Energy Prices – Severn Barrage

Mr Peter Hain (Neath) (Lab): I thank the Secretary of State for his revelation that The Sun is now the house journal of the Liberal Democrats. It does him and the Government no credit that their attitude to Labour’s price freeze has veered wildly, initially denouncing it as Marxist, which was a revelation to all Marxist disciples, and now misrepresenting it with a patronising approach that belies the fact that my right hon. Friend the Member for Don Valley (Caroline Flint) and the leader of the Labour party have been proved right all along on this policy, as they will be proved right in the future.

One of the best vehicles for keeping energy prices low is the Severn barrage. This huge infrastructure investment boost makes the Severn barrage a no brainer, not least because it requires no Treasury funding. The £25 billion construction cost will be financed entirely privately, mainly from sovereign wealth funds and other large-scale institutional investors, because they would have a guaranteed revenue stream over a period of 120 years or more. The project will create 20,000 jobs during its nine-year build, and with multiplier effects another 30,000 jobs, making a total of 50,000 jobs and a £70 billion boost to the economy. Many of the jobs will be located in communities in south Wales and the south-west of England, which are crying out for such a boost of investment and high-skilled jobs. Some 80% of the spend will be in the United Kingdom, unlike wind power where 80% is spent abroad because countries such as Germany and Norway have stolen the lead on wind turbine manufacture.

The scheme would harness one of the world’s largest potential sources of renewable energy: the huge tidal range of the Severn estuary—the second highest in the world. Building an 18-kilometre barrage between Brean in England and Lavernock Point in Wales would be one of the world’s largest privately funded global engineering projects.

Madam Deputy Speaker (Dame Dawn Primarolo): Order. I must reluctantly intervene on the right hon. Gentleman. This debate is about energy prices, not energy generation from things like the barrage. He needs to relate his comments to the impact on energy prices and passing on reductions to the consumer.

Mr Hain: I was about to do that, but I need—obviously with your permission, Madam Deputy Speaker—to describe the project in order to do so.

Most importantly, the barrage would produce the cheapest electricity in the United Kingdom—half the cost of alternative sources such as gas, nuclear and coal, as well as other renewables. Previous consortia interested in the project have looked to a period of consumer subsidy lasting less than 25% of its life—very small compared with other renewables. After that initial subsidy period, promoted by previous consortia backing the barrage, it would generate electricity at £20 per MWh for at least a century, less than half the wholesale market price that the economy has been used to.

The latest project backer does not want the consumer subsidy of contracts for difference, a point which I hope the Secretary of State will note. In meetings with him, I have discussed support for the barrage, which he has not been able to give. The barrage has attracted widespread criticism from wildlife groups, but it has considerable other benefits, including low electricity prices over its entire life if the current project is taken forward in this way. In addition, it would have other important effects on the economy. The 1,026 turbines required, each the weight of a jumbo jet, would be built at two factories in the region, most probably at Port Talbot and Bristol. The planned caisson-casting yard at Port Talbot deep-water docks could afterwards be converted into a port for ultra-large container ships. It would also enable us not just to keep prices low, but to export the technology and expertise in tidal barrage construction around the world. So it would keep prices low, which consumers desperately need, and it would support flood protection. Some 90,000 properties and 500 square kilometres of Wales and the south-west, including the Somerset levels, would be supported, and it would act as a barrier against storm surges. Therefore, prices would be kept low and there would be many other benefits from the project.

In conclusion, this is the biggest single investment project coming from the private sector, needing no consumer subsidy at all in contracts for difference, according to the latest backer of the project, which I hope the Government will meet. I hope that people will see this as something that should have been backed already, and that now all parties will back it as a—

Madam Deputy Speaker: Order.

Visteon Pensioners


Peter with Visteon pensioners in Parliament celebrating their long but victorious campaign to persuade Ford to honour their obligations instead of reneging on these and robbing the pensioners of their rights.

Neath Families Facing up to £1000 Cuts Catastrophe says Hain

Almost £1000 a year has been taken away from the hardest hit families and communities across Neath as a result of changes to the benefit system it has been revealed.

A report from Sheffield Hallam University has investigated the effects of welfare reforms on South Wales, concluding that the original forecasts severely underestimated the financial losses to the Valleys.

Throughout the Neath constituency residents have lost £640 per annum on average because of cuts to the welfare system with residents in Neath town centre hardest hit, losing £833 per annum.

The full devastation of welfare changes throughout South Wales is said to be as much as £430 million a year.

Peter Hain MP said: “We warned everyone this would happen because of the callous indifference to disabled and vulnerable people by the Tory-Lib Dem government who couldn’t care a damn for our Valleys and towns. It is just pain and misery for our communities all over again.

‘These cuts to the welfare budget are pushing people into real poverty, it is no coincidence that in the hardest hit areas in the constituency – Neath town centre and Ystalyfera – there are Foodbanks to help those struggling to make ends meet or pay the bills.”

See full table of averages below

Neath Loss per working age adult
Aberdulais 650
Allt-wen 550
Blaengwrach 720
Bryn-coch North 410
Bryn-coch South 560
Cadoxton 440
Cimla 490
Crynant 550
Cwmllynfell 590
Dyffryn 640
Glynneath 670
Godre’r graig 680
Gwaun-Cae-Gurwen 760
Lower Brynamman 690
Neath East 930
Neath North 810
Neath South 760
Onllwyn 750
Pelenna 640
Pontardawe 700
Resolven 640
Rhos 480
Seven Sisters 690
Tonna 480
Trebanos 580
Ystalyfera 800
Figures from Sheffield Hallam

Former Welsh Secretary Peter Hain challenges David Cameron over impact of spending cuts on councils

Western Mail,

David Cameron has been warned by former Welsh Secretary Peter Hain that continuing to slash budgets for local authorities will have irreversible consequences and leave councils with the bare minimum of services.

Mr Hain’s intervention comes as local authorities look to make further savings to plug their budget deficits with Neath Port Talbot alone looking at a cut of between £50m and £60m on top of the £30m already taken out in the last five years.

In a stinging letter to the Prime Minister, the Neath MP said: “I am deeply perturbed by the devastating effect your Government’s swingeing cuts are having on the ability of local authorities to carry out their functions.

“Difficult decisions have already been made to cut highly-valued services and to reduce the size of the workforce to enable the council to meet the budget shortfall. Only through the hard work of the councillors, officers, trade unions and staff have compulsory redundancies been avoided, which is vital given the high unemployment rate in the constituency.

“If cuts of this magnitude continue to be passed down from Westminster, which is what local authorities are anticipating until 2020, it will effectively reduce them to the bare minimum of providing the statutory functions required of them. Local services will be decimated and no longer meet the taxpayer’s own expectations.”

Mr Hain went on to tell the Prime Minister that questions would be asked over the role of councils with reduced functions and services, adding: “I fear this is the Government’s long-term aim – to reduce the functions and role of local authorities to the point that they are no longer viable or necessary.”

He said substantial cuts had already been made to Neath Port Talbot’s budget with many of the visible services affected, libraries closed or transferred to local groups. The once “gold standard” service of school crossing patrols had been reduced to national standards, funding to third sector groups cut and jobs lost.

The letter goes on to say: “The further cuts of between £50m and £60m are a fifth of Neath Port Talbot’s total budget. The trajectory of these cuts emanating from Westminster is unsustainable. Cuts of this magnitude are forcing councils to think of costs and changes are being driven by savings, which is not what local representatives were elected to do and not what many of the workforce came into public service for. For many it is heartbreaking not to be able to provide the standard of service they would like.

“At a time when you and the Chancellor laud that the economy is growing these continuing cuts are out of step with your own proclamations. If the economy is doing as well as you profess then I fully expect the Welsh settlement to increase.

“If on the other hand it continues to be reduced I fear that very soon local authorities will reach a crisis point in delivering services and will not be able to meet the demands placed on them. The implications for the future will be major and it is questionable whether the effects can even be reversed.

“Margaret Thatcher’s legacy in Neath is the decimation of the mining communities. Yours will be the decimation of all communities with the dismantling of local government and the services they provide. Quite simply the continuation of the callous cuts by the Government will leave local authorities, including Neath Port Talbot, with skeleton services and this cannot be allowed to happen.”

The Prime Minister’s response is awaited. Ministers challenged about the impact of cuts invariably refer to the need to cut the deficit.

Aimless Austerity Risks a Generation


Former Secretary of State for Wales Peter Hain has today condemned the Tory-Lib Dem government after economic data from the Office for National Statistics indicated that real-wages have fallen for the seventh consecutive year.

His comments came after the Bank of England slashed its growth forecasts for the British economy as the debate about the health of the economy continues to rage on.

The MP for Neath said: “We’re seeing a lot of news about this being a “surprise” to some, if the Chancellor had listened to the shadow cabinet it would not be. My own research indicates that in Neath people are close to being £3,000 worse off than they were in 2008 because of the erosion of real-wages by inflation and austerity.”

He continued, “frankly I think we’re approaching a watershed in our society because the Chancellor refuses to accept his long-term economic plan is long-term economic pain to most people. A recent report released by the Children’s Society and Step Change revealed on Tuesday that there are tens of thousands of children in Welsh families trapped in the debt spiral.”

“One of my proudest achievements was to be a member of the last Labour government where we saw the number of children in poverty reduced by 800,000. The latest figures from the Institute of Fiscal Studies shows that under this government that number will have increased by 300,000 by next year.”

The report from Step Change and the Children’s Society built upon research done by the Rowntree Foundation conclusively showing that that almost one quarter of Welsh families were trapped in poverty, this estimated to effect 148,059 children in Wales.

Mr Hain said: “the writing is on the wall, the Welsh Government is fighting an uphill battle against austerity. So long as the Chancellor continues to push this austerity agenda Welsh families will suffer as we are consistently forced to bear the brunt of unfair policy, this risks the welfare of a generation of young people in Wales, it is tragic.”