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Mr. Llwyd: The hon. Gentleman is right, and I should have phrased my remark better.
We face other problems. Parts of the UK are doing very well and other parts are doing very badly. One thinks of the north-east, the north-west and Wales. The Secretary of State for Trade and Industry recently made a telling speech about the difference between the south-east and other more prosperous parts of the UK, and the way in which Wales is still lagging behind. He said:
- "Lack of investment, poor skills and education qualifications, these are some of the underlying causes we need to tackle. In the modern economy we cannot build a strong economy, a strong nation, if we have a tail of under performing regions."
- "We need all our regions firing on all cylinders."
The new earnings survey recently showed that the average income for Great Britain as a whole is £21,842, while the average income in Wales is £19,134. There is a gap and we must continue to strive to close it. We could consider having more regional economic policies. For example, there is nothing to prevent the introduction of a corporation tax cut in an objective 1 area. There is nothing to prevent us from giving rent or tax holidays or introducing cuts in employers national insurance liability. Those are valid options that could be used if the political will existed.
Mr. Denzil Davies: The hon. Gentleman referred to a corporation tax cut in an objective 1 area. I do not know what definitions would be used, or how one would compute profits, but he is saying that any company just outside that area, such as a company in Newport vis-a-vis a company in Swansea, would pay a higher rate of tax on its profits.
Mr. Llwyd: No, that is not what I am saying. I said that there was a perfectly valid case for introducing such a tax cut in an objective 1 area.
The much-quoted chairman of Corus said that none of that was possible until he was questioned, when he said that it was possible. There is nothing to stop central Government considering other deprived areas such as those in England and Wales that are outwith the objective 1 areas.
If the Government really want to operate a regional economic policy, they can do it. It is all very well the Secretary of State for Trade and Industry simply describing the problems--an accusation levelled at the hon. Member for Brecon and Radnorshire (Mr. Livsey)--as he has done in several keynote speeches, but he has not to my knowledge responded to the clamour to adopt some form of regional policy whereby regional solutions are introduced to perk up a specific region, whether that be Wales, the north-east or north-west of England, or anywhere else.
Mr. Davies: No one is against so-called regional policy. I question how one could have regional differentials in corporation tax on profits. They do not have such a system in Ireland; the rate of corporation tax in the south of Ireland is the same as applies throughout the country. I find it difficult to imagine how one could operate a policy of differentials within Wales.
Mr. Llwyd: The whole of Ireland is an objective 1 area.
Mr. Llwyd: It still is, for the time being. In addition, part of the Irish success arises from the fact that the Government have pegged corporation tax at a very low rate until 2010, which is bound to be attractive to any inward investor. I wish that we could do something similar to attract inward investment.
On the question of regional competitiveness, in a recent publication Robert Higgins of the centre for advanced studies in Cardiff makes it clear that the south-eastern regions of England are driving economic growth and that there is a great difference between their situation and that of Wales, the north-east and Yorkshire. I acknowledge that there are problems, and I have mentioned some possible answers which I believe should be given consideration. Currently, there appears to be no political will to do anything other than describe what is happening and say, "Dear, dear--there's another few manufacturing jobs gone."
The 75p increase offered to pensioners in the 2000 Budget will go down in history as one of the biggest political gaffes. The recent pre-Budget statement contained an increase of £5 for a single pensioner and £8 for a pensioner couple, and I know about the television licences and the £200 winter fuel allowance, but, backed by the Age Concern manifesto recently received by all hon. Members, pensioners are telling me that they want a proper, decent pension that they can decide how to spend.
Mr. Ruane: Will the hon. Gentleman give way?
Mr. Llwyd: No, because other hon. Members want to speak and it would be unfair if I did not try to finish my remarks fairly soon.
Pensioners say that they want a proper pension and that they will decide how to spend it--that message comes from every pensioners' group. I hope that, even at this late stage, the Government will heed it and address the issue. There is no doubt that pensioners are being pushed to the fringes of society. Far too many depend on state handouts and benefits: despite having worked throughout their lives and giving their all to build a better country for our generation, they are now told to stand back and accept the odd handout now and then. It really is not good enough.
On student tuition fees, I declare an interest as one who currently has two children at university. Even though the expense is ruinous, I am not entering a special plea on my own behalf, because by investing in their education I am doing the sensible thing--at least, that is what I tell myself almost every night. None the less, I have to say that tuition fees are having the adverse effect that people predicted when they were introduced. There was a 4.2 per cent. fall in overall applications between 1996 and 1999, and a 14.3 per cent. decrease in applications from mature students. A recent study by the National Union of Students of working-class pupils in Hull shows that more than 50 per cent. were less likely to apply for university because of fees and loans. At the same time, applications in Scotland have increased by 19.2 per cent. since tuition fees were abolished. That is conclusive evidence.
Having recently met students at University college, Bangor and in Aberystwyth, I believe that that issue will have to be revisited soon. Students leave university, often without a job that they can go straight into, with debts of up to £12,000 hanging around their necks. That cannot be right. I know that, in their hearts, Labour Members feel as I do. We must ensure that we have education for all. In passing, I should like to point out that my father was a retired policeman and that had it not been for the fact that
I received a full grant, I should never have become a lawyer. We dare not prevent talented young people from developing their talent; otherwise, we shall for ever be saying that Wales is uncompetitive.7.45 pm
Mr. Win Griffiths (Bridgend): We all have the current farming crisis on our mind. We welcome the Government's decisive action to end the crisis and their decision to apply for the agrimonetary compensation that, in the past, Governments have not been swift to claim. I hope that it will help farmers to get through this difficult period and that, in future, we have a Government who care for the countryside and want to develop positive policies for it.
I was extremely disappointed by the speech made by the Opposition Front-Bench spokesman. He spent almost an hour quoting press reports and historic bits and pieces, press cuttings and radio excerpts, many of which did not set out the facts, but reflected the gloss that commentators had put on what had been said. Given his frequent references to a forthcoming general election--it has not yet been announced, but he seems sure that there will be one and that it will result in a Conservative Government--I was surprised that he did not compare the 18 years in which the Conservatives were in power with the four years in which the Labour party has been in power. The comparisons are most instructive.
Let us consider unemployment. When the Conservatives left office after 18 years, their legacy in Wales was an unemployment rate of 6.5 per cent., or 80,000 people. By their standards, that was incredibly good, especially compared with the figures for some of the preceding years: at times, more than twice as many people had been unemployed during the wonderful Tory years. Yet after only four years, the Labour Government have managed to cut unemployment in Wales by about 20 per cent. There are now slightly fewer than 60,000 people unemployed in Wales. We have made significant inroads into the terrible Conservative unemployment record.
Let us examine other economic measures, such as interest rates. During the four years of the Labour Government, interest rates have been on average 4 per cent. lower than they were during the Tory years. Under the Tories, we had double-digit interest rates for four years. At one point they were as high as 15 per cent.--more than twice the rates seen under the Labour Government--and industry suffered, home owners suffered negative equity and other problems abounded. Yet in four years, the Labour Government have turned that record round: we now have the lowest mortgage rates, the lowest long-term interest rates and the healthiest prospects for economic growth that have been seen since the second world war--or even in this century. Although I am no expert in these matters, I should not be surprised to learn that the latter is true.
I shall not overstate my case, because the comparison between Labour's four-year record and the Conservatives' 18-year record makes it clear. Under the Tories, growth was 2 per cent., whereas we have managed 2.7 per cent., which is reflected in the way in which we have been able to tackle unemployment. There are about 40,000 more jobs in Wales now than there were when the Tories left office.
We have been able to turn the record round, and not by means of the boom-and-bust economics of Tory Governments. They would introduce financial cuts and
then increase public expenditure. First, we drew our breath and kept a firm hand on public expenditure over the first couple of years. Once we had the economy right, we expanded public expenditure. It is instructive to compare what happened in the last few years of the Tory Government with what has happened under the Labour Government. In the last three years of the Tory Government, public expenditure as expressed in the public service functions held by the Welsh Office increased by 2.2 per cent. and 2 per cent., and, when we came to power, the Tories were planning an increase of 0.4 per cent. for 1997-98.We had to take some difficult decisions about not suddenly expanding public expenditure, in order to get the economy right first. After 1997-98, public expenditure under the Labour Government increased by 2.7 per cent. In 1999-2000, it increased by 8.2 per cent. It then increased by 6.5 per cent., and there are planned expenditure increases of 10 per cent., 8.2 per cent. and 7.1 per cent. These figures show clearly how the Government have grasped the economy and are now able to put additional expenditure into public services. All that has been done with an expanding economy.
Let us consider the prosperity index. There have been many arguments about gross domestic product, but in the Tory years the relative position of Wales in the GDP league of the United Kingdom declined. The Labour Government have begun to address these problems, and improvements are being made in Wales. Perhaps more important in many ways, average earnings are increasing.
In 1999-2000, average earnings in Wales increased by 4.1 per cent. That increase was greatly helped by the introduction of the national minimum wage, which the official Opposition opposed. They are now saying grudgingly that they will not oppose the increase announced today, to £4.10 an hour, because firms are beginning to get their computerised systems ready for next October. We know that most Conservative Members would like to get rid of the minimum wage, which has been so helpful in improving incomes, and especially those of women in Wales.
The working families tax credit has helped about 67,000 families in Wales. On average, it is worth about £30 more than the old family credit. Child benefit has been increased significantly--there was the greatest ever increase of 25 per cent. this year. Given all the changes that have been made to taxation and social security, families with children are about £850 a year better off than they were in 1997.
The new deal has helped to put more people back to work. We know that 28,000 jobless people have been helped. It is a new deal that the Conservative party would want to get rid of entirely. About 18,000 people have been helped back into work and about 10,000 have been helped back into education or further training.
The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) talked about pensions. We all know that the 75p increase was a mistake, but many pensioners say that they are glad that the Government are providing a winter fuel allowance of £200. They are glad also that the over-75s do not pay £104 for their television licences. They are glad as well that in April a single pensioner will receive a £5 a week increase, and that married couples will have an £8 a week increase, with promises of above-inflation increases in years to come.
Pensioners have seen the Government getting the economy right. We are now ensuring that pensioners are receiving an above-inflation share and an above- average-earnings share of public expenditure. Pensioners do not want to lose the winter fuel allowance. It is tax free and does not cause reductions in social security money if it is received as well.
The Government's record is extremely good after a difficult two years. I shall be more than proud to campaign, whenever the general election comes, on the four years of this Labour Government set against any of the 18 Tory years, safe in the knowledge that no other party could form a Government to look after the interests of Wales.
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