Draft National Health Service (Wales) Bill

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Mr. Murphy: I am old enough to remember both Labour and Conservative Governments of the past who, instead of being able to announce huge increases in public spending, had to go to the International Monetary Fund and cut public spending. When the hon. Gentleman's party was in power for all those years, we had to endure fewer doctors, nurses and teachers, mass unemployment in Wales, interest rates at a record high and mortgage rates that went through the roof. That is what people remember after 18 years of the Government that the hon. Gentleman supported.

I do not disagree with the general thrust of the hon. Gentleman's main point that resources must be matched by reform and delivery. However, I do not understand why his party cannot commit itself to such resources. All that it said yesterday was that it would

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commit itself to defence and overseas aid. It would not say a word about spending increases for education, health and all the other things. His party is going around the world like a Cook's tour, trying to find the policies that it wants to introduce in this country. It has not a clue how it would pay for those policies. Today's statement shows that the Government have played their part in giving the proper resources to the National Assembly to ensure that it delivers those services. We have played our part in that bargain.

Ian Lucas (Wrexham): Is my right hon. Friend aware of the very warm welcome that the statement has received from business in Wales? Mr. Russell Lawson, spokesman for the Federation of Small Businesses in Wales, said:

    ''The dramatic rise in the level of funding for schools and universities is very good news.''

Does my right hon. Friend agree that investment in education and the creation of a skilled work force are the means by which Wales can develop and improve in the future? Such an approach from the Assembly would be welcome.

Mr. Murphy: I could not agree more with my hon. Friend. He knows, of course, that around the corner from his constituency—metaphorically speaking—is Ireland. If he were to look there, he would know that the economy in the Republic of Ireland, and to a certain extent in Northern Ireland, improved so dramatically during the past 20 years because resources were put into training, reskilling and education, specifically to bring up to date the skills of the young Irish generation so that they could apply those to inward investment and indigenous industry. That worked remarkably well.

One of the hopes of the objective 1 programme, and why it is fully additional to our block, is that we will be able to use it to train young people in the skills needed in the new technological age. I think that the Assembly has grasped the nettle; it is very conscious of the fact that we need a newly trained, reskilled Wales. That is the only hope for the future, and my hon. Friend was right to draw attention to it.

Mr. Jon Owen Jones (Cardiff, Central): I, too, welcome the fact that the brilliant stewardship of the United Kingdom economy has allowed my right hon. Friend the Chancellor of the Exchequer to make money available to invest in public services in Wales.

Does the Secretary of State agree that it is important that the money go quickly to the frontline services? Given that the Welsh Assembly has decided that there will be no ring fencing for local government services and that local government elections will be held a year after the Welsh Assembly elections, how will it ensure that local government overcomes the temptation to build up reserves in this financial year to be spent liberally in its election year?

Mr. Murphy: Of course, Governments never do that.

I take my hon. Friend's point. He has wide experience as a Minister in the Wales Office and

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knows the problems of achieving the effective delivery of services. There must be a good working relationship between Welsh local government and the National Assembly and, for that matter, between it and the Government and Members of Parliament. The draft National Health Service (Wales) Bill is about ensuring that the devolution of decision making comes more and more to the front line of a locality. I will ensure that my right hon. Friend the First Minister is made of aware of my hon. Friend's points.

Adam Price (East Carmarthen and Dinefwr): The Secretary of State says that there is no case for complacency. However, is not he being complacent in dismissing as irrelevant the fact that, for the third comprehensive spending review in a row, Wales will receive a lower increase in health and education spending than England? He cited figures for the increases in Scotland and Northern Ireland. Can he give a comparable figure for England on which the Welsh allocation was based? If the entire Barnett consequential was allocated to education, what would the average annual real-terms increase be for Wales?

Mr. Murphy: The hon. Gentleman is aware that the increase per head is no different in England and Wales. He and his party say continually that the Barnett formula should be changed but it gives Wales 13 per cent. more spending per head than England. That is a simple fact. The reason why that might decrease is that we are getting wealthier.

Why does the hon. Gentleman think that the situation in Scotland is different from that in Wales? It is because the Scottish economy has improved at a faster rate than the Welsh economy. The Barnett formula was established to ensure that the differences between the rest of the United Kingdom and Wales were gradually lessened. The more that the Welsh economy improves, the more that happens. I do not suggest that, for example, next Tuesday we will see such a sudden improvement in the Welsh economy that we will no longer need Barnett. However, the hon. Gentleman knows as well as I do that thousands more people are in work this year than last year. He knows that Wales is growing at a faster rate than other regions of the United Kingdom. Opposition Members will still not acknowledge that £12 billion of public spending is good for Wales. I should be more than happy to engage in discussion on the detail, and I will do so with the hon. Gentleman in future. He should not be so embittered against the Labour party that he believes that anything the Government do for Wales, including the best ever settlement, is not good for Wales.

Alan Howarth (Newport, East): My right hon. Friend the Secretary of State has made a statement of the greatest importance and promise for Wales, for which I thank him. Brainpower and skills are the most crucial assets to the Welsh economy and the Government have afforded the Assembly a magnificent opportunity to invest in education and get money speedily to schools, colleges and universities. However, has he noted that even under the reformed stability and growth pact, which is being discussed, the European Commission would insist that eurozone member states' spending on capital as well as

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current programmes must be in balance during the cycle? That would mean deep cuts in the spending plans announced by my right hon. Friend the Chancellor, and that spending programmes would have to be submitted to Brussels before being submitted to Assemblies. Has my right hon. Friend assessed the damage that would be caused to public services in Wales if we were to join the euro?

Mr. Murphy: That is an interesting argument, and my right hon. Friend and I will be dealing with it in the weeks and months ahead. I understand the views of my right hon. Friend the Member for Newport, East (Alan Howarth), but whatever the rights and wrongs of infrastructure and capital spending in our structural funds, a balance must be struck between them because we cannot regenerate parts of our country, for example, unless there is infrastructure. I agree that reskilling and retraining should be high on the agenda, but I will not debate the issue with him further.

Chris Ruane (Vale of Clwyd): I fully endorse and support the comprehensive spending review, which is excellent news for Wales. I am particularly pleased by the extra £400 million for agriculture, which brings the total to £2.9 billion. I am very pleased with the extra £70 million that was given to Wales by the National Assembly last year to support steel communities. I am also pleased that an announcement will be made today on supporting the coal areas.

Given the extra money that is going to Wales and that which has been announced for the UK, will my right hon. Friend work with Cabinet Ministers, the First Minister and the Deputy Minister for Economic Development in Wales to ensure that seaside towns such as Rhyl, Colwyn Bay—the second and third biggest towns in Wales—Prestatyn, Porthcawl, Barry and Pensarn are given parity with rural communities, steel communities, coal communities and inner-city communities? Will he ensure that we get the investment that we need after 25 years of decline?

Mr. Murphy: I am not sure whether my hon. Friend mentioned Porthcawl, which is one such town. Obviously, I agree with him, and he knows that in the Budget my right hon. Friend the Chancellor announced changes to the ways in which we deliver benefits and deal with the new deal and unemployment. Those measures are not restricted to one particular part of Wales; coastal towns in Wales such as those in his constituency will benefit in the same way as other parts of Wales. I will ensure that his points about devolved areas are made to the First Minister and other appropriate Ministers because we would be wrong to think for one second that the difficulties and problems in Wales are confined to one particular place. In Rhyl, for example, we need to tackle severe unemployment and crime problems.

Mr. Roger Williams (Brecon and Radnorshire): The Secretary of State's mention of the Liberal Democrats' policy of a 1p increase in tax for education reminds me of the 2p change for which the Labour Government were responsible—they took 1p off income tax just before the election and put 1p on national insurance just after it. As the Secretary of State has said on many occasions, timing is everything.

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Turning to a more constructive issue, the Chancellor said in his statement yesterday that resources do not come without reform, with which almost all parties would agree. I should like to discuss a financial reform that would benefit the efficient delivery of education in Wales, and the Secretary of State, who is responsible for liaison between the Government and the Assembly, could play a part in it.

A number of schools have complained that money that eventually ends up in their budgets takes a long time to arrive because it depends on announcements from the Chancellor and the Secretary of State for Education and Skills. The money is delivered in dribs and drabs in order to obtain political kudos from its announcement. Schools find it difficult to plan their budgets unless they know their totality. In my constituency, for instance, staff have been threatened with redundancy because the budget will not accommodate them. The money arrives in the end, but the loss of morale as a result of the process could be avoided. Will the Secretary of State take the initiative to ensure that schools get their total budgets at an early stage in order to allow them to conduct the necessary long-term planning for effective education?

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Prepared 16 July 2002