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Mr. Martyn Jones (Clwyd, South): As my hon. Friend knows, I represent part of Denbighshire. I endorse all his statements about the problems that it faces. I add my request to the Secretary of State for an inquiry into that matter because it causes great problems to my constituents.

Mr. Ruane: I thank my hon. Friend for that intervention.

A full inquiry would be of benefit not only to my constituents, but to the people of Wales. We must learn the lessons of what happened in Rhuddlan borough council, so that we do not repeat the mistakes when Wales receives, I hope, its £2 billion-worth of objective 1 funding from Europe, starting in January.

It is important that the inquiry has the power to summon witnesses. The key players in the affair have been very reluctant to supply the information that is required to answer the questions that are being put by the public. I understand the Welsh Office's reluctance to grant a full-blown public inquiry--there have been only 24 such inquiries since 1921. They can be expensive. The cheapest was Lord Cullen's inquiry into the Dunblane massacre, which cost £1 million. The dearest, I think, was the inquiry into child abuse in north Wales, which cost £15 million. I realise that Rhuddlan's debt is not in the same league as Dunblane or the north Wales child abuse issue, but it has left a considerable legacy for the finances and body politic of Denbighshire, which will be eradicated only if there is a full inquiry into what went wrong.

I look forward to the full co-operation of my right hon. Friend the Secretary of State and the Welsh Office in settling this long-running issue and await with interest the comments of my hon. Friend the Minister.

The Parliamentary Under-Secretary of State for Wales (Mr. Jon Owen Jones): I understand my hon. Friend's strong feelings about the injustice of the situation that his local authority finds itself in. He explained the great cost of a public inquiry, but then said that holding one would solve the problem of Rhuddlan's debt. In what way would a public inquiry alleviate his authority's debt problem?

Mr. Ruane: I am asking for two things. The way for the problem of the £8 million debt to be alleviated--

Mr. Martyn Jones: --is for the Welsh Office to pay up.

Mr. Ruane: Indeed, is for the Welsh Office to pay up, mate. A population of 89,000 people cannot repay the debt. We are looking to the Welsh Office--which should have been monitoring the situation over seven years--to help us out. The inquiry is a separate issue, but we must have one. The issue has been going on for four years. The public clamour for an inquiry has not abated. It is getting

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worse and I agree with the demands. We must have a proper inquiry to ensure that we learn the lessons. That is in the interests of the Welsh Office for possible future European grants and it is in the interests of my constituents. I thank the Welsh Office for the help that it has given, even though it has been a long time coming.

2.52 pm

Mr. Cynog Dafis (Ceredigion): I shall start by slightly modifying my speech to respond to the rather puerile attack--if it can be called an attack; it was more of a sniping exercise--from the hon. Member for Montgomeryshire (Mr. Öpik) on Plaid Cymru. We have been expecting it for some time and were wondering when it would come. We were aware that the Labour party was too engaged in its affairs to turn its guns in our direction. We expect that to happen in the next month or so. We shall be ready, having prepared our policy in considerable detail. It will be interesting to see the detailed policy development of the other parties in preparation for the Assembly. The Liberal Democrats have at last got round to sniping at Plaid Cymru, because of their desperation about their awful position in the opinion polls. I am sorry, but that is the reality.

The hon. Member for Montgomeryshire invited me to imagine a Welsh local government budget in what he described as an independent Wales. It is possible to construct such a budget. It would be a difficult budget, bearing in mind the current condition of the Welsh economy, but it could be done. However, it would be an academic exercise, because a so-called independent Wales--the hon. Gentleman is still using the language of the 19th century--is not on any agenda for the next five, 10 or even 15 years. Plaid Cymru's agenda is to make the existing constitutional settlement--the National Assembly for Wales--work well for Wales. We shall also be pushing for parity with Scotland, which has been given a far better settlement, as soon as possible. I trust that we shall have the support of the Liberal Democrats. I am confident that we shall also have the support of many Labour Members.

The eventual constitutional outcome for Wales is, to a large extent, in the lap of the gods. It depends a great deal on what happens to the European Union and the enterprise for European federalism. It also depends on the democratic will of the people of Wales. Let us leave it to them. Plaid Cymru aspires to full national status for Wales, but full national status could be significantly different in 10 or 15 years from what it is today for the Republic of Ireland, Denmark or any other so-called independent European country. There will be a convergence between the constitutional status of the Basque country or Catalonia and that of Ireland, Denmark and other states. The terror of independence and separatism--the bogey that the hon. Gentleman is trying to raise--will disappear over the horizon.

Mr. Öpik: I did not mean the hon. Gentleman to feel that I was sniping. I was attempting to make a serious political point. The first sentence in Plaid Cymru's general election manifesto said:

"Plaid Cymru is the only party which places a self-governing Wales in a European Union at the forefront of its political agenda."

Is that right?

Mr. Dafis: I am happy to confirm that that is our position, but it is not relevant to the hon. Gentleman's

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point. The implication of his comments seemed to be that Wales was inherently incapable of getting into the position of being able to pay its way. The suggestion was that Plaid Cymru could never get such a local government settlement in an independent Wales. He is saying that Wales could never ensure a generous settlement for its local government. If that is what he means, he has a dismal view of the potential of Wales. We reject that.

I agree with much of what the hon. Gentleman said about the settlement. I can be more generous to him than he was to me.

Mr. Jon Owen Jones: Before the hon. Gentleman leaves the subject on which he was having an interesting debate with the hon. Gentleman from the other side of the Cambrian mountains from him, I hope that his comments about the present settlement will reflect the fact that Wales's tax base--its GDP--is 83 per cent. of that of the rest of the United Kingdom. His aspirations have to reflect the reality of that low tax base.

Mr. Dafis: I could not agree more. That is a reality that would make it very difficult to come up with a robust Welsh budget at the moment. Does the Minister agree that there must be reasons why the Welsh tax base is in such a parlous condition and the Welsh economy is in such a state? It has something to do with the construction of the British state, the way budgets have been handled and how taxation, public expenditure and regional development--or its absence--have been dealt with over the past 20 years. The problem can be traced back to Wales's ridiculous over-dependence on heavy industry, the failure to introduce a more varied industrial base and other matters.

The situation is recoverable within the European framework that we would like--which is not necessarily the framework that we shall have--if Wales has appropriate policies instead of the inappropriate policies that we have constantly had to suffer from. Wales can hope to achieve a GDP level comparable to the best in Europe. I hope that the Minister also has such faith in the future of Wales.

Mr. Llew Smith (Blaenau Gwent): I accept that in a separatist Wales, the budget would not be determined by the British state. However, the hon. Gentleman's vision involves a federal Europe. Does he accept that in such circumstances, the budget would be determined by the unelected and unaccountable European central bank, which would determine the budget level and interest levels? It would be illegal under article 107--

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. We must not get into a debate on European banking. We should be considering the Welsh financial matters that are before us.

Mr. Dafis: I shall address those matters directly, but of course they have to be considered in the light of the framework mentioned by the hon. Member for Blaenau Gwent (Mr. Smith). Power is shifting from London to Europe, so the big question relates to democratic accountability, and what should determine interest rates and European monetary policy. Power is also shifting to Wales, Scotland and Northern Ireland, so the really big constitutional question relates to the future of this place.

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What significant powers will remain here? We need to get our heads round those issues and build a Welsh future on that basis.

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