We oppose the downgrading of Ammanford Fire Station
Sign our Petition

Wales Debate

Jonathan Edwards (Carmarthen East and Dinefwr) (PC):

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 due 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 only to increase the minimum wage to £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.