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architect of the Health Service, drew his spirit from the people of Wales--and the pervading spirit was social justice. This White Paper goes in the opposite direction. It is another instance of an error of political judgment on the part of the right hon. Gentleman. I understand that my own county health authority--Clwyd-- condemned the overhaul of the National Health Service. It said that the health authorities that provide regional services--Merseyside, for example, offers cancer services to North Wales--have their costs reimbursed through extra Government funding, but that under the new arrangements they would charge for those patients they treat. Dr. David Jones, the general manager, said that between £5 million and £10 million would be needed. As recently as yesterday, the health authority voted, by nine votes to one, with one abstention, to reject the right hon. Gentleman's own White Paper. This measure is not needed by the people of Wales, and when the general election comes, and when there are further parliamentary by-elections, the right hon. Gentleman's party will be called severely to account. That I predict.

These measures--all of them--will be the means by which the right hon. Gentleman's party loses many, many votes in Wales, and, symbolically, I throw the book at him. He will deserve the criticism that he will get throughout the length and breadth of Wales for putting his name to measures that Wales does not want and does not deserve. He should know that he is putting very heavy burdens upon the backs of his hon. Friends who will present themselves to the Welsh people for re-election.

I firmly believe that the Prime Minister appointed the right hon. Gentleman as our Secretary of State by error. Perhaps she thought that his constituency--Worcester--was in Wales. These legislative measures will quicken the electoral decline of the Conservatives in Wales. The Education Reform Act, the Local Government and Housing Bill, the Electricity Bill, the proposed changes in the National Health Service, the poll tax and the privatisation of our water industry are against the grain of our nation's history, and I know that they will be rejected by the electorate. The Secretary of State for Wales, who so carelessly--indeed, cheefully-- endorses them, will in the long run be found waiting by the Welsh people.

For all his skills of presentation, the right hon. Gentleman cannot hide the fact that he is politically the Prime Minister's messenger-boy. The most experienced member of the British Cabinet, and arguably the most able, is the Prime Minister's apologist for unjust, unwanted legislation in Wales. I remind him that at Prestatyn last year he was rash enough to say that he would make the political map of Wales blue. Well, he has got the blues now. Pontypridd gave him the answer. Hon. Members on this side reject the free market approach. We shall redouble our efforts, because we believe that the Conservatives are in decline. We look forward to the hustings, when our programme will point to victory and to social justice. 6.9 pm

Sir Anthony Meyer (Clwyd, North-West) : The hon. Member for Alyn and Deeside (Mr. Jones) reminds me of nothing so much as a small boy sitting on the edge of a canal bank, fishing aimlessly through the long afternoon with a bent pin, and coming up with nothing more than a few rusted tin cans.

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I am very conscious that this slot in our debates was almost invariably filled by my good and close friend, and the friend, I believe, of every Welsh Member, Sir Raymond Gower. On a later occasion it will be my privilege to pay a fuller tribute to him, but at this point I must say that he had one quality in particular that I think we should all do well to emulate : he invariably gave his political opponents credit for sincerity and for good intentions. I will try, at any rate in this speech, to live up to his high standards in that respect.

After the Pontypridd by-election, which was caused by the untimely death of another much-loved and much-admired Welsh colleague, Brynmor John, and which has brought into this House a very distinguished new Member, whom we all eagerly look forward to hearing, if he catches your eye, Mr. Speaker, the Labour party, very understandably, is feeling rather pleased with itself. It can hardly be blamed for licking its lips over the prospects in Vale of Glamorgan, where the act of Raymond Gower will be a hard one to follow.

There were two fundamental reasons for the Pontypridd result. There is the natural disenchantment that comes after any Government have been in power for some time. The only surprise is that it took so long in coming. What is of more specific interest is to assess how far the mid-term unpopularity has been mitigated and aggravated by the Government's policies, particularly those affecting Wales. I intend to deal mainly with those policies but, before that, I must face another relevant issue.

During the by-election campaign the Labour party concentrated on attacking the value of the valleys initiative of my right hon. Friend the Secretary of State. The hon. Member for Alyn and Deeside did the same today. There was a lot of talk about hype from one Opposition Member and much derision over the paucity of visible results from the initiative. Fair play ; that is all part of the rough and tumble of politics and I am sure that my right hon. Friend would be the last to complain. He knows the value of a sharp jab in the solar plexus. In trumpeting so loudly the scope and huge aims of his valleys initiative he was laying himself open to just such a jab, especially with a by-election coming when it did. No doubt there will be other such blows in Vale of Glamorgan.

However gleefully the Labour party exploits the contrast between my right hon. Friend's policies and the achievements shown to date, it knows two things well. First, the valleys initiative represents a major effort by one Minister, in a Government who are excessively addicted to market forces, to intervene purposively in the economy and to use the power of the state to unleash large-scale private investment. Secondly, it shows something else which offers an even sharper comment on its by-election tactics. My right hon. Friend, in this matter as in everything else that he has undertaken in his long and immensely distinguished public career, has always been conscious of the need for boosting morale. He knows that if he can create the impression that the valleys are about to enjoy a rebirth of activity, private investors, scenting a boom, will want to get in on the act. That, in its turn, will touch off other investors until the process of growth becomes self-stimulating.

I apologise for a brief attack of total recall, but I can remember the mood of dismay with which those of us in the British forces in this country in 1943 contemplated the prospect of making an opposed landing on the heavily fortified coast of northern France. I remember how, within

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a few weeks of his appointment as commander- in-chief, General Montgomery, speaking directly to all the troops under his command, had convinced us that the landing was not merely possible but something to look forward to with relish and cheerfulness. My right hon. Friend is perhaps too young to have come under Monty's spell, but he has some of his qualities--at any rate the electorate of Wales seems to think so.

A truly startling poll conducted by the Western Mail just before the by- election--if Opposition Members wish to dispute the validity of the poll, may I say that it predicted the result of the by-election with uncanny accuracy--showed that no less than 93 per cent. of Conservative voters who expressed an opinion said that my right hon. Friend the Secretary of State was doing the best job among Welsh party leaders. That is perhaps not surprising. It showed that 73 per cent. of Liberals thought the same, and the cruellest blow of all for the Labour party was that half as many again of Labour voters approved of my right hon. Friend as approved of the Member for Alyn and Deeside. Almost every Welsh Member is prepared to admit in private that the Secretary of State is the best thing that has happened to Wales in many a long year, and his speech today was good evidence of that.

I come to the more controversial matter--the impact of the Government's policies on Wales. Without the substantial economic progress that has occurred under this Government, there would not have been the recovery from the painful process of industrial reconversion that was forced on Wales by the previous over-reliance on the older, heavier industries. There is no doubt that the Welsh economy is infinitely better placed to withstand any future blast than it was even 10 years ago. I am aware that there is plenty of room for discussion as to whether the social price of the conversion has been higher than it need have been or whether the fruits of the new-found prosperity have been shared out with tolerable fairness. However, the prosperity is indisputable, and I see unmistakable evidence of it throughout my constituency, most notably in Rhyl. However, some of the Government's policies have exceptionally, and sometimes needlessly, damaged Welsh susceptibilities. There is the exclusive reliance on interest rates as a means of combating inflation, which is causing hardship and resentment among farmers and home buyers. There is the sheer lunacy of the poll tax, which will turn out to be at a higher level than we have been led to expect and will be far more expensive for local authorities to collect than the Government have allowed for. I withdraw none of the criticisms I have repeatedly directed at that daft idea. However, it is now the law and must be obeyed.

There is the privatisation of water, which is at present dragging its serpent path through Committee and making few friends on the way. I still find it as intensely and deservedly unpopular in Wales as it has ever been, and the news that the Government plan to spend £100 million telling us how splendid it is is hardly calculated to endear it to us any more.

There is the privatisation of electricity, which does not arouse the same hostility but which does not send the blood coursing through Welsh veins.

There is also the fundamental reform of the National Health Service, which is certainly necessary and well intentioned. However, it will be hard to make it acceptable unless the Government are seen, at the same time, to be making a massive additional injection of public funds into

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the Health Service. That should be done in much the same way as they could more easily have secured acceptance for the changes in the social security system if they had not tried to combine those changes with limiting the growth in expenditure at the same time. Of course, there have been the confrontations with the doctors, nurses, social workers, farmers, house buyers and, in their time, the teachers, miners, postal workers, civil servants, the BBC, all our EEC partners and the Governments of Australia and New Zealand--and now, as if that was not enough, the serried ranks of the lawyers. That is far from being an exhaustive catalogue. It is all seen by many people in Wales as part of the syndrome, once described by my hon. Friend the Member for Aldershot (Mr. Critchley), of the Prime Minister being unable to see a British institution without wanting to hit it with her handbag.

It is not as if there was any great love in Wales--any more than anywhere else in the United Kingdom--for those institutions. However, there is a growing feeling that enough is enough and that privatisation is in danger of becoming an obsession of the sort more usually associated with the right hon. Member for Chesterfield (Mr. Benn) and Mr. Enoch Powell. It is more urgent to improve public services than to pull them up by the roots.

More and more people in my constituency, including many of my Conservative supporters, wish that the Government would stop and let us catch our breath instead of turning everything upside down for the sake of it. Also, they are not as convinced as they might be of the overwhelming merits of the reforms to date. They have been told time and again that the Department of the Environment has sorted out local government. However, they find that, despite all the talk about curbing local council extravagance, Clwyd county council is making a gigantic increase this year in its rate precept while, at the same time, failing to carry out its full responsibilities in education or social services. They ask how that can be when Clwyd had a generous rate support grant settlement and the new machinery is supposed to be in place to stop such extravagance. However, the intolerably large increases go on just the same. What will Ministers do about it? What can they do about it?

The people have been told, rightly, how much the Government have done for the police, where their record is miles better than that of their predecessors. But they read also that the north Wales police have asked for 30 extra posts and have been allotted six, and at the same time they read of more and more loutish riots in hitherto peaceful villages.

Although we have the best Home Secretary that I can recall, the Government are not seen to be winning the battle against crime or disorder. It would be dishonest to pretend that a large increase in police resources would turn the tide. However, the impression which is now widely prevalent in north Wales, that the Government are refusing the increase in manpower for which the police are asking--an increase which is needed if they are to cope with imported hooliganism in seaside resorts and the home-grown variety in the villages without totally depriving the countryside of any cover--reinforces the growing sense of unease that the Government are getting

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some of their priorities wrong. I ask the Secretary of State to convey to the Home Secretary the deep disquiet that is felt throughout north Wales on this matter.

It is not just in the matter of law and order that there is growing concern about the Government's priorities. There certainly was a need to diminish the power of the state, to give the individual more room to breathe and to assert himself over mighty corporations. The new freedom has brought results that benefit the whole community, but there are things that can be better done by collective action. I refer to public order, the protection of the environment, education, and health. People seem to sense that fact more vividly in Wales than in other parts of the United Kingdom. That feeling will have to grow and deepen before it constitutes any real threat to the Government at the next election--although, no doubt, it will fuel many a by-election humiliation. As long as divisions in the centre and on the Left persist--and they will persist--there can be no effective challenge to Conservative supremacy. We Conservatives will continue to govern this country for a long time.

I do not know whether the ambitious projects that my right hon. Friend has launched, not just for the valleys but throughout Wales, will have shown enough results to enable our party substantially to increase its representation in the next Parliament. It certainly deserves to. What I do know is that a Conservative Government who rely for their power and authority solely on English seats are not the kind of Government whom I want in my country. I should find it hard to support policies that seem designed to produce such a result, and I have profound comfort in knowing that neither would my right hon. Friend or any of my hon. Friends on the Government Front Bench. 6.22 pm

Dr. Kim Howells (Pontypridd) : I echo the tributes that have already been paid to my distinguished predecessor, the late Brynmor John. As Under- Secretary of State for Defence, Minister of State in the Home Office, chief Opposition spokesman on Northern Ireland, defence, social security and agriculture, and simply as a decent human being, Brynmor John gained the respect and admiration of all whom came into contact with him. As a member of Labour's shadow Cabinet, he maintained a special interest in defence, community relations and Welsh affairs. He listed his chief interests as music and watching rugby.

During my by-election, his and my favourite club, Pontypridd, fought a hard and uncompromising duel with Llanelli. As I sat and watched the huge, force -fed Llanelli forwards manhandling our smaller, spirited Pontypridd pack, I thought of Brynmor and wondered what he would have made of such a spectacle. Would he, like me, have been reminded of the similarity between Llanelli's tactics and those of the majority of the Cabinet when they rudely trounced the former right hon. and learned Member for Richmond, beginning a train of events that resulted in a by-election in that constituency being held on the same day as that in Pontypridd? Would he, like me, have been struck by the similarities in the one-eyed press coverage given to both bloodbaths, with Pontypridd and the former right hon. and learned Member for Richmond portrayed as the guilty parties, leaving Llanelli to pour its players into the present Welsh national side and the Prime Minister to retain her grip on the national economy?

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Given the less than distinguished record of the current Welsh rugby team and the Government's performance in controlling inflation and their balance of payments deficit, Brynmor John would have smiled and whispered something about how it is better to lose a short battle but win the war. If ever the Welsh rugby establishment or the Prime Minister care to venture into the Pontypridd constituency, there will be a special welcome there. It may take some getting used to, but it may also help them on their way to wherever they plan to retire. The Pontypridd constituency is modern Wales in microcosm. I am far from certain that the Welsh rugby establishment or the Prime Minister has any notion of what that means.

Oh, they have their methods for gauging the mood of the Welsh nation. The rugby bosses seem to favour the sacrifice of a goat at midnight so that they can judge the composition of the national squad from reading the carcase's entrails. The Prime Minister employs as her own diviner in Wales the right hon. Gentleman from the English marches who continues to chant, "Initiative, initiative," as though he believes that, at a stroke, the very word will eradicate all the economic and social problems that his Government claimed to have cleared up five years ago.

My constituents bear little malice towards those who, because of accident of birth, walk in ignorance of the true nature of modern Wales. They have almost certainly forgiven the candidate for the Social and Liberal Democrats, for example, who, in the recent by-election, referred to Pontypridd as a black hole. They did not forgive him quickly enough to prevent him from losing his deposit, but never mind. Pontypridd's intrinsic sense of fair play ensured that the SDP candidate lost his deposit as well.

As I said, the constituency is modern Wales in microcosm. Its northern extremities embrace the old heart of Wales's coal industry. In the south, it is fringed by the M4 corridor of newer, lighter industries, and to the east and west by constituencies which, like Pontypridd, have experienced considerable changes of character since the second world war. Evidence of those changes is spread evenly across the Pontypridd constituency. There has been around its southern communities a welcome expansion of new industries. At the northern and eastern ends of the constituency the evidence of change is less encouraging. For example, the Tonyrefail community was proud of its colliery--Coedely--until it was closed under the auspices of the Conservative Government. Similarly, if we travel south and east, we find the community of Beddau, where the Cwm colliery was located. That colliery employed 1,000 men until it was closed under the auspices of the Conservative Government. Travel south and east and we find the community of Nantgarw, which lost its colliery at the same time as Beddau lost the Cwm colliery. There is no let-up to such closures. Just an hour ago I heard directly from British Coal that it has lodged the strongest possible public complaint at news of the Central Electrical Generating Board's decision to import, via Newport docks, a test cargo of 30,000 tonnes of American coal for its Aberthaw B power station. British Coal is particularly upset at the news, because, as the Secretary of State knows only too well, it has invested heavily in the collieries which supply Aberthaw. British Coal has made it

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clear that that investment has resulted in an unprecedented increase in efficiency and productivity, and a perfectly adequate supply of low-cost fuel from its pits to Aberthaw.

I fail to see the sense in allowing the CEGB, which is about to be hocked off to private enterprise, to destroy the good work of this investment just for the sake of making a fast buck on the international coal market. I deplore the prospect of my constituency's electricity supply depending for its fuel on sources beyond the boundaries of Wales. Although we in Pontypridd may have reservations about the price that we pay for our electricity, and even greater reservations about the lack of anti-pollution technology installed in power stations, we are glad that our electricity is generated from low-sulphur Welsh coal at the Aberthaw power station. We are far from glad to note the Government's enthusiasm not merely for imported coal but for the construction of a nuclear pressurised water reactor at Hinkley Point, just 20 miles from the southern edge of my constituency. Although, no doubt, some of my constituents may enjoy the remarkable spectacle of the Secretary of State for Energy attempting to emulate Tony Curtis in that great old film "Trapeze" by performing the political equivalent of a triple somersault as he justifies the need to ring-fence the nuclear industry at the same time as he throws the rest of the power industry into the open market, many more of my constituents will be hoping and praying that the Secretary of State for Energy will find no equivalent of Burt Lancaster to catch him as he hurtles towards the temporary safety net of the Back Benches,, taking his poor nuclear policy with him. The people of Pontypridd do not intend that their elected representative should remain silent on such issues, and nor shall I, as long as I manage to attract the attention of your fair and most reasonable eye, Madam Deputy Speaker.

6.30 pm

Mr. Gwilym Jones (Cardiff, North) : It is rare to have the privilege of following a maiden speech, especially in mid-term, as a result of a by- election. It is traditional that maiden speeches are listened to without interruption and greeted with approval. I have no wish to depart from that tradition, although I do not do so merely out of tradition. The hon. Member for Pontypridd (Dr. Howells) is already a known face from his appearances on television. I was most interested to see in a recent television appearance that he has such diverse interests as jazz music and our own exciting proposals for redevelopment in south Cardiff. He now has the opportunity to be a known voice--or an even more known voice--as he has taken his place on the Opposition Benches.

I unhesitatingly offer the widest welcome to the hon. Gentleman personally because, whatever political differences any of us may have with each other, I am sure that the hon. Gentleman is as sincere in representing his constituents as I and every other hon. Member try to be. Whatever our differences, we must try to remember that we are human beings as well as hon. Members and we must try to work together. The hon. Gentleman will know as well as any of us what a hard act he has in following the late Brynmor John. He was a loved and respected Member of Parliament. He was loved and respected in the House and as a neighbour, in that my constituency abuts the Pontypridd constituency. I know that Brynmor John was

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loved and respected in south Wales as well. I wish the hon. Member for Pontypridd well in his membership of the House, and I am sure that in our continuing debates we shall hear much more from him. Another hard act to follow was the late Sir Raymond Gower. The hon. Member for Alyn and Deeside (Mr. Jones) spoke admirably in his tribute to my late hon. Friend. He said that Sir Raymond Gower was arguably the finest constituency Member of Parliament for Wales that we have seen. The hon. Member for Alyn and Deeside never spoke truer words. I can subscribe to those words because for much of my life in south Wales I lived in the late Sir Raymond Gower's constituency. My first involvement in politics was in 1964, when I canvassed the area in which I lived on behalf of the then Conservative candidate, Sir Raymond Gower. Most recently, when I had the privilege to enter the House, Lisvane, where I live in south Wales, was in Raymond's constituency.

There has always been intense media coverage about what will happen after the loss of Sir Raymond Gower. It struck me that the right hon. Member for Plymouth, Devonport (Dr. Owen) made a most appropriate comment on Monday in delivering some form of rebuff to his counterpart, the leader of the Social and Liberal Democrats, the right hon. Member for Yeovil (Mr. Ashdown). He suggested that there was no great haste to be discussing the Vale of Glamorgan as the late Member for the Vale of Glamorgan was not even buried at that point. There have been unseemly moves in that direction, and I am afraid that the speculation about who may replace my hon. Friend continues. Only last night the editorial in the South Wales Echo said that whoever was to be the new Conservative Member for Vale of Glamorgan had to be an outstanding Member of Parliament. Yet we do not know who will be the next Conservative candidate for the Vale of Glamorgan and we do not know when the by-election will be held. As the right hon. Member for Devonport said, there is plenty of time to speculate about that. When we have a new hon. Friend to join us on the Conservative Benches--if that is to be the outcome --I sincerely hope that, whatever qualities he has, we shall be able to say that he is another Sir Raymond Gower, who is truly fit to represent the Vale of Glamorgan which Raymond represented so well and for so long.

I do not want to fight the Pontypridd by-election again. I will admit to the hon. Member for Pontypridd that I went up there myself. At the end of Thursday night, when I was still going round the doors of Hawthorn in the cold rain, it went through my mind how marginal a constituency we were fighting there. But we can learn from Pontypridd. I refer again to the hon. Member for Alyn and Deeside, who called the result in Pontypridd a watershed. I find it interesting that he should describe it as a watershed because, as far as I can calculate, it was Labour's second worst result in Pontypridd at least since the end of the second world war.

I may be criticised by the hon. Member for Rhondda (Mr. Rogers), who made a fascinating attack on his own Front Bench by strongly criticising the use of references to the Western Mail, just as the hon. Member for Alyn and Deeside was doing that. I suppose that I knew what he meant when I saw on the front page of last Tuesday's Western Mail :

"Thumbs up for PM and Walker."

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The Western Mail was certainly not prophesying the result of the Pontypridd by-election in putting that headline on its front page, but there were some interesting points in the opinion polls to which the Western Mail article referred.

An issue that has been on our Welsh agenda and to which it is pertinent to refer in a Welsh day debate is the question of devolution, which most of us in Wales thought had been buried on this day 10 years ago, when the people of Wales voted overwhelmingly and convincingly for having no truck with the Labour Government's Welsh assembly. That was borne out by the opinion poll that was reported in last Tuesday's Western Mail. Excluding those who did not know or did not answer the question, 44 per cent. of the respondents said that they did not want devolution. Out of the supporters of the party that espouses devolution--the Welsh National party--a majority wanted devolution, but a not insignificant number of those who said that they were going to vote for the Welsh nationalists--23 per cent.--said that they were opposed to devolution.

Dr. Dafydd Elis Thomas (Meirionnydd Nant Conwy) : To get the record straight, my party does not espouse devolution. Clearly the hon. Gentleman has not been reading the Western Mail.

Mr. Jones : I am somewhat surprised by that correction. The respondents to the Western Mail opinion poll would have felt that Plaid Cymru was espousing a form of devolution--the ultimate form of devolution. My understanding of the hon. Gentleman's policy is that he wants to see an independent Wales within the Common Market. To me, that is a form of devolution. I point out to the hon. Gentleman that, besides the 23 per cent. of his own supporters who say that they do not support devolution, a further 20 per cent. say that they do not know--and that is a total of 43 per cent. of those who claimed to support Plaid Cymru in the Pontypridd by- election.

My hon. Friend the Member for Clwyd, North-West (Sir A. Meyer) has already referred to another result from the opinion poll--the substantial approval rating for our right hon. Friend the Secretary of State for Wales. He had a far higher approval rating than the hon. Member for Alyn and Deeside or the leader of the Welsh nationalists, the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas). I know that the hon. Member for Meirionnydd Nant Conwy will join me in noting that that was a far far higher approval rating than that for the hon. Member for Brecon and Radnor (Mr. Livsey), the leader of the Democrats in Wales.

Mr. Allan Rogers : When it comes to approval ratings and opinion polls, does the hon. Gentleman accept that the best opinion poll was the by -election result in Pontypridd because we attempted to make that election a referendum on the policies of the Secretary of State and the electors of Pontypridd gave them a firm thumbs down?

Mr. Jones : I do not think that the hon. Gentleman's contention is right--

Mr. Rogers : Count the votes.

Mr. Jones : Yes, I do count the votes, but I contend that my party did no worse in the Pontypridd by-election than the Labour party, because the Labour party regarded that

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seat as its own but it got its second lowest ever result in a Pontypridd election since 1945. It was even worse than its 1987 result and was worsted only in the 1983 election.

When the approval ratings were broken down by the political allegiances of those questioned, 19 per cent. of Labour supporters preferred my right hon. Friend the Secretary of State for Wales while a mere 13 per cent. approved the actions of the hon. Member for Alyn and Deeside (Mr. Jones), who is my right hon. Friend's counterpart on the Opposition Front Bench.

Those questions and approval ratings were not confined to my right hon. Friend the Secretary of State and to his opposite number because my right hon. Friend the Prime Minister's approval rating was tested among the Pontypridd electors. She scored 34 per cent., which was significantly more than the leader of the Labour party. Indeed, out of those who said that they would vote Labour--we know that there were substantial numbers on Thursday--one in four preferred my right hon. Friend to the leader of the Labour party.

From all that I deduce--this is most relevant to our consideration of Welsh affairs--that there is still a form of traditional support for the Labour party in the valleys in Wales. However, that support is grudging and owes most to tradition. When the electors of the valleys of south Wales are asked specific questions about policies and the people who implement them, there is a far higher approval rating for my right hon. Friends the Prime Minister and the Secretary of State for Wales and for their Conservative policies than for the Opposition. On that evidence the by-election result is not a watershed. It is the death knell, or rather yet another death knell, for the Labour party in Wales and underlines the aim of my right hon. Friend the Secretary of State to turn the map of Wales blue. What else can we learn from that result, and what else has happened in this past year? I have learnt that we have a new spokesman on the Labour Front Bench and that he displays a more positive approach than his predecessor. Indeed, he referred positively to the valleys initiative this afternoon. I wonder how much the hon. Member for Alyn and Deeside regretted comments in the press this week that, under the leadership of the hon. Member for Cynon Valley (Mrs. Clwyd), who unfortunately is temporarily not in her place, a study has been set up, comprising Labour party researchers, which is determined to prove that the valleys initiative is a sham, a hype and not worth proceeding with. How typical that reaction was of a destructive attack from Labour and how much it must be regretted. How much more refreshing it would be if a Labour Member representing the valleys had said that he or she was setting up a study group to try to show how the valleys initiative could be improved and how one could build on the excellent work done by my right hon. Friend the Secretary of State.

However, when such conversions happen, they are something of death-bed conversions. Again in the Western Mail this week I noted that the hon. Member for Alyn and Deeside outlined his policy for housing and his commitment to the right-to-buy for council house tenants. I wonder how that commitment has come about. Is it because it is now an elephant on the doorstep and cannot be ignored because nearly 60,000 tenants of council houses and flats in Wales have now exercised their right to buy? In view of its poor result in the Pontypridd by-election, the Labour party clearly cannot continue to attack council house tenants who have exercised their right to buy. There

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is still a strong and continuing stream of applications from tenants who want to exercise that right to buy. Therefore, I welcome the hon. Gentleman's conversion, which is probably a good, if a late and dated, example of his pragmatism.

Perhaps the hon. Member for Alyn and Deeside will now welcome the new Housing Act. Rented accommodation has usually been a smaller proportion of the housing stock in Wales than in the United Kingdom and instead home ownership has traditionally been higher. Since 1979 the proportion of those who own their own homes in Wales has increased from 59 per cent. to 68 per cent. I very much welcome the Housing Act and hope that the hon. Member for Alyn and Deeside will soon do so. It provides tenants in Wales with more choice and better services.

I am glad about the establishment of Housing for Wales, which takes over the responsibilities of the Housing Corporation. I believe that it will operate those responsibilities better. Mr. Allan from Cardiff is to be the new chairman and I particularly welcome one of my constituents, Mr. Adam Peat, who is to be the chief executive. I am glad that the financial resources for Housing in Wales for 1989-90 will be 19 per cent. greater than for the previous organisation. More emphasis in Wales is now rightly being put on housing associations as being the providers of socially necessary housing. Since 1979 housing associations in Wales have either built or renovated 15,000 additional homes. They are providing necessary additions to the council housing stock and the stock of the private rented sector. As not everyone wants to be a council tenant, the greater emphasis on housing associations is especially welcome. Local councils appear to be frightened of some of the provisions of the new Housing Act. They appear to be especially frightened of the freedom for tenants to change their landlord. Why should councils in Wales be frightened of that new freedom? If they are good landlords who look after their tenants, there should be little for them to be frightened about--if "frightened" is the right word-- because tenants would not want to change from them. If we consider the theory of that new freedom, we should ask why local councils are frightened of tenants having that opportunity which merely represents a freedom that the tenant can exercise, if he so chooses, after a ballot. I am glad to note that two tenant groups in Cardiff are already actively considering the opportunity to change themselves into housing associations. Their estates would be owned by housing associations which they could feel were their housing associations. They would be able to feel that they could more closely control the places in which they live. I cannot predict the outcome. The tenants may ultimately resolve to remain with Cardiff city council and not to form themselves into housing associations. However, it is good that those two groups are giving this issue their fullest consideration and I hope that all tenant groups in Cardiff and elsewhere will also do so. If there are any minor shortfalls on the part of housing authorities such as Cardiff city council, this exercise will at least encourage them to be better landlords and more responsive to the proper needs of their tenants.

My right hon. Friend the Secretary of State for Wales also referred to the new Local Government and Housing Bill. I welcome especially the new grants regime. It will overcome the frustrations that many people in my constituency and elsewhere have felt at being eliminated

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from assistance when making necessary repairs to their homes simply because their homes were not built before 1919. I welcome the fact that the greatest help will go to those in the greatest need and that 100 per cent. mandatory grants will be available to those who most need them. I have many examples in the Tongwynlais, Gabalfa and Heath areas of my constituency where there is 1920s housing which is just as much in need of that help as pre-1919 housing. The people who live in those houses also need those 100 per cent. mandatory grants. In many ways, that matter is a less well publicised aspect of the work of the Welsh Office. Inevitably our press is filled with the controversy surrounding new housing developments. The latest planning application to change yet another green field makes significant headlines, but the important progress made in improving Wales's existing housing stock and the further progress that will be possible when the Bill becomes an Act have certainly not been promoted. I confess that I have had enough cause to quarrel with the Welsh Office. I was particularly upset to learn recently that the North Penwyn development in my constituency now seems certain to go ahead. What can be laid directly at the door of the Welsh Office is the allowing of an appeal by the Land Authority for Wales enabling it to develop parts of my constituency when the local council had overwhelmingly turned down the application. I still feel that that is entirely against the authority's remit, which should be to facilitate land and housing development where that is a commonly desired objective, not to act in the same way as a speculative developer and flout the wishes of local residents and councils.

I tend to prefer the strong policy operated by the Vale of Glamorgan borough council, which has largely tended to say that the vale is full and that there is no more room for speculative housing development there. That council is not only working in an excellent way to conserve the Vale of Glamorgan, but redirecting finances towards projects that need them--for instance, the redevelopment of older housing stock that could be brought up to a superior standard if only the money were spent. There is an opportunity for 5,000 new homes to be built in the south Cardiff redevelopment, but instead the green fields in my constituency are being destroyed. I suggest to my right hon. and hon. Friends that more promotion of the excellent work being done to improve existing housing stock could result in preserving those green fields.

Let me finally deal with the subject of health, and in particular transplants--especially kidney transplants. This is a cause that I still hold dear. Wales has led the way in improving kidney dialysis treatment, to the benefit of many patients. Pioneering work has led to the establishment of subsidiary renal units. In the last Parliament, my hon. Friend the Member for Stockport (Mr. Favell) promoted a ten-minute Bill, arguing that if only the English Department of Health were to emulate Wales there would be a tremendous improvement in kidney treatment there. I especially welcome the recent letting of two new contracts for a further two new subsidiary renal units, including one in my constituency, at the University hospital of Wales.

I congratulate the Under-Secretary, with his responsibilities for health, on agreeing to walk in Cardiff's St.

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David's day "Walk for Life" on Sunday, and I also pay tribute to the lord mayor, who has done so much to promote it. I urge my hon. Friend, when he is walking on Sunday in a most excellent cause --and, I hope, raising a good deal of money--to reinforce his determination that Wales should maintain its leading role in kidney treatment. I need only remind him of those disturbing newspaper reports about the deplorable sale of organs, involving foreign patients and transplants taking place in this country.

There is a continuing demand for kidney treatment, and a potential for the number of transplants to be increased through the adoption of the concept of "required request". If only the right questions were asked at the right time I am sure that many more transplant operations could be carried out, and that opportunity should be taken. I urge my hon. Friend on his walk to meditate on the possibility of maintaining the spirit of the lead and taking the matter up with the Department of Health in England. What could be better for Wales's leading record in improving kidney treatment than for us to hear in the Queen's Speech this autumn that a transplant notification Bill will be introduced, making the necessary progress here--as it has been made in so many parts of Wales?

6.53 pm

Mr. Denzil Davies (Llanelli) : First, I warmly congratulate my hon. Friend the Member for Pontypridd (Dr. Howells) on his excellent speech. We all knew him, to our advantage, when he was a distinguished research officer for the south Wales branch of the National Union of Mineworkers and many of us relied on his expertise when problems arose--as they still do-- involving the coal industry. I shall not follow what my hon. Friend said, especially his remarks about that famous match in which Llanelli once again beat Pontypridd, save to say that if he comes to Llanelli we shall give him and his team a traditionally warm west Wales welcome.

The Secretary of State spoke very briefly about water privatisation. My hon. Friend the Member for Alyn and Deeside (Mr. Jones) rightly said how ridiculous the measure was. In all our debates, both in Committee and on the Floor of the House, I have been unable to hear or read any cogent argument or sensible justification for abolishing the Welsh water authority and replacing it with a company quoted on the London stock market. If past experience of the privatisation of public utilities such as gas and telecommunications is any guide, the service to the consumer will certainly not improve and will probably deteriorate. Prices will rise steeply and Welsh industry--which already has to pay far more for its water in many respects than many other parts of the United Kingdom--will suffer and find itself at a competitive disadvantage.

The privatisation plans cannot be justified on any of the grounds on which the Government have sought to justify privatisation in the past. It certainly cannot be justified on competition grounds. I concede that, when the Government privatise what used to be known as the trading part of the public sector, such as steel, it can be argued that competition will result. The steel industry has to compete with other steel companies, with imports on the home market and with other countries on the export market. Steel also competes with other products such as aluminium and plastic.

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The case for privatisating public utilities, however, is much weaker, although I suppose that it is possible to argue that even in the case of gas there is competition in that there are other energy sources. There is no competition whatever for Welsh water, and there will be no competition for the new water company, because there is no substitute for water. The privatised water industry, as has been said, will be a total monopoly. In their ideological madness and Ayatollah-like fundamentalism, the Government are trying to graft on to a total monopoly principles and structures which can be applied only to a free competitive market. Because there will be no free market in water, the result will be a terrible botch-up, to the detriment of consumers.

The second justification for past privatisation has presumably been money. The Government have made a lot of money out of it. Now, however, they have a massive surplus on their public sector accounts--a surplus that has come about not through shrewd economic management but through the temporary benefit of North sea oil, through other privatisation measures, through the sale of council houses and through running the economy at levels far above its productive potential. The Chancellor now has so much surplus money that he dare not do anything with it. He is in the extraordinary position of being frightened to touch the money. All that he can think of is the futile exercise of repaying the national debt. The third justification was that privatisation would establish what the Prime Minister describes as "popular capitalism" in Britain--a share-owning democracy. The privatisation of the Welsh water authority will do little for that. The Secretary of State waxes lyrical about his proposal to ensure that 15 per cent. of shareholders in the new quoted public company will be individuals. That may well happen--I do not know--but I can say for sure that the other 85 per cent. will be held by City institutions.

The accountability, albeit imperfect, which currently exists through the House and the Welsh Office will be removed and economic power will be transferred to a kind of corporate conspiracy between the managers of the new publicly quoted company on the one hand and the managers of City institutions such as pension funds and insurance companies on the other-- the actuaries, the investment managers and what the Chancellor describes as the "teenage scribblers" of the City of London. We shall have corporate capitalism, as opposed to the popular capitalism that we thought the Prime Minister favoured. The Government have no moral right to sell off the assets without returning the money that they receive to the local authorities and the ratepayers who have paid for and created those assets. There may be legal challenges in the courts, as there were with the Trustee Savings bank, and perhaps the Government will beat them off, but there is no moral right on the part of the Treasury or the new company--unless there is a restriction on the dividend--to expect that money to go back to the coffers of central Government. If the Government had any moral sense they would return the money to the local authorities.

It has been estimated that the Government's plans will probably mean that the price of water to Welsh consumers will increase by about 50 per cent. In the past few years the price of water in Wales has gone up by about 10 per cent. over and above the retail prices index. Under the new arrangements--we have not seen them in detail--

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apparently the new stock exchange company will be allowed to increase prices first by the RPI and then by something called the K factor.

The K factor is a figure made up of a number of complicated ingredients and indexes. One element in the K factor will be the cost of investment. If the new stock exchange company wants to invest, presumably it will have to borrow money. We all know about the level of the pound today. As things are going, it will cost upwards of 20 per cent. to borrow from the money markets. The cost of that borrowing can only be met by the Welsh consumer through price increases--it cannot be borne anywhere else.

In the competitive market place situation in which the Government believe when companies invest they often, though not always, recoup the cost of that investment not just from existing consumers but, they hope, from increased turnover and sales, an expanded market and by beating their competitors. Such companies therefore spread the cost of the investment. The new Welsh water company, however, cannot increase its sales. Everyone wants purer water, better sewers and less polluted beaches, but such improvements will not increase the sales of water or produce new customers, so there will be no chance to recoup the cost of the investment by spreading the cost--the existing customers will have to pay the lot.

It gets worse, however, because the K factor will include another figure which we should perhaps call "Special K" for the dividends that will have to be paid by the quoted company as a kind of Danegeld to its owners--the insurance companies and the pension funds. Those owners will want to be told about the dividend before the sale takes place or they will not buy the shares. As a general principle, the dividends of companies--on the stock market or otherwise--are usually paid out of profits. Profits may also result from lower costs, and there may be some scope in the Welsh water authority for reducing costs, although I doubt it because everyone knows that it is a capital intensive operation, so there is little chance of substantial cost reductions.

There is not much hope of paying for the dividends out of sales increases. As I have already said, one cannot sell any more water than at present, however much purer the water, better the infrastructure or cleaner the beaches. On top of the initial basic costs of water and the investment costs, those extra dividends--12 per cent., 15 per cent. or whatever the City demands--will have to met from the price paid by the consumer. Welsh water consumers will want to pay for better services, albeit grudgingly in some cases, but they will also have to pay for the transfer of funds from them to the new owners of the company, 85 per cent. of which will be owned by City of London institutions.

As my hon. Friend the Member for Alyn and Deeside has said, a sensible Government would use some of their huge surplus funds to improve our water infrastructure and to make our water and our beaches cleaner rather than to pay off the national debt. Such expenditure would be non-inflationary, unlike the Government's proposals and despite what the Chancellor says about inflation being a terrible thing. Improving services would not have an inflationary effect on prices. If the Government were concerned about efficiency they could set up an independent body to monitor the use of their money in the new companies. A sensible Government would do that and there would be no problem.

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A responsible Secretary of State--I am sure that in private the right hon. Gentleman believes this--would go to the mullah at No. 10 and tell her that the whole thing is nonsense, that the Welsh people do not want privatisation because it will not help our services and it will do no good. If the right hon. Gentleman did that, he would serve the Welsh people well, but it would probably be his last service to the Welsh people.

7.7 pm

Mr. Keith Raffan (Delyn) : I join my colleagues in congratulating the hon. Member for Pontypridd (Dr. Howells) on his victory after what we all know was a hard-fought campaign and on diving in so quickly and delivering an eloquent and witty maiden speech. I look forward to hearing him again in the Chamber, as we all do, as well as in the smaller more initimate atmosphere of the Welsh Grand Committee--which meets shortly and to which we all look forward with such enthusiasm--and, who knows, perhaps even in the Select Committee on Welsh affairs.

This debate is the principal Welsh parliamentary event of the year. As has already been said, today's proceedings are tinged with sadness because of the recent loss of two of our senior Members, Brynmor John and Sir Raymond Gower. Both were good, decent and kindly men who were well respected on both sides of the House. Sir Raymond, with his 38 years of service as a Member of Parliament, narrowly missed being Father of the House, but in a real sense he was the father of Welsh Members. The Financial Times said of him :

"His interest was his constituents and he was assiduous in their welfare".

Those words could equally apply to Brynmor John. Both raised politics from what Alan Watkins of The Observer calls "a rough old trade" to something closer to a noble calling.

Last December, towards the end of his speech in the Welsh Grand Committee, my right hon. Friend the Secretary of State said that he was

"anxious that we take full advantage of what the A55 can do for north Wales."

He was keen to examine closely the immense opportunities arising from the £500 million investment spent on dualling that road. He drew a parallel with the enormous impact on economic development in south Wales of the opening of the M4 corridor. My right hon. Friend then announced that he was asking my hon. Friend the Minister of State to confer with local authorities and agencies in north Wales "to achieve a much more co- ordinated concept. That will attract economic activity, inward investment and develop existing business."--[ Welsh Grand Committee ; 7 December 1988, c. 9-10.] I hope that that "much more co-ordinated concept" will develop into--I dare not use the word initiative--a full-blown programme for north Wales. Some may ask why that is necessary and why the Government have to intervene in view of the fact that much economic progress seems to be taking place naturally.

In my own constituency, unemployment has dropped by 48 per cent. in the last two years. That is the fastest falling unemployment rate of any Welsh constituency during that period. In close second and third places are Alyn and Deeside and Wrexham Maelor. Much has been achieved but more still remains to be done.

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My right hon. Friend the Secretary of State referred to the fact that unemployment has fallen faster in several of the valleys than in north Wales. There are currently more people out of work in Clwyd, North-West and Ynys Mo n than in the Rhondda, Torfaen, Blaenau Gwent, Cynon Valley, Islwyn and Pontypridd. A more co-ordinated and positive approach is needed to ensure that the prosperity that is beginning to be seen in north Wales is pushed along the A55 corridor into coastal Clwyd without by-passing any area on the way.

I want to make two important points which must be faced if we are to realise the full value of the A55 improvements. The first concerns roads--I have made it before and I shall make it again and again until the necessary action is taken by the Welsh Office. We need adequate access link roads to and from the A55. I am, of course, aware of the division of responsibility for roads between the Welsh Office and the county councils. But that is not a sufficient response.

Clwyd has no coherent road strategy. That is not just my view or that of Delyn borough council, but that of the hon. Member for Wrexham (Dr. Marek). I informed the hon. Gentleman that I was going to say this today and he totally endorsed my view. It was also the view of the previous Secretary of State. Clwyd county council, having dragged its feet for a long time, finally commissioned an A55/A548 road link from consulting engineers Frank Graham and Partners. They concluded what we all knew--that the road network in the area of Flint and Holywell is unsatisfactory in terms of safety, environment and travel conditions. Yet, the county council deferred indefinitely any further study until the Flint by-pass, the third Dee crossing and Northop by-pass has been completed. It said that those roads would relieve congestion on the current link between Northop and Flint--the A5119.

Delyn borough council takes a diametrically opposed point of view. It believes that a new road link between the A55 and the A548 is of vital importance and should be completed before the Flint by-pass is completed and before the third Dee crossing is even started. The borough council commissioned a study of strategic road issues affecting Delyn, including an A55/A548 link, from Messrs. Colin Buchanan and Partners. The report is due in three or four weeks' time. I understand that, with those prestigious engineers carrying out the report, it is already striking dread into the hearts of the county surveyors department at Clwyd.

It is astonishing that the transport section of the Clwyd first structural plan alteration contains no mention of the benefits that the A55 will bring to Clwyd. Delyn's view is in sharp contrast. The council is particularly anxious to exploit the opportunities offered by the A55. We urgently need Welsh Office intervention to ensure the development of a coherent road strategy for Clwyd and the whole of north Wales so that the vast investment of taxpayers' money in the A55 is worth while. That strategy requires adequate access link roads.

I turn now to my second point on industrial development. I welcome the announcement by my right hon. Friend the Secretary of State today of three further WDA factories in Delyn. I do not want to sound like a broken record but he knows that there is too great an imbalance with the concentration of Welsh Development Agency factory space in the south-east of Clwyd, in Alyn and Deeside and Wrexham Maelor.

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In the ten years since 1978 the total industrial floor space has increased in Alyn and Deeside by 72 per cent. in Wrexham Maelor by 46 per cent., while it has increased in Delyn by only 23 per cent. Admittedly, in Rhuddlan it has risen by 67 per cent. but that was from a very low base. I might add because it emphasises my point, that the situation becomes more worrying further along the north Wales coast. In Glyndwr industrial floor space is up by 25.9 per cent., in Colwyn it is down by 2.1 per cent., in Aberconwy it is down by 3.6 per cent., in Arfon it is up by 9.6 per cent., in Dwyfor it is down by a massive 50.2 per cent., in Meirionydd it is up by 9.6 per cent., and in Ynys Mo n it is up by 2.5 per cent.

This clearly shows the need to shift the focus of the WDA property efforts in north Wales away from the present heavy emphasis on factory provision immediately adjacent to the English border, further west along the A55, following, in effect, the improvements in the road. I congratulate my right hon. Friend the Secretary of State on the positive move that he has made in regard to north Wales. I believe that we are now poised to take full advantage of the dualling of the A55.

As usual, all the fresh ideas are coming from the Conservative party. We initiate and the Opposition react. We set the agenda and the pace and they set up a policy review committee to try to keep up. We look to the future and they look to the past. We come up with new, fresh ideas and they rehash old, stale ones--

Dr. Thomas : Will the hon. Gentleman give way?

Mr. Raffan : Of course I shall not give way : I have only 10 minutes.

We come up with fresh ideas and the Opposition rehash old ones. To see that we need look no further than early-day motion No. 69 in the name of the hon. Member for Ceredigion and Pembroke, North (Mr. Howells), entitled "Welsh Parliament".

Today is a famous anniversary--I do not know whether the Leader of the House or those involved knew it when they organised today's business. It is the tenth anniversary of the day when the Opposition parties suffered a monumental defeat in the referendum on a Welsh assembly, by 80 per cent. to 20 per cent.

I am a kind and considerate chap, so I tabled an amendment to the early-day motion gently to remind Opposition parties of that event so that they would not humiliate themselves again, but to no avail. They seem to have forgotten 1 March, 1979. However, there is of course one Opposition Member who should not have forgotten that date. He led the "Labour says No" campaign so ably that he brought down his own Government. I refer, of course, to the right hon. Member for Islwyn (Mr. Kinnock), who is always so much more effective when opposing his own party than when opposing ours.

Let us look at the right hon. Gentleman's record. He was for devolution in 1974 ; against it in 1979 ; for it again in 1989. He has done a triple backward somersault as spectacular as any that Greg Louganis has ever performed but without any water to break his fall. If we go back 10 years we find an unbelievable treasury of quotes on devolution from the right hon. Gentleman. Here is a sampler : "The irony of devolution is that it will smash beyond healing the unity of Britain".

He also said :

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