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Session 1999-2000
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Welsh Grand Committee Debates

The Budget Statement and its Implications for Wales

Welsh Grand Committee

Tuesday 4 April 2000


[Mr. Barry Jones in the Chair]

Budget Statement and Implications for Wales

Motion made, and Question proposed [this day],

    That the Chairman do now report to the House that the Committee has considered the matter of the Budget statement and its implications for Wales.-[Mr. Paul Murphy.]

4 pm

Question again proposed.

Mr. Ieuan Wyn Jones (Ynys Môn): As I was informing members of the Committee earlier this afternoon, we are considering the impact of the Budget on the people of Wales and whether it satisfies the requirements and aspirations of traditional Labour voters or whether it is a middle England Budget. I suggested-this clearly went against the views of Labour Members-that the Chancellor could not do both.

It would, however, be right to acknowledge that there is good news in the Budget. We welcome the roughly £100 million allocation for the health service and the £50 million for education. We could be churlish and say, ``About time, too'' but we will not do so on this occasion. However, in the past three years, following on from the underfunding under the previous Conservative Administration, health trusts in Wales have amassed deficits totalling £18 million. The reason for that is simple: the incoming Labour Administration accepted the spending plans that the previous Conservative Government had set out. We hope that the money can be put to good use once those deficits have been cleared-and they must be cleared, otherwise many of our trusts will be in serious difficulty.

I should make it clear that we want the money that is allocated for education to go to our schools, and the National Assembly was right to decide that it should be allocated through our local authorities. However, to allay the concerns of the hon. Member for North Dorset (Mr. Walter), who chided the Assembly for that decision, I should say that the Assembly resolved last week to ensure that local authorities understand that the money should be allocated to our schools.

In several of today's exchanges, I have detected an uncomfortable fact with which many hon. Members must come to terms. The decision-making process under which the money will be allocated is a matter for the National Assembly-after all, that is what devolution is about. The real party of Wales will make sure that the money is allocated and well spent-in partnership. It is remarkable that there is partnership and co-operation in the National Assembly and that people work together-

Mr. Don Touhig (Islwyn): That is why Alun Michael is still First Secretary.

Mr. Jones: Let us deal with that. Is the hon. Gentleman seriously suggesting that Rhodri Morgan was not the choice of ordinary members of the Labour party? Would he like to respond to that?

Mr. Touhig: No.

Mr. Jones: Of course not. The hon. Gentleman understands that partnership, co-operation and working together are the language of Welsh Labour in the Assembly. In the House of Commons, however, we have representatives of old Labour.

Mr. Alan W. Williams (East Carmarthen and Dinefwr): The hon. Gentleman said that we have something other than the language of partnership. How many times has he visited the House of Commons over the past two years? I can count his visits on the fingers of fewer than two hands.

Mr. Jones: The hon. Gentleman should go back to school to learn his maths. I have been here on more occasions than can be counted on the hands of two fingers. [Laughter.] Let me explain it to the hon. Gentleman. He fought the 1997 election on the basis that we are heralding a new kind of politics in Wales. He understood what devolution was about. He fought on the basis that a National Assembly would be set up in Wales that would involve co-operative politics. It may come as a shock to Labour Members, but the language that I hear from them today is not the language that I hear from their colleagues in the National Assembly.

Mr. Williams: Will the hon. Gentleman give way?

Mr. Jones: No, I will not give way any more. The hon. Gentleman has had ample opportunity to make his point.

Let us come back to the issue of whom the Budget addresses. Does it address the underlying concerns of the people of Wales, or is it designed to ensure that the Labour party retains the votes of middle England? Let us put one fundamental issue to the test. When the Labour Government talk about the comprehensive spending review, it is set in tables of stone for Wales. Nothing can be done until it is decided. When we talk about additionality and match funding and about people whose lives have been destroyed by 18 years of Conservative Government, we are told that we have to wait until the comprehensive spending review is completed.

However, when it suits the Chancellor or the Prime Minister to breach that comprehensive review, they do so. We welcome that and make no bones about it. We want more money for health, education and transport. But what about the economy of Wales? It is on its knees and not a single penny in the Assembly's budget has been allocated to Wales by the European Union. Let us remember that there was not a single penny of European money or match funding under 18 years of Conservative Government. But the people of Wales voted for change. The valleys and rural west and north Wales carry some of the lowest incomes in Europe. That money is needed to build up the Welsh economy.

Mrs Betty Williams (Conwy): Will the hon. Gentleman give way?

Mr. Jones: There will be an opportunity for the hon. Lady to speak later. [Hon. Members: Give way!]

Mrs Williams: Will the hon. Gentleman give way?

Mr. Jones: I will later. [ Interruption.] This is utterly remarkable. It is the kind of politics that we thought we had left behind. [ Interruption.] Look what partnership means to the Labour party. That money must be put into the National Assembly budget to make sure that the people of Wales have it in full. As the Secretary of State knows perfectly well, the £100 million that has been allocated for health in Wales and the £50 million for education is not in any way based on the needs of the people of Wales. It follows a rigid formula, based on population, that takes no account of the fact that Wales needs extra funding.

We must convince the Government that we cannot use that formula to deliver match funding to Wales. Also, the principle of additionality must be over and above that block. We need that assurance from the Secretary of State and we need it from the Minister when he replies to the debate. But the mantra will be repeated: ``You must wait until the comprehensive spending review''.

Mr. Simon Thomas (Ceredigion): I thank my hon. Friend for giving way. [ Interruption.] In his Budget speech, the Chancellor of the Exchequer said that he was prepared to work in consultation with charities and voluntary organisations

    with cash allocated in our spending review-[Official Report, 21 March 2000; Vol. 346, c. 866.]

Does my hon. Friend agree that that was a commitment, not to a sum, but to allocate cash in the spending review? If the Chancellor had given such a commitment to the people and the economy of Wales, it would have been welcomed with open arms.

Mr. Jones: Of course it would. The comprehensive spending review is a mantra, enabling the Chancellor to say, ``For Wales, no; for spending patterns in England, yes, of course.''

Mrs Betty Williams: Will the hon. Gentleman give way?

Mr. Jones: Of course.

Mrs Wiliams: I guess that the hon. Gentleman wants to partner his colleague the hon. Member for Ceredigion (Mr. Thomas) rather than me.

Does the hon. Gentleman agree that, had it not been for new Labour, he would not be in Committee today talking about objective 1 funding for Wales? Should we not thank the new Labour Government for Wales being on the objective 1 map? Does he accept that his colleague the right hon. Member for Caernarfon (Mr. Wigley) asked my hon. Friend the Member for Vale of Clwyd (Mr. Ruane) not to create too much fuss to get Conway and Denbighshire on that map?

Mr. Jones: I must remind the hon. Lady that I was born and brought up in Denbigh, the very area that will benefit from objective 1 status. Of course, I would not want my own town to be excluded from the objective 1 area. We must ensure that as much of Wales benefits as possible.

The hon. Lady was making a cheap party political point. I accept that the Prime Minister secured objective 1 funding for Wales. However, in the first year of that funding, not a single penny of the allocation is in the National Assembly budget for 2000-01. Does anyone wish to challenge me on that? We could lose the whole of that first year's allocation if a decision is not taken before the comprehensive spending review.

Mr. Donald Anderson (Swansea, East): With respect, the sum was allocated for the six years of the EU budget. That sum remains: if it is not spent now, it will be spent over the six years.

Mr. Jones: It is quite simple. The money must be committed and spent within the first two years, otherwise it is lost. I make a final plea to Government Members, some of whom I would describe as my honourable Friends.

Mr. Chris Ruane (Vale of Clwyd): Will my hon. Friend give way?

Mr. Jones: My hon. Friends in the Government may regard our debate as political banter, but the issue under consideration is extemely serious.

The battle is not between new Labour, Welsh Labour, Plaid Cymru and the Liberal Deomcrats, but is being fought on behalf of the Welsh people. We must work in partnership to ensure that the money comes to Wales through the comprehensive spending review. We may treat the matter as a joke, but unless the money is allocated in this year's Budget, Wales will be a low-wage sweat economy forever.

Mr. Alan W. Williams: Will the hon. Gentleman give way?


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Prepared 4 April 2000