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Welsh Affairs

I will not give way. The hon. Member for Brecon and Radnorshire spoke of the importance of small businesses in Wales, and my hon. Friend the Member for Vale of Clwyd (Chris Ruane) praised the benefits of mindfulness. The hon. Member for Carmarthen West and South Pembrokeshire reminded us of the beauty of Pembrokeshire, only to be upstaged immediately by my hon. Friend the Member for Ynys Môn. The hon. Gentleman also mentioned the contribution of local companies to the UK economy, which is extremely important. My hon. Friend the Member for Ynys Môn referred to the need for clear policies on energy, and I shall return to that matter shortly. The hon. Member for Ceredigion (Mr Williams) made the case for devolving Welsh language broadcasting. Sadly, the hon. Member for Aberconwy (Guto Bebb) spent a great deal of time criticising a report, when his constituents would probably have been more interested if he had taken up the very real issue of rocketing prices at the petrol pump, particularly in rural Wales. If we are to see the economy in Wales flourish, we need economic policies from the UK Government that will stimulate growth. We need fiscal policies that will strike the right balance between paying down the deficit and getting the economy going. We need taxation policies that do not squeeze lower and middle income households so hard that they have no money to put back into the Welsh economy and are struggling even to pay the most essential household bills. I was dismayed to hear the Secretary of State reiterate at Welsh questions yesterday that she was in favour of sticking to plan A. I am sorry to have to point out to her that her Government's plan A is hurting but not working. Sometimes I wonder what planet she is living on. She only has to walk down any high street in Wales to see shops closing and the economy on its knees. The latest high-profile victim is Peacocks. We certainly welcome its takeover by the Edinburgh Woollen Mill and the jobs that that has secured, but 3,000 jobs will still be lost and more than 200 shops will close, including both the Peacocks stores in Llanelli. No matter what initiatives the Welsh Government undertake—I point out two in particular: the excellent Jobs Growth Wales programme aimed at creating 4,000 jobs a year, with an emphasis on the private sector; and help for business in the form of some £55 million in grants and loans—UK economic policy is enormously important in helping or hindering the success of those initiatives. When it comes to inward investment to Wales from overseas, I certainly agree that there should be the closest possible collaboration between the Welsh Government and other relevant bodies such as UK Trade & Investment to avoid duplication and increase Wales's outreach overseas. We are not going to get anywhere, however, unless we have a UK Government providing the right economic and business climate to make the UK a preferred destination for investment to business and manufacturing. When Labour was in government, an additional 1.1 million new businesses were created. By the time we left office in 2010, the World Bank ranked the UK as the best country in Europe for ease of doing business and fourth best in the world, ahead of the US. While there is always room for improvement and we should seek to streamline wasteful bureaucracy, time-consuming duplication and form filling, to use cutting red tape as the main strategy for driving economic recovery, as this Government seem to be trying to do—and, indeed, as the Under-Secretary for Wales said yesterday at Welsh questions—is addressing the wrong problem. That is to avoiding the two very real issues of creating the right economic conditions to foster growth and creating the right political climate—that is, the certainty about policy that is needed to encourage long-term investment in manufacturing and jobs. The Government's attitude to business and industry matters—it matters very much to Wales. What business and industry need more than anything are certainty and confidence that the UK Government will not move the goalposts. It is extremely disturbing that this Conservative-Lib Dem Government have created so much uncertainty about their commitment to green policies that the UK has slipped from third to 13th in the world for investment in green growth. The Secretary of State and her Cabinet colleagues need to restore business confidence and create a climate of certainty before they damage any more industries or frighten off any more potential investors. We have seen how the UK Government's catastrophic imposition of sudden changes to the feed-in tariffs for solar panels is already putting hundreds of jobs at risk in Wales. Here was a scheme that gave a real boost to private industry in Wales—a scheme that was unlocking capital and attracting people to use their savings or borrow money to invest in solar panels. By investing that £10,000 or £20,000, they were providing private sector jobs in the Welsh economy. What other scheme do the Government have to unlock capital in that way and use it to stimulate growth in the local economy? As my hon. Friend the Member for Ynys Môn mentioned, before the election Labour set up a £60 million fund to attract investment in offshore wind power. In 2010, the current Prime Minister promised to continue the policy, but nearly two years later just £1.2 million has been awarded and many companies are looking elsewhere to invest. Indeed, big investors in wind energy, such as General Electric, Vestas, Gamesa and Mitsubishi, are threatening to take millions of pounds worth of green jobs abroad because they are losing patience with this Government. They do not know where they stand, and they now seriously doubt the Tory Government's commitment to renewables. The UK has some of the best wind resource in the world. Indeed, the UK is the windiest country in the EU, and we have our fair share of it in Wales, but the signals coming from the UK Government are confused, hesitant and lukewarm. When companies are making big decisions about where to build energy installations or set up factories to manufacture the components, they need to know what Government policies are, what returns they can expect and what the financial incentives are—they need a climate of certainty. I urge the Secretary of State and her Cabinet colleagues to provide clear policies to attract green investment. Moving on to UK Government policy that affects Wales, only a fortnight ago we heard the very worrying news that Britain could lose its treasured triple A rating—the very justification the Chancellor has used for his crippling austerity measures. Why would the UK lose its triple A status? Because this Government have forgotten that in order to pay back the deficit, they also have to think of stimulating growth in the economy to make the money to pay back the deficit. That is where this Government are failing. This Government inherited a growing economy, so it is no wonder that people are asking why we have seen almost no growth for a year and why the Government have had to revise their borrowing up by £158 billion. We are seeing just what Labour has been warning of since 2010: the Chancellor is cutting too fast and too deep, and by hitting lower and middle income households the hardest, he is hitting the very people who spend their money most immediately back into the Welsh economy just to keep themselves clothed and fed. That is not only deeply unfair; it is economic madness. It is already having a direct effect on the Welsh economy, and we have only seen the beginning of the cuts. Let us make no mistake: over the next three years, the Government will—according to House of Commons figures—take £6 billion out of the pockets of people in Wales, and that will include £800 million in tax credits. Tax credits are money that families who are working hard and trying to do the right thing are given to top up their incomes, and they need to spend that money straight away in order to keep their homes warm and their children fed and clothed. What else is the Chancellor cutting? He is cutting £7 million from health in pregnancy grants, and £113 million from child trust funds, and the freezing of child benefit is equivalent to a cut of £249 million. He is cutting £209 million from disability living allowance, and £43 million from lone parent benefits. All that is coming out of the Welsh economy, as is the £1.5 billion cut that will result from the use of CPI rather than RPI to uprate benefits, and all that is happening against the background of pay freezes—not to mention the more than £2 billion cut represented by the rise in VAT. What we need now is a real economic stimulus from the UK Government to back up the Welsh Government's initiatives on jobs and help for industry, and that is what I ask the Secretary of State to provide. I ask her to look at Labour's five-point plan for stimulating the economy, and to cut VAT, boost jobs and stand up for Wales by doing something that will really help to get the Welsh economy going. People cannot see any help at all coming from the Secretary of State to us. They cannot see the Secretary of State standing up for Wales, and that is what they would like to see.