Select Committee on Welsh Affairs Minutes of Evidence

Examination of Witnesses(Questions 20-39)




20. What contingency plans do you have for further redundancies? It is not that I am anticipating any in my own constituency because I really do think that it has a long future, the steel industry, but in the light of your experiences over the last two years I would imagine that you have thought long and hard about other redundancies and how you are going to deal with that. To put it more positively, what work has been done in order to assist them with their diversification of these local emerging economies?
  (Mr Murphy) That is the key to it, I think, that you have to manage a changing economy, and that is the economy that your Dad and my Dad knew all those years ago, the one which is entirely in South Wales at least, but also to a certain extent in North and East Wales as well, based upon coal and upon steel. That has gone in terms of the diversification of industry changing to heavy engineering, for example, and in a way that is changing too. In my own constituency I see this enormous shift from a coal and steel constituency to one involved in making brakes, for example, to one now which is involved in high-tech and different types of new technology and new industry. The bottom line I suppose is that I have got 3.6% unemployment in my constituency. That is replicated throughout the whole of Wales constituency by constituency. The change which needs to be managed is going to be very painful for individuals and I think that the experiences that we have gathered over the last 18 months, two years, regarding Corus showed us that now we have got a model, a Team Wales if you like, in which we can bring people together in the event of any difficulties like we have just faced. We can bring together the Jobcentre Plus, ELWA, WDA, Careers ales, the Rapid Response Service, all of these people coming together to deal with specific problems affecting the areas which have been affected in the way that we have just described. I think the long term key to all this—and I am sure everybody in the Committee will agree—is that you have a much more diverse economy than we had in the past, that you rely much more heavily on small and medium sized businesses than on great big ones, because if they go, as in Ebbw Vale's case,—when I started work in Ebbw Vale in the early seventies 10,000 people were employed in the same steelworks. When they closed it this year a thousand people were made redundant, a lot of people, but not compared with what it had been, 10,000 people and before that more than that—the impact upon a single community of something like that happening (and North Wales members here will remember Shotton as a classic example and the impact that had on the community) is that you have to diversity into smaller and medium sized concerns so that you cushion any blows on communities.

Mrs Williams

  21. The report on page 13, point 4, says: "Wales and Border rail franchise maintained as a priority for the Government and the Strategic Rail Authority". Could you tell the Committee what this means in practice?
  (Mr Murphy) The establishment of a Wales and Border franchise is first of all a priority for the Assembly and one which has my full support and sympathy as the Secretary of State for Wales. My role in all this has been the key to the proposal at the forefront of consideration by the Strategic Rail Authority and my ministerial colleagues as well as ensuring that policy developments take account of the particular transportation needs of Wales. I think that the old DETR and now the Department of Transport are acutely aware of the specific problems and needs of Wales. That is why the Wales and Border franchise is well advanced. It will be possible for the SRA to announce the successful bidder of that franchise in spring 2003 with the successful candidate becoming operational in the autumn. There are four short-listed companies who have stated that they will make their best tenders by January 2003. Of course infrastructure is important in terms of the rail structure of Wales but this is also hugely important in terms of ensuring that we can get a decent railway service in Wales and we work closely with Sue Essex, who is Development Minister in the Assembly,—a good minister, I might add,—with the Department of Transport and before that with the DETR.

  22. Do you feel that the National Assembly is sufficiently involved in the process of awarding the franchise?
  (Mr Murphy) Yes. We have been very much involved over the last number of months in discussing this issue with them, including by way of meetings. They I know are looking at their own responsibilities with regard to rail and they have not finalised the proposals yet but obviously when they do my colleagues and I will look at them very carefully. Until we have the Assembly's considered proposals on their responsibilities within their transport policy it would probably be premature for me to speculate on that, so we await that. They do take integrated transport very seriously in the Assembly, as all of us who live and work and represent Wales do, because of the nature of our country. That is why there has been a full involvement by the Assembly. They are looking at the future as well and we await their response.

  23. What are your views about giving powers of guidance over the SRA to the Welsh Assembly similar to the ones given to the Scottish Executive?
  (Mr Murphy) There are differences between Scotland and Wales, which was evidenced by the way this was all structured in the first place, but I really would not want to get into any detail on that until I have seen the proposals which the Assembly put forward. As I say, it would be wrong for me to pre-judge that or be premature in what I say whilst they are considering it.

  24. Do you understand that there are strong feelings coming from the Assembly expressing the view that they should be given powers of guidance on the SRA?
  (Mr Murphy) I believe these views are held by some members of the Assembly. There is a Welsh person who is on the SRA. The Scottish comparison is not quite straightforward. They have got a lot more internal routes than we have in Wales. As I say, let us await the proposal.

  25. Can I turn to another topic now, one which is going to be debated in this House today? As you know, one of the areas on which we are keeping a watching brief has been the closure of Post Office branches in Wales. What input have you had to the Government's policy on post offices? I would like to cover urban and rural.
  (Mr Murphy) First of all, as the member of the relevant Cabinet committees on these issues, it is important for me to be able to put the specific problems of Wales in the context of the relevant Cabinet Committee. Because of that I then wanted to see what those problems were and so I held a number of meetings with a number of key stakeholders. That is what they call them these days, stakeholders. They include the representatives of the Communication Workers Union, the General Secretary in fact, Postcomm, Postwatch Wales, Consignia, Cabinet colleagues and the First Minister, and of course a number of Members of Parliament, including the Member for Aberavon, Dr Francis, so that I could gauge what the feelings were of all those people in terms of where they felt the changes needed to be dealt with in the Post Office network. As you know, a formal requirement has been placed on the Post Office by the Government to maintain the rural network and to prevent avoidable closures. At Cabinet committee meetings I have raised the uniqueness of the rural network in Wales, which is the hub of rural communities, and the importance of maintaining it. What I have also done though is explain to my colleagues that we have in Wales probably a unique situation in the valleys of South Wales which could be regarded as being both urban and rural, in other words urban villages. The nearest equivalent I guess would be perhaps the pit villages of the north east of England. We do have a situation in large parts of Wales which you could not really call rural but which are not quite big towns either where the Post Office plays an extremely important role. Each of us who represent valley constituencies would be able to give dozens of examples of that. We must not forget either that the cities and the large towns have their own individual problems with regard to post offices, but the ones that particularly come to mind are the rural communities and the Welsh and urban villages, in particular those in the South Wales valleys. My job is to be able to ensure that in the decisions that Government makes regarding post offices they look at those particular features of Wales. You will be aware that the Government is fully committed to modernising the Post Office network. We have made the largest ever investment in the Post Office, £500 million on ACT automation, and in 2003 universal banking services are being implemented, with more to follow. The main high street banks and the Nationwide Building Society have agreed to provide access to their basic bank accounts as part of the universal banking services. In addition to that the National Assembly itself is involved in these issues because they have certain responsibilities too in ensuring that communities survive in the rural areas and also that those people who are most vulnerable in our rural but also in urban villages and elsewhere, and perhaps in our inner cities too, are looked after as best they can be. In summary I have held many meetings over many hours on the question of post offices.

Mr Wiggin

  26. I am just curious about one thing, Mr Murphy, which is your expression "avoidable closures". Obviously, what we are concerned by is what separates specific Welsh post offices from, say, post offices across the rest of the United Kingdom. Unfortunately, because you said "avoidable closures", that hides a multitude of sins, does it not, because that does not, from your answer, give us any extra information. You have very kindly explained all the procedures you are going through but it does not tell us what you did that does more for Wales than perhaps is being done for other post offices elsewhere.
  (Mr Murphy) The point I was trying to make was this. I cannot save every single post office in Wales; no-one can say that, because post offices come and go anyway for all sorts of reasons. The issue in a more general sense is the recognition of the post office as being so important to the life of a community. I was not brought up in a rural area but I was brought up in an urban village and I knew how important that was, particularly in those areas where that is accompanied by a considerable number of examples of deprivation. In those places you have to look at whether there is a large number of old people, people who are disabled, people who cannot travel and so on. Those things have to be taken into account. What I am saying is that the Assembly and the Government together are looking very closely at those issues from a specific Welsh point of view where there are differences between Wales and the rest of the United Kingdom in the nature of our topography and the economic well-being of Wales.

Mrs Williams

  27. Secretary of State, you mentioned the areas within Wales which might fall between rural and urban and I recognise that. I read an article recently which said that the Post Office are considering now, when there is a closure and they are unable to find a successor and they really want to keep the service going in that area, having a presence at a primary school or a bigger school. In your discussions with DTI ministers and Consignia would you consider looking at the map for Wales in that context and do what you can to push that idea forward because that would be a real partnership, would it not, between LEAs and the service and the users?
  (Mr Murphy) That is a very imaginative idea. We do have to look at different ideas like that. I think that the isolation of some of our Welsh rural communities is probably greater than it is in England. The distances that people have to travel are probably greater. I have often thought that we under-use our schools, for example, in our villages and in urban villages as well, and that they ought to become in many ways the centre of village life in a way that they have not been in the past. Many decent village schools have perhaps been under-used. You may rest assured that that point will be put across to my colleagues.

Mr Caton

  28. I remember when we produced our report on the future of post offices in Wales the Government were then talking about—and this fits in very well with the last thing you said about isolated communities—the fact that one of the new roles of the post office could be as the background you are talking about, as a sort of GP for government information and some services. I understand that has been piloted in England and from what I have heard the feedback has been very good, yet it does not seem to have been rolled out across the rest of the United Kingdom. It certainly has not impacted on Wales yet. Is that something that you have been involved in discussing?
  (Mr Murphy) We have had a look at different examples of how that can happen. Of course, you always have to match the overall cost against the usage of those particular services. I think that the Post Office itself in a local, sometimes remote, isolated community plays a much wider role than simply dealing with stamps and all the rest of it. It deals with contact, particularly for the elderly community of that village. It goes beyond those particular issues. There is a recognition of that. I think the universal backing idea goes very much towards that too. I think too that the Assembly probably will have a role to play in the sense that it is responsible, for example, for local government which affects the lives of so many people and how that then relates into government services and so on.

  29. Continuing looking at your third objective in the report, can I look at the potential of using state aids in Objective 1 areas? You may remember in our Report on Objective 1 earlier this year we recommended that the Government should look favourably on requests from the National Assembly Government for Article 87(3)(a) derogations in Objective 1 areas. Has any further progress been made in this area?
  (Mr Murphy) The Government position has not changed since we responded to that recommendation. We agree with the Committee that it is important to recognise that Objective 1 status does not automatically entitle the Government or the Assembly to introduce state aids in West Wales and the Valleys. If I remember rightly, the committee asked me a question on this in Cardiff some months ago, Chairman, when you were chairing with one arm in a sling, and we looked at the different measures which will benefit Wales, such as extending the stamp duty exemption to cover all non-domestic transfers in disadvantaged areas, the Community investment tax credit, the research and development tax credit, and of course, interestingly and topically, the Chancellor announced it in a northern seaside town recently the enterprise communities, which I shall be discussing with the Chancellor over the next few weeks and how they affect Wales, because doubtless enterprise communities will have an impact upon Wales and those communities which need a boost in terms of ensuring that they get more enterprise, more entrepreneurs, and that in a way, like the stamp duty exemption, will cover lots of wards in Wales which previously were not covered by these things.

  30. Has the National Assembly actually requested any specific derogations for its affected areas?
  (Mr Murphy) They have requested the general issue, as you know, because we pointed it out to you before, and it is linked into Objective 1. At the moment the Assembly is considering a request in a letter which I have sent to them as to what they would like to see the Chancellor introduce in the course of his review, which is normal practice, so I am awaiting further information from the Assembly as to what they would want. My guess is that they would be likely to repeat their request but we must await the formal letter.

Mr Wiggin

  31. With the greatest respect, Secretary of State, I am really not convinced that I know what you do, apart from explaining things beautifully, which is why I would like you to explain why it is the case that not all meetings of the Joint Ministerial Committee are publicised. Even if the proceedings of these meetings are confidential is there not a case for putting rather more information in the public domain, perhaps how many meetings are held, for example, and which ministers attend them?
  (Mr Murphy) On the first point, I hope I have not been wasting my time over the last hour in saying to you what I do. From time to time I get journalists, occasionally work experience people, coming to my office to see what I do. Perhaps you should come and do the same one day, but that is another issue.

  32. Is that an invitation? I might well take you up on that.
  (Mr Murphy) On the JMC, some are publicised and some are not. The idea of a Joint Ministerial Committee is sometimes to bring ministers together to discuss matters of huge importance which are dealt with in Scotland, Wales and Northern Ireland by devolved governments and by the United Kingdom Government for England. For example, on 22 October the period covered by this report, the JMC met on health, on 8 November on Europe, and on 7 March on Europe. Since the report was published we have had a further one on Europe, another one on equality and there will be a general one not too long away to look at the whole question of what is happening on the devolution scene. There are others too. When those meet, incidentally, joint communiqués are issued to the press and to the public as to who was there and what we discussed and what the issues were that were so important that we had to deal with. Then there are others which meet in confidence. Sometimes it is important that they do that because occasionally we have to meet to discuss issues which may be highly sensitive and those generally are dealt with but which it is better from the point of view of the members of the committee to deal with them in that way. Incidentally, that excludes all the bilateral meetings that are held, which of course are not necessarily called Joint Ministerial Committees but there are lots of bilateral meetings which are held. For example, I meet bilaterally and my deputy meets bilaterally with Assembly ministers literally every week to discuss various issues. You could say that they are Joint Ministerial committees; we are both ministers and we meet jointly as a committee, but it is not classified formally as the others are. Secondly, the devolved administrations also of course meet between themselves, which is something that we wanted them to do. I know, for instance, that the Health Ministers meet from time to time with Scotland, Wales and Northern Ireland. In addition to that the devolved administrations meet with other ministers under the aegis of the British-Irish council and the Good Friday Agreement, and they have been meeting on a number of occasions in that guise. Similarly, I know that all the agriculture ministers meet quite regularly from the devolved administrations but it probably would not be classified technically as a Joint Ministerial Committee although that is what it is. As well as the formal JMCs meeting therefore there are informal bilateral meetings.

Dr Francis

  33. Could we turn to Objective 5 now and funding policies? Can you explain exactly what your role is in determining the National Assembly's budget?
  (Mr Murphy) The first one of course is the Comprehensive Spending Review. That takes place, as you know, not just at the actual timing of the spending review; it does not happen in July every couple of years. It does not work like that. What happens is that the discussions, the negotiations, that lead up to the Comprehensive Spending Review are very intense, very detailed, and it is in that role that the first and perhaps most important part of my role of finance is concerned. In the second Comprehensive Spending Review what was particularly significant for us in Wales was the exemption which was given to Objective 1 structural funds to be over and above the Barnett formula. It was the first time it happened where we decided as a Government that it was such an important issue for Wales that, contrary to what had happened for 20 years, those structural funds would be over and above the money that would go into Wales for its everyday use. That is probably the classic example of how we dealt with the issues of negotiating the block grant and there are others, but that is probably the one that is most well known. The second one is that between Comprehensive Spending Reviews there are often calls on the reserve and I want to give you an example of that. It is then for me to keep a very close watch upon calls upon the reserve from England to ensure that we in Wales will get our consequential and fair share of what is happening. We did it, for example, on flooding a year or so ago. The formula does not automatically operate in these circumstances and a case has to be made. That case has to be made by me working with the Assembly. For example, when credit approvals were provided to support local public service agreements with English local authorities, my Office intervened to ensure that we had equivalent funding in Wales. There are also other examples which I could give you in writing. That is the second part of my role. The third of course is as a member of the Government, a member of the Cabinet, in ensuring what our Government's priorities are in the first place. From our Office in Wales and the Assembly the emphasis, for example, on health and on education, which has been an area on which the Government puts priority, I know is also our priority in Wales. If more is to be spent in England on health and education I obviously welcome that because I know too that we have the same priorities and consequentially we will have more money for the National Assembly as we have done historically. Those are the three main areas.

  34. I think you have already answered this second question, but I will pose it because you may have something to add. Given that the National Assembly's block grant is largely determined by these well-established principles do you still have significant scope to influence the size of that block grant, given the examples that you have just given?
  (Mr Murphy) The answer is yes, of course. Although the Barnett Formula is formulaic, had the formula been used under Objective 1 then there would not have been extra money from Objective 1.

  35. You are encouraging us and others to be approaching you more regularly to influence that block grant.
  (Mr Murphy) I always encourage representatives of Welsh constituencies to influence me on a variety of things.

Mrs Williams

  36. Turning now to the administration of the Welsh Office, and concentrating for a minute on the Welsh language which is covered on page 22 of the Report and also in your written evidence concerning the Welsh language scheme, when is the draft scheme likely to be submitted to the Welsh Language Board?
  (Mr Murphy) The consultation period ended on 11 October and we are now in the process of carefully considering the responses we have received. We will then submit a final draft approval by the Welsh Language Board, hopefully this side of Christmas. We want to consider the consultation process. It is not easy to say how long it will take to consider all those comments, it depends on the detail involved, but I want to get it as quickly as possible. Of course, representatives of Welsh constituencies also have a copy of that draft report.

  37. Can you stick your neck out to tell us when you are hoping to get it out?
  (Mr Murphy) We have to be fair to the people who were consulted in that we have to give proper weight to the points that they have put, but as quickly as possible and I would hope before Christmas.

  38. But we have had that consultation on various subjects in the past and you have got a fair idea how long it is likely to take, surely.
  (Mr Murphy) I will make sure it is as quick as I can. If I know it is going to be too slow you will be asking me questions about the same thing before very long, so I take your point.

  39. In paragraph 5.5 of your Report on the Welsh Language there is a sentence which says: "The Wales Office is committed to doing more to provide a fully bilingual service." Is that bit contradictory because before that you tell us what you are doing and you say: "Office publications such as Departmental reports and the Service Delivery Agreement are already available in both languages. The office will reply in Welsh to anyone who writes in Welsh and telephone calls in Welsh are transferred to a Welsh speaker whenever possible." Then you go on to that sentence I have just read: "the Wales Office is committed to doing more to provide a fully bilingual service." Either there is a full bilingual service or there is not.
  (Mr Murphy) Because we are based in London as much as we are based in Cardiff, we have difficulty sometimes in taking translation because the Assembly itself has the first call upon its own translators, although they are very helpful to us, to be fair to them. Sometimes we have to go out and get translators in. I think there will always be examples where we can improve but I think we have done very well as you rightly read out in 5.5 there.
  (Ms Jackson) I think that that sentence is an acknowledgement that we are not perfect. There will be occasions when one of the few Welsh speakers in the London Office is out at meetings or not around and we will not be able to put a telephone call through to them. There are occasions when timetables of publication documents which ought to be bilingual slip and the Welsh language version comes out after the English language version. We do not claim that we succeed 100% in everything that we do but we will continue to make an effort to reach 100 per cent. I do not think that there is any particular reason to change the policy. The implementation of the policy sometimes through force majeure does not happen as we would wish it to.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2003
Prepared 17 February 2003