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26 Feb 2004 : Column 457

Welsh Affairs

[Relevant documents: The Fourth Report from the Welsh Affairs Committee, Session 2002–03, "The Primary Legislative Process as it affects Wales", HC79 and the Government Response thereto, The Second Report from the Welsh Affairs Committee, Session 2003–04, "The Work of the Committee in 2003", HC178, and Minutes of Evidence [The Wales Office Departmental Report 2003], HC883, Session 2002–03.]

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ainger.]

3.6 pm

The Secretary of State for Wales (Mr. Peter Hain): It gives me great pleasure to introduce this debate in front of your good self, Madam Deputy Speaker, one of our proudest women representing Wales in Parliament—

Chris Ruane (Vale of Clwyd) (Lab): From north Wales!

Mr. Hain: My Parliamentary Private Secretary reminds the House that you are from north Wales, Madam Deputy Speaker.

I start today by paying tribute to two great servants of the Welsh people here at Westminster whom we have lost during the past year. Lord Williams of Mostyn was a good friend, a highly valued Cabinet colleague and a man of both the sharpest intellect and the wisest wit. He put his great talents to use in the service of Wales and both the Government and the people of Wales miss him greatly. Lord Islwyn was a great fighter for his constituents, who took part in this Welsh day debate on many occasions. He was very proud when Newport was awarded city status by Her Majesty the Queen in 2002.

I also wish to pay tribute to John Charles, an international football legend and one of the greatest Welsh sportsmen of all time, who well merited his nickname of the gentle giant. He had a distinguished international and league career, was a most versatile player and was one of the first British players to make his mark in the Italian league. My sincere condolences go to his family and friends on the loss of a true Welsh gentleman on and off the field.

I also wish to pay tribute to all those Welsh men and women of our armed forces serving in Iraq, and in other conflict zones around the world and, in particular, I offer sympathies to the families of those who died in the service of their country, including those from my home village of Resolven. Last week I had the pleasure of visiting Maindy barracks in Cardiff to meet Brigade Commander Iain Cholerton, and be briefed on the excellent work of the Royal Regiment of Wales. I am sure that every Member of the House would wish to join me in recording our thanks for the dangerous and demanding tasks that they carry out on our behalf.

During this past year as Secretary of State I have taken forward my pledge to work with the Assembly to build and promote a world-class Wales, with a highly skilled, high quality economy and top class public services—a Wales determined never to be second best—and we have a good story to tell. In the past, when the world did badly, Wales did much worse. Today, in a period of global economic uncertainty, Wales has done

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much better: we have more jobs, greater growth, low interest rates, higher public investment and sustained stability. We have the lowest public debt almost anywhere in the world; the lowest interest rates since 1955; the lowest inflation since the 1960s; and the lowest unemployment for 25 years. Of all the major economies, the British economy has been the fastest growing, despite the worst global slowdown for nearly 30 years.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) (PC): The Secretary of State notes the increasing economic success of Wales, as he sees it. In the light of that fact, will he accept the view of the National Assembly that we should have a public holiday on 1 March, St. David's day? The right hon. Gentleman would be in a strong position to suggest that to the Cabinet and I know that it would have cross-party support and the approval of the National Assembly. Will he consider the point further?

Mr. Hain: I shall consider the idea further and keep it under review. If a serious, argued case were to be presented to us, based on full consultation with the business community, taking into account the economic impact on the Welsh economy vis-à-vis the English economy, we should give it even more careful consideration than we were able to do last year or the year before.

The employment rate in Wales is up by 0.7 percentage points since December 2002. Wales has also seen a fall in the rate of economic inactivity—hidden unemployment—which is down by 0.3 percentage points since December 2002. Wales has 28,000 more people in work than this time last year, 4,000 fewer people inactive in the economy and for the nine months to December 2003 business activity accelerated at its fastest rate. Average earnings were up 3.9 per cent. in 2002–03, so employment and earnings are rising together, which shows that we are on the right path to close the prosperity gap.

I remind hon. Members of the words of the then Secretary of State for Wales, the right hon. Member for Richmond, Yorks (Mr. Hague), who warned in this very debate seven years ago:

Chris Ruane: Eat your words.

Mr. Hain: I agree. No doubt, we shall hear similar dire predictions from the Opposition today, and I have no doubt that they will prove to be just as inaccurate and fatuous.

That economic success is the result not of good fortune or chance circumstances, but of a strong partnership between the Government in Westminster and the Assembly Government in Wales. It represents a complete break with the boom-and-bust, stop-go economic policy of the previous Government and a rejection of the isolationist, confrontational approach of the nationalists. Both have failed Wales in the past and both would fail Wales in the future.

Lembit Öpik (Montgomeryshire) (LD): Does the Secretary of State agree that there are employment

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black spots in Wales? Job cuts in localities can create local recessions, so does he agree that the Assembly and Parliament must ensure that we do not neglect communities that depend on one large employer? As he knows, that is exactly the problem in my mid-Wales constituency.

Mr. Hain: I am aware of the problem in the hon. Gentleman's constituency, especially as we sought to rescue the factory concerned. We must constantly try to provide alternative employment patterns and opportunities.

What is the practical effect of our hard-won economic stability? It has meant that thousands of Welsh men and women who were without work in 1997, and thousands who would have had no hope of work under a continuation of the economic policies of the previous Government, now have jobs. Claimant-count unemployment in Wales has fallen by 45 per cent. over the past seven years. Welsh gross domestic product per head increased by 15.6 per cent. between 1997 and 2001. Wales is closing the gap with the UK on economic activity, and we are on the right path to close the prosperity gap with other parts of the country, with the third fastest rise in earnings in Britain in 2002–03. It means, too, that more than 50,000 unemployed people in Wales have found employment through the new deal—a programme that the shadow Chancellor has described as "an expensive failure", and which his party is pledged to abolish.

I challenge the right hon. Gentleman and his Front-Bench colleagues, including the hon. Member for Leominster (Mr. Wiggin), to visit, as I did before Christmas, the Disability Action Trust in Llandarcy, in the constituency of my hon. Friend the Member for Aberavon (Dr. Francis), to see the work it is doing through the new deal programme to equip people with sight difficulties for the world of employment, and then to tell me whether he still thinks that the new deal is an expensive failure.

Thanks to a member of the Liberal Democrat staff in the Assembly, we now know, from their draft manifesto, that the Liberal Democrats intend to scrap the new deal. Although it is not yet St. David's day, the Liberal Democrats already have a leak, but perhaps next time they might consider circulating their draft manifesto to all Labour Members of Parliament and not just to Labour Assembly Members. It is an insult to the House that Labour Members of Parliament were not included in the circulation list.

It is important that we focus on the proposals in that document and their implications for Wales. The Liberals describe the new deal as a

It also says that the Liberal Democrats would get rid of the child trust fund, which the Government are introducing to ensure that, in future, all children have a financial asset at the start of their adult life—[Interruption.] This is an equality issue, yet on the basis of that document the Liberal Democrats will be going

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into the next election proposing to rob Welsh babies of up to £500 each—the 30,000 Welsh babies born every year who would attract that money.

Mark Tami (Alyn and Deeside) (Lab): Does my right hon. Friend agree that the manifesto shows, once and for all, that the Liberals are just the Tories in disguise?

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