Budget Statement

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Chris Ruane: I shall try to be brief.

Mr. Huw Edwards: And polite.

Chris Ruane: And polite—as ever.

Most people have opened their speeches today on the subject of health. I will look at the other benefits that will arise from last week's historic Budget, especially those for the economy.

When I was in the Library earlier, I looked at the March 2002 statistics for unemployment. I noticed

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that my constituency saw the fourth highest drop in unemployment of the 659 constituencies in the country. The drop between March 2001 and March 2002 was from 1,452 to 1,115 people—23 per cent. in one year. Many Welsh Members should be pleased because the table showing the top 25 constituencies includes four in Wales. My constituency is top of the Welsh constituencies at No. 4 in the table, that of my hon. Friend the Member for Ogmore (Huw Irranca-Davies) is at No. 5, with a 22 per cent. drop in unemployment, that of the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) is at No. 10, with a 21 per cent. drop—

Gareth Thomas (Clwyd, West): So why is he whinging?

Chris Ruane: I do not know.

The constituency of my hon. Friend the Member for Aberavon (Dr. Francis) is at No. 17, with a 20 per cent. drop. Those are fantastic figures. The Budgets that the Chancellor has introduced each year, with his other macroeconomic and microeconomic steps, have created a healthy, sustainable economy.

The Chancellor's latest measures in last week's Budget will specifically benefit Wales. Opposition Members asked what he has done for small businesses, to which I responded that he had simplified VAT. We have thousands of small and medium-sized enterprises—probably more than anywhere else in the country—and the number is growing, especially in north-west Wales. Among micro-firms comprising of just one or two people, the Budget has gone down really well. In the county of Denbighshire last year, 68 new companies were created with the help of local councils and other support networks; 44 were created in Ruthin; and 24 in Rhyl. I would like that to be the other way round—my hon. Friend the Member for Clwyd, West (Gareth Thomas) would challenge me on that—because we need to create employment, not just throughout Wales, but in the poorest communities. That is where we must target our resources.

We need the approach, which is proving successful in Wales, of developing specific sectors in specific geographical areas. In my area—the central part of north Wales—the sector is opto-electronics. Last week, the Chancellor announced a £400 million package to help research and development. A £10 million project for the St. Asaph business park, which lay empty for seven years under the Conservatives, has created 1,000 high-quality jobs. When the opto-electronics incubation and research centre is built this October, there should be 22 separate units around the centre from which new companies can be started, and they will be given all the help that they need over an 18-month to two-year period. Twenty-two new cutting-edge companies will be developed every two years in my constituency.

My worry is that the jobs created in that sector may go to people in England, perhaps in Warwickshire and on the Wirral where there is a traditional skills base, because those skills do not exist in the central part of

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north Wales. In the past, the area has relied on agriculture, seaside and rural tourism, and coal mining. We know that the research centre is coming in October so we need to start to plan for the skills base to ensure that my area benefits.

The Chancellor has taken measures in the past, as he did last week, to ensure that we connect with the poorest in the community, such as through the working families tax credit and the child tax credit. The child tax credit means that any family with a household income of less than £13,000 a year—there are hundreds, if not thousands, of such families in my constituency—will be given not £26 a week help, but £54 a week. That will make a big difference: it will make work pay. The minimum wage and the 10p starting rate for tax are policies that will affect individuals and encourage them to go back to work.

The Chancellor has also taken steps to abolish stamp duty in certain areas, targeting the poorest communities in Wales. Such policies will help to get unemployment in my constituency down further. It is currently at 3.9 per cent. Only 1,115 workers in my constituency are unemployed at the moment, but 13,000 people in Denbighshire between the age of 16 and retirement age are economically inactive. Hopefully, those are the people that the Chancellor's measures will attract back into the work force.

Under objective 1, we need to get an extra 5,000 people in Denbighshire back into the work force, although only 2,000 people in the whole county are unemployed. That is a massive task. We need to get an extra 3,000 of the economically unemployed back into the work market. I think that that can be done. I praise Edith Frodsham of the Employment Service in my area of north Wales. Llandrillo college, the local further education college, opened just two years ago, and 5,000 students will be trained there. Gareth Evans of Denbighshire county council's economic development department has secured more objective 1 funding for Denbighshire than any other county in Wales—an average of £59 for every man, woman and child.

The Welsh Development Agency, the Federation of Small Businesses, Business Connect and the Confederation of British Industry are all playing a co-operative role throughout north Wales, and especially in my constituency, to ensure that we are getting unemployment down, employment up, and the profitability levels that we need.

There is a connection between the economy and the health measures that the Chancellor announced last week. My right hon. Friend the Secretary of State for Wales mentioned that by 2007 and 2008 the health budget for Wales will stand at £5.8 billion. We need to ensure that the money is not just spent on health, but that it benefits the whole Welsh economy. We need to source Wales. I am not saying that we should favour Wales against any other sector of the United Kingdom or the European Union, because that is illegal. We need to ensure that companies in Wales are aware of the big benefits of putting in big and small contracts, and tendering for that £5.8 billion. A conference was held last October at the St. Asaph business park by the NHS in Wales to make north Walian firms aware of

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the benefits. Only 25 companies from north Wales turned up. I was very disappointed about that. It was an excellent initiative. I ask all MPs in Wales to make the businesses in their constituencies aware of the benefits of putting in for contracts with the NHS.

The increase that the Chancellor announced in last week's historic Budget has put clear red water between us and the official Opposition. I am not sure whether hon. Members noticed, but I shouted a very uncomplimentary word when the Chancellor announced that the increase would happen over five years. It is okay for the official Opposition to pick holes in the Chancellor's policies. They might have the correct political strategy in not putting forward specifics three and a half years away from the election. However, as we get nearer and nearer to that date, Conservative Members will have to show their party and the electorate what their policies are.

We must consider the current position of Wales. At the moment, Wales spends 9.1 per cent. of gross domestic product on the health service, which is above the European Union average. We have had great successes in Wales. In Ysbyty Glan Clwyd in my constituency, we have opened a £20 million cancer centre. It was opened by Prince Charles last year. We also have an excellent, well run hospital there. The finance has been put in place by the Chancellor; we now need to develop those policies.

We hear the phrase, ''Welsh solutions to Welsh problems''. There are specific problems in Wales. We certainly have the highest number of pensioners in north Wales. Clwyd, West, Conwy and my constituency have the highest number of pensioners in the whole of Wales. We need a co-operative and collaborative approach with social services and other sectors of local government so that the correct policies are implemented to stop pensioners falling ill and to ensure that they are looked after properly when they become ill.

We also have to deal with the specific problem in Wales of the highest incidence—not just in the UK but in the whole of Europe—of teenage pregnancies and the related problem of the highest number of low birth weights. A researcher in my constituency told me that the incidence of low birth weights in Wales is worse than in Albania. Again, we need a co-operative and collaborative approach with education, housing and social services to address the problems. Another issue that we must deal with in Wales is long-term illness. As a result of depopulation and of heavy industries such as steel and coal, we have a legacy of long-term illness.

We have to develop specific Welsh solutions, but we must also ensure that we set targets and measure performance against them. If we do not do so—independently, as the Chancellor wants—we will not achieve our long-term health goals. That was one of the key points in the Chancellor's speech last week. I hope that my right hon. Friend, the Secretary of State, will take that message to the National Assembly for Wales when he has the opportunity to do so.

5.1 pm

Huw Irranca-Davies (Ogmore): I thank you, Mr. Griffiths, for this first opportunity to address the

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Welsh Grand Committee. I also thank the Secretary of State for Wales for his kind words about my predecessor, Sir Ray Powell, which were much appreciated. I will convey his and the Committee's thoughts to my constituents and to Sir Ray Powell's family.

The biggest tribute that I can pay to my predecessor is to try to increase Labour party membership in the constituency. During the by-election we had a significant increase of about 60 new members, so I thought that I would bring along some forms today.

I have been reading some of the statements of Opposition Members. After my maiden speech, the hon. Member for East Carmarthen and Dinefwr, who is not with us at the moment, said:

    ''I would support many aspects of the Labour tradition in Wales. I have always said that I feel like a prodigal son of the Labour party, which I am sure will disown me.''—[Official Report, 28 February 2002; Vol. 380, c. 917.]

[Interruption.] They will disown him, and I will tell him why. We heard hardly a kind word from him about the benefits that the Budget will bring for the people of Wales and the whole of the United Kingdom. He did not acknowledge the benefits to the health service—with adequate reform—to schools in Wales and to businesses. Unfortunately, I will have to tear up his membership slip. With that hon. Gentleman, I suspect that there is no silver lining without a cloud.

The hon. Member for Meirionnydd Nant Conwy said in June 2001:

    ''We as a party will challenge that centre-right thinking of low taxation linked to low public spending . . . to reverse current thinking about low tax, low spend.''—[Official Report, 25 June 2001; Vol. 370, c. 450.]

Am I missing something? I thought that that was what the Labour Government had delivered and were getting on with, along with reform, investment and change. Unfortunately, what do we hear from the hon. Gentleman? A little bit of whingeing. I will have to tear up that slip as well—no new membership there.

However, I compliment the hon. Member for Montgomeryshire. He wrote in The Western Mail, in response to the Budget, that

    ''the quality of people's lives in Wales may be about to improve . . . Welsh Liberal Democrats welcome the investment announced by Gordon Brown.''

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Prepared 24 April 2002