Draft National Health Service (Wales) Bill

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Mr. Murphy: I take the hon. Gentleman's point and I shall ensure that it is relayed to the appropriate Ministers in the National Assembly. It is fair to point out that there is a different system once there is devolution. In the old days, my predecessors were presumably able to process such matters within weeks or even days. Things are different now because the National Assembly's budget regime is transparent and must take into account a Committee structure. That is part of the devolution project for which people voted. At the same time, I understand the hon. Gentleman's points and will ensure that they are relayed.

Albert Owen (Ynys Môn): My right hon. Friend is right to highlight the good news about the additional objective 1 funding. As he pointed out, my area has received an extra £90 million-worth of investment in recent weeks, and I acknowledge the importance of objective 1 as a catalyst. However, he spoke about reform and resources in his statement. Do you agree that the money destined for the chalk face should reach the school in its entirety, and will you press the National Assembly to ensure that schools in my area get the full amount and do not lose out to schools elsewhere?

The Chairman: I shall not do so, but I call the Secretary of State to reply.

Mr. Murphy: I shall relay my hon. Friend's views to my right hon. Friend the First Minister and my hon. Friends the Ministers for Finance, Local Government and Communities and for Education and Lifelong Learning. In fact, I have already done that, because some Members made the point to me yesterday. However, it is for the Assembly to decide how best schools should be funded.

There has been an enormously generous settlement for education, not just in this but in the previous spending review. If one considers the two spending reviews together, the amount of money that is

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available for education in Wales is huge. My main point is that, compared to past years, the availability of resources for our educational system is second to none.

Kevin Brennan (Cardiff, West): I congratulate my right hon. Friend on securing for the second or third time running a Barnett-busting increase in spending for Wales. Does he agree that the position taken earlier by the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) on the so-called Maclean report from Nuffield college represents little more than bogus opportunism? Perhaps I am wrong about that. If I am, would my right hon. Friend consider accepting a delegation from the hon. Gentleman and the leader of the Scottish National party—his party's partner in Parliament—to explain how they would implement the Maclean report and its implication of a £600 per head cut in spending in Scotland?

Mr. Murphy: I am willing to meet anyone, any time, anywhere. Of course, the matter is hugely complex. It would be an oversimplification to suggest that out of the blue there would suddenly come a huge amount of extra money for Wales, Scotland or Northern Ireland under the Barnett formula. Most of the questions that I am asked about the Barnett formula are not from Welsh or Scottish Members of Parliament, but from English MPs who have envied the special treatment that Wales, Scotland and Northern Ireland have received, quite rightly, in the years since Barnett was introduced. The reality is that all the talk of Barnett, match funding and all the rest of it would be utterly meaningless if we were to be swept away into the Atlantic as an independent state.

Huw Irranca-Davies (Ogmore): Does the Secretary of State recognise that this is not Barnett plus but Barnett plus, plus? Looking for reform of the Barnett formula is like looking for fool's gold because the real gold is lying at our feet, and the Government, having laid the foundations of the Assembly, still have a vested interest in how it is spent. Hon. Members have alluded to many concerns this morning about how money is passed to front-line services. However, in passing on those concerns—as I shall, too—does my right hon. Friend recognise that, ultimately, this is a devolution settlement and that, although we still have an interest in how the structure is built, we must let the Assembly get on with it?

Mr. Murphy: Yes, of course. That is part of the settlement, which is about ensuring that the National Assembly is responsible for the functions that are devolved to it. We have a responsibility for the legislation as well as for the resources. Today, we will be considering such legislation, which means that the health service in Wales will be delivered more locally and more accountably. That is for us to decide in partnership with the Assembly through the legislation that we pass. Of course, we all have an interest because all of us represent the same people in Wales.

I agree with my hon. Friend about the Barnett plus, plus. It is a very special deal that we have now had for three years, and we will have it for a future three years. As well as the money going into that objective 1 structural funding, we now have the schemes. They are

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beginning to work in each of the constituencies of those who represent objective 1 areas. Overall, that is a hugely important scheme for Wales, which never happened in the past but has under a Labour Government.

Paul Flynn (Newport, West): Is it not a matter of great congratulation that the increase in public spending on services in Wales has been unsurpassed since the days of the 1945–51 Labour Government? That is a matter on which the present Government should be congratulated.

However, should we not also look at the unfortunate losses in manufacturing industry, which has seen the darkest events in Wales during recent years? Those losses have not just been of jobs, but of capacity. Blast furnaces and aluminium factories are closing down, never to be re-opened. That is a very severe blow. Before we engage in a self-indulgent, speculative look at the scare stories on what might happen when we enter the eurozone, we should reflect on the evidence given by Corus, Alcan and Allied Steel and Wire, which have said that being outside the eurozone is the principal reason why jobs have been lost in Wales. Being outside the eurozone means that Welsh production is artificially dear, and that that in Europe is artificially cheap. That has been a major cost to the Welsh economy. When we look to our decision, we might well use the following accurate slogan when talking to the people of Wales: ''It is either euro or your job.

Mr. Murphy: It is not for me as the right hon. Member for Torfaen to intervene between east and west Newport. I will say to the hon. Gentleman, however, that we share our disappointment about what happened at Llanwern with my right hon. Friend the Member for Newport, East (Alan Howarth), and with other industries in our constituencies. I believe that many firms have had difficulties because they were not in the eurozone. That is not the full picture of course; there are other reasons, too.

The other point that I would make to my hon. Friends is that we are providing other forms of employment for people as the Welsh economy is changing. That is why there are more people in work this year than there were last year, despite the problems that we have had in manufacturing industry. I read in The Western Mail yesterday—I did not like what I read today because it was more interested in the Cabinet's mode of transport than what we discussed—that inward investment is now higher in Wales than in any other part of the United Kingdom. That is a significant factor, which highlights the fact that Wales is still going places despite the problems of the past, and each of us wants to ensure that we encourage industry. That does not mean that people who have been affected by redundancies in my hon. Friend's constituency and mine feel any less happy about that, but there are jobs to go to, which would not have been the case years ago.

Dr. Hywel Francis (Aberavon): I welcome the comprehensive spending review, particularly with regard to spending on education. I was struck on a recent visit that I made to Pontrhydyfen primary school in my constituency, and also one to Baglan

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energy park, by an old Welsh saying with which I am sure that the Secretary of State is familiar: ''gorau arf, arf dysg''—the best weapon is the weapon of learning. With that in mind, I am sure that my right hon. Friend would agree with Sir Edward George and with the Chancellor, who summed that up in the Financial Times on 18 June by saying that education is the best anti-poverty and social and economic development strategy. Does the Secretary of State agree with that statement?

Mr. Murphy: Of course I agree with that. My hon. Friend spent a lifetime ensuring that people in adult education could go on to better jobs and better futures. He knows what a difference education makes to people. The one message that comes from the Committee today that will be conveyed to the National Assembly when it begins its deliberations is the emphasis that all of us—whatever party we belong to—put on education, training and reskilling.

Coal State Aid

11.25 am

The Secretary of State for Wales (Mr. Paul Murphy): I am grateful for the opportunity to make a brief statement regarding coal state aid in the United Kingdom and Wales, and this seems the appropriate time to do so.

This morning, my right hon. Friend the Secretary of State for Trade and Industry announced a targeted extension of the United Kingdom's current coal state aid scheme from 23 July until the end of the year. That is good news for Wales and the coal industry. My right hon. Friend has agreed to seek the European Commission's agreement to a modified extension of the subsidy scheme in order to help secure the long-term future of viable mines under exceptional short-term pressure. She will be consulted shortly on the details of additional criteria that are to be used in making awards of aid.

I am delighted to make this announcement to the Committee. The Parliamentary Under-Secretary of State for Wales and I have been putting forward Wales' case in past months, as indeed have several hon. Members in this Committee who have constituencies in coal-mining areas. The announcement will be particularly welcomed by coal-operating companies in Wales, including Betws colliery, which the Under-Secretary visited on 17 June.

In addition to announcing the targeted extension of the operating aid scheme, my right hon. Friend the Secretary of State for Trade and Industry also announced that she would consult on an investment aid scheme for pits that have a viable future that would use the flexibility secured at European level to pay for such aid. To date, European rules have prevented us from supporting viable investment projects through regional selective assistance. That announcement, too, is excellent news for Wales, and I am sure that it comes as a direct result of the many interventions that have been made by hon. Members here, Members of European Parliament, and the Assembly itself.

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