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The Budget

One of the things about universal benefits is that the hon. Gentleman will pay a lot more tax. These things actually work themselves through, because those on higher incomes, and who have high pensions, will pay back the money in taxation. For those who are just above the level at which they can get pension credit and so forth, however, winter fuel allowance is extremely useful. This morning, the Chief Secretary to the Treasury said something about the least well-off being able to get help from the Department for Environment, Food and Rural Affairs. Given that the money for the winter fuel allowance was originally Treasury money and came directly out the taxation system, what will happen about that DECC money? Will the Welsh Assembly be given extra money to make similar payments to people on similar levels of income in Wales, or is the Welsh Assembly Government expected somehow to Box and Cox and try to produce the equivalent from whatever they are given? I would be grateful if the Minister can confirm exactly what will happen. The significant changes to the tax credit system mean that people with a joint household income of £26,000 or above will lose all their tax credits. In addition, certain people will lose child benefit and the child trust fund. All those things take money out of circulation in the local economy. Added to that is the stealth tax that will result from changing the way we calculate a large number of benefits and pensions and moving from the retail prices index to the consumer prices index. Yet again, more money is being taken out of the economy. People with a small disposable income will therefore have an even smaller income. In places such as Llanelli, we might want to talk about regenerating the town centre and private sector business, but the money being taken out of the system is not there to generate wealth, to generate business for local firms or to help the local economy. For historical and geographical reasons, residents in some areas face much higher charges for their water. At the top of the table is the south-west of England, but we in Wales have similar problems. We have a long and beautiful coastline, and we want to encourage tourism, so we want our seas to be as clean as possible. At the same time, we have a relatively scattered population. That means that we, too, suffer from high water charges. It will come as no surprise to anybody to learn that Wales comes second in the league table after south-west England. Nor will it come as a surprise that Ofwat, as the regulator, looks at these charges and says, ““We really can’t hammer the consumer any more. We must ask Dwr Cymru to keep its charges down.”” However, if Welsh Water does that, it will have to limit its expenditure on new infrastructure, which will have a knock-on effect on what it can do to decrease the number of sewage spillages into our beautiful seas—let us not forget the fines that it has recently been charged for such spillages into the sea—and the sort of infrastructure that can help sewage flooding back up into people’s houses. Ofwat, quite rightly, wants to keep the charges down, but Welsh Water is then faced with the dilemma of how to improve infrastructure while not being allowed to raise prices. If south-west England can have special terms and conditions, why was the whole of England and Wales not looked at in one go in the context of cross-subsidy and helping people in areas such as Wales, who also suffer from high charges and who need massive investment in infrastructure to support our rural communities and the tourism industry that we want to develop? If cross-subsidy for water charges across the whole of England and Wales is not the way forward, what about some sort of system of water benefit? Water is the one charge on which no concession is made for people on very low incomes. On council tax, there can be council tax benefit; on housing costs, there can be housing benefit; work has been done on fuel poverty, giving some help towards fuel costs for those on low incomes; the one area that has not been tackled yet is water. If we are to consider those high charges, what about a system of water benefit right across the UK? That would put the help in where it is most needed. I will conclude on enterprise zones, which have been heralded by the Government as very desirable and special. The Welsh Assembly Government are being challenged to do something similar in Wales, but let me challenge some of the assumptions. As my hon. Friend the Member for Pontypridd has quite clearly stated, the cost of the jobs in the enterprise zones in the 1980s and 1990s was in the region of £26,000 per job created, as opposed to something like £6,500 for the jobs created through the future jobs fund, which the Government have scrapped. What are enterprise zones getting? First, will the Minister clarify what the enterprise zones in England are being given? In exchange for relaxing planning rules, they are being allowed to keep the rates, but what else will they have? What else will encourage anyone to go to them? Quite honestly, I wonder what the Government are asking the Welsh Assembly Government to mimic and whether it is worth having. Secondly, it is very difficult to define exactly which areas will most benefit from enterprise zones. One of the difficulties is that there is a lot of displacement from one area to another, and people complain that their area has not been included. As my hon. Friend the Member for Vale of Clwyd has pointed out, the areas of traditional unemployment in Wales may not be the only areas that suffer significant amounts of unemployment in the coming few years, and different patterns of deprivation may emerge in Wales as the cuts take effect. If the Welsh Assembly Government are being challenged to create enterprise zones, will the Minister tell us exactly what the enterprise zones get in England and what he anticipates the Welsh Assembly Government will wish to copy? My advice is that the Welsh Assembly Government should consider the matter very carefully and come to their own conclusions on the best way forward. I really do not think that we should put up with this nonsense of enterprise zones being wonderful things, because I do not think that that will be the case.