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Mr. Ruane: The right hon. Gentleman mentioned some of the negative statistics for Wales. May I counter them with some positive ones? There have been 40,000 new jobs in Wales since 1997--29,400 in the two years to September 2000--and 67,000 families have benefited from the working families tax credit. The new deal has helped 27,000 jobless people into work in Wales. More than 100,000 workers in Wales are benefiting from the
national minimum wage--approximately 10 per cent. of the work force. All that has been achieved under Labour over the past three and a half years.
Mr. Wigley: I was not expecting the hon. Gentleman to read out his manifesto for the forthcoming election in his Clwyd constituency. No doubt he will put the best spin that he can on the figures that exist. However, he acknowledges that--as the Committee stated in its report--severe problems face Wales. Of course, we welcome the new jobs have that have been created, such as the 600 at Bridgend that were re-announced today by Ford. We welcome any good news. However, we must look at the targets at which we should be aiming. The gulf in GDP per head has widened over the past 20 years, and the problem is getting progressively worse--even over the past three years, as my hon. Friend the Member for Ynys Mon (Mr. Jones) rightly said.
I turn to this week's disastrous news about the job losses in the steel industry. The hon. Member for Vale of Clwyd (Mr. Ruane) will not be surprised that I am referring to this, because the decision has hit Shotton as it has hit the steelworking towns of south Wales. The First Minister in the Assembly, who represents Cardiff, West here at Westminster, has estimated that the total effect of the decision, including knock-on effects, will be the loss of about 7,000 jobs in Wales.
That loss will be on top of a loss of between 2,000 and 3,000 jobs in the agricultural sector over the past 18 months, which was mentioned earlier. Although we welcome the confirmation of the new jobs that have been announced, even with the knock-on effect taken into account, they go only one tenth of the way towards remedying the recent job losses, and they will certainly not represent any progress in increasing the amount of income per head in Wales.
It is unacceptable that any company should treat its work force as Corus has done. It is equally unacceptable that the Government should have stood back from the crisis that has been rapidly developing over the past 18 months. When we warned of the dangers, we were told to stop scaremongering. However, not only the steel industry but all manufacturing has been hit by the Government's policy of maintaining the high parity of the pound. The number of manufacturing jobs in Wales decreased from 230,000 in 1990 to 192,000 last year--a decrease of 38,000 jobs. Tourism and agriculture have also been hit by the over-valued pound.
Mr. Martyn Jones (Clwyd, South): I want to correct the right hon. Gentleman. As I understand it, the Government's policy is not to maintain the parity of the pound but to maintain interest rates. That has nothing to do with the parity of the pound.
Mr. Wigley: Goodness me! If one retains interest rates as the only tool with which to control inflation, and holds them at too high a level, that will inevitably affect the parity of the pound because money will be sucked in. That is basic economics. Handing over control to the Bank of England, with only one objective--to control inflation--will inevitably have a knock-on effect on employment. Even the United States gives its central bank the twin objective of having regard to employment and to inflation.
The Government are totally culpable in passing over responsibility to the Bank of England without giving it responsibility for employment as well as inflation.
Mr. Llew Smith: The right hon. Gentleman obviously disapproves of handing over powers to the Bank of England, and I agree with him about that, but what are his views on handing over powers to the European central bank? As I understand it, if we hand over such powers, the matters that the right hon. Gentleman believes should remain in our control will no longer do so.
Mr. Wigley: I believe that such policies must be accountable to the people and that policies followed by the Bank of England or the European central bank must have an eye on what is acceptable to the people in terms of employment as well as inflation. For the Government--a Labour Government--to have abandoned employment as a criterion for the Bank of England in controlling the economy beggars belief. The founding fathers of the Labour party, including those in the hon. Gentleman's Blaenau Gwent constituency, must be turning in their graves as they contemplate this situation.
There is a need to get the pound to a realistic parity against the euro and I believe that, having achieved that realistic level, we should be in the European currency system to give manufacturing the confidence it needs to plan its future. It is unacceptable that the factories of Wales--
Mr. Smith: Will the right hon. Gentleman give way?
Mr. Wigley: No, not at the moment. I shall make progress rather than take running interventions from the hon. Gentleman.
I hope that some Labour Members agree, unless they have totally changed their colours, that it is unacceptable that the factories of Wales should be put in jeopardy by the vagaries of the currency casino from which we are suffering, now and over recent years.
The steel issue runs even deeper. Steel is a basic commodity of the manufacturing economy, basic for construction and basic for any independent defence policy of these islands. For the Government to sit back and allow the future of that basic industry to be determined by shareholders in the New York stock exchange and decisions of Dutch executives is not acceptable. The steel job losses will hit Gorseinon and Shotton and cast a grave shadow over the future of the Llanwern steelworks, where productivity is 20 per cent. higher than that of the Dutch steelworks that will benefit from Corus's cuts in the United Kingdom.
For Ebbw Vale--yes, the constituency of the hon. Member for Blaenau Gwent (Mr. Smith)--the news is absolutely calamitous. That community depends on steel. It still has not got over the previous round of cuts and has some of the worst figures in Wales for poverty and deprivation. Now it is to be hit by the scandalous and unacceptable closure decision. A Labour Government--yes, a Labour Government--are sitting back and letting that happen, but let us not pretend that they are helpless.
Of course the Government can do something, as the right hon. Member for Llanelli suggested. They could and should have intervened to tell Corus in no uncertain terms that they would not sit back and allow such a
vital industry to be undermined, but they did not. They could intervene even now on the basis of the strategic importance of the steel industry, as suggested last week by Edwina Hart, Labour's Minister for Finance and Communities in the National Assembly. They could say that, unless Corus rethinks, they will act to take the United Kingdom steel industry back into some form of public ownership or, at the very least, to underwrite the trade union proposals for a takeover or a management buy-out. They could examine the model successfully followed by Tower colliery or the Glas Cymru model for Welsh Water.What is not acceptable is for the Government to wring their hands, shake their head and utter spurious, cynical noises of sympathy while doing absolutely nothing to save those vital jobs.
Mr. Smith: Will the right hon. Gentleman give way?
Mr. Wigley: Not at the moment.
What on earth is the point of electing a Labour Government if they stand back and watch communities such as Ebbw Vale be sacrificed on the altar of the New York stock exchange?
Mr. Hanson: The Labour Government are not sitting back and watching jobs being lost. Like my right hon. Friend the Member for Llanelli (Mr. Davies) and some of my hon. Friends, I represent steelworkers. We met Corus and met the unions before, during and after the announcement and we shall continue to do so. I will not take posturing from the right hon. Gentleman on those points.
Mr. Wigley: And I will not take mock anger at the Dispatch Box from the Minister. If the Government were doing something, we should have known what they were doing. By now, they should have shown their colours by their actions.
It is time that the Government shook themselves out of the self-congratulatory complacency that they have shown in the debate. We need action on steel. We need a proactive regional policy, as recommended by the Select Committee. We need to lower corporation tax to attract new investment, as has been done in Ireland. We need regional variation of tax as a tool of regional policy, as recommended by the Select Committee. We need operating aids such as lower national insurance in objective 1 areas. We need--again, as highlighted by the Select Committee--a revised Barnett formula to ensure that resources are available to tackle social deprivation in Wales in line with our needs. It is sad to see that the Secretary of State for Wales has already ruled out that option in his reply to a question on 18 January.
It is outrageous that the funding available for Wales in 2001 is still based on the 1978 formula, taking no notice of the enormous structural changes in the Welsh economy over the past 20 years. Unless the Labour Government are prepared to act on such social priorities, what on earth is the point of their existence? The clock is ticking not just for Ebbw Vale and Llanwern, but for new Labour in Wales. Unless they change course, their time will soon be up.
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