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Mr. Huw Edwards (Monmouth): My right hon. Friend may be aware that the chief executive and chairman gave evidence to the Select Committee on Welsh Affairs on Thursday. When my hon. Friend the Member for Gower (Mr. Caton) suggested to the chairman, Sir Brian Moffat, that the Bryngwyn plant was profitable, the chairman stated that he had no knowledge of its profitability. Does that not demonstrate the incompetence of senior management who are prepared to shut a plant regardless of whether it is profitable?

Mr. Murphy: That is clearly of considerable concern; but what concerns all of us who represent steel constituencies in Wales such as Ebbw Vale, Shotton, Gorseinon and Llanwern is the fact that steel plants that are among the most efficient and productive in Europe, if not the most efficient, are to close or at least partially close. That strikes me as a national tragedy from a Welsh and indeed a British point of view.

Mr. John Smith (Vale of Glamorgan): I am sure most Members support all that my right hon. Friend has said. Does he agree that if Sir Brian Moffat proceeds with his proposals, does not listen to the unions and decimates the steel industry, the knighthood that he received for services to the industry should be withdrawn?

Mr. Murphy: I am not in a position to comment on Sir Brian's honour. I am much more interested in what he is proposing to do to 3,000 people in Wales, their families and their communities. I hope he will listen very carefully to the alternatives that the unions and others will put to him in the next week or two.

Steel, however, is not the only industry in Wales. In recent weeks we have seen Ford's £240 million investment in the Bridgend engine works, which will create or secure 500 jobs in a leading-edge technology. Investment of £17 million is going to Mostyn docks in

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north Wales to secure 85 new jobs. There are 100 new jobs at IQE in Cardiff, announced in December, and 83 at Surface Technology Systems in Newport. Moreover, 1,700 jobs are to be created by BAE, and 1,000 are to be safeguarded at General Domestic Appliances. There are to be 400 jobs at Lloyds TSB, 400 at On:Line Finance and 230 at Paramount Food. There will be 264 new high-tech jobs at Wireless Systems International in my constituency, and 110 at Pure Wafer Ltd.

Manufacturing output and manufacturing investment are rising. There have been difficult times, but the climate, including the relative exchange rate between the pound and the euro, is improving. Manufacturing output is up 3.5 per cent. Exports are up 9 per cent. in the past year alone. Inward investment since 1997 is worth £2.2 billion.

Overall, the increase in jobs in Wales has outstripped any losses by 17,000 in the past year. That rate of growth is greater than that in the UK as a whole. It is greater even than that in London or the south-east of England, but jobs are not the last piece of good news for the Welsh economy. Last week, the Office for National Statistics published new data on regional GDP. I know that those data are often subject to change and reassessment, but it is only fair that I quote it, given that the hon. Member for Ceredigion (Mr. Thomas) has been so happy to use it in the past few weeks. He said:

Perhaps he might wish to use any speech that he might make this afternoon to update the House. The latest figures, published on 27 February, show that Wales's relative share of GDP has risen from 80.2 per cent. of the UK average in 1998--itself a figure that was revised upwards--to 80.5 per cent. in 1999.

What matters to our constituents? Do more jobs matter to them? We are getting that. Does better pay matter to them? We are getting that. Does more prosperity matter to them? We are getting that. Do low interest rates matter to them? Interest rates are falling. Does low inflation matter to them, too? Inflation excluding mortgage rates is at its lowest since records began; including mortgage costs, it is enjoying its longest run at low levels for many decades.

I know that many in our rural communities feel that they are suffering from particular economic stress--something more than just the immediate effects of the foot and mouth outbreak. Labour Members are more than aware of that feeling. Mine is a mixed constituency: I represent farmers as well as steel workers in the House. Overall, the Labour party represents more rural and semi-rural constituencies in the House than all the other parties in Wales combined; indeed, it represents more such constituencies than all the other parties in the UK combined.

We--the UK Government and the National Assembly--are acting to assist rural communities, and not just through the £3.5 billion that is paid in subsidy to farming throughout the UK every year. The Assembly is acting in partnership with the Strategic Rail Authority to improve rural rail-bus links and to restore passenger services to the Vale of Glamorgan.

Mr. Simon Thomas (Ceredigion): Before the Secretary of State moves off the economy, will he confirm that,

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when the Government came to power, Wales's GDP was 82.8 per cent. of the UK average and that what the Government have presided over--there has been a slight readjustment lately--is a decline in GDP of more than 2 per cent.?

Mr. Murphy: The hon. Gentleman is not prepared to accept that Wales is getting better--in its economy, prosperity, jobs and in the relative way in which people live in Wales. That is typical of the Welsh nationalist party. All the time, it grumbles and whinges about what the economy is like when everyone knows, in his constituency, in my constituency--in the constituencies of all of us who represent Welsh seats--that things are getting an awful lot better.

Dr. Julian Lewis rose--

Mr. Murphy: I give way to someone who does not represent a Welsh constituency, but we will listen to what he says.

Dr. Lewis: Unlike me, the Secretary of State was not, I believe, born in Wales. Will he, in his great concern for the farming community in Wales, dissociate himself from the remarks of the hon. Member for Newport, West (Mr. Flynn), who stated on "Farming Today" on 22 March:

If that were not good enough, he was also quoted in Farmers Weekly on 4 February as saying:

Does the Secretary of State dissociate himself from those remarks?

Mr. Murphy: First, I should like to say that I most certainly was born in Wales. I was born in the parish of Llanbradach, near Usk, which at the time, I suppose, was in Monmouthshire--although in our hearts that was a Welsh county. My hon. Friend the Member for Newport, West (Mr. Flynn) has just returned to the Chamber and can reply to the hon. Gentleman's comments after we inform him of them.

The Assembly's rural development plan has been accepted by the European Commission, so in future subsidy payments to agriculture will be modulated, with additional United Kingdom Exchequer funds to strengthen not only farming but rural communities more generally. It is of course fallacious to suggest that measures such as the children's tax credit or the minimum wage work only to the benefit of urban areas. As I have already said, most Members in Wales represent mixed constituencies. I know that those measures are as important in rural parts of Torfaen as they are elsewhere.

In last year's Welsh affairs debate, I was able to tell the House that the Government had agreed to establish in statute a Children's Commissioner for Wales.

Mr. Paul Flynn (Newport, West): Before my right hon. Friend leaves the subject of the serious crisis hitting so many parts of Wales, may I tell him something? No one would begrudge the full compensation that the farming

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community will receive for the nightmare that it is going through, but if we are in the business of compensating all the citizens of Wales who are suffering severe losses because of no fault of their own, should we not also be thinking of compensation for steel workers who may be losing their livelihoods, many of whom will probably never work again? I am told that, in redundancy payments and other compensation, they will be receiving about one fifth of what Dutch steel workers would receive. In this era of compensation, with all the incidental losses being suffered by people outside the farming industry, should we not be thinking of full compensation for steel workers?

Mr. Murphy: My hon. Friend is right to compare what would happen to a steel worker's family with what would happen to a farmer's family when we hit times as bad as we are experiencing now. Some of his comments have probably dealt with the points made by the hon. Member for New Forest, East (Dr. Lewis).

As I said, the Government agreed to establish a children's commissioner. That announcement reflected the importance of this House and this Parliament in passing primary legislation for the people of Wales. Since our last Wales day debate, my office has overseen the parliamentary passage of new Welsh law not only on the children's commissioner, but on care standards more generally, on education, on training and on local government.

When we first dealt with the issue of the children's commissioner, we were limited to using the legislative vehicle then available--which has become the Care Standards Act 2000. That necessarily led to the creation of a commissioner with a limited role. However, I am pleased to say that, as we all know, our further measure was welcomed on both sides of the House and quickly passed into law. I am very grateful for the co-operation that was shown by all parties on the children's commissioner.

Today I am in an even happier position. On 1 March--less than one year after our announcement in last year's debate--the new commissioner took up his post. A Bill to widen the scope of his work to the full canvas of the Assembly's work is now being considered in another place, having completed its passage through this place in a matter of weeks, with, as I said, the co-operation of all parties. This year, Parliament has debated not only the Children's Commissioner for Wales Bill, but Welsh aspects of the modernisation of the national health service.

As hon. Members may recall, last year the present Conservative spokesman on Welsh Affairs, the hon. Member for North Dorset (Mr. Walter) told the House:

Moreover, despite the Prime Minister's promises, the hon. Gentleman added:

The hon. Gentleman was, of course, referring to the funding of the objective 1 programme. As the House knows, objective 1 is an opportunity for west Wales and the valleys to catch up some of the economic ground that they lost in the 18 years of the Conservative Government. It must

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therefore have been something of an embarrassment to the hon. Gentleman when, in last July's spending review, we did indeed fully fund the objective 1 programme.

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