Ten minute rule motion on Shared Prosperity Fund (Wales) Bill - Mar 22

Shared Prosperity Fund (Wales) Bill

Ben Lake (Ceredigion) (PC)

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to report to Parliament on the merits of devolving management and administration of the money allocated to Wales via the Shared Prosperity Fund to the Welsh Government.

Ahead of the spring statement tomorrow, surging energy bills and increasing costs of living are rightly making us nervous. We are at a critical juncture not only in overcoming the legacy of the covid-19 pandemic and the devastating consequences of the war in Ukraine, but in how we approach levelling up. What I advocate today through this Bill is a clear UK-wide commitment to lower energy bills and to meeting our net zero targets by improving energy efficiency in homes and businesses, delivered through a devolved shared prosperity fund.

Households and businesses across the UK are feeling not just a pinch, but a hammer blow from rising energy bills. Having already risen by 54% and likely to rise further due to our dependence on fossil fuels, the Wales fiscal analysis team has calculated that the average Welsh household on a default dual-fuel tariff will see its energy bill rise by £693 from April. Wales is particularly vulnerable in this respect. We have the highest poverty and child poverty rate of the four nations, with almost one in four people, and 31% of our children, living in poverty. Our vulnerability to energy price shocks is compounded by having the oldest, least energy efficient housing stock in the UK, with a fifth of homes in Wales built before 1900, and the lowest proportion of dwellings rated energy performance certificate C grade or above. This also affects our climate ambitions, of course, with housing responsible for about 20% of our carbon emissions.

Some will argue that the Chancellor has already helped address the energy crisis by providing a rebate to UK households. However, I would argue that this measure was insufficient at its introduction and is even less adequate now. I realise that calls on the Government to introduce a windfall tax on cash-rich oil and gas producers—we should remember that the largest producer in the North sea has just reported $1.7 billion in profit—are likely to go unheeded. Nevertheless, the Government must ensure that they do not revert to a business-as-usual approach to energy supply, or fall for the siren call of those who would have us believe that salvation can be found in greater exploitation of fossil fuel reserves. To do so would not only be to forget the calls made at COP26 in November or the latest Intergovernmental Panel on Climate Change report on climate change, but grossly to overstate the short-term benefit of shale gas extraction and to underestimate its cost.

Cardiff University recently concluded that 1,016 fracking pads would be needed to replace just half of the UK’s gas imports to 2035. This would mean the construction of one shale gas pad approximately every five days over the next 15 years across our country. What is more, additional domestic gas production is unlikely to translate into lower prices for UK consumers, as our prices reflect Europe’s gas markets, with which we are intricately interconnected. Indeed, the Green Alliance cross-party thinktank offers a sobering fact for proponents of fracking: the first four days of the current gas crunch in September saw the greatest gas export from the UK to Europe on record, as domestic producers sought the best price for their product. Finally, there is the small matter that fracking is a devolved matter, and it has been banned in Wales since 2018 following a Plaid Cymru motion. Wales also joined the Beyond Oil & Gas Alliance at COP26, but, worryingly, the UK Government refused to commit this week to respecting devolved powers over fracking.

There is no solace to be found in the technologies of the past. Instead, we must commit ourselves to delivering a step change in our energy system, towards which I believe the shared prosperity fund, if managed effectively, could make an important contribution. The Government promised in 2019 to replace EU regional funding with a programme that is

“fairer and better tailored to our economy.”

So far, however, the amount of funding allocated to that end has failed to match the promise of the UK Government’s levelling-up rhetoric. Just as worrying is the lack of a joined-up approach that brings together communities, local authorities and the Welsh Government to address the unique challenges that Wales faces. Instead, we are at very real risk of seeing competition, rather than co-operation, between various groups and authorities bidding for funding, resulting in a disjointed approach to key issues such as energy efficiency and a failure to realise the promise of economic regeneration.

Instead, through this Bill, Plaid Cymru and Members from across the UK are advocating using the shared prosperity fund as a means to level up the UK through fostering greater collaboration among its nations and regions. Such an approach is far more likely to achieve the transformational change that we all desire and to realise important objectives such as a more energy-efficient housing stock. There is ample evidence in favour of a bold and extensive retrofitting scheme, and in response to last year’s Budget, Plaid Cymru echoed calls by the Future Generations Commissioner for Wales for a £3.6 billion investment programme over 10 years to improve the efficiency of the Welsh housing stock. It has been estimated that by delivering a long-term funding settlement that would leverage further investment from the private sector, guarantee green jobs and deliver much-needed energy efficiency improvements, this measure could deliver average annual savings of some £418 for Welsh households.

If we applied such an infrastructure programme—developed by, and tailored for, each of the nations and regions of the UK—we could secure real long-term energy savings for UK households. Unfortunately, that opportunity was missed in the autumn. By devolving the administration of different aspects of the shared prosperity fund to Wales, the Government will ensure the levelling-up agenda respects local democracy and harnesses the energy and focus of every tier of government towards the realisation of a coherent strategy. Failure to do so will mean that the levelling up we all hope to bring about will continue to elude us, no matter how lofty the rhetoric we employ or the number of policy documents we produce.

To end, it is only by devolving the management and administration of the shared prosperity fund that we can hope to bring about a transformational programme that will meet our societal, economic and climate action responsibilities.

Question put and agreed to.

Ordered,

That Ben Lake, Hywel Williams, Liz Saville Roberts, Richard Thomson, Claire Hanna, Stephen Farry, Alison Thewliss, Geraint Davies, Jonathan Edwards, Wendy Chamberlain and Beth Winter present the Bill. 

Ben Lake accordingly presented the Bill.

Bill read the first time; to be read a Second time on Friday 6 May, and to be printed (Bill 288).