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The Budget

I thank you, Mr Owen, for your chairmanship this afternoon, and I also thank Mr Havard for chairing this morning’s sitting. This is the second time that the Welsh Grand Committee has met this month, which emphasises the Government’s commitment to ensuring that Welsh affairs and concerns remain central to the work of the House. The Budget is an ideal topic for such an occasion because the decisions that my right hon. Friend the Chancellor announced last week will affect every area of public expenditure in Wales, whether devolved or not. The Secretary of State opened the debate by pointing out that the Budget builds on last year’s emergency Budget and spending review by consolidating the economic rescue mission, moving to reform, and setting the United Kingdom on the road to recovery. No one can or should underestimate the scale of the challenge facing the country in seeking to address the appalling economic bequest left to the Government, and appalling it is, despite the confession—although there was more avoidance than confession—with which the shadow Secretary of State regaled us. His speech was a long way of simply saying, ““Not me, guv.”” He insisted that Labour had behaved with the utmost prudence in its stewardship of the British economy. If one accepted the right hon. Gentleman’s thesis, which was echoed by the hon. Member for Pontypridd, one might reasonably wonder why Government Members were not rejoicing at the golden economic bequest that the previous Government left us. The right hon. Member for Neath referred repeatedly to investment, which is a word that Labour Members use repeatedly to create a smokescreen for the devastation that their Government wrought on the British economy. For ““investment”” read ““debt””, occasioned by imprudent, profligate borrowing, and it is that debt with which every man, woman and child in this country is now saddled. Given the scale of the indebtedness that the Budget tries to address, it is astonishing that the shadow Secretary of State still believes that the British public should be grateful to Labour. By far the greatest part of his speech was devoted to his alternative history lesson. He touched little on the Budget’s details, although he criticised fuel prices, which concern all of us. They are largely dictated by global factors, but the Chancellor used the Budget not only not to trigger the duty escalator that would have kicked in under Labour, but to reduce fuel duty by 1p a litre, so petrol is now some 5p a litre cheaper that it would have been under Labour. The right hon. Gentleman was critical about spending cuts, and while he acknowledged that a Labour Government would have had to make cuts, he refused to say what they would have cut. That common theme was developed by all Labour Members who spoke this morning. They seem to acknowledge that cuts must be made, but they are not willing to say where. In fact, they seem to think that public expenditure can be let rip without notable spending cuts and without increasing taxation. We would all appreciate it if they would indicate where the money might come from. The wonderful Welsh word for a mess is ““llanast””, which my mother repeatedly accused me of creating in my bedroom when I was a boy. The simple fact is that until the Labour party says what it would do to address the economic llanast with which it has left us, it is in no position to criticise what we are doing as we try to clear it up. In the brief time available to me, I want to deal with some of the specific points that were made. The hon. Member for Carmarthen East and Dinefwr referred to the Barnett formula. I think that everyone recognises that it is coming to the end of its life, and the Government are therefore initiating a Calman-like process to consider what should replace it. That will involve every aspect of funding, because it is absolutely clear that, if the Welsh Assembly Government are to have more powers, they should have more responsibility. The new Calman-like process for Wales will consider not only the possibility of a Holtham floor but whether the Assembly should have tax-varying powers, which I know the Labour party would not welcome, but that is the way it is. The hon. Member for Vale of Clwyd made an astonishing speech. It was as if Aneurin Bevan had never died. I was absolutely amazed by the visceral hatred that he exhibited for every Member sitting on this side of the Committee. We are apparently all millionaires, and he of course is the working-class hero standing up to us. Well, I do not recognise his description of the area of Wales that I live in. Like my hon. Friend the Member for Cardiff North, I fought my election, in which I gained a substantially increased majority, on the basis that the next Conservative—or coalition, as it turned out—Government would have to do all in their power to address the appalling economic legacy left by the Labour party. I was proud to stand on that platform. It might be of interest to know that, far from its being an employment desert, the latest figures show some 354 vacancies in the hon. Gentleman’s constituency. That might have been of some comfort to him, had he bothered to turn up for the winding-up speeches. We heard a very good contribution from my hon. Friend the Member for Aberconwy, who rightly said that the renaissance of the British economy will be private sector-led. He also referred to the Welsh Assembly Government Department that is responsible for the economy. I share his dismay at its performance, and cannot understand why the Welsh Assembly Government thought it prudent to replace the Welsh Development Agency, an organisation run by business men who understood business, by taking it in house and completely wrecking the inward investment programme that it had shone at. The hon. Member for Newport East raised a very important point about the carbon floor price, and I want to deal with that specifically, because it is a concern, given the reliance of much of Wales, and indeed the United Kingdom, on intensive energy users. Only yesterday, my right hon. Friends the Secretary of State and the Secretary of State for Business, Innovation and Skills had a meeting with Tata in south Wales. BIS and DECC are currently working on a joint project to assess the cumulative impact of Energy and Climate Change policies on energy-intensive industries in the United Kingdom. The research will be used to advise Ministers on how to de-carbonise the electricity generation sector while maintaining a competitive UK economy. I can see that I am coming towards the end of my time—thank you for the signal, Mr Owen, which I am sure was meant charitably. All in all, this has been a very good Budget not only for the United Kingdom as a whole but for Wales. It has sought to start redressing the imbalance that we have in Wales between a dominant public sector and an under-performing private sector. The fact is that many of the levers that reside with the Welsh Assembly will have to be pulled if that economic recovery is to happen. There are a number of challenges for the Welsh Assembly Government. Will they support the creation of enterprise zones in Wales, to secure the clusters of economic growth that parts of Wales so badly need? Will they exempt start-ups and micro-businesses from regulation? Will they provide the relief that we are providing to home buyers with FirstBuy, and help boost the recovery in the housing sector in Wales? Will they, most importantly, look at the planning regime and seek to liberalise it, not impose appallingly heavy and burdensome regulation on builders? Finally, will they support apprenticeships? Those are the challenges for the Welsh Assembly Government. We have given them the tools in this Budget to do the job. We in Whitehall and Westminster are more than happy to assist them and to ensure that Wales has a bright future.