Budget Statement and its Implications for Wales

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Mr. Jon Owen Jones: Will the hon. Gentleman give way?

Mr. Thomas: No. I am sorry, but I have only two minutes left.

We have seen some money to encourage the use of those fuels. For example, biodiesel will receive a substantial cut in tax, but in two years' time. Why not now? The technology exists, and the infrastructure is starting to be put together—[Interruption.] Hon. Members say that biodiesel is not on the market, but every diesel car on the market now can run on 85 per cent. biodiesel. Diesel cars were developed in Germany to run on vegetable oil, so it can be used now. There is no point waiting for two years.

Another example is the tax on aggregates, which makes sense in itself when one thinks about not allowing people to mine. But the way it has been put together encourages people to mine old mines. That has been counted as recycling and will pose a problem. The hon. Member for Gower is not present. He might have something to say about dredging.

There are environmental deficiencies, but the issue of the moment is foot and mouth. There was nothing in the Budget to alleviate the current situation and the reasons for that are obvious. We do not know the extent of the problem yet. It may be controlled or it may increase and become a bigger problem.

There is a unique relationship in Wales between agriculture and the environment and between the rural economy and tourism. It has been argued, as a few hon. Members tried to argue today, that one can differentiate between them, but that is not possible. Tourists come to Wales to see what our farmers have created. We cannot differentiate between them. Tourism is suffering too. I am glad that the Urdd has reopened in Llangranog in my constituency. It has lost more than £150,000 in two weeks, which shows the effect of the problems on the tourist industry. We must not create or allow a split to develop between tourism and agriculture where one side says, ``We are claiming compensation,'' and the other says, ``No, you cannot have compensation because we do not get any.'' What is needed at the end of all this is a package for rural areas. As the hon. Member for Brecon and Radnorshire said, we need guidelines for the tourist industry on what can be done.

3.48 pm

The Parliamentary Under-Secretary of State for Wales (Mr. David Hanson): I join in the tributes to your chairmanship, Mr. Jones, and to your nearly 31 years in the House of Commons representing Alyn and Deeside and the Flintshire constituency. You represented some of my current constituents for some 13 years and it is to my advantage that some of them think that you still do. On behalf of all hon. Members I should like to thank Monmouthshire county council, the House of Commons authorities, including Hansard staff, the door keepers, the police and all the others who have helped us here today. I am tempted, given the nature of the debate, to thank the returning officer too, but perhaps we shall leave that for the near future.

During the past four years the Government's prime aim has been to build a platform of economic stability. Our discussions on the Budget have related to that platform. We have tried to take a balanced approach between making resources available for greater public investment in education and the health service while making targeted tax changes that have helped the poorest members of our society most. I reflected on what my hon. Friends the Members for Cardiff, North and for East Carmarthen and Dinefwr said about that. Through the tax cuts, we are trying to help the disadvantaged and the poorest in our community, and to lift children out of poverty.

Before I deal with hon. Members' contributions, I want to reflect on what my right hon. Friend the Chancellor did for people in Wales in last week's Budget. There is extra money for education and health—£100 million over and above last year's comprehensive spending review—and there is extra money for fighting drugs. The Chancellor has targeted investment on tax cuts with the 10p income tax band, which helps those who earn the lowest incomes, and the children's tax credit will rise from £10 a week in April 2001 to £20 a week in April 2002. There is also a rise in the working families tax credit.

Maternity pay has been increased, and maternity cover extended—moves that are especially important to women in our community, as my hon. Friends have said—and the introduction of paternity leave will also help at the pressured time when children are first born. The minimum wage has been increased to £4.10 an hour, and rural and urban areas will be helped by cuts in petrol tax duty of 2p a litre on ultra low sulphur petrol and 3p a litre on ultra low sulphur diesel.

Because of the Government's actions in this and previous Budgets, from October 2001, families with children in Wales will be £1,000 better off, and such families in the poorest fifth of the population will be £1,700 better off. Real changes are being made because of the Budget, including such measures as the extension of the new deal, the increase in the minimum wage, changes in national insurance contributions and the help being given to lone parents, the disabled, partners of the unemployed and the over-50s. The balance of power in Wales is being shifted in favour of the poorer members of our community.

In Wales, change is occurring in economic stability, the creation of jobs and the fall in unemployment. The investment that my right hon. Friend the Secretary of State has outlined—£100 million extra—will be targeted at real things, as my hon. Friend the Member for Preseli Pembrokeshire (Mrs. Lawrence) said. It will make real differences in schools and hospitals throughout Wales. On that basis alone, we should commend the Budget to hon. Members.

I shall try to respond to as many as possible of the various points that hon. Members have made, although time is limited. I pay tribute to the hon. Member for Brecon and Radnorshire in his pending retirement. Foot and mouth was the key issue that he raised, and I can tell all hon. Members who mentioned foot and mouth that the Government's main aim is to eradicate it as quickly as possible, and to ensure that we examine the implications for farmers, when that involves the killing of animals. Farmers will receive the full market value for slaughtered animals. The Government have quickly made available £156 million of agrimoney compensation.

Real problems surround foot and mouth. However, we start from the basis of trying to eradicate it, and I hope that hon. Members agree with that. I represent a rural area, as do many other hon. Members, and we all urgently want to see foot and mouth eradicated. My hon. Friend the Member for Monmouth drew attention to his concern that the MAFF helpline for foot and mouth was shut at the weekend. I am assured that three Assembly helplines, advertised on its website, were open from 10 am to 4 pm during the weekend. I used one yesterday to raise concerns in my constituency about foot and mouth, so I hope that that reassures him. My hon. Friend paid tribute to the help that the Budget gives to families. The minimum wage, the new deal and the working families tax credit are important in his constituency, as elsewhere.

The hon. Member for North Dorset, who has had to leave, said that ultra low sulphur petrol is not available in Wales. However, from 1 April, it is expected to be available at 96 per cent. of major retail sites and more than 80 per cent. of total sites in Wales. By 1 June, we expect 100 per cent. of petrol stations in Wales to have ultra low sulphur petrol available and we have cut the rate of tax on non-leaded petrol to compensate for the period during which ultra low sulphur petrol is not available.

The hon. Gentleman criticised the Government's performance on education and national health service waiting lists. I leave you with one thought, Mr. Jones. How will the Conservative party tackle those issues when they have given a pledge to cut taxes and public spending?

My hon. Friend the Member for East Carmarthen and Dinefwr referred to child poverty and emphasised the strong economy. There are difficulties with Dewhursts, Dairy Crest and Valeo, which border his constituency, but the strong economy, low inflation, low interest rates, and investment are key elements in helping to restructure and reform our economy. His reference to Plaid Cymru and its economic arguments were spot on. My right hon. Friend the Member for Llanelli (Mr. Davies) has said many times that the cost of independence to our public services will be rejected by the people of Wales when the election comes.

The hon. Member for Meirionnydd Nant Conwy referred to Corus. He knows the situation and our concern about it, but we await with interest the comments of Sir Brian Moffat. He surprised me—my right hon. Friend the Secretary of State will also be surprised—when he said that there was no new money in the Budget for objective 1 funding. If he thinks that there is no new money in the Budget, he is not a nationalist, but a Dutchman. The Budget includes new money for objective 1 funding. My right hon. Friend the Secretary of State fought very hard for that new money. It is British Government money to support objective 1 funding.

Mr. Wigley: Will the Minister give way?

Mr. Hanson: I cannot, because of the time. The right hon. Gentleman has been absent for a large part of the debate, but not for as long as his party leader, who will be fighting for his seat at Westminster in the general election shortly, but cannot be bothered to come to our debate today.

My hon. Friend the Member for Cardiff, Central referred to the repayment of £34 billion of national debt. His comments were important and valuable, as were his comments about the Liberal Democrats. We all share collective responsibility.

The hon. Member for Montgomeryshire referred to compensation for foot and mouth disease. The Government are considering a range of issues, but no decisions have been made. Full consultation is under way, but the starting principle is that compensation is not given for consequential losses. We are discussing with the industry the possibility of insurance-based arrangements. Many of our constituents are affected and we recognise the problems.

The hon. Gentleman also referred to the euro and he knows the five tests. He also knows that, unlike the Conservative party, we shall give the people of Wales a choice in due course.My hon. Friend the Member for Clwyd, South (Mr. Jones) referred to the new deal, which is vital in creating wealth and support. My hon. Friend the Member for Clwyd, West (Mr. Thomas) referred to implementation of the national minimum wage. The Department of Trade and Industry has made 290 visits to Wales to check on enforcement. It has recovered £192,000 of money for low-paid workers and many enforcement orders have been issued. Again, I must tell the Committee that the minimum wage would not exist but for my hon. Friends.

The hon. Member for Ribble Valley said that the Chancellor should give the money back in tax cuts. If that money were given back, what public services would be taken back? Spending cuts would have to be made in the number of police, educational establishments, nurses and doctors. That is crucial. If the Conservative party goes into the election promising tax cuts, it must go into it promising public spending cuts. We need to know where those cuts will be made.

My hon. Friend the Member for Preseli Pembrokeshire referred to investment in education, as did my hon. Friend the Member for Bridgend. We have had a positive debate on those issues.

 

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Prepared 12 March 2001