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Mr. Rod Richards (Clwyd, North-West): Will the hon. Gentleman give way?
Mr. Davies: No, I shall not give way to the hon. Gentleman and I shall tell him why. He has been a Member of the House since 1992--almost five years--
including a brief and relatively undistinguished career on the Government Front Bench. In that five years he has shown no understanding of the normal courtesies of Parliament. Until he does, I have no intention of giving way to him on this or any other occasion.
The debate about the provision of secondary legislation is interesting and it may well be pursued in Committee. It is an interesting comment on the legislative arrangements in the House that, when dealing with a Bill such as this--involving a minor technical matter on which there is broad agreement--the Government have to suspend the Standing Orders of the House, as they did last Friday, to take away from the majority of Welsh Members of Parliament their existing rights, under Standing Order No. 86, to sit on the Committee that will deal with the legislation.
Last year was the 20th birthday of the Welsh Development Agency and I took the opportunity over the weekend to read with interest the debate that took place on the Second Reading of the Welsh Development Agency Bill. The debate was initiated by my right hon. and learned Friend the Member for Aberavon (Mr. Morris), who has taken a great interest in the proceedings and developments of the agency ever since. During the Second Reading debate, the WDA was vigorously opposed by the then Conservative Front-Bench team. The then hon. Member for Pembroke, Mr. Edwards, addressing my right hon. and learned Friend, said:
It is interesting that the right hon. Member for Conwy (Sir W. Roberts) is in his place. At the time--and I believe subsequently--he was one of the strongest opponents of the WDA. He said:
Since then, and especially since 1979, the Conservative party and successive Conservative Secretaries of State have been consistent about only two matters. I hope that the present Secretary of State, who has a few weeks left in the job, will pay attention to these important matters. I understand that he was a 16-year-old at the time, causing great embarrassment to himself and the Conservative party with a speech in which he called on the Conservatives to roll back the frontiers of the state. Perhaps these are the frontiers of the state that he wanted to roll back.
Successive Conservative Secretaries of State have been consistent about only two things. First, they have never reconciled themselves to the agency or to the concept of partnership. Secondly, they have been consistent in their determination to use the agency's successes for their own party political purposes.
Sir Wyn Roberts (Conwy):
The hon. Gentleman has forgotten to mention that when my right hon. and noble
Mr. Davies:
There has been no change in the agency's statutory basis. I know that the right hon. Gentleman has used that argument before, but there has been no change in the agency's statutory basis, and he and his colleagues opposed its creation. The right hon. Gentleman has loyally served several Secretaries of State who have done their very best since 1979 to undermine not only the integrity, but the existence of the WDA.
I remind the present Secretary of State and the Under-Secretary of State of the regime that existed under Dr. Gwyn Jones, the former disgraced chairman of the agency and a pal of Lord Walker. I shall remind the Secretary of State of what the Public Accounts Committee said of the regime under the then Secretary of State and Dr. Gwyn Jones. It said in paragraph 3.(xviii) of its 47th report on the WDA's accounts for 1991-92 that it was
I want to press three charges against the present Secretary of State. First, he has ruthlessly suppressed the findings enclosed in the WDA's corporate plan submitted to the Welsh Office in August. That plan for the forthcoming financial year reveals a number of interesting figures about the state of the Welsh economy.
First, the plan reveals that Welsh gross domestic product is 16 per cent. below the UK average. It reveals that Welsh household income is 77 per cent. of the UK average. It reveals that between 1990-95, real GDP in Wales rose by 3.3 per cent., whereas real GDP in the UK as a whole rose by 5.4 per cent. It reveals that real services GDP in Wales rose by 5.6 per cent., whereas in the UK as a whole it rose by 8.5 per cent. No amount of propaganda can disguise the true impact of those figures on our Welsh communities. We have now had 18 years of Conservative government and the relative position of the Welsh economy is no better than it was in 1979 when the Conservatives took office. Today we have 200,000 fewer people in work than when the present Prime Minister took office in 1990.
Secondly, the present Secretary of State has denied the WDA the funds required for long-term stability even though he claims that it is his protected and favoured expenditure programme. To do what little he has, he has--as he announced to me last Monday in a parliamentary answer--cut the budgets of the agriculture, training, roads, housing, environmental services and
education programmes. Those cuts have been imposed to pay for the small increase in his economic development programme.
In the current financial year--in November 1996--to avert the crisis of his own making, the Secretary of State had to inject an emergency package of £25 million into the agency. Even with that experience of the damage caused by underfunding, the base programme for the next financial year, at £150 million, will be a lot less than required.
The agency itself--on page 17 of its corporate plan, which it submitted on 26 July 1996 to the Welsh Office--called for base expenditure of £178 million, plus European funding. I know that my hon. Friends the Members for Pontypridd (Dr. Howells) and for Merthyr Tydfil and Rhymney (Mr. Rowlands) are particularly concerned about cuts in the land reclamation programme. The information that I am about to provide will very clearly explain to them why those cuts are about to be implemented.
Mr. Hague:
Would the hon. Gentleman increase the agency's programme for the coming year?
Mr. Davies:
Let us deal with the current budget. As soon as the Secretary of State and the Government can pluck up the courage to face the electorate, we will have an election. As soon as we have a new Government, that Government will set about delivering their own programmes. I am now telling the Secretary of State of the consequences of the guidance that he gave to the Welsh Development Agency and of the--I believe dishonest--failure on his part to provide it with funds to perform those actions that he has publicly required it to do.
On page 17 of the corporate plan, which was submitted to the Secretary of State last July, the agency called for £178 million base expenditure, plus European funding. It stated:
The report went on to state:
"He seeks to interfere where he should leave alone. He seeks to dictate where he should give freedom . . . He persists with policies that will destroy confidence."
He then asked the House to reject the Bill establishing the Welsh Development Agency.
"For the Government to become involved themselves in industry is an admission of failure. We may be sure that where private industry cannot succeed the Government will almost certainly fail."--[Official Report, 26 June 1975; Vol. 894, c. 712, 790.]
He and all other Conservative Members of Parliament voted against the creation of the WDA.
"unacceptable that the Welsh Office took no action against anyone in the top echelons of the Agency who presided over a catalogue of serious and inexcusable breaches of expected standards of control and accountability."
The Secretary of State's predecessor, the free market anti-Welsh Secretary of State, the right hon. Member for Wokingham (Mr. Redwood), cut the WDA's budget--its grant in aid--by two thirds. He enforced on the WDA a policy of property sales that wreaked havoc in 1995-96. The agency's ability to prepare on the basis of stability and sustainability has still not been restored. Peter Walker, now Lord Walker, attempted covert privatisation with Operation Wizard. The right hon. Member for Wokingham was less subtle; he preferred to emasculate the agency by imposing ferocious cuts in its budget.
"This would enable the Agency to achieve its objectives and the targets set out in the strategic guidance letter"--
which is the public guidance that the Secretary of State provides to the agency for the forthcoming year. The agency told the Secretary of State that that amount would be required to meet his own, publicly stated guidance.
"Whilst funding at this level would not be sufficient for the agency to secure the very large inward investment projects, this would enable it to deliver a range of programmes consistent with its short, medium and long-term strategies for development and job creation in Wales.
Therefore, to stand still, next year the agency will require £180 million-plus, whereas its budget is £150 million, which is £30 million less than it told the Secretary of State it requires to meet his targets. Of that £150 million, some £25 million is already earmarked for the LG development at Newport. The reality is that there will be savage cuts in the agency's programme, and the effective end of any more major inward investment projects. Quite simply, the agency does not have the
money to perform those tasks that, 10 or 15 minutes ago, the Secretary of State told the House that it intended to perform.
Activity would be centred on converting existing projects, providing the base for future investment, re-establishing the land reclamation programme towards previous millennium targets and maintaining the infrastructure projects at broadly current levels."
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