United Kingdom Internal Market Bill — House of Lords, 2020-11-23
Topic: Macroeconomics
Dafydd Wynne Wigley (Plaid Cymru, Centre-left to left): My Lords, Amendment 22 stands in my name and that of my good and noble friend Lord Hain. It follows on fairly naturally from Amendment 21, which we have just passed. The objective of this amendment is to put on the face of the Bill an unequivocal statement that nothing in this Bill, if enacted, will diminish or constrain the devolved Governments from continuing to use their purchasing power to help achieve their economic objectives. As there have been many worries expressed in this Chamber, in the other place, in Cardiff Bay and in Edinburgh about the danger of a clawback of powers to Westminster, I believe that it would be helpful for the devolved Governments if an unequivocal statement along the lines which I propose could be included in the Bill. I know that Ministers in the devolved Governments would welcome such a definitive statement I have at earlier stages, and in the context of the Trade Bill, drawn the attention of the House to the way in which successive Welsh Governments—Labour, Labour/Plaid Cymru coalition and Labour/Liberal Democrat coalition—have all regarded the purchasing power of the Welsh Government as a valuable tool in implementing their policies and achieving economic objectives. It would be very strange were that not the case When the late Professor Phil Williams and I, with the help of many others, published in 1970—yes, 50 years ago—An Economic Plan for Wales, we identified that a key ingredient in Wales’s economic plight, namely that the GDP per head in Wales was significantly below the UK average, was the fact that activity rates in Wales were some six percentage points below those in England and that therefore a central objective of economic policy in Wales should be to raise those activity rates to the UK average. Over the subsequent three decades, it was an uphill struggle. Only after the establishment of the National Assembly—now our Senedd, of course—were real inroads made. It was only a couple of years ago that, for a brief time, activity rates in Wales were actually higher than the UK average I focus on this for a very good reason: that a significant contributory factor to this success was the deliberate strategy pursued by successive Welsh Governments of using their procurement policy to support businesses within Wales. They did this within the constraints of European competition policy, and without lowering standards. When the Assembly was established, between 30% and 35% of goods and services were procured by the Welsh Government from within Wales. By now, the figure is 55% and the target, I understand, is to achieve over 70% procurement from within Wales. As the larger corporations realised this was happening, some of them opened new sales offices in Wales. In due course, this led to their also establishing local suppliers within Wales. This means that, for every pound spent by the Government, there is a multiplier effect within the Welsh economy: more jobs are created and a virtuous circle is established Previously, we saw on occasion the total nonsense of purchasing bodies within Wales—central government, local government, our health authorities, universities and colleges—using suppliers many miles distant when a local capability existed. I well recall during my time as an MP a school in north-west Wales having its grass cutting done by a company from England and a hospital getting its sandwiches from a supplier in the Midlands. Now, the green agenda has at long last become more generally recognised as essential for the survival of the human race, and the concept of buying local and eliminating unnecessary product miles has become mainstream. Supporting local economies is now seen as a valid, indeed essential, objective of government policy. Last month, partly as a response to the devastation that Covid could cause to small businesses, a campaign began called Where You Shop Matters, underpinned by Visa. That campaign has gained widespread support in Wales and, hopefully, will do so elsewhere Clearly, it will never be possible to source all Welsh government procurement within Wales. We do not produce all the goods in Wales, and where we do, they do not necessarily compete on price, standards or punctual availability. The fact that they are made in Wales certainly should not overrule all other considerations, but, other things being equal or within a tolerable latitude of being so, economic, social and environmental good sense tells us that this is a valid governmental approach Let us not pretend that the sourcing of relatively mundane supplies within the local economy is going to solve all our problems; it is not. The truth is that, despite raising employee activity rates, Wales’s GDP per head remains stubbornly near the bottom of the UK league table. To get to the top of that table requires innovation, creativity, investment, enterprise, self-confidence and initiative. However, as we have slowly started to depend more on ourselves and less on others, we have seen those factors move in the right direction. Within a UK single market, Wales needs the latitude to develop its own solutions to what are long-standing psychological, as well as economic, challenges. The last thing we need now is for central government in London to impose dramatic straitjackets on our capability and capacity to help ourselves My amendment seeks assurances that the Bill will in no way limit devolved Governments in taking initiatives in their procurement policies to create economic gain that will serve their communities. It seeks to ensure that existing procurement practices and procedures will not be constrained and that the devolved Governments may continue to legislate in a manner that helps to ensure that their procurement policies underpin their economic and social objectives. That has been permissible under European single market rules, and I ask the Minister to confirm that the Bill cannot and will not be used to undermine those policies within the UK internal market. I beg to move.