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Session 1999-2000
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Standing Committee Debates
Welsh Grand Committee Debates

The Budget Statement and its Implications for Wales

Welsh Grand Committee

Tuesday 4 April 2000

(Morning)

[Mr. Barry Jones in the Chair]

Oral Answers to Questions

The Secretary of State was asked-

Cardiff Airport

10.30 am

1. Mr. John Smith (Vale of Glamorgan): When he next plans to meet the owners of Cardiff international airport to discuss opportunities for increasing business travel. [116180]

The Secretary of State for Wales (Mr. Paul Murphy): I have no immediate plans to meet the owners of Cardiff international airport. However, I recognise the importance of the airport to the continued economic well-being of south Wales.

Mr. Smith: I thank my right hon. Friend for that reply. He may discover that, according to Civil Aviation Authority figures, as much as 75 per cent. of business air travel has been lost by Cardiff international airport to other airports because of poor service access. It is also a widespread belief in the business community in Wales that access to business air travel is an essential prerequisite for the regeneration of the Welsh economy with or without objective 1 funding. In view of the decision not to proceed with the proposals for an airport link road, will he meet the First Secretary and impress on him the importance of finding a viable alternative route as a matter of urgency for the Welsh economy?

Mr. Murphy: I meet the First Secretary regularly and I shall, of course, ensure that those points are relayed to him. As my hon. Friend knows, Vale of Glamorgan council has had a study undertaken of road links for the airport and I am aware of the airport's importance to the economic life not only of south Wales, but of the whole of Wales. I hope that it will play a vital role in our new regenerated economy that I hope will develop in the years ahead.

Block Grant

2. Mr. Nigel Evans (Ribble Valley): What representations he has received about increasing the block grant in relation to local government funding.[116181]

The Parliamentary Under-Secretary of State for Wales (Mr. David Hanson): I have met local authorities on several occasions and discussed a range of issues with them, including funding issues.

Mr. Evans: I am grateful for that response, but the Minister will know that the increase in council tax this year throughout Wales averages more than 10 per cent., which is five times the rate of inflation, at a time when many people are receiving inflation rate salary increases or no increase at all-and decreases if they happen to be farmers. Will he explain why the increases have been so high, especially in Wales? It is not as though people are receiving the increases that Russell Goodway, the Labour leader of Cardiff council, has received recently. I now give the hon. Gentleman an opportunity to condemn such increases and to demand that Russell Goodway decreases his salary forthwith.

Mr. Hanson: I am grateful for the hon. Gentleman's constructive comments. He approaches the matter with an element of restraint. As we discussed at Welsh Questions and in the Welsh Grand Committee, the Assembly and the Welsh Local Goverment Association are currently looking at a fairer formula for local government spending for the settlement for next year's grant. As he knows, decisions on budgets and council tax are up to individual authorities and they vary throughout Wales. Some authorities are considering different levels of increase because of the demands in their areas.

As for Mr. Goodway, the hon. Gentleman will be aware that the Assembly Secretary, Mr. Peter Law, is discussing that matter with Cardiff council and the Welsh Local Government Association. It is important that we give them the opportunity to reflect on the issue because of the possibility of a successful outcome that will benefit local government throughout Wales.

Mr. Llew Smith (Blaenau Gwent): I am sure that the Minister is aware that my constituency has not only one of the poorest communities in Wales, but according to recent statistics, one of the poorest communities in the United Kingdom and that the forumula that deals with the distribution of the block grant does not take poverty into consideration. Will he meet his opposite number in the Assembly to discuss such matters to ensure that the main factor that determines the new formula is poverty? Will he comment on the fact that one of the Assembly Members-Phil Williams-who represents my area refused to support the recent deal to bring an additional 5 million into Blaenau Gwent through the block grant distribution?

Mr. Hanson: As I mentioned, the Assembly and the WLGA are considering a new formula, and it is important to include elements such as poverty in it. However, those remain matters for the National Assembly. I will certainly take an interest. I am meeting Peter Law, the Assembly Secretary, next Monday to discuss local government issues. As my hon. Friend will be aware, I was in Blaenau Gwent yesterday evening with members of his local authority, and we discussed a range of local authority issues.

I should tell my hon. Friend and the hon. Member for Ribble Valley (Mr. Evans) that local government funding is important. In that context, it is important to recognise that my right hon. Friend the Chancellor of the Exchequer has put tremendous additional resources at the disposal of the National Assembly, including money for education, which will go directly to schools and will support local government expenditure in the next financial year.

Mr. Richard Livsey (Brecon and Radnorshire): Although I agree that the hon. Member for Blaenau Gwent (Mr. Llew Smith) is right to say that his area is poverty-stricken, it is not true that four councils in the valleys are very poor and need special, targeted additional funding? It is not fair that other authorities in Wales are having to fund the programme; that should be the Government's duty. Sparsely populated rural areas have experienced a hike in business rates, which have gone up two and a half times, and a 13 per cent. increase in council tax. Those areas are poor, too, and need due consideration.

Mr. Hanson: I can only reiterate that the formula is up for discussion. The Welsh Local Government Association, the National Assembly and the Government take an interest in such matters and will examine the issue. I can add nothing to what the hon. Gentleman has said, except to say that business rates in Wales have risen on average by 6 per cent. this year.

Railways

4. Mr. Simon Thomas (Ceredigion): What discussions he has had with train operating companies in Wales on the establishment of a single franchise covering all Welsh railways.[116183]

The Secretary of State for Wales (Mr. Paul Murphy): None. Rail franchises are a matter for the shadow Strategic Rail Authority and, in due course, the Strategic Rail Authority, in consultation with the National Assembly for Wales.

Mr. Thomas: I am grateful for that reply from the Secretary of State. In that context, could we have a beefed up Welsh presence on the Strategic Rail Authority? Is he aware of a report by the Select Committee on Welsh Affairs that said that two board members should represent Wales on the authority? Will he bat for that proposal in the Cabinet?

Mr. Murphy: The hon. Gentleman knows that the Transport Bill, which is currently going through the House and will soon go to the other place, deals with such matters. There will be a Welsh representative on the board of the SRA, and the Assembly will be consulted on the appointment. Additionally, the SRA will be required by legislation to consult the Assembly on its strategies. The shadow SRA has already met the Assembly's Local Government and Environment Committee.

Pensioners

5. Mr. Alan W. Williams (East Carmarthen and Dinefwr): What representations he has received from pensioners in Wales concerning the measures announced in the Budget.[116184]

The Parliamentary Under-Secretary of State for Wales (Mr. David Hanson): My right hon. Friend and I are aware of pensioners' concerns, but we have received no representations on measures announced by my right hon. Friend the Chancellor in his recent Budget.

Mr. Williams: I welcome the rise in the heating allowance from 100 to 150, which was announced in the Budget, and the minimum income guarantee, which will help our poorest pensioners. Does my hon. Friend agree that the richest quarter of pensioners have done well in the past 20 years from private pensions, but that we must do more to help the bottom half and that that should be the main focus of the new pensioners' credit?

Mr. Hanson: My hon. Friend is right in the sense that there is a great discrepancy between pensioners who have done well in the past 20 years and those who have fallen behind as a result of changes made by the previous Government. This Government are attempting to support a guaranteed weekly minimum income, which will rise as a result of the Chancellor's Budget to 75 for single pensioners and 116.50 for couples. It will rise in line with earnings from this month. I hope that that will help the poorest pensioners in our community. Together with the extra measures that the Government have introduced in regard to heating allowances, free eye tests and television licences for those over 75, the minimum income guarantee forms a package that will, I hope, help the poorest pensioners. It will give direct support to pensioners across the board, but will target those on lower incomes in particular.

Mr. Denzil Davies (Llanelli): While I agree with my hon. Friend that pensioners have received many benefits in the budget for which they are grateful, would he agree that it is now necessary to look at the basic level of pensions to see whether it can be increased? If there are some pensioners who have done very well over the last 20 years, the way to deal with that is through a progressive system of income tax.

Mr. Hanson: As my right hon. Friend will be aware, I have no direct responsibility for raising the basic level of pensions. The Government entered the general election with a manifesto commitment to retain the basic pension as the foundation for income in retirement and to increase it at least in line with prices. That is what the Government have done to date, and what the Government are committed to do. I heard what he said with regard to the basic level of pensions. I believe the Government have attempted to raise pensioner incomes and have succeeded in doing so, not in a way linked to taxation but through things such as the winter fuel payment.

 
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