Draft National Health Service (Wales) Bill

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The Parliamentary Under-Secretary of State for Wales (Mr. Don Touhig): No.

Mr. Llwyd: I dare say. That is staring truth in the face—obviously the sort of thing that new Labour likes to do.

Does the Secretary of State agree with Professor Maclean and Peter Gripaios of the university of Plymouth who say that the Barnett formula is short-changing Wales? Year on year, Wales receives a smaller increase than England because of the Barnett squeeze. Surely it is time for the Secretary of State to stand up for Wales, do away with the Barnett formula and introduce a needs-based formula for Wales.

Mr. Murphy: The percentages to which the hon. Gentleman referred are comparisons between ourselves and the United Kingdom. He knows that Wales' percentage increase this time is higher than the increase for Northern Ireland and for Scotland. He understands that because in all cases the cash addition increase per head is the same as for the rest of the United Kingdom. The reason that it is different is that the initial level of spending is higher. The amount per head is already 13 per cent. higher in Wales than in the United Kingdom. In anyone's language, that is not a bad deal for Wales in relation to the United Kingdom.

Plaid Cymru Members' criticisms deflect from the enormously successful story that they know that we must tell but they cannot bring themselves to acknowledge that. No previous Government

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increased the amount for the Welsh block to £12 billion. That is almost double what it was when the Conservative Government were in power. It is an enormous increase in the resources that the Assembly has at its disposal. They do not understand that it is not just the money that goes to the Assembly that matters, but money spent in Wales on other services, too. For example, in the financial year 2000–01, Government spending per head amounted to £4,709 in the United Kingdom, but £5,302 in Wales. The amount is even higher now as a result of the increases that I have just announced.

The arguments about Europe that the hon. Gentleman used today are exactly the same as he used in this Room two years ago. Even then he could not bring himself to ask how we got objective 1 status in the first place. It did not come like manna from heaven. It came because a Labour Government obtained the grant, which Plaid Cymru Members doubted we could get. They said subsequently that we might be able to get it but that it would not extend to two thirds of Wales—and it did. The worst thing that they did was to suggest for almost a year to the people of Wales that the public spending cover of almost £500 million would never be achieved. In the lead-up to that discussion, all the spokespeople for their party—Dr. Phil Williams was one—said that what mattered was whether for the first time in the fiscal history of our country, objective 1 money would be outside the block and outside Barnett. Everyone knew that that was the argument at the time. They now believe that that should be wiped from the public memory and that it does not matter.

In all my years in this place and as a Minister elsewhere, structural funds have had to be found from within the blocks. That £500 million—now almost £1 billion—has come to us as a consequence of that decision over and above the block that we have. There was never a great block of match funding. Some has come from the private sector: my hon. Friend the Member for Ynys Môn (Albert Owen) is to benefit from a private-sector objective 1 fund that the private sector will match. The First Minister and the Minister For Finance, Local Government and Communities have said time and again, as they did to me only yesterday, that not one solitary scheme will not be funded because of a lack of match funding. To suggest that hospitals and schools will not benefit because of a lack of match funding is nonsense. The entire block now goes to the Assembly to decide. It is for neither the hon. Gentleman nor me to determine where the money is spent.

That old and stale argument about match funding was stale two years ago and is even staler today. The additional money is what mattered, and we have that. We have heard a lot of talk about the money that Wales should get, but if they had their way and they achieved an isolated, independent and separate Wales, never in a million years would they get anything like the amount of money that the Chancellor has given.

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Julie Morgan (Cardiff, North): I congratulate my right hon. Friend on his optimistic statement. It is very good for Wales, and we are all rejoicing because of it.

My right hon. Friend referred to the money that has been earmarked for health, but does he agree that social services and children's services urgently need money? It is for the Welsh Assembly to make decisions about the allocation of such resources, but will he exert all of his influence to push for children's services in particular to receive a much-needed boost?

Mr. Murphy: I entirely agree with my hon. Friend, although, as I said to her two years ago, she might be better placed than me to influence such decisions. However, the Assembly rightly places great emphasis on the importance of social services and children's services.

One of the difficulties that social services face is long waiting lists caused by bed blocking. We must sharpen up on that; we must provide more resources to social services, to ensure that waiting lists go down, and that people are properly looked after.

I pay tribute to my hon. Friend's efforts on behalf of children. She has advocated the rights of children for many years. The Assembly has the first Children's Commissioner in the UK, and in that regard it is also almost unique in Europe. The Assembly can use that post to achieve the aims that she has identified.

Lembit Öpik (Montgomeryshire): The Liberal-Democrat-led partnership government in Cardiff will welcome the real extra money for health and education. The additional resources meet the expectations that the Government's previous statements led us to have, and they should result in measurable improvements in the provision of those two key services in Wales.

Many of us will also be very pleased with the continuing prudent commitment to pay back the national debt. Over the long term, that will make a substantial difference, not only in Wales, but in the entire UK. It shows sensible husbandry of the entire nation's macro-economic situation.

However, many of us also feel some frustration with statements such as that which we heard yesterday, because it is always hard to see where the double-counting is taking place in them. A certain amount of scepticism has been created because, on previous occasions, what seemed to be very generous settlements have turned out to be mere re-announcements of money that has already been allocated. The Government have a slight cross to bear as a consequence of such past opportunism; on some occasions, they have sought to spin money that was already allocated, so people will have to examine this statement with a fine toothcomb to see whether there actually is some new money.

The long-standing Liberal Democrat commitment to reforming the way that we allocate money, not only to Wales, but to Scotland and Northern Ireland, is reinforced by the fact that extra money is being put in, above and beyond Barnett. That money is welcome, but it shows that we must look at how best to allocate money to Wales, because in the eyes of many people,

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including myself, the Barnett formula does not necessarily reflect the real basis of need in Wales and in other parts of the UK. When devolution is rolled out across the regions of the UK, it will be very important that we have a transparent and strategically need-based formula that everyone can see works effectively.

Although the money for law and order is welcome, does the Minister agree that crime prevention is one of the best ways to save money in that area? We must find different ways to address crime. Would he be willing to consider the benefits of organisations such as Youth at Risk that seek to prevent offending in the first place, rather than simply enforcing law and order once we have generated a culture of crime?

Finally, does the Secretary of State accept that some of those who analysed the Chancellor's statement yesterday believe that there is centralisation in the plans he outlined because, increasingly, the Treasury is seeking to create more direct lines of financial communication, bypassing, for example, local authorities? Can he assure me that he will resist any centralisation of powers from the Assembly, which is still in its infancy and would not take kindly to or benefit from economic centralisation, whatever the motive might be?

Mr. Murphy: I take the point about centralisation. What matters is delivery of good public services, which must be done in partnership with local authorities and between central government and the Assembly. We must find a system to deliver the best services for the people whom we jointly represent. In the health service, that means patients, in schools, it means pupils and when crime is involved, it means victims.

On the point about double accounting, the hon. Gentleman will have heard the ''Today'' programme this morning when Andrew Marr, who must be a good judge of such matters, said that there is no double accounting. In my statement today, I made it clear that that was so with regard to the health figures that were announced in the Budget. We all remember the hon. Gentleman's penny—the endless penny.

I welcome the hon. Gentleman's general welcome for the statement. An enormous amount of money is going into public services in Wales and it is up to the Assembly to spend it wisely. I am sure that it will do so.

Mr. Nigel Evans (Ribble Valley): I, too, thank the Secretary of State for his courtesy in sending an advance copy of his speech to me. Page 5 states that extra investment is made possible through prudent management of the economy and that economic stability and sound public finances provide the best foundation for long-term investment in public services. That statement was made the day after £220 billion was wiped off the stock market. It has fallen to below 1996 levels, but no mention was made of that. Anyone can act like Viv Nicholson, the pools winner who said, ''Spend, spend, spend'', but that is not sustainable. Does the Secretary of State believe that the Chancellor's programme is sustainable when one of his advisers to the Department of Trade and Industry said that there is a £20 billion black hole at the heart of

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Government spending? We already know that national insurance contributions will increase next year. That will hit everyone: employees and employers, as well as public services. Millions of pounds of the sums announced yesterday will be clawed back from local authorities, who will have to find extra cash for the increased national insurance contributions for their employees. The same applies to the health service and education. The Government are giving with one hand and clawing back with the other. We have had 53 tax increases since 1997, but no mention is made of that.

The Secretary of State said that public services matter. The Government will be judged on that, not the Chancellor standing at the Dispatch Box, talking of billions of pound here and billions of pounds there. What matters is how the money is spent. In Cardiff, £8 million has been spent on the hole next to the Welsh Assembly where the new building will be. Is that good value for money? Clearly, it is not. That money could have been better spent on almost anything else.

It is now five years since a Labour Government was elected and we were told that things could only get better, but in Wales there is a teacher crisis, waiting lists are rising, street crime is soaring and robbery, car crime and drug crime are increasing. The south Wales police authority area alone has seen a 29 per cent. rise to 595 incidents; in Dyfed-Powys the increase is 13 per cent. and in north Wales it is 19 per cent.

Gwent is the only area that has shown an improvement—it is typical that, of the four police authority areas, the Labour party is only interested in the one that has shown improvement. It is not interested in the other three areas, which cover the vast majority of people. Does the Secretary of State believe that the extra money announced yesterday will make a difference?

What will be the difference compared with the past five years, during which extra money has been spent but there has been a deterioration in public services? Let us consider the care homes that are closing throughout Wales. That is an absolute scandal, but no mention of it was made yesterday. Let us be specific. Can the Secretary of State now say that, due to yesterday's announcement, not a single care home will close and that the further investment in the care that the elderly so clearly deserve will be made?

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Prepared 16 July 2002