welsh language broadcasting. (905483)

There will be a full evaluation of the fund’s impact on the provision of public service broadcasting for young people, including Welsh language content. The Government are committed to Welsh language broadcasting. S4C will receive £88.8 million a year for the first two years of the licence fee settlement, rising in line with inflation thereafter.

Diolch, Mr Speaker. The fund’s 5% target for content in the indigenous languages has been invaluable to producers of Welsh language children’s programmes such as an upcoming drama series about children’s mental health and, of course, the production of new episodes of “Sali Mali”. Mike Young, the producer of “Sam Tan” and the creator of “SuperTed”, has previously stated that those much-loved favourites would not have been made without state support. Will the Minister agree to meet me to discuss the impact of the fund’s closure and ways we can secure the future of original children’s content in the Welsh language?

I would be delighted to meet the hon. Gentleman to discuss that issue. I would approach it with an open mind. I will perhaps remind the hon. Gentleman that it was a Conservative Government who established S4C. It was also a Conservative Government who introduced the Welsh Language Act 1993. He may also know that it was a Conservative Chairman of the Welsh Affairs Committee who allowed Welsh to be spoken for the first time in Select Committee hearings. Modesty prevents me from saying any more on that, but I can assure him that we will always want to support the Welsh language.

Broadband Coverage and Speeds

4. What recent discussions he has had with (a) Cabinet colleagues and (b) the Welsh Government on improving broadband coverage and speeds in Wales. (905484)

The Secretary of State recently met the Culture Secretary to discuss the delivery of the UK Government’s £5 billion Project Gigabit, which will deliver gigabit connections to the hardest to reach 20% of the UK. Up to 234,000 homes and businesses in Wales should benefit from this investment.

Diolch, Mr Speaker. According to the House of Commons Library, 17.4% of lines in my constituency receive less than 10 megabits per second, one of the worst records in the British state. It is clear, therefore, that the UK Government and Welsh Government broadband strategies are failing large parts of Carmarthenshire. Will the Wales Office emphasise that mission 4 of the levelling-up White Paper published last week prioritises areas that have been neglected so far?

Those figures are concerning, and I agree that that connectivity needs to become a priority. However, the statistics will also show that the number of homes connected to fast broadband in Wales has risen from just 11% in 2019 to 47% in 2022. That number continues to rise and later this week—in fact, tomorrow—I shall be visiting the Swansea Bay growth deal to look at a project that will further increase connectivity in Wales.

Bore da and diolch, Mr Speaker. Following on from that question about speed and infrastructure in Wales, my hon. Friend may be aware that back in the ’80s and ’90s I travelled quite quickly with my fellow students on the train from Lampeter to Aberystwyth. Will he provide an update on the likelihood of bringing back the train line between Carmarthen, Lampeter and Aberystwyth, especially in the 200th anniversary year of the setting up of St David’s University College in Lampeter?

That is an exciting and interesting suggestion, and one of a number that will be looked at. What I am doing, with the Secretary of State for Wales and the Secretary of State for Transport, is looking at projects already under way, such as the improvements to the north Wales coast line and to the south Wales relief line.

I think the hon. Member for Lincoln (Karl MᶜCartney) was trying to say that there would be an improvement to broadband if the train line was reopened. That is the only way his question can be connected to the lead question.

The Conservative manifesto promised gigabit-capable broadband to every home and business across Wales, and across the UK, by 2025. How does the Minister justify the levelling down in his Government’s so-called levelling-up White Paper, which now only states targeting 70% to 80% by 2025?

I hope the hon. Gentleman will agree that we have set some very ambitious targets. I certainly hope we are going to meet them, but I just point out once again that the number of homes connected to fast broadband has risen from just 11% to 47% in three years. I think that is an exceptionally good outcome. I can assure him that we want to see that figure continue to rise.

Diolch, Mr Speaker. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) is absolutely right to raise this issue, because broadband speeds in urban areas—not only in Wales, but in England—are not always up to the mark. At the same time, will the Minister praise, for example, Openreach, which provides fibre to the premises in very rural areas of Wales such as the Dysynni valley in southern Snowdonia?

I am not sure whether my hon. Friend wants to declare a particular interest. Obviously we support Openreach in delivering fibre to the hardest-to-reach areas, but I take him back to the whole purpose of Project Gigabit—to deliver to the hardest-to-reach 20%. The figures already show that we are being very successful in achieving that greater connectivity in rural Wales.

Crown Estate: Devolution

5. If he will make an assessment of the potential merits of devolving control of the Crown Estate in Wales to the Welsh Government. (905485)

6. If he will make an assessment of the potential merits of devolving control of the Crown Estate in Wales to the Welsh Government. (905487)

9. If he will make an assessment of the potential merits of devolving control of the Crown Estate in Wales to the Welsh Government. (905490)

There is no public appetite at all in Wales to devolve the Crown Estate, which would serve merely to fragment the market and delay the further development of key projects.

The Scottish Government have awarded 25 GW of offshore wind development rights through Crown Estate Scotland to 17 projects, which has put Scotland at the forefront of global offshore wind development. It is more than double the UK’s existing offshore wind capacity and it will create high-quality jobs and significant local investment. Why does the Secretary of State not think that devolving the Crown Estate to Wales would benefit the people of Wales in the way that it is benefitting the people of Scotland?

I have spoken on this subject recently to port authorities, investors, councils, employees and, most importantly, the public. Not a single person—not one—has suggested to me that the future of floating offshore or, indeed, any other renewables will benefit from the devolution of the Crown Estate. This is an international opportunity for Wales. The supply chain benefits are huge and, actually, the Scottish National party’s ambitions are far too modest in this respect.

The recent devolution of the Crown Estate seabed is predicted to enable Scotland’s offshore wind farms to reliably power around 30 million homes across the United Kingdom. Has the Secretary of State assessed how many millions of homes could be powered by Welsh offshore generation?

I think I caught the majority of the hon. Gentleman’s question. Yes, we have undertaken significant analysis of the potential, but the potential is massively enhanced by this being a UK-wide—an international—approach. It is not enhanced—indeed, it is jeopardised—by constant reference to devolution of the Crown Estate, which seems to be almost off-putting to future investors in this particular sector.

Well, it has not put off investment in Scotland, certainly.

The Crown Estate portfolio in Wales, with its marine assets, has risen in value from £49 million in 2020 to its current value of £603 million. The evidence from Scotland is that it is hugely beneficial for the devolved Government to be handling that and maximising the supply chain opportunities. Why is the Minister not open to the idea of devolving it, or is the message to the people of Wales that when it comes to governance in Wales, Westminster still knows best?

Absolutely not. I made it clear earlier that where I take my advice from and listen the most intently is the views of port authorities, councils, investors, employees and the public. That is what really matters to me. This is about job creation and sustaining jobs and not about looking at every single issue through the prism of independence and what works for the Scottish Government. This is about making this work for the people of Wales, and that is what is important to us.

Devolution of the Crown Estate is a total red herring, and it so cynical of nationalists to turn every issue into an anti-United Kingdom process row. Does my right hon. Friend agree that floating offshore wind represents a hugely important opportunity for Wales, particularly for the port of Milford Haven in my constituency—Milford Haven is shared by his constituency—and will he assure the House that he and his colleagues at the Department for Business, Energy and Industrial Strategy are doing everything to ensure that Wales and Pembrokeshire benefit from the opportunities of renewable marine energy?

My right hon. Friend is right; I met the Crown Estate last week and had exactly that conversation. I have to say that it was an exciting, interesting, innovative conversation about all the possibilities that he mentions, which exist across the whole UK but particularly in the Celtic sea. I repeat what I said earlier: the emphasis and impetus come from investors, members of the public and port authorities, not from nationalists who just wish to look at everything through the prism of their own power base.

The Secretary of State has just said that there is no public interest or appetite at all, and that not one person is saying that devolving the Crown Estate is a good idea. By this morning, 10,000 people had already signed a petition asserting Wales’s right to reap the benefits of our own national resources.

The ScotWind auction raised almost £700 million for Scotland’s public finances. To reassure the Secretary of State, this is not a new tax. In the heat of the cost of living crisis, Scottish renewable natural resources generate revenue for the benefit of the Scottish people, providing a better welfare service than in Wales. Is it not clear that devolving the Crown Estate in Scotland has improved the Government’s ability to respond to the cost of living crisis, and so it would in Wales?

Shock, horror—the hon. Gentleman raises that petition. Of course, it represents a tiny, tiny, tiny proportion of the population of Wales, even assuming that everybody who signed it is resident in Wales.

I chose my words carefully earlier. The people I want to listen to most intently are the people who will do the work and benefit from the work: port authorities, councils, employees, the public and investors. Every single person I have spoken to about the issue concludes that devolving the Crown Estate is nothing more than a distraction that would actually damage the prospects of its being the success story it deserves to be.

“Parity with Scotland” is possibly not the catchiest of slogans, but here it is just a matter of fairness. Will the Secretary of State now commit, in this Parliament, to the devolution of the Crown Estate to Wales?

Connectivity and Infrastructure

The Government are committed to levelling up across the whole United Kingdom, including Wales. Better connectivity and infrastructure are key to that, which is why we asked Sir Peter Hendy to conduct the Union connectivity review.

Does my hon. Friend agree that in addition to the actions that he has announced, the Union connectivity review pledges to do much more, including reducing journey times on the east coast rail line and protecting important domestic routes between London and Aberdeen, for example? It shows levelling up in action and is a demonstration of this Government working for the entire United Kingdom, including Wales.

To draw on the link between Wales and Scotland, I congratulate Loganair, which flies between Cardiff and Edinburgh and will no doubt benefit from the cut in air passenger duty for regional airports. As a result, we can expect to see an increase in demand for flights, which is good news for Cardiff airport, good news for travellers and good news for the Union.

Cross-Border Transport Connectivity

10. What recent discussions he has had with the Welsh Government on improving cross-border transport connectivity. (905491)

Cross-border links are vital to achieving levelling up in every part of the United Kingdom, including Wales. Last week, I met the Welsh Government’s Transport Minister to discuss how our Governments can work together to improve those vital links, including through the recommendations in the Union connectivity review.

If you go by train to north Wales, Mr Speaker, the chances are that you will go through Chester. We have plans ready to go to increase capacity at Chester station, but we are being held up because the Minister’s colleagues in the Westminster Department for Transport will not agree on Union connectivity grants for Network Rail and Transport for Wales. Will he please have a word and tell them to get a move on?

I am sure that my colleagues in Westminster will be doing absolutely everything they can to improve connectivity links between Wales and England, but perhaps the hon. Gentleman could have a word with his colleagues in the Welsh Labour Government, who have decided to abandon road building in Wales. Traffic congestion is bad for the environment, and a good road network is good for a flourishing economy.

The Llanymynech-Pant bypass proposal is the most important connection for my constituency, although it is 90% in England. I welcome the Treasury Bench’s commitment of £45 million to get it to the next stage, but will the Minister meet with me to ensure that the Welsh Government, with their road blocking and lack of vision on Union connectivity, deliver this road?

My hon. Friend has been an absolute champion of the bypass over many years—[Interruption.]—and I am sure that everyone on this side of the House is deeply disappointed—

I am sure that everyone on this side of the House is deeply disappointed that the Welsh Labour Government have decided to abandon road building in Wales.

Before we come to Prime Minister’s questions, I want to point out that the British Sign Language interpretation of proceedings is available to watch on