Budget Statement and its Implications for Wales

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Mr. Michael: The hon. Member for Ribble Valley shows a remarkable ignorance of the way in which the combination of nationalists has propped up the Conservatives in the Vale of Glamorgan.

Mr. Ipik: That is an interesting psephological point. I look forward to hearing a response from the hon. Member for Ribble Valley, should he catch your eye, Mr. Jones.

I will remind the Committee of what the Liberal Democrats would do differently. We would cut waiting times and find the money for an extra 3,300 doctors and 11,400 nurses across the United Kingdom. We would ensure that average class sizes really went down to 25 for all five to 11-year-olds, and give every pensioner an extra £5 a week, £8 for every pensioner couple. We would pay for that in clear and transparent ways. We will increase tax for those earning more than £100,000 and we will be quite clear about our intentions for the 1p on income tax. We will also make some capital gains tax changes. Those policies would add a considerable amount to that spent on the public sector.

I will make a point that underlines the difference between the Liberal Democrats and the Labour party. The hon. Member for Cardiff, Central was critical and cynical about the changes that we made in Scotland in respect of the abolition of tuition fees. It was a Liberal Democrat policy and our Labour partners in Scotland bought into it. The people of Wales can decide that either they do not want that policy or accept our commitment to abolish tuition fees for students. Voters will have to make that decision at the next poll.

The Liberal Democrat party is trying to make politics more transparent. We want to be honest to the public about where we stand, where we agree with other parties and where there are alternative policies. Instead of investing in the 2006 general election, the Government should have invested in the people of Wales today.

My party is known for its co-operative and positive spirit, but voters must decide whether they want that kind of partnership. I will not tolerate hypocrisy in my party. If hypocrisy exists, I will take it up internally and externally. I want our party to be honest, and to be seen to be honest. I give that commitment to all hon. Members and to the public. If the people of Wales want a party that has proved that it makes a difference when in government and that its actions are transparent, they should consider giving their vote to the Liberal Democrat party.

2.44 pm

Mr. Martyn Jones (Clwyd, South): I am delighted that we are in Cwmbran again. I chaired an inquiry session here recently, which was another good day.

The main points of the Budget speech gave positive indications for Wales and the Welsh economy. However, it is worthwhile first to describe the economic backdrop of recent years to help us to measure the progress made by Labour since 1997. In particular, it is worth reflecting on the legacy of Margaret Thatcher in Wales. During her period in office, 23,000 miners lost their livelihoods; 65,000 jobs were lost in manufacturing industry; council house construction was slashed by 90 per cent.; the poll tax was forced on us; we limped through Black Wednesday and its consequences, and endured boom and bust; we experienced record home repossessions and negative equity on homes for the first time; we witnessed the tragic economic and social breakdown of some of our communities.

That land is now foreign to us. I suspect that it is the land to which the Leader of the Opposition has referred. He claims that we would return to that land after the next general election, if the Labour Government won another term. The opposite would be the case. When Conservative Members reflect on the failures of Baroness Thatcher's dismal 11-year reign, they will fully understand why none of them represents a Welsh constituency. In 1997, the right hon. Member for Huntingdon (Mr. Major) lost the battle, but the war was lost during Baroness Thatcher's dismal reign of economic failure and decline.

Last week, I was heartened to read that some Tory parliamentary candidates are contemplating using photographs of Baroness Thatcher in their election material at the next general election, instead of the customary mugshot of the Leader of the Opposition. I commend them for contemplating that; if a leaflet bearing the image of Baroness Thatcher fell through the letterbox of any Welsh voter, that would guarantee that the Tory party remained as numerically challenged in terms of parliamentary seats as it is today.

After only four years of Labour Government, the recovery of Wales presents a sharp contrast. Wales has undergone an economic revival over the past 47 months. If my party's pledge card had included a commitment to achieve the lowest inflation ever and the lowest unemployment and interest rates for some time, nobody would have believed it. We have fulfilled those pledges, and achieved much more.

Undoubtedly, one of the biggest success stories has been the introduction of the new deal. That is the same new deal to which the hon. Member for Buckingham (Mr. Bercow) referred, in his usual mild-mannered tones, as

    ``a colossal and expensive failure''

and a

    ``rotten service at a rip-off price''.

I recommend that he and his Conservative colleagues visit their local Employment Service offices. I did that recently. The people whom I met there deal daily with employment issues and they are delighted with the new deal.

The reduction of youth unemployment was a key Labour general election pledge, and I am proud that it has been achieved in Wales. Today, as a result of the new deal, 17,000 young people in Wales have secured a job; Labour's target in the 1997 general election was to secure 13,000 jobs for under-25s. By the end of November last year, 6,300 employers in Wales had signed up to support the new deal. That is an amazing statistic, although the economic measures used by Opposition Members are, perhaps, more amazing.

In last week's Budget speech, it was announced that the new deal would be expanded to benefit all over-25s who have been receiving jobseekers' allowance for more than 18 months. It was also announced that the new deal would be extended to lone parents. That is excellent news. In Wales, 50,000 people will benefit from that important change. In addition, it was announced that all claimants of invalidity benefit would be able to participate in the new deal. It is apparent that, under Labour, Wales has gone back to work.

The Labour Government have invested in the future of Wales by taking profits from fat cats and investing them in high-quality training for our young people, the disabled and the long-term unemployed. That will help to rebuild our economy.

Our communities will soon face a choice between the Tories—who would scrap the new deal—and Labour, which is extending it to cover lone parents and the long-term unemployed. The Conservative party left the young people of Wales on the scrapheap. The Labour Government have invested wisely to give them back their future and to enable them to use their talents.

Unemployment in Wales is now lower than in Scotland and Northern Ireland, and employment is growing faster in Wales than in the UK as a whole. During the past year alone, 17,000 jobs have been created. The number of unemployed people claiming benefit has continued to fall. The latest figures cover the winter months, which is usually the worst period of the year, but they underline the fundamental strength of the Welsh economy; compared with last October, 1,800 fewer people are out of work. There are more people in work in Wales than ever before.

That growth in jobs did not happen by chance. It happened because the Government have delivered economic policies of stability, growth and low inflation. The Conservative party would take the country back to the days of boom and bust, and the shadow Chancellor said nothing in response to the Budget speech that will convince the people of Wales that the Tories have changed one iota since the days when he was an advocate of right-wing Thatcherite doctrine, the effects of which I have already outlined. Mortgage costs would rocket, thousands would be faced with repossessions and unemployment would rise because he would scrap the new deal and end measures to make work pay, such as the working families tax credit and children's tax credit. The policies of our Government and the new announcements on pensions, the minimum wage and the 10p tax rate made in the Budget statement underline our commitment and ensure that Wales has its share of prosperity from the United Kingdom's economic cake.

I would like to touch on two areas of concern. My hon. Friend the Member for Monmouth movingly referred to the problems of steel jobs for his constituents. We have problems in north Wales, too, in that several hundred jobs will be lost if Corus does not negotiate meaningfully with the Government, the Assembly and the unions during the remaining two months of the consultation period.

Hon. Members will recall that Sir Brian Moffat came before the Welsh Affairs Committee and had a rough ride, although he did not tell us why it was necessary to lose so many jobs within Wales. The fundamental issue seems to lie in the amalgamation of Corus with a Dutch company, giving the shareholders of British Steel a £700 million handout. That sum would have kept British Steel going for two years, even at the losses that it was making. It might have met a peak in the cycle and not have lost any jobs.

Sir Brian Moffat sat in the Committee and showed no concern for the 6,000 who were losing their jobs, because he, as a shareholder in Corus, had given himself a nice little handout before the merger with Hoogovens. That is at the nub of why he does not care; he is sitting pretty, thank you very much. When he comes before the Select Committee again, that will be forcefully pointed out to him, along with many other things that we are finding out as time goes on.

Many hon. Members have referred to the foot and mouth epidemic, which is a tremendous problem for not only agriculture, but tourism. The Select Committee is trying to establish why Wales, although it has a good image, does not have as prominent an image as Scotland and Ireland. I am afraid that we will have an even bigger problem if tourism is affected by foot and mouth as it seems it may be.

The Budget contained measures for rural areas, including a cut in fuel duty, which will help many people in my constituency who have to travel for whatever reason. As we know, there is little or no public transport, so that measure will help those people. Similarly, the cut in the road licence fee for cars up to 1500 cc will help those who have to travel by car.

The sections of the rural community who criticise the way in which the Government are tackling the foot and mouth problem are wrong to do so. It has been decided that the way chosen by the Government is the only sensible way in which to keep Britain free of the disease. If the economic disbenefits of the foot and mouth disease policy were to be set against the disbenefits for tourism, it would be difficult to make a decision, especially if the disease reached an epidemic scale in this country. Those sections of the farming industry that criticise the Government should not do so.

I am sure that the Secretary of State would agree that the Government have a great deal left to do in Wales. Social exclusion in many parts of the nation, both north and south, remains a challenge for us all, but that challenge has been brought about by the legacy of failure to which I referred. The Government will not shirk that challenge; we have set out to rectify the failure of past Governments and, after four years of power, we are beginning to turn the corner. We have made a start on a long road to recovery and, in the coming months, I hope that the Welsh people will give us the chance to complete our journey for the benefit of everyone in the country.

2.55 pm

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Prepared 12 March 2001