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4.46 pm

Mr. Win Griffiths (Bridgend) (Lab): On the day when we look at the affairs of Wales, it is already apparent that, to a certain extent, we are at one step removed. I shall start with our function as the body that passes the Welsh block to the Assembly, using the Barnett formula. Although no hon. Member has mentioned that yet, it is relevant to many comments made about the health service in Wales because the Barnett formula depends on passing the relevant money from the health service budget in England to the health service budget in Wales. We all know that the health of the population in Wales is far worse, and therefore in need of far greater investment, than the health service in England. In fact, Labour and Tory Administrations in the past have provided more money from the Welsh block to the Welsh health service than happens, pro rata, for health spending in England. That is a difficult starting point when we consider the health service.

The health service in Wales faces a long-term problem—it goes across the lifetimes of many Governments—but one thing that we can say is that no other Government in Wales, for Wales, have invested so much in the health service. While the Assembly has been in existence, health spending has increased by 50 per cent. in cash terms—I guess that that must be worth more than 30 per cent. in real terms—and the number of dental, medical, nursing, midwifery and health visitor staff has increased by just under 2,000 full-time equivalents. Under the Labour Administration, the number has increased by more than 2,200; under the Tories, although dental and medical staff increased by nearly 700 after 1990, the number of nurses, midwives and health visitors decreased by more than 1,500—a loss that we could not really stand if we were to deliver a better health service in Wales. At the moment, 65 per cent. more doctors and 35 per cent more nurses are in training than were when Labour came to power in 1997.

Unfortunately, the record for beds is not good. Under the Tories, from 1990, more than 4,000 beds were lost, at a rate of more than 700 a year. Under Labour, that rate has been significantly slowed—about 1,000 beds have been lost, at just over 200 a year—and I am pleased to say that we have increased the number of acute medical beds by nearly 200. The plan is to carry on increasing them.

Mr. Wiggin: I am pleased to hear someone defending the health service in Wales, but can the hon. Gentleman tell the House why one in 10 people in Wales is on a waiting list if things are going so well?

Mr. Griffiths: I shall come to that later.

Bed occupancy is a significant measure of the effectiveness of the health service in Wales. Under the Tories, it averaged 77 per cent. in the 1990s, but under Labour, it has averaged 80 per cent., and in some of the

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better trusts it is above 85 per cent., although I would argue that that puts a strain on the delivery of an effective and high-quality service. There have been great improvements in out-patient attendance in Wales. Under the Conservatives, it increased in the 1990s by about 8 per cent. a year, and under Labour it has increased by slightly more. On average, 13,000 more patients are seen every year than was the case in the Tory years. However, that has not had a significant impact on waiting lists, which have undoubtedly grown.

There are a multitude of reasons for that increase. A major factor is that accident and emergency attendance in Wales has increased much faster than in England—the rate is 19 per cent. faster in Wales. I have seen a couple of different figures for emergency admissions. One increase is 33 per cent. higher than the figure in England, and the other is 40 per cent. higher. However, the increase is high, and it has had a big impact on elective lists. Elective list activity has gone down in the past few years, although out-patient attendance has increased significantly.

We have seen what Wanless said about the health service in Wales, and there was particular praise for the development of public health and primary health care policies. However, there was also significant criticism of the health service in Wales, such as insufficient acute beds—that is being worked on—wasted resources, which is a serious issue, duplication, misuse of skilled personnel, and the provision of inappropriate and inefficient services. The Assembly is committed to respond to those issues, but there is a big question mark about whether we are moving quickly enough in using the extra resources to tackle the problems.

Wanless made some telling comparisons with the north-east of England, whose industrial past, population and current make-up are similar to those of Wales. The report pointed out that Wales spent 5 per cent. per head more than the north-east. It said that we had 8 per cent. more nurses, midwives and health visitors, and 17 per cent. more beds per head of population. The average stay in hospital was 15 per cent. longer, 9 per cent. more per head was spent on prescribing, and 12 per cent. more items were prescribed per head.

We can obviously learn lessons from the north-east, and we need to do so. This is only a guess, but the 5 per cent. difference in spending per head must be worth about £100 million. Just over three years ago, I spent a little time studying the way in which costs were worked out in the health service. I found that, for 1996–97, if all trusts in Wales using the 100 most frequent treatments hit the Welsh average, there would be a saving of £30 million. If they hit the average of the best three trusts, there would be a saving of £100 million. That could have a significant impact on what is happening in Wales.

Some staff in hospitals that are not providing effective and efficient services should move to new-buy hospitals. In south Wales, and to some extent in north Wales, hospitals are sufficiently close for that to be done. We need to concentrate our activities on those hospitals that provide the best and most efficient services. That requires hard decisions. I was disappointed when the Assembly, instead of making it official policy to make those changes, said only that they might be made,

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because they are necessary if the health service in Wales is to be more effective. When I look back on the 15 months or so for which I was a Minister in the Welsh Office, with responsibility for health among other things, I sometimes wish with the benefit of hindsight that I had done this or that differently. Now, we have to grasp the nettle.

Some excellent developments are taking place in Wales, but there are still significant areas in which the Assembly will have to take action if we are to ensure that the significant additional resources put into the health service in Wales are used effectively to improve the health and speed up the treatment of those on waiting lists.

4.56 pm

Hywel Williams (Caernarfon) (PC): The provision of affordable and good-quality housing is clearly one of the major problems facing Wales, especially in rural areas such as my own. The competition for houses almost guarantees that local buyers will be priced out of the market. For example, last summer Gwynedd county council surveyed house prices in the Llyn peninsula and found that the salary multiples allowed by building societies meant that no one on an average wage could afford a single house. In other words, many residents were shut out of the housing market.

A quarter of holiday homes in Wales are to be found in Gwynedd, a large proportion of which are in my constituency. In some communities, such as Abersoch, around 65 per cent. of houses are second homes. Prices have risen steeply in those areas in the past year or so, no doubt catching up with prices in England. But the rate of house price inflation in some parts of Wales, including my constituency, has been as high as 30 per cent.—for example, in Pwllheli, my home town. Needless to say, the growth in wages has not kept up with that huge growth in house prices. That makes it increasingly difficult for local people, particularly first-time buyers, to access the housing market. Although house price inflation is apparently slowing in parts of England, no such trend is discernible in rural Wales—or, for that matter, in Cardiff and other urban areas. Doubtless the price disparity between England and Wales will cause that to continue for some time, and house price inflation in Wales will continue at a high rate. That is very significant, as I will explain later.

The National Assembly Government recognise the existence of the problem. According to an answer given by the Secretary of State to the hon. Member for Clwyd, West (Gareth Thomas), the Assembly is spending

So the Assembly is clearly doing something, but is it enough?

Significantly, the Assembly's Environment, Planning and Countryside Committee undertook an investigation into the matter, and it produced a report in February, entitled, "Planning Aspects Associated with the Provision of Affordable Housing and Sustainable Communities in the Countryside". The Committee points to the rapid and huge increase in house prices, particularly in coastal areas, in areas of great natural beauty, and in rural northern and western communities.

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It states that that has effectively locked local people out of the housing market. It makes recommendations regarding greater flexibility for planning authorities to respond, and it recommends that options already open to planners should be clarified so that local authorities know where they stand. In areas where there is acute pressure on the housing market, it also calls for new policies on new build that favour local people where need is robustly proved, which, I contend, applies to a large part of my constituency and many others.

So far, so good, and I hope that those changes, however marginal, will be useful in future, if adopted. Will they have a fundamental effect, however, on affordable housing provision in Wales? I fear that they will not, because of the Chancellor's proposals on tax relief for self-invested personal pensions and self-administered personal pensions in relation to investment in second and further homes. I fear that much of the good work that the Assembly might do, and the good that further changes might effect in rural Wales, will be undone as a result of those forthcoming Budget proposals.

Before I turn to that part of my speech, may I draw the House's attention to the nature of housing stock in Wales? It remains in a poor state, with a huge potential repair bill. Much of our housing is pre-1919—much more than in England. I have looked for recent figures, but they are difficult to access. In 1996, at any rate, 35 per cent. of housing stock in Wales was pre-1919, compared with 25 per cent. in England. There is certainly a need for new build in Wales, but repair and renovation are more important, especially in constituencies such as mine, where, on the whole, we have enough houses already—in fact, we have a surplus of them, many in the holiday home market.

If new build is needed in Wales, and renovation needed even more, it is significant that new build is nil rated for VAT whereas repairs attract the full rate. If we are looking for a VAT regime that fitted the circumstances in Wales, it should be the other way round—repairs could, at least, be rated lower, if not nil rated. Under the current VAT regime on repair of houses, Wales loses out. I will not ask the Secretary of State or the Minister to take the matter up with the Treasury, however. I have already made inquiries, and the prospects of a beneficial change in the VAT regime for Wales on repair of houses are also probably rated at nil. When someone in my constituency fixes the roof, puts in a toilet or fixes the damp, they pay 17.5 per cent. more than someone who builds a new house. We do not need that many new houses; we are losing out.

The Government's proposals for the Budget on SIPPs and SAPPs were published in December, and consultation goes on until 5 March. I believe that those proposals will have an extremely negative effect on the housing market in Wales. What are they? The Chancellor intends to extend the ability of pension schemes to invest in residential property. That may sound innocuous, but it means that investment in residential property will attract tax relief at up to 40 per cent. In simple terms, if someone with that sort of personally administered scheme invests £100,000 in a second, third or fourth home in Wales or anywhere else, that £100,000 will attract 40 per cent. relief. On my simple arithmetic, someone would therefore get a £100,000 house for £60,000, which seems a very good

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bargain. Furthermore, it is intended that when the value of that house is realised, it will be free of capital gains tax. That is quite a bargain for people investing for the first time in SIPPs and SAPPs—tax relief on the purchase, and the sale is free of capital gains tax. With huge house price inflation in Wales—30 per cent. in one year—£100,000 would be converted into £130,000 in one year.

In addition, in some wards, such as Abersoch in my constituency, purchases of houses up to £150,000 are free of land stamp duty tax. That is a huge bargain. Second, third, fourth or fifth homes are free of tax at every point, whereas the help available to first-time buyers is virtually nil. That is entirely wrong.

Have the Government any idea of the effect on the housing market in Wales? When I asked the Secretary of State whether any assessment had been made of the effects on the second home market, he answered that none had. When I asked the Treasury what effect there would be on the market in general, it answered that the market would rule. Will wealthy pensioners from England invest in Wales? At a return of 30 per cent. a year in house price inflation, with 40 per cent. off the purchase price and with no capital gains tax to pay, any sensible investor will invest in Wales rather than in England, where the return is 8 per cent. on current house price inflation.

The Treasury has apparently told the press in Wales that very few people will apply for those advantages. I think that that will not be the case, and that the proposals need to be resisted. It would be good for Members on both sides of the House, considering the effect on first-time buyers, if we all resisted those proposals before 5 March. I appeal to hon. Members to do so.

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