Budget Statement

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Mr. Simon Thomas (Ceredigion): The hon. Gentleman mentioned the 1p ''on offer from other parties'', and I take it he includes my party in that. In fact, not many pensioners in Wales would have been affected by a new 50 per cent. top rate for taxable income above £50,000—a measure which would raise £5.7 billion.

Albert Owen: My point related to 1p on the lower band of income tax. As the hon. Gentleman says, many pensioners are not on high earnings, but it is still not right to penalise those on low earnings. That is why I support the minimum income guarantee, which helps to alleviate pensioner poverty.

Lembit Öpik: Just for clarification, the Liberal Democrats would have used an increase in the top rate to 50p in the pound for the health service, and an increase of a penny in the pound for education. If one manages the thresholds correctly, the nightmare scenario that the hon. Gentleman describes need not arise, and those pensions would not suffer on account of arrangements that the Chancellor could easily organise.

Albert Owen: I do not accept that, but I will not repeat my point. The effect of putting a penny on income tax at the low rate would be cancelled if ceilings were low.

I realise that other Members want to speak in the debate, so I will begin winding up. The Budget was a long time coming. It provides the necessary long-term investment in the national health service and is progressive in the way in which it deals with national insurance. I welcome its seamless benefits for low-income families and the increase for pensioners.

Pundits have said that the Chancellor has taken a gamble. In The Guardian yesterday, I read that more than 50 per cent. of Conservative supporters support the Budget. It is the type of gamble that I want the Chancellor of the Exchequer to take year on year. [Interruption.] From a sedentary position, the hon. Member for Ribble Valley mentions The Guardian, but

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that statistic was also reflected in The Times, which is not a Labour newspaper.

Chris Ruane (Vale of Clwyd): What about gambling?

Albert Owen: I am not a gambling man. I am not even tempted to take up bingo now the Chancellor has abolished the tax on it.

It was important that the Chancellor took the measures in the Budget. He was right to take them now, because timing is everything in politics and the economy is ready to be built on. His measures will help to build a better, fairer Wales.

4.31 pm

Mr. Roger Williams (Brecon and Radnorshire): I thought it a little rich that Government Members such as the hon. Members for Cardiff, West (Kevin Brennan) and for Clwyd, South (Mr. Jones) chided Opposition Members for voting in favour of the Budget in general while being critical of certain aspects of it. Such licence is allowed to Opposition Members, but is unfortunately not often allowed to Government Back Benchers.

We have in the past clearly stated our way of raising money, we feel free to repeat it because it has some worth, and I am going to repeat it again today. I took the Secretary of State's point about pensioners being exempt from national insurance, but, as my hon. Friend the Member for Montgomeryshire (Lembit Öpik) said, we have nothing against pensioners who have incomes of more than £100,000—whether that is dividend income, earned income, pensions or whatever—making a substantial contribution to the national health service.

We are not happy with the 1p increase in employer national insurance contribution. It does nothing for the health of the nation when businesses struggle and have to fight for survival. That struggle does nothing for the health of those trying to run such businesses, and nothing for the health of people who will be made redundant if such businesses fail. A tax on business is not a way to encourage good health in the nation, but is a way to put more and more people in danger of ill health and stress.

There is one aspect of the Budget on which we have not touched. The aggregates levy is perhaps a small matter, but is important to Wales. Wales's geographical and geological qualities make it an important source of aggregates. The House had agreed the principle of the levy before I was elected, and when I first heard about it, I was in favour, because it is an environmental tax that encourages the reuse of aggregates and discourages the quarrying of virgin aggregates. We all know the environmental problems that quarrying can cause to both the countryside and people's lives through the destruction of landscape, the release of dust and increased traffic movements. In principle, therefore, I was in favour of the aggregates tax. However, some of my constituents have drawn certain problems to my attention.

There are in my constituency a number of quarries that obviously contribute to both the local economy

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and local employment. Several community councils wrote to me saying that they were very concerned about the effect that the aggregates levy would have on employment, not only of people who work in the quarries, but of those who drive the lorries—owner-drivers who make up the greater component of the transport system that moves aggregates about the countryside. I looked into the matter. The aggregates levy is £1.60 a tonne, which may not sound like a lot of money; however, the cost of aggregates coming out of the quarry is usually about £5 a tonne, so the duty on aggregates is 30 per cent.

I was also contacted by people from local authorities who were concerned about the effect that the levy would have on the cost of road maintenance and roadbuilding, and the effect that that would have in turn on local authority budgets. Obviously, if the price of aggregates goes up, the costs of housebuilding, construction, road maintenance and roadbuilding will be affected.

The arguments for the aggregates levy are interesting, because the Government cannot give an estimate of how much virgin aggregates will be saved by it. In a sense, the tax is a good idea, but they have no idea what its effect will be.

Mr. Simon Thomas: Is the hon. Gentleman aware that one of the reasons why the Government cannot explain what environmental savings will come from the aggregates levy, let alone the environmental cost of transporting aggregates over greater distances, is that the only research undertaken was a simple opinion poll by a company that has now gone bust, which asked local people if they would be prepared to pay a bit more to see the quarries in their area close?

Mr. Williams: I have read the material to which the hon. Gentleman refers. , As one who was a Member of the last Parliament, he has more experience I do, and he was probably present when the matter was discussed.

Another issue that has fallen out of discussion is the rebate that the Government were once considering giving to quarries that produced aggregates in a more environmentally friendly manner. It is possible to do that: for example, quarry operators can ensure that dust is suppressed and does not go into people's houses or the countryside, or they can ensure that good restoration plans are in place so that when the quarry comes to the end of its life, the site can be restored in a way that is fitting to the countryside and provides opportunities for leisure and recreation.

Mr. Nigel Evans (Ribble Valley): May I clarify what the hon. Gentleman is saying? He voted for the NIC increases, but opposes them. He is in favour of the aggregates levy, but not for the quarries in his area. If the Government were to put a tax on fences, might it encourage him and some of his colleagues to get off them and actually make some decisions?

Mr. Williams: I have explained my position on national insurance. I certainly was not going to vote one way and then another. I am just trying to ensure that the Government have a chance to reconsider the

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aggregates levy. Although I believe that it should be implemented, there are ways in which it can be more finely tuned to ensure that it achieves the environmental aims and objectives that it was set up to achieve.

Lembit Öpik: I ask my hon. Friend to give way. [Interruption.] I apologise, Mr. Griffiths. I was not going to rise, but I really cannot contain myself any longer. Is it not completely unclear whether the Conservatives support the extra money? Is it not reasonable for us to express our concerns about the process of raising the money without necessarily opposing the investment?

Mr. Williams: I am sure that that is the case. I was about to say that a peculiar thing about the aggregates levy is that it raises no tax for the Treasury but is completely tax neutral. The Government propose that the money should be distributed. I am sure that the hon. Member for Ribble Valley would be very pleased to note that one of the proposals is that it be used to reduce the employer's national insurance rate by 0.1 per cent. At least that would undo some of the harm that the Budget has done.

Another proposal—one that I would like the Secretary of State to take up—is that the rest of the money be put into a sustainability fund, with the purpose of encouraging the restoration of quarries and enhancing the environment of the villages and communities around quarries. As I understand it, the Government have not yet come out with the proposals, criteria and guidelines for implementing their sustainability fund. They have an opportunity to examine two courses of action: giving rebates to quarries that quarry in an environmentally friendly way, and accelerating consideration of the sustainability fund so that communities within the range of quarries can benefit.

4.40 pm

Mrs. Betty Williams (Conwy): Lesson No. 1: we should not be talking to colleagues when the Chairman has his eye on us.

On Monday, I was present at an inspirational lecture at the university of Wales, Bangor given by my hon. Friend the Member for Foyle (Mr. Hume). I say ''inspirational'' because all present, including senior academics, the judiciary and many young students, listened in intense, concentrated silence as he recounted the paths towards peace in Northern Ireland that he has trodden during his lifetime. There were lessons for many in his words.

My hon. Friend has been to my constituency before, and would be welcome again. He recounted the occasion when, as a child—of about 10 years old, I think—he attended an outdoor parliamentary meeting with his father. He felt himself caught up with the passions aroused by patriotic flag-waving. His father brought him down to earth by reminding him, ''You can't eat a flag''. That comment is relevant in Wales today, and I would add that the people of Wales cannot eat the graffiti, ''Cymru i'r Cymry. English go home.''

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However, we may eat and thrive on the results of education, training and work. As one whose first language is Welsh, I recall the time when I was the constituency secretary of the late Lord Goronwy Roberts, a Member of this House for 29 years. He coined the election slogan, ''Bydd gwaith yn cadw'r iaith''—''Employment will retain the language''. That slogan is very relevant today as we discuss this year's Budget. If we have a sound, stable economy in our communities, our language and culture will flourish.

In Wales and in my constituency, the Budget has been well received. We in this House must not pre-judge how the Welsh Assembly Government will apportion their budget. Health will, rightly, be of major concern to our colleagues in Cardiff, as will education. A better educated nation will be a healthier nation. In my constituency and in north Wales, the university of Wales, Bangor, has a direct role to play in enabling the nation to be healthier through education.

In collaboration with the only other higher education institution in north Wales—the North East Wales Institute of Higher Education, or NEWI, in Wrexham—the university of Wales, Bangor has led the development of the community university in north Wales. That brings Bangor and NEWI into close partnership with the eight further education colleges in the region. The aim, very simply, is to provide a new opportunity and perhaps a second chance for those in north Wales who for whatever reason—geography, family or finance—have not previously had the opportunity to develop their full educational potential. By facilitating part-time study, and by providing clear paths for progression from further to higher education and more convenient local access points across the region, the community university is creating new opportunities. The people who have been given those opportunities will benefit further from the Budget.

A second example of the pioneering work at Bangor is the talent identification programme. The university works with six schools in Wales—one in the constituency of my hon. Friend the Member for Ynys Môn (Albert Owen)—in areas where the social and economic indicators are low. The university works in those schools with children identified by their teachers as intellectually capable of university study but who, because of family background, would be unlikely even to think about applying.

The university starts working with the children when they are about 13 years old, and continues to do so during the rest of their time at school. They are brought into the university to encourage them to understand that a university education is open to them. The scheme is now being extended to include parents. A statement from one school summed up the programme:

    ''It is about boosting self-esteem, confidence and ambition and about providing new horizons.''

The programme is growing and reaching more and more young people each year. In that way, we are planning for the future—a future of prosperity for our young people.

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In the last comprehensive spending review, my right hon. Friend the Chancellor kept his promise to the people of Wales. He did not let Wales down on objective 1 funding. Wales received a settlement over and above the Barnett formula. There are now new opportunities for making fundamental and lasting changes to our local economy. Unemployment in Wales is at its lowest for 27 years. Objective 1 funding through local partnerships can have a lasting impact on the region's economy by creating employment that is sustainable in the longer term. Again, my local university is already active in several partnerships, which are already seeing results.

This Budget gives confidence to education and to business. Some 98 per cent. of businesses in Wales are small or medium-sized and will benefit enormously from the Budget. Again, the university of Wales, Bangor, has been active, having long believed that one of the most effective ways to transfer knowledge from a university to business and industry is through the TCS—teaching company scheme—partnerships funded by the Department of Trade and Industry. In such partnerships, a university graduate works in a company for two years on a development project of particular commercial interest to that company. The project is jointly supervised by a university member of staff and the university's facilities are made available to support the development work. The partnerships have been very successful.

Health and education are closely linked. Another recent and important development in my area has been the bid to establish a north Wales clinical school, which also reflects the theme of collaboration, as it has been put forward by a consortium comprising five partners from the north Wales health sector and three academic institutions. That development, important for the whole of north Wales, will widen access to medical education for the young people of our region, and increase the number of young doctors wishing to develop their careers in north Wales and who understand the needs of rural communities, including Welsh-speaking communities. I urge my right hon. Friend the Secretary of State to continue his dialogue with the ministerial team in the Welsh Assembly Government to ensure that that scheme goes ahead. It is one reason why the extra resources announced for our national health service are vital to us in north Wales.

Last year's Budget was remembered as a family Budget. This year's will be remembered as a Budget that helped the business community and, more importantly, as a Budget that saved the NHS.

4.49 pm

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