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Mr. Caton: I shall speak in favour of the policy for rural areas as set out in the Bill and, therefore, against the amendments. In doing so, I have much sympathy for the fears and concerns of Members who represent constituencies which come within the area of the Development Board for Rural Wales, which is to be merged into the Welsh Development Agency.

I used to live just outside Aberystwyth. That being so, I am aware of the high-quality work that the DBRW has done, including the use of its social powers. Its special expertise in taking up economic problems in our country towns and villages has proved valuable. The Mid-Wales Export Association, which was established and funded by the DBRW, has undertaken superb work recently.

I represent and live in a rural constituency that is not included within the DBRW boundary. Like many of my colleagues in rural south Wales, west Wales and parts of north Wales, I am concerned that the current situation is not sustainable, to borrow a word that was used in a previous debate. We do not have access to the expertise and experience that was once available to us. In the perception of the DBRW, we have in the past been overshadowed, often understandably, perhaps, by the acute problems faced by neighbouring urban and industrial areas.

8.15 pm

The new WDA must make rural development policy one of its key functions, using best practice from both the DBRW and the WDA. We must use the experience and the expertise of both. It must serve the whole of rural Wales, not a particular geographical segment. If we do that, I am sure that the whole will produce rather more than just a sum of the parts.

The agency must have a dedicated rural section, call it a rural affairs department, a rural policy unit or whatever.

Mr. Llwyd: That is precisely what the amendment seeks to achieve.

Mr. Caton: The hon. Gentleman interrupted me just as I was about to say that I do not believe that this is a matter for legislation in the way that is set out in the Bill.

The assembly and the agency should give serious and sympathetic consideration to the proposals of Professor Peter Midmore and Joan Asby of the Welsh Institute of Rural Studies in Aberystwyth, which are that an integrated rural development fund should be established to foster co-operation and indigenous growth, which realistically will be the main source of new jobs and economic activity in most of rural Wales in the coming years.

I can understand that subsumation into an all-Wales Development Agency for some people in mid-Wales represents a threat. I believe that for them, as for the rest of the people of rural Wales, it provides a tremendous opportunity. I hope that we grasp it.

Mr. Ieuan Wyn Jones (Ynys Mon): I am grateful for the opportunity to say a few words in support of my

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hon. Friend the Member for Meirionnydd Nant Conwy (Mr. Llwyd), who made an excellent speech in support of the amendment. Having listened to the debate, I think that there is general agreement that there is a need for the Welsh Development Agency to have a rural remit, although there is disagreement about the way in which that is best achieved.

I cannot support any move towards the ring-fencing of cash within an organisation such as the WDA. Although I have supported ring-fencing in the past, I now believe that it can be an extremely rigid way of allocating money. It does not allow flexibility for any agency in any particular way, and that flexibility is important.

I make a particular plea--this has been touched upon by the right hon. Member for Llanelli (Mr. Davies)--for agriculture. He was right to say that it is a vital industry in rural Wales. It is now the biggest employer of any productive industry throughout Wales. In Wales, 53,000 people are employed directly in agriculture. The Development Board for Rural Wales has estimated that, over the next 10 years, 5,000 of those jobs will be clearly under threat.

We are facing a crisis in the rural economy, which is a crisis in rural Wales. Rather than approaching those matters in the disparate way that we have done historically, with some money coming from the common agricultural policy, some through structural funds, some from the Welsh Office and some from local authorities, we should adopt an integrated rural approach. I believe that the new powerhouse agency will have an opportunity to integrate within Wales all of the money that should be coming through into the rural economy. We should consider agriculture as the basis upon which we drive up the rural economy while ensuring that we consider the ancillary industries.

I hope that the Minister will acknowledge the strength of feeling about the need for particular concern to be paid to rural Wales and to drive forward the agenda for an integrated rural policy.

Mr. Hain: I begin by thanking everyone who has contributed to an excellent debate. I acknowledge that there is a real crisis in agriculture and in rural economies generally. I hope that some of my remarks will provide some reassurance. However, there is no point in denying that a crisis exists. The Government are doing their best to tackle it.

I thank the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) for the way in which he moved the amendment. In doing so, he made some extremely pointed and inclusive remarks. In asking him and his hon. Friends not to press this group of amendments, I do not for a moment wish in any way to underplay the valuable and much-praised work of the Development Board for Rural Wales over the past two decades. However, much of the rationale for its establishment was a reflection of the need to develop new towns in mid-Wales. That work was completed some time ago, and the board's activities now very much overlap, and, in some cases, duplicate, those of the WDA.

That overlapping and duplication is, in the Government's view, inefficient and is a waste of public money: such waste is one of our key motivations in attempting to reduce the number of non-departmental public bodies in Wales. The legislation as it stands

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provides for those functions of the DBRW and the Land Authority for Wales that are not at present enjoyed by the WDA--I stress that point--to transfer to the agency on merger. I am convinced that the skills and experience of the DBRW's staff will provide an invaluable addition to those of the agency, in particular in rural affairs. The transfer of all the board's functions rather than just those not currently enjoyed by the agency would not enhance the agency's powers or functions in any way. That is an important point.

I shall pick up on a point that the hon. Gentleman raised--whether or not I am a Latin scholar--about the issue of "cease to exist". I understand his concerns in that respect, which were echoed by hon. Friends behind me. I shall clarify what the Bill means. In saying that the functions cease to exist, all it is saying is that the DBRW ceases to exist. That is how the Bill achieves that objective. There is, however, a selective transfer of functions that the DBRW exclusively has at present, which the WDA does not have, to the new agency under clauses 121 to 125. That achieves the objective that the hon. Gentleman is seeking.

Mr. Llwyd: The Minister used the word "selective". Does he mean that some powers currently enjoyed by the DBRW will not transfer? Or does he mean that all the powers over and above those that the WDA has, which the DBRW has, will transfer? To what does selective refer?

Mr. Hain: There is an overlap of powers and functions at present, so there is no need to transfer all of them; only those that are not enjoyed by the WDA at present will be transferred.

I now take up the issues raised, quite rightly, by my hon. Friend the Member for Clwyd, West (Mr. Thomas), who made several valid points. I hope that Members of the Assembly will have expertise in agriculture and rural affairs. That is essential. I cannot guarantee it by legislation, but I hope that all the parties will ensure that that is secured.

My hon. Friend also raised a point about the importance of agriculture in the assembly's objectives, and, indeed, those of the WDA. The assembly will be obliged to set out a clear strategy to safeguard--indeed, defend and improve--conditions in rural communities. Section 1(4) of the Welsh Development Agency Act already says:

"In exercising their functions the Agency shall have regard to the requirements of agriculture and efficient land management."

That will remain. I think that that answers the point, which was also made by my right hon. Friend the Member for Llanelli (Mr. Davies).

The point was well made by many hon. Members, but in particular by the hon. Member for Brecon and Radnorshire (Mr. Livsey), that rural areas have been facing a crisis. That is why the Government announced today that they will fund the entire start-up costs and first-year running costs of the new British cattle movement service. In addition, the Government have decided that the charges for implementing new specified risk material controls on cattle, sheep and goats will not be recovered from the industry from 1 April. That amounts to the Government giving £70 million to

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agriculture. I can assure all hon. Members that a substantial portion of that money will go straight into Wales because of its needs.

Mr. Denzil Davies: As my hon. Friend said, the agency shall now have regard to agriculture, but that is not the same as making it one of its main purposes. Section 1(2)(b) of the Act talks about promoting industrial efficiency. If "industrial" is replaced with "business", which has been defined, surely agriculture must mean promoting agricultural efficiency.

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