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Dr. Cable: The hon. Lady knows that the whole argument is about how regulation is framed. I shall pursue the example of the working time directive, on which the Government are now in a very difficult position. Last week, Brendan Barber, the TUC general secretary, wrote a thoughtful article in which he pointed out that the trade unions might well have come on board on the working time directive if the Government had confronted at an earlier stage the crucial distinction between workers who genuinely want to work long hours because that is their lifestyle preference and workers who are coerced into working long hours by their employers. If the system of regulation had captured that distinction, no problems would have occurred. The issue is not about, as the hon. Lady put it, "protective regulations"; it is about the how regulations are phrased. The matter must be addressed in a market-friendly manner, which relates to the key issue of the working time directive.

At Prime Minister's questions, my party leader touched on another big theme, pensions, about which enough has been said not to pursue it in great detail. However, a tension clearly exists between whether we address pensioner poverty through large-scale means-testing, which is the Chancellor's preference and which is becoming unsustainable because of the scale of the testing and the disincentive effects that have been created, or whether we pursue it in another way. We have advanced the idea of a citizen's pension for men and women that is above the means-tested level, at least for older pensioners. We must debate the matter, but we cannot do so until the Government give a clear message on how they want pension policy to evolve.

Mr. Philip Hammond (Runnymede and Weybridge) (Con): The Liberal Democrat amendment regrets

Will the hon. Gentleman take this opportunity to end press speculation to the contrary by confirming that local income tax remains Liberal Democrat party policy?

Dr. Cable: Yes; it most certainly does, and I am happy to refute any suggestion to the contrary. The hon. Gentleman must have foresight, because I was about to conclude on that point, which I shall approach in the context of the slightly wider question of social justice.

Mr. Salmond : I believe in local income tax, but how does the hon. Gentleman reconcile the concept of a local income tax with the concept of a flat tax?

Dr. Cable: Local income tax is a flat tax, so I cannot see the point of the intervention. Local income tax might be right or wrong, but it is certainly flat.
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I have always acknowledged the Chancellor's pursuit of his objective of a fairer system over the past eight years. One of the problems is that all measures of pre-tax income and post-tax income show that income inequality is not significantly better—indeed, it may be worse—than it was in earlier periods. We need to debate the ONS numbers on the share of income paid in tax by different income groups, but, for some reason, the release of those figures has been postponed until next month. The available evidence suggests that the overall tax system in this country is highly regressive, which completely undermines the Chancellor's pursuit of social justice through taxation and tax credits. That is why Liberal Democrat Members continue to believe that income-based local taxation based on ability to pay is the way to proceed, and we will continue to argue that case. We await the Government's proposals with interest, because we understand that they to some extent converge with our point of view.

Mr. Deputy Speaker: Order. Before I call the next speaker, I remind the House that Mr. Speaker has placed a 10-minute limit on all speeches by Back Benchers and that it applies from now on.

2.7 pm

Mr. Paul Murphy (Torfaen) (Lab): I know that a number of maiden speeches will be made in this Chamber this afternoon. Indeed, I feel as if I am making my maiden speech, because it is 17 years since I spoke from the Back Benches.

When I made my maiden speech, I talked about unemployment in my constituency. In 1987, there were 6,000 unemployed people in my constituency. Today, the figure is 1,000, which means that 2.2 per cent. of people in my south Wales constituency are unemployed. That is almost full employment. The dramatic transformation of our economy over the past eight years in particular has meant that youth unemployment, for example, has dramatically reduced in all our constituencies. In my constituency today, there are only 45 long-term unemployed young people. Some 2,000 people have used the new deal, 1,000 of whom have found jobs. I am sure that all hon. Members understand that their own local economies have changed beyond recognition, too.

Helped by the dynamic economic development policies of my local authority, my constituency, which was based on coal, steel and heavy engineering, now relies on a host of different types of employers. Those employers range from light engineering to business to traditional employers such as the brake manufacturer TRW, which employs some 800 people, to Big Pit in Blaenafon, which employs people in the tourist industry at a world heritage site. That diversity of our economy owes a very great deal to the policies of my right hon. Friend the Chancellor of the Exchequer under the Government of whom I was proud to be a member for eight years.

Similarly, in Wales generally we have had unparalleled resources going into our public services. They have come because, as my right hon. Friend said earlier in his very good speech, we were able to release public funds because we were paying less and less in unemployment benefits. As a result, unprecedented and
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unparalleled levels of public resources are going into public services in Wales, particularly into our health service. We were able to obtain European objective 1 status for Wales, which has meant that Wales has become more entrepreneurial and more skills and industries have developed.

We have seen a great partnership between the Labour Government here in Westminster and the National Assembly in Cardiff in dealing with the question of our pensioners. In Wales, the transport policies of the Assembly mean that a pensioner can travel free the length and breadth of the Principality. Added to that are our own policies of free television licences for over-75s, help with council tax bills, and winter fuel payments; 30,000 of my constituents are benefiting from the latter.

Of course, more needs to be done—we acknowledge that. My right hon. Friend the Chancellor spoke about the importance of helping young people with getting on to the housing ladder, for example. In the autumn, my right hon. Friend the Secretary of State for Work and Pensions will be looking at the extremely important report on the way in which pensions develop in the years ahead.

As well as that, economic change has been formidable in Northern Ireland. I had the very great privilege of being a Minister and a Secretary of State there for nearly five years, and I cannot begin to thank the people of Northern Ireland—Protestant, Catholic and those of no persuasion—for the warmth, generosity and hospitality that they gave me over those years. They have experienced a transformation in their economy that is beyond belief. Unemployment in Northern Ireland now stands at 4.7 per cent. compared with nearly 13 per cent. in 1993—that is down from 89,000 claimants to 37,000. Fifty per cent. of young people in Northern Ireland now go on to higher education of some form or another. New industries are developing. European aid has proved invaluable, as in the Republic, and a new spirit of enterprise is growing. Tourism is flourishing. More people now visit Northern Ireland than live there—2 million people visited last year compared with 1.7 million residents. Although there are of course areas of deprivation, the face of Northern Ireland has changed dramatically for the better.

I believe that the Good Friday agreement and the peace process have brought that about, coupled with the policies of a Labour Government who have encouraged investment from all over the world, especially from the United States and the European Union. As result, people are staying and living in Northern Ireland to create new wealth, which they did not do in the past. When devolution was up and running, local industry could be encouraged and government was more accessible and accountable to the people there. Devolution certainly helped the local economy. That is why the restoration of the Assembly and Executive in Northern Ireland is vital for the economic future of the Province. No one in that place wants to return to the days of the troubles. Everyone wants economic progress, and most people realise that a continued stalemate cannot be good for Northern Ireland's economic future.

I wish my successor, my right hon. Friend the Member for Neath (Mr. Hain), the very best in his new role as Secretary of State, and I urge all the parties in Northern Ireland to continue to try to find a solution to
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the impasse and to create the confidence between parties to come to an agreement. For that to happen, all paramilitary groups, especially the IRA, must decommission their weapons and abandon criminal and paramilitary activity. When that happens, Northern Ireland, with a restored and vibrant local democracy, can look forward to a prosperous, peaceful and politically stable future.

2.14 pm

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