The
Committee consisted of the following
Members:
Chairman:
Mr.
Martin
Caton
Ainger,
Nick
(Carmarthen, West and South Pembrokeshire)
(Lab)
Brennan,
Kevin
(Parliamentary Under-Secretary of State for Children, Schools
and
Families)
Bryant,
Chris
(Rhondda)
(Lab)
Clwyd,
Ann
(Cynon Valley)
(Lab)
Crabb,
Mr. Stephen
(Preseli Pembrokeshire)
(Con)
David,
Mr. Wayne
(Caerphilly)
(Lab)
Davies,
Mr. Dai
(Blaenau Gwent)
(Ind)
Davies,
David T.C.
(Monmouth)
(Con)
Flynn,
Paul
(Newport, West)
(Lab)
Francis,
Dr. Hywel
(Aberavon)
(Lab)
Gillan,
Mrs. Cheryl
(Chesham and Amersham)
(Con)
Griffith,
Nia
(Llanelli) (Lab)
Hain,
Mr. Peter
(Neath)
(Lab)
Hanson,
Mr. David
(Minister of State, Ministry of
Justice)
Havard,
Mr. Dai
(Merthyr Tydfil and Rhymney)
(Lab)
Howells,
Dr. Kim
(Minister for the Middle
East)
Irranca-Davies,
Huw
(Parliamentary Under-Secretary of State for
Wales)
James,
Mrs. Siân C.
(Swansea, East)
(Lab)
Jones,
Mr. David
(Clwyd, West)
(Con)
Llwyd,
Mr. Elfyn
(Meirionnydd Nant Conwy)
(PC)
Lucas,
Ian
(Wrexham) (Lab)
Michael,
Alun
(Cardiff, South and Penarth)
(Lab/Co-op)
Moon,
Mrs. Madeleine
(Bridgend)
(Lab)
Morden,
Jessica
(Newport, East)
(Lab)
Morgan,
Julie
(Cardiff, North)
(Lab)
Murphy,
Mr. Paul
(Secretary of State for
Wales)
Öpik,
Lembit
(Montgomeryshire)
(LD)
Owen,
Albert
(Ynys Môn)
(Lab)
Price,
Adam
(Carmarthen, East and Dinefwr)
(PC)
Pritchard,
Mark
(The Wrekin)
(Con)
Ruane,
Chris
(Vale of Clwyd)
(Lab)
Smith,
John
(Vale of Glamorgan)
(Lab)
Tami,
Mark
(Alyn and Deeside)
(Lab)
Touhig,
Mr. Don
(Islwyn)
(Lab/Co-op)
Williams,
Mr. Alan
(Swansea, West)
(Lab)
Williams,
Mrs. Betty
(Conwy)
(Lab)
Williams,
Hywel
(Caernarfon)
(PC)
Williams,
Mark
(Ceredigion)
(LD)
Williams,
Mr. Roger
(Brecon and Radnorshire)
(LD)
Willott,
Jenny
(Cardiff, Central)
(LD)
Alan Sandall, Mick Hillyard,
Committee Clerks
attended
the Committee
Welsh
Grand Committee
Wednesday 26 March
2008
(Morning)
[Mr.
Martin Caton
in the
Chair]
Oral Answers to Questions
The
Secretary of State was
asked
Capital
Gains Tax (Second
Homes)
9.25
am
1.
Hywel
Williams (Caernarfon) (PC):
What discussions
he has had with the Chancellor of the Exchequer on the impact of the
proposed reduction in capital gains tax on second homes on the market
for affordable homes in Wales.
[195510]
The
Secretary of State for Wales (Mr. Paul Murphy):
I have regular discussions with ministerial colleagues on a range of
issues, including affordable housing in
Wales.
Hywel
Williams:
I thank the Secretary of State for his brief
answer. I see many young couples at my surgery who are desperate to
rent their first home, but I cannot help them. That is all the more
bitter, given that so many perfectly good houses are standing empty as
holiday homes. There are more than 3,000 in the western part of my
constituency, yet the Government intend to give a huge present of
taxpayers money to second home owners. I know that the
Secretary of State is a man of deep principle and I am sure that he is
not happy with the situation, so what can he do to persuade the
Chancellor or the Prime Minister to change their minds on such
issues?
Mr.
Murphy:
I am not convinced, by the way, that the reduction
of capital gains tax from 40 per cent. to 18 per cent., if memory
serves, will be the main issue when determining affordable housing in
the hon. Gentlemans constituency. I sympathise with him, as do
probably all hon. Members who represent Welsh constituencies as they
face the same problem. I met the Minister for Sustainability and
Housing in Wales recently to discuss, among other things, affordable
housing. While I understand the hon. Gentlemans point, I do not
agree that that is the only way in which we can deal with such issues.
I accept that Gwynedd is a special case because of the nature of second
homes during the past number of years.
Mrs.
Cheryl Gillan (Chesham and Amersham) (Con): The Secretary
of State will agree that that problem is not unique to Wales.
Affordable housing is a problem throughout the United Kingdom and all
members of the Committee are concerned about it. However, does he agree
that, with property people in Anglesey and Gwynedd reporting a 40 per
cent. drop in the inquiries about such properties in those
areas,
and given that a substantial part of second home ownership in Wales is
caravans on large tourist sites, it is possible that the drop from 40
per cent. to 18 per cent. might put some dynamism into the important
holiday caravan sector in Wales, on which we rely and which accounts
for some 3.2 per cent. of our economy in
Wales?
Mr.
Murphy:
I understand the hon. Ladys point about
the importance of people with holiday homes, including caravans, but
there is still the problem of affordable housing throughout Wales. It
is difficult to know how to deal with it because of the house price
rises over the past number of years and the shortage of affordable
housing in various parts of Wales. Housing is the most significant
issue that we face in Wales not because of second homes, but because of
young families who do not earn enough not being able to afford
expensive housing. I welcome any initiatives that the Welsh Assembly
Government are taking to relieve the
situation.
Bilingual
Juries
2.
Mr.
Elfyn Llwyd (Meirionnydd Nant Conwy) (PC):
What discussions he has had with the Secretary of State
for Justice on proposals for the implementation of bilingual juries in
Wales; and if he will make a statement.
[195511]
The
Secretary of State for Wales (Mr. Paul Murphy):
Wales Office Ministers have regular discussions with ministerial
colleagues, including the Secretary of State for Justice, on issues
that affect Wales. I met him last week and discussed the issue with
him. It is plainly an important matter. We have to consider
peoples rights to be heard in their own language, the
implications for random selection of juries and the practicalities
involved.
Mr.
Llwyd:
I thank the right hon. Gentleman for his reply. He
may recall that, in 1993, I tabled an amendment to the Welsh Language
Bill with the intention of bringing in the right to have bilingual
juries. It was defeated by one vote. One of those who voted in favour
of such a provision was the First Minister, Mr. Rhodri
Morgan. Lord Justices of Appeal, High Court judges, circuit judges,
district judges, magistrates and practitioners all agree that the time
has now come for the change to be made. I know that the Secretary of
State has had discussions with the Justice Secretary and that he will
look at the matter very seriously, but if bilingual juries were
introduced, the intention would be not to impose them on everyone, but
to give people a choice. If they were required, over £500 of
public money would be saved each day because instantaneous translation
would not be needed, so there is no administrative problem. I can
assure him that the administrators in the circuit in Wales also believe
that it is easy to do. The time has come, and I am sure that he will
lend his support to this important measure in due
course.
Mr.
Murphy:
There is a genuine point about people
wanting to have their cases held in Welsh. It is quite possible to do
so with Welsh juries and, indeed, in
judge-only cases. Where a jury is needed and the use of Welsh is asked
for by a defendant, simultaneous translation can be used. However,
meaning can be lost in translation, and that is an issue.
A number of practical
difficulties are still being explored, such as the availability of
people confident enough to act as jurors in the Welsh language.
Incidentally, I have discussed that issue with the First Minister.
There is also the issue of randomness, and the hon. Gentleman, as a
solicitor, will know that that is a big plank of our judicial system.
The Justice Secretary is still looking at that issue and has not closed
his mind to it, but there are practical difficulties that need to be
overcome.
Mr.
Peter Hain (Neath) (Lab): Having dealt with that issue
myself, I know that there is an extremely difficult balance to strike.
In many areas of Wales, such as Gwynedd or parts of Carmarthen, the
principle of random selection would coincide with a bilingual jury so
that both principles were satisfied. However, the ancient right to jury
trial has been struggled for, fought for and established over many
centuries, and the principle of random selection is an absolutely vital
part of that. I understand the case for bilingual juries, which is
self-evident, but if any progress is made on that, we must be careful
not to destroy the principle of being judged by a jury of ones
peers. In the majority of Wales, if we were to insist on a bilingual
jury, the principle of random selection would be
denied.
Mr.
Murphy:
I entirely agree with my right hon. Friend. I also
agree that the availability of people confident enough in the Welsh
language outside the main Welsh language areas of Wales is a
difficulty. However, I know that the Justice Secretary has looked at
all those issues, including randomness, which my right hon. Friend
quite rightly described.
Mrs.
Cheryl Gillan (Chesham and Amersham) (Con): I will make
common cause with the right hon. Member for Neath, but will preface my
remarks by saying that I come from the party that introduced the Welsh
Language Act 1993. I share his concerns about the infringement of the
principle of the random selection of juries and about the
disqualification of the majority of Welsh citizens from acting as
jurors in cases for which a bilingual jury is required. The Secretary
of State must look into that area and consider it carefully with his
colleagues in the Cabinet. Can he assure me that any solution will not
result in another Government database that lists peoples
linguistic skills, proficiencies and capabilities in Wales? Will he
also ensure that he talks again to Victim Support Wales, which raised
concerns in the early part of this century about the selection of
juries causing extra delays in court and resulting in difficulties for
the victims?
Mr.
Murphy:
Those are the practical problems that we have to
face. I think that every Member present understands that people are
much more comfortable speaking Welsh in court if it is their first
language, rather than English, particularly if they
are older people and live in those parts of Wales that are
predominantly
Welsh speaking. I understand the importance of recognising that, but we
have to balance all those things, and that is the purpose of the
further inquiry into the
issue.
Neighbourhood
Policing
3.
Mr.
Dai Havard (Merthyr Tydfil and Rhymney) (Lab):
What assessment he has made of the effectiveness of
neighbourhood policing in Wales; and if he will make a statement.
[195512]
The
Parliamentary Under-Secretary of State for Wales (Huw
Irranca-Davies):
Wales Office Ministers have regular
discussions with Home Office Ministers, chief constables and others in
respect of police issues in Wales. I welcome, as I am sure will other
hon. Members here, the fact that by 31 March 2008 all Welsh communities
will be fully covered by neighbourhood policing teams. That is a
significant achievement that is due to three years of hard work by
forces and police
authorities.
Mr.
Havard:
I thank the Minister for that answer. He will be
aware that we in the justice community in Merthyr campaigned to get one
of the trials of community justice introduced locally. That is just
beginning: it is one of the 10 extra projects across the UK and the
only one in Wales. Clearly there is a relationship between community
justiceits transparency and efficiencyand neighbourhood
policing. In discussions with his colleagues in other Departments, will
the Minister ensure that they learn lessons from the experiment in
Merthyr in consolidating the work of neighbourhood policing and, by
extension, of community and restorative justice, and that they maintain
the resources for both
activities?
Huw
Irranca-Davies:
I will indeed. I commend my hon.
Friends use of the phrase justice community. He
is right to praise that work, which will result in a £4.5
million refurbishment and new state-of-the-art community justice rooms,
where Merthyr is leading the way for the rest of Wales. Those lessons
will be learnt.
I
take the opportunity to pay tribute not only to my hon. Friend and the
rest of the justice community in his area, not least the Safer Merthyr
Tydfil group, which is doing groundbreaking work, but to the excellent
work of the community safety partnership and the Labour authority in
Merthyr
Tydfil.
Mr.
David Jones (Clwyd, West) (Con): I relate to the Minister
what, only this morning, the clerk to the Llysfaen community council in
my constituency said, which is not untypical of the concerns that I
have heard expressed. While appreciating the work of community beat
managers, assisted by police community support officers, frequently the
community beat manager is overburdened with paperwork, which takes him
or her off the beat and into the office, while the PCSOs are not
equipped with any powers of arrest. What are the Government doing to
ensure that community beat managers are spending less time in the
office on clerical work and more time on the front
line?
Huw
Irranca-Davies:
The hon. Gentleman raises an important
point. All members of the Committee and people throughout the UK want
to see our PCSOs and police officers in neighbourhood policing spending
their time out on the beat, tackling crime and nuisance behaviour.
Without a doubt we look forward to what comes out of the Flanagan
review on how to reform and to make that happen in police forces
throughout the UK.
I
am sure that the hon. Gentleman welcomes, as we all do, the 688 PCSOs
who are now on the streets of Wales, alongside the 7,500 police
officers. I remember sitting on the Committee that brought that in,
along with other Members here13 weeks of hard deliberation,
with opposition to bringing in PCSOs from some quarters I remember. I
now challenge anyone to say that we would take them
away.
Alun
Michael (Cardiff, South and Penarth) (Lab/Co-op): On that
point, would the Minister discuss the deployment of police and
community support officers with Home Office Ministers when he next has
the opportunity? The contribution that PCSOs have made is massive, but
it is partly because of being rooted in the community and not subject
to abstraction in the way that fully trained police officers are. Does
my hon. Friend agree that there is a danger of those support officers
not being used as intended, but being taken out of those community
duties at the whim of chief constables? Will he urge Home Office
Ministers to make sure that this triumph of policy continues to be
applied at the local community
level?
Huw
Irranca-Davies:
Indeed I will. My right hon. Friend raises
an important point about the need for PCSOs and for neighbourhood
police officers to be embedded within the community. He will welcome,
as I do, the neighbourhood initiative in the current campaign,
so that people know not only that there is neighbourhood policing going
on but the name of the individual within their neighbourhood. That is
partly what my right hon. Friend is sayingidentifying and
keeping in the area those individuals who know the local crime and
nuisance areas and who can deal with it, nipping it in the bud at the
first opportunity.
Suicide
Prevention
4.
Mrs.
Madeleine Moon (Bridgend) (Lab):
What
assessment the Government has made of the impact on policing resources
in Wales of the trend in the numbers of suicides in Wales in 2007-08;
and if he will make a statement.
[195513]
The
Parliamentary Under-Secretary of State for Wales (Huw
Irranca-Davies):
The police service is an enormously
important agency in working alongside other agencies to reduce death by
suicide wherever possible. Thanks to the sustained investment provided
by the Government, police numbers in Wales, including south Wales, have
risen hugely, giving police forces far greater flexibility to use their
resources more
effectively.
Mrs.
Moon:
I thank my hon. Friend for that reply. The suicide
rate in Wales is 35 per cent. higher than that in England, with rising
numbers of attempted
suicides and a large number of open verdicts from coroners. The police
are under tremendous pressure to investigate, and to deal with families
distressed and destroyed by the suicides. I pay tribute to the work of
the South Wales police in particular, in dealing with the recent spate
of suicides in my constituency and that of my hon. Friend. Is it now
time, however, to look at psychological autopsies? Should we look at
the emotional state of the person before their death and at what
services could have been in place earlier, so that more needless deaths
do not take place? That would reduce the stress and the horrible
effects on some of our police officers who have constantly been called
out.
Huw
Irranca-Davies:
I thank my hon. Friend for raising an
important point. She is right in commending the work of South Wales
police and others on the ground, herself included, throughout Wales and
the UK, where young male suicide in particular is a rising phenomenon.
A coroner is likely to make inquiries into an apparent suicide and to
seek evidence of the deceaseds state of mind before death,
although the nature and extent of those inquiries are determined by the
coroner. The coroner may commission information, including post mortem
reports and specialist scientific examinations, and may also make an
inquiry of any person, if they consider it relevant. However, I thank
my hon. Friend for raising an important point that merits further
examination.
Mark
Pritchard (The Wrekin) (Con): Does the Minister share my
concern that the United Kingdom has one of the highest suicide rates in
Europe? Many of those suicides have been facilitated by unhelpful
internet sites. Will he commit to discussing that with the internet
service providers, who are willing and able to filter other products
online? Will he undertake to liaise with his colleagues at the Home
Office to see what can be donenot necessarily to shut down the
sites because often they are offshore, in places such as
Japanto filter the information coming from those sites into the
United
Kingdom?
Huw
Irranca-Davies:
The hon. Gentleman raises an important
point on internet use and, while none of us should jump to any
conclusions, I am pleased that the Government have commissioned the
Byron review which will look at that in detail. An assessment is taking
place of the possible contribution of the internet and other factors to
the suicides in Bridgend and in south Wales in general. Again, we
should not jump to any conclusions. However, in respect of the focus on
Bridgend, south Wales and the UK, it is not a UK phenomenon, nor is it
a Bridgend or a south Wales phenomenon. It is a European phenomenon.
The UK is not at the top of that table, but we should be at the top of
the table in examining what the root causes are and how we can address
those, including the internet
issues.
Coal
Compensation
Scheme
5.
Ann
Clwyd (Cynon Valley) (Lab):
How many former
miners in Wales have had their claims settled under the coal
compensation scheme.
[195514]
The
Secretary of State for Wales (Mr. Paul Murphy):
At February 2008, over 103,000 claims have been settled in Wales for
both respiratory disease and vibration white
finger.
Ann
Clwyd:
I thank my right hon. Friend for that reply. I am
pleased that so many cases have been settled. Were it not for a Labour
Government, those miners would still be waiting for their
compensation.
Some
miners have been asked to pay fees by solicitors out of their
compensation, even though those fees have already been paid by the
Government to solicitors. How much of a problem does he assess that to
be in
Wales?
Mr.
Murphy:
I am grateful to my right hon. Friend for that
excellent point. The coal compensation scheme is one of the most
important and significant measures taken by a Government to put wrongs
right. She makes an important point about fees for
lawyers. All of us, including me, who represent mining or former mining
constituencies have had to deal with that difficulty. The schemes have
highlighted significant issues of unprofessional practice. Both the
Department for Business, Enterprise and Regulatory Reform and the
Ministry of Justice are working closely with the Legal Complaints
Service and the Solicitors Regulation Authority to pursue those firms
that have acted
unfairly.
Mr.
Roger Williams (Brecon and Radnorshire) (LD): I also
welcome the claims that have been settledthey have made an
enormous difference to individual lives and to the local economy of
some relatively impoverished communities. Despite that, three classes
of claim remain outstanding. First, the small mines; that issue has
still not been resolved and a number of people in my constituency
continue to raise it. The second issue is that of surface workers. It
seems strange that some of those who worked in equally dusty conditions
are still unable to prove that they should have compensation. The third
issue is difficult to resolve and is about those people who have
retired due to ill health before the end of their career, and how we
can calculate that.
Will the Secretary of State,
and any other interested hon. Members, work with me to see if we can
make some progress over the next six months and get such cases
resolved? Often, the claimant dies before compensation has been
paid.
Mr.
Murphy:
I understand the points raised by the hon.
Gentleman and I know that he appreciates the general value of the
scheme. On surface workers, the advice from the expert medical team is
that the levels of non-visible dust in surface jobs were not sufficient
to cause lung disease, and therefore that was not covered by the 1998
High Court judgment. However, claims going to common law have been
identified, and direction for such cases was due for discussion at the
court hearing earlier this month. I would be happy to talk to the hon.
Gentleman about some of those specific
issues.
Mr.
Don Touhig (Islwyn) (Lab/Co-op): I praise the Legal
Complaints Service of the Law Society for the work that it does in
trying to recover money that
solicitors might have unjustly taken. It will be at my constituency on
Saturday morning at the Newbridge Memo, where we are holding an advice
surgery. However, it is not just solicitors; there are trade unions
such as NACODS South Wales, which have taken money from miners and
their widows and families. Will my right hon. Friend and hon. Members
from all parties join me in calling upon solicitors and organisations
such as NACODS South Wales to pay the money back to those
people?
Mr.
Murphy:
I could not agree more with my right hon. Friend.
I am sure that those points will raised at Newbridge at the
weekend.
Antisocial
Behaviour
6.
Mrs.
Siân C. James (Swansea, East) (Lab):
What recent steps have been taken to tackle antisocial
behaviour in Wales; and if he will make a statement.
[195515]
The
Parliamentary Under-Secretary of State for Wales (Huw
Irranca-Davies):
My right hon. Friend and I have regular
discussions with Cabinet colleagues and other stakeholders on issues
affecting Wales. The Government take the problem of antisocial
behaviour very seriously, and have introduced tough measures in recent
times to try to eradicate the problem.
Mrs.
James:
I thank my hon. Friend for that answer. According
to recent research, 20 per cent. of people in south Wales perceived
that, between 2006-07, there was serious antisocial behaviour in their
communities. During the same period, we saw in Swansea small but
significant reductions in crime due to the changes that we have
introducedmore policing, community support officers and so on.
Will my hon. Friend look at those figures, and try to do a little more
to reassure people and bridge that gap between the perception and
reality of the crime figures?
Huw
Irranca-Davies:
My hon. Friend does a great service to the
Committee and to Wales by highlighting what is often a discrepancy
between the perception of crime and nuisance behaviour, and the
reality. We should remind the public not only about the measures that
we have brought forward but that sexual offences in Wales have
decreased by 9 per cent., offences against vehicles are down 3 per
cent., theft offences are down 1 per cent., and fraud and forgery is
down 14 per cent. We live in predominantly safe communities, not least
because of the measures that we have brought forward and due to the
very good work that goes on under the leadership of my hon. Friend and
others in Swansea to provide safer
communities.
Devolution
7.
David
T.C. Davies (Monmouth) (Con):
What
discussions he has had with the First Minister on devolving powers to
the National Assembly for Wales.
[195516]
The
Secretary of State for Wales (Mr. Paul Murphy):
I have regular discussions with Welsh Assembly Government Ministers on
a range of issues, including
devolution in Wales. The Government are committed to giving the National
Assembly for Wales new law-making powers through the provisions of the
Government of Wales Act 2006.
David
T.C. Davies:
Given that the Welsh Assembly has already
been given further powers through that Act without any reference to the
Welsh people in a further referendum, does the Secretary of State agree
that it would be fair and reasonable to look at the possibility of
removing powers from the Welsh Assembly in areas where its delivery of
public services has fallen below that which should be expected by all
citizens of what I like to call Great
Britain?
Mr.
Murphy:
I am not sure whether that is the official
Conservative position, but it is certainly not the
Governments.
Mrs.
Cheryl Gillan (Chesham and Amersham) (Con): What
discussions has the Secretary of State had with the National Assembly
for Wales about my written question and my subsequent freedom of
information request on releasing the correspondence between his
Department, the National Assembly for Wales and the Welsh Assembly
Government between 1 May 2007 and 1 February 2008, relating to the
legislative procedure for Wales, including legislative competence
orders? Will he explain why he wrote that making such correspondence
available
would
restrict our
ability to conduct business effectively.[Official
Report, 12 March 2008; Vol. 473, c.
461W.]?
When will he reply to
the freedom of information request that I sent at the same time as I
tabled the
question?
Mr.
Murphy:
The reply will come to the hon. Lady from an
official in the Wales Office because that is how the process works. I
hope that it will be in her office in a matter of
days.
On the first
part of the hon. Ladys question, I think that most Ministers
and ex-Ministers agree that it would not be wise to put in the public
domain certain issues that have to be dealt with because doing so would
impede good relationsin this case, between the Assembly and the
Government.
Adam
Price (Carmarthen, East and Dinefwr) (PC): The Calman
review, a joint commission between the Scottish Parliament and the
Westminster Government, is about to begin investigating the case for
tax-varying powers for Scotland. That will also be a subject for a
commission that is due to be established by the Welsh Assembly
Government. Will the Secretary of State say whether the Government are
as committed to exploring the case for tax-varying powers for Wales as
they are for Scotland? Will the Assembly commission have the same
access to Treasury officials and information as the Scottish
review?
Mr.
Murphy:
My view is that there is not a case for
tax-raising powers in Wales for two reasons. First, I do not think that
everybody wants them. Secondly, the
resource base in Wales is inevitably lower than that in Scotland. As the
hon. Gentleman knows, in the 1997 referendum in Scotland, the second
question was whether the Scottish people agreed on tax powers. My guess
is that it would be very difficult to have such tax-raising powers
unless that was the will of the people, confirmed in a referendum. It
is possible that taxation issues will arise during the months ahead
when Sir Emyr Jones Parry deals with those matters. We will have to
wait and see, but, at the moment, any referendum that is held will deal
with the powers of the
Assembly.
The
second part of the hon. Gentlemans question is really about
Barnett and the commission that the Assembly is holding on that
important issue. My view is that we must be careful about Barnett
because we could end up worse off than we are. As he knows, there is
the problem that, on average, more than £7,000 is spent per head
in Wales, compared with just over £6,000 per head in England.
Whether our English colleagues in some areas of the country will be
prepared to accept that is quite another
matter.
Mrs.
Gillan:
On the answer that the Secretary of State gave me
earlier, how could making the correspondence available possibly impede
his ability to do business with the Welsh Assembly Government? After
all, both ends of the equation are familiar with the correspondence. Is
it not the truth that the correspondence is being hidden from every
member of the Committee, every Member of the House and every Member of
the Welsh Assembly who is not in the Government in Cardiff
bay?
I
think that it is wrong to conceal from us correspondence about the way
in which we legislate for Wales. I ask the Secretary of State to look
again at the answer that he gave me and to consider the answer that was
given by the Welsh Assembly Government that it was against public
interest to reveal the correspondence. Will he please talk to his
officials? To conceal correspondence on the legislative processes for
Wales is not good
enough.
Mr.
Murphy:
The hon. Lady knows that there are many examples
in Government where we cannot reveal all the correspondence simply
because it is in the public
interest.
Mrs.
Gillan:
Why not? It is about the legislative
process.
Mr.
Murphy:
Well, there are many examples from previous jobs
that I have done. The Committee can understand that, if we had
revealed, for example, the correspondence of my right hon. Friend the
Member for Neath, the former Secretary of State for Northern Ireland,
there could have been serious difficulties in dealing with the problems
of relations between the two separate Governments. I am talking about
the general
principle.
The
Chairman:
We must now move on to the main debate and it
may be helpful if I remind hon. Members about its timings. We have from
now until 11.25 am; we will then meet again at 2 pm, and debate on the
motion can continue until 4.30 pm. I call the Secretary of State to
move the
motion.
Budget Statement
9.55
am
The
Secretary of State for Wales (Mr. Paul Murphy):
I beg to
move,
That
the Committee has considered the matter of the Budget Statement and its
implications for
Wales.
As always, I
am delighted to serve under your wise chairmanship, Mr.
Caton; as all of us are. I shall be brief, because the opportunity for
members of the Committee to deal with the Budget, its implications and
wider financial issues affecting Wales is important. The Committee is a
means by which Welsh Members are able to express their views, and time
is relatively
limited.
People
sometimes underestimate the fact that the world is different from what
it probably was when I first entered the House 22 years ago. The global
economic uncertainty we are facing is very different from what we have
experienced in the past. Our country is not an exception to any other
in the world in having to deal with such uncertainty. I shall not go
into the details, of which all hon. Members are aware, of what is
happening in the United States housing market and banking systems, and
the consequences for us, such as rising oil prices and the rest of it.
They have an effect on how we deal with our economies and, in this
case, how our Budget is
structured.
The other
matter on which all hon. Members, certainly Labour Members, would agree
is that even though we live in a deeply uncertain world, we are very
fortunate in that, over the last decade, we have had such a strong and
stable economy because of the actions of the Government. That has
effectively meant that we can withstand the storms of global economic
uncertainty in a way that we would not have been able to do had there
not been such wise stewardship of the economy as we have experienced
over 10 years. That must be the backdrop to any discussion of the
Budget. The fact that our interest rates and rate of inflation are
lower than they have been for many years and that our unemployment
rates are the lowest for three decades is an indicator that, however
difficult it might be globally, the United Kingdom can withstand some
of those shocks in a way that other countries might not be able to do.
That must also be important for us in
Wales.
The Budget has
particular resonance for our businesses, our pensioners, and our
children and families, not to mention the environment. Over the last
few weeks in which I have been in this job and been travelling around
Wales, the importance of smaller and medium-sized businesses to our
economy has struck me, as I am sure that it does all of us who
represent constituencies in
Wales.
I worked for a
long time in the constituency of the hon. Member for Blaenau Gwent at a
time when a single industrysteeldominated that area. I
represent a constituency that was dominated by coal, large engineering
and also by steel. As good as those jobs were, and in some cases still
are, the problem of relying so heavily on a single big industry is
that, when that industry goes, the whole local economy is blighted. The
only way that such difficulties, such as the enormous problems that
faced Ebbw Vale, can be dealt with is by having a diverse economy that
is made up of
businesses and particularly smaller and medium-sized businesses that can
withstand those shocks as well. That is why, despite the problems in
the economy, not a single constituency in Wales does not have much
lower unemployment levels than a decade ago. That is not just because
of the good stewardship of the economy; it is also because of the
diversity of employment that we now all have: IT, small businesses, the
service industries. In my constituency there is a huge variety of
employers and that has effectively wiped out
unemployment.
Lembit
Öpik (Montgomeryshire) (LD): Although I agree with
the right hon. Gentleman that unemployment levels are lowthey
are certainly low in Montgomeryshiredoes he not accept that
there has been a degree of upheaval and that some businesses have gone
to the wall? The consequences in areas such as mine are that there are
jobs, but they are low-wage jobs. One of our problems is that people
may be employed but they have a lower income than in many other parts
of the United Kingdom, and that leads to a practical deficit in terms
of quality of
life.
Mr.
Murphy:
I understand the issues and, in rural
constituencies, they are perhaps more acute because of investment
coming in. But the hon. Gentleman would agree that one way to tackle
that problem was to introduce, as the Labour Government did, the
minimum wage. That is how we were able to overcome some of the problems
faced by the lowest-paid people. I do not underestimate the individual
difficulties, but in any economy, however good it might be, businesses
will go under but new ones will replace them. My constituency has lost
something like 15,000 jobs over the last 10 years, but they have all
been replaced, many of them by highly paid, specialist and skilled jobs
too. There are big employers in the service industry. The Town centre
in Cwmbran employs 4,000 people either in shops or offices and that
compares with the 3,000 or 4,000 people who used to work in big
engineering or steelworks or in the coal industry. That shift is
enormous. There is not a city, town, village or community in Wales that
has not benefited from what the Government have done in the last 10
years.
David
T.C. Davies (Monmouth) (Con): Does not the Secretary of
State agree that although this transition in many cases from
large-scale nationalised industries to small and more vibrant
industries was very painful, it was absolutely necessary and was a
result of a previous Governments economic
policies?
Mr.
Murphy:
I would not agree with all of that; I accept the
first
point.
Mrs.
Cheryl Gillan (Chesham and Amersham) (Con): Although the
Secretary of State is painting this terribly rosy picture, can I drag
him back to reality and ask him what he would say to the 25.1 per cent.
of the potential working population in Wales that is economically
inactive? That is around 448,000 people in Wales. The picture is not
always quite as rosy as he would have us believe. A quarter of the
potential working population in Wales is not
working.
Mr.
Murphy:
I am not painting an over-rosy picture. I am just
describing my experience and all our experiences in our constituencies
when we simply look around and see how people work, how they go about
their business and where they go to work. The mobility and prosperity
that people enjoy result from employment. I do not underestimate the
point that the hon. Lady makes about those who are economically
inactive, but the pathways to work and other measures that the
Government are introducing go a long way to addressing those issues.
The last thing any Government should be is complacent on these matters.
Of course, we have to deal with them. There are some wards in my
constituency and in constituencies throughout Wales where these are
difficult issues. But at the same time, while not painting a rosy
picture, we must have a realistic picture that the world is now
better.
Mrs.
Gillan:
Could the Secretary of State, as he is speaking
from his personal experience, tell us what he plans to do to encourage
his colleagues in Government to reverse the trend? Whereas the number
of the economically inactive in the whole of the United Kingdom has
fallen recently by 0.2 per cent., it has increased in Wales by 0.8 per
cent. The trend is going in the opposite direction and I am sure that
he shares my concerns about that; we are all concerned about it. I hope
that he will show how the Government are going to improve things by
reversing the trend, because Wales is going in the opposite direction
from the rest of the United Kingdom.
Mr.
Murphy:
Last week or the week before, I discussed these
very issues, among other things, with Jane Hutt, the Education Minister
in Wales. Young people, in particular, should be able to go into the
world with proper skills and training and with a good background so
that they can get jobs. The culture of not working, which was huge in
parts of Wales at one time, has gone, but there is still a job
to do. I agree that the issue must be addressed, but the Assembly
Government, the British Government and, indeed, local government can
work together to overcome some of those
difficulties.
Mr.
Roger Williams (Brecon and Radnorshire) (LD): I appreciate
that more people are in employment and I appreciate the hon.
Ladys point, but key to this issue are families in which the
children grow up without their parents, for whatever reason, ever
having been in employment. There needs to be a step change to encourage
such families back into employment, because a general improvement in
the economy and the introduction of certain programmes by the
Government are not sufficient. We need something brand-new, and that
perhaps starts in the education phase, not the employment phase, as the
Secretary of State said.
Mr.
Murphy:
Yes, and I think that the measures that the
Assembly plans to introduce for 14 to 19-year- olds, together
with those that the Government are introducing on post-16 education and
skills, go a long way to addressing the hon. Gentlemans
point.
Mr.
Don Touhig (Islwyn) (Lab/Co-op): I welcome the
Governments pathways project, which is an excellent way of
helping people to become economically active again. I remind my right
hon. Friend, however, that economic inactivity was invented by the
Conservative Government, who used it to hide the unemployment figures
created by their economic mismanagement.
Mr.
Murphy:
I entirely agree, as my right hon. Friend would
expect.
Mark
Pritchard (The Wrekin) (Con): I am happy to help the
Secretary of State out of the rather large hole that his colleague has
put in him. It is sad that the debate is becoming partisan, and I hope
that we can all work together for the good of the people of Wales and,
indeed, the United Kingdom.
On the point about pathways to
work, however, does the Secretary of State share my concern that
although the Government rightly want to modernise provision and look at
new ways of bringing people back into the workplace, many of the
contracts that have been, or are about to be, awarded are going to
large organisations, many of which do not have specific expertise? Some
of the large contracts that are about to be awarded, for example, will
go to organisations with no expertise in getting people who are
mentally ill back into the workplace, even though many of the smaller,
bespoke not-for-profit organisations do have that expertise. Will the
Secretary of State give an undertaking that he will ensure that no one
is left behind as a result of the new
contracts?
Mr.
Murphy:
I understand that some of the examples that the
hon. Gentleman points to may well need attention, but the Welsh
situation is probably better than that in England because a variety of
organisations are involved, including voluntary groups, charities and
private industry. The point, however, is that people are now doing
something valuable. By the way, his point about people with
disabilities is well made, and that is also an important
issue.
Mrs.
Gillan:
The Secretary of State has been more than generous
in giving way, but I cannot resist intervening on the point raised by
the right hon. Member for Islwyn. Let us just mention a statistic that
he may not claim is a Tory statistic after 10 years of Labour
government. Is it not true that the Welsh employment level has fallen
by 1.1 per cent. to 71.1 per cent. in a year when the UK average has
risen by 0.3 per cent. to 74 per cent.? Despite the attempt at a
partisan jibe from across the Committee, is not the important point
that we should be addressing the current trend together, not trading
political insults?
Mr.
Murphy:
I do not think that my right hon. Friend for
Islwyn meant any insulthe was simply telling the truth. There
may have been a slight shift here, or a slight shift there, but given
the millions out of work when this Government came to office in 1997,
it is a bit rich to bring up those issues. I recall knocking on doors
in my constituency in 1992. Young men were crying on the doorsteps,
because they had no jobs. There has been a huge change-around. Whatever
statistics we might bandy aboutThis has gone down by 0.7
per cent., That has gone up by this or
thatthey are nothing compared with the situation all
those years
ago.
Mr.
Peter Hain (Neath) (Lab): I very much agree with my right
hon. Friend. I listened with incredulity to some of the points put to
him by Conservative Members. Not only did incapacity benefit levels
triple in Wales under the
Conservatives
Mrs.
Gillan:
You are living in the
past.
Mr.
Hain:
Through much concerted activity, our policies are
reducing the number of economically inactive people, whereas we do not
have a clue what the Conservative partys policies would
be.
Mr.
Murphy:
We have an idea, but will know for sure when the
hon. Lady makes her
speech.
Alun
Michael (Cardiff, South and Penarth) (Lab/Co-op): My right
hon. Friend might note that the hon. Lady was muttering from a
sedentary position, You are living in the past. The
point is that Labour Members do not want to return to the past that the
Conservatives gave us of hopelessness for young people. That is what
brought many of us into Parliament in the first place, but she does not
seem to understand
that.
Mr.
Murphy:
My right hon. Friend is entirely right. It would
be in some peoples interests to wipe from the public memory
what happened all those years ago, but we cannot allow that to happen.
As we approach a general electionwhenever it might bewe
must remind people of what it was like before and what it is like now.
As I said at the beginning of my address, that difference is a result
of the wise policies of the Government and the Chancellor of the
Exchequer in
particular.
Mr.
Elfyn Llwyd (Meirionnydd Nant Conwy) (PC): I, certainly,
have no interest in looking backindeed, I always look forward.
However, will the right hon. Gentleman tell me what progress has been
made on the loss of the Her Majestys Revenue and Customs jobs
in Wales, which are vital to the objective 1 area? I know that he has
spoken to colleagues about it, but it is a vital issue and I would like
to know what progress has been
made.
Mr.
Murphy:
I know that some announcements were made a few
weeks ago and that others are yet to be made. Both the hon. Gentleman
and the Assembly will be interested in and concerned about ensuring
that jobs in objective 1 areasthey are now called convergence
fund areasare safeguarded. Obviously, however, we must await
progress on
that.
Lembit
Öpik:
The right hon. Gentleman will understand that
I want to look to the past as well as the future and draw a comparison
between some economic policies started by the Conservatives and
continued by
Labour, such as the closure of post offices, which leads to jobs cuts.
Will he accept that some of us take a cynical view of the
Governments desire to break with the past, given that the post
office closures, which de facto were initiated by the Conservatives,
who shut thousands of them, are being continued by the Labour party?
Will he also accept that there is a budgetary opportunity to handle the
situation differently in order to provide local services while not
presiding over further cuts in what many regard as a vital local and,
especially, rural
service?
Mr.
Murphy:
The reality is that we cannot continue to lose
millions of pounds a day on unviable businesses. The hon. Gentleman
asks us to take a balanced approach to post offices that provide a
vital service, particularly in certain areas. The fact is that the
Government have invested millions of pounds, and continue to do so, in
the Post Office, whereas the previous Government did not invest a
penny.
Mr.
Touhig:
The Welsh Local Government Association has asked
the Welsh Government to become involved in discussions with Royal Mail
to see how they can collaborate best to help to sustain the post office
network. Will the Government support that
initiative?
Mr.
Murphy:
Yes. The idea of a one-stop shop for local
services, which could be in post offices, is an excellent
idea.
Mark
Pritchard:
I do not want to embarrass the Secretary of
State again, but I understand that he has campaigned against the
closure of post offices, so I am a bit confused about his role this
morning. Is he a Cabinet Minister enforcing Government policy or an
individual Member of Parliament campaigning against his
Governments policy?
I come back to the earlier
point about primary industries. As someone who grew up in a coal-mining
valley and close to the steelworks at Port Talbot and who played poor
rugby in the midst of the steam coming out of the mills, I know about
huge job losses. The Secretary of State will know that those great
primary industries have seen a recovery of late. The global economy is
cyclical and there is more investment in steel and a renaissance of
coal in Wales. In fact, there is a bright future for steel and coal as
a result of the difficult decisions made in the 1980s. They are on a
firmer foundation with private sector investment rather than the
taxpayers subsidy of more than £2 million a day as in
the 1980s.
Mr.
Murphy:
The figures for manufacturing output in Wales over
the four quarters to quarter three in 2007 increased by 1.2 per cent.
over the previous forecast. It has
increased.
I shall
return to the Budget. I have tried to get a figure across to the
Committee four times, and this is it: 175,280 small and medium-sized
businesses in Wales will benefit from the Budget
proposals.
Mrs.
Siân C. James (Swansea, East) (Lab): We have
experienced the nature of employment in Wales with the demise of the
heavy industries and so on. Small and medium-sized industries are
important in my constituency, particularly in places such as Swansea
Vale and the SA1 development. Can the Secretary of State assure me that
the small firms loans guarantee will apply to those companies in Wales?
The announcement in the Budget about extra money will be important to
SMEs in my
constituency.
Mr.
Murphy:
I shall write to my hon. Friend with more details,
but I agree with the general principle of what she said. Swansea has
been transformed. When I was a lad, going by train or road into my hon.
Friends constituency and passing the Carbon Black and other big
heavy industries, the area looked like a moonscape. Now, happily all
that has gone and the working conditions and jobs of people in Swansea
are now infinitely better in many ways than they were in the past. That
is because of the measures that the Government have
taken.
Mr.
Roger Williams:
The Secretary of State said that the
Budget improved the economic climate for small and medium-sized
businesses, but how could that happen when corporation tax on small
businesses has increased from 20 per cent. to 22 per cent., and the tax
allowance on industrial buildings was abolished? North Road garage in
my constituency has just built a fantastic new showroom, but it
believes that such measures are a double whammy for small and
medium-sized
businesses.
Mr.
Murphy:
That is balanced by the other issues such as the
capital gains tax reduction to which I referred earlier, the
corporation tax changes and the allowances given by the Assembly and
the Government to small businesses. No one can suggest that the regime
for small and medium-sized enterprises in Wales is not better than it
has ever been. That is proven by the fact that our businesses have
flourished and thrived. Doubtless, there are individual instances of
difficulties but, in general, the Budget was good news for
industry.
Lembit
Öpik:
I agree with the Secretary of State that the
current Government have made a better fist of the economy than the
previous Government, but there are worries about the general direction
and mood music in respect of small and medium-sized businesses. One
example that concerns me is the collectivisation of Inland Revenue
services. He knows very well that small businesses like local access to
their tax offices, and I suspect that that probably increases the tax
take. How therefore does he justify his legitimate aspiration to help
small and medium-sized businesses at the same time as overseeing the
collectivisation and centralisation of services that small and
medium-sized businesses would much prefer to have on their
doorstep?
Mr.
Murphy:
The hon. Gentleman makes an interesting and
important point. He understands that there is an onus on the Government
to ensure that they become as efficient as they can in respect of
proper value for money. The overall policy of ensuring that there is a
slimmer, leaner and better bureaucracy is important to small businesses
because they will pay less for it in taxation.
I will move on quickly to deal
with two or three other issues in the Budget that affect Wales. I know
that other hon. Members wish to contribute. On families and child
poverty, there is no question in my mind that the lives of poorer Welsh
families with children will be better because of the measures
introduced by the Government. In 2009, child benefit will go up to
£20 for the first child. In Wales, 360,000 families will benefit
from that. Increases in the child tax credit will help 197,000 low and
middle-income families in Wales. How the Government work with the Welsh
Assembly Government and local authorities to tackle child poverty is an
extremely important part of that
job.
Hywel
Williams (Caernarfon) (PC): Can the Secretary of State say
unequivocally that the Government are on course to meet the targets of
halving child poverty by 2010 and eradicating it by 2020? Will he give
that assurance
today?
Mr.
Murphy:
A target is a target and it is there to be aimed
at. I do not know what will happen over the next five or 10 years, but
the aim is to ensure that we get there. It is anybodys guess
what is ahead of us. However, in terms of what has happened so far and
what is happening, families with children are much better off than they
were. The measures in the Budget will make that even
better.
I also want
to touch on the issue of pensioners. The Budget will help Welsh
pensioners facing escalating fuel prices. In Wales, 480,000 pensioners
receive the winter fuel payment. As hon. Members know, that will go up
to £250 for over-60s and £400 for over-80s. There is no
question in my mind that winter fuel payments make a real difference to
the quality of life of the older people in our
communities.
Albert
Owen (Ynys Môn) (Lab): One of the big issues that
has hit all families in Wales and across the UK is the rise in utility
bills. There is evidence to suggest that people in Wales are paying a
higher price for their fuel than people in England. I understand that
the Government have instructed the regulator to look into the hikes in
fuel prices. Will there be a Welsh dimension to that? Will the
Secretary of State liaise with Assembly Ministers to ensure that that
point is put
forward?
Mr.
Murphy:
Yes, I will. Issues such as smart metering will, I
hope, improve the way in which householders, and particularly
pensioners, use their fuel more effectively and efficiently. There are
all sorts of ways of doing that, such as improving the insulation in
houses. We and the Assembly can help with that in order to bring fuel
bills down, particularly for poorer people and pensioners. We will look
at that
issue.
Adam
Price (Carmarthen, East and Dinefwr) (PC): As the hon.
Member for Ynys Môn said, many utility companies have increased
their prices by seven or eight times the rate of inflation. Why did the
Government not look at the £9 billion windfall tax that energy
companies are receiving as a result of the way in which the emissions
trading scheme has been introduced? That money could have been used not
just to pay for a
one-off winter fuel allowance, but address the deep-seated problems of
fuel poverty that we all face in our
communities.
Mr.
Murphy:
I agree with the general point that the winter
fuel payment to pensioners is not the complete answer to this problem.
There must be a long-term answer for dealing with rising fuel prices in
the world and how they affect
us.
I want to touch
on the way that the Budget tackled issues about the environment and
climate change before I sit down. The announcement included excise
duties for cars and charges for carrier bagsan issue that the
Assembly is interested in. There are issues about renewable energy and
the way that the Severn estuary could be used. All those things are
important for our future. Ultimately, it seems to me that the Budget
will benefit all the people of Wales and make their lives much
better.
Mrs.
Betty Williams (Conwy) (Lab): Does my right hon. Friend
remember his visit to the Crest Co-op in my constituency a few weeks
ago? Does that not tie in with the Budget proposals and the
announcement? Does he agree that recycling, if it is done in the proper
manner, will generate jobs in parts of Wales where we have had
difficulties in the past?
Mr.
Murphy:
Yes, and it was a fascinating visit. We heard how
people obtained employment, how the company recycled in a special way
and how the community benefited. The whole area benefited from the
project, and that is a good example of how, if we work together with
the Assembly, local government, voluntary organisations and businesses,
we can produce a Wales that is more prosperous, greener and a better
place for us all to live
in.
10.25
am
Mrs.
Gillan:
First, may I congratulate the Secretary of State
on reinstating questions at the beginning of the Committees
proceedings? I hope that he will, on reflection, continue to give us
the opportunity to question him and the Under-Secretary, not least
because we do not have the advantage of being able to put topical
questions to the Wales Office, as we do with other Departments. I hope
that he will take that on board for future sittings.
People in Wales and, indeed,
throughout the United Kingdom and the worldthe Secretary of
State started his speech by exploring global issuesexpect any
Government to secure their two basic interests: economic security and
physical security. People expect to be financially secure and to be
free from the fear of attack, but if the Government fail to secure one
of those basic interests, they can expect more than a certain amount of
disillusionment from the electorate; they will be seen to have failed
in their role and can expect to be held to account. Only when those
fundamentals are secured are people free to develop other interests in
their surroundings and to concern themselves with the details of
everyday life.
It
cannot have escaped hon. Members attention that people
throughout the United Kingdom are facing significant financial
difficulties and that our economic
fortunes look less secure with every financial forecast and event. With
Northern Rock, we have seen our first run on a bank for nearly 200
years, and the impact of sub-prime loans is reverberating around the
world. At times like these, people look to the Government to provide a
safety net. The Government have had their chance to provide that safety
net, but they are
failing.
In the past
10 years, the world economy has been moving in the right direction, but
the previous Chancellor failed to make hay while the sun shone. Instead
of the Government being in a position to ease the financial pressures
on the United Kingdom, they now find themselves forced to turn the
screw. Nothing has been put aside for a rainy day, and the country is
now in the red. Government borrowing is up by £40
billion to £160 billion, which is £40 billion more than
the Chancellors prediction a mere six months ago, when he said
that borrowing would be £120 billion over the next four years.
At 3 per cent. of GDP, the budget deficit is one of the worst of any
industrial economy. Taxes are up, and the tax take will be
£2.8 billion higher by 2010, which represents
£110 out of the pockets of every
family.
Growth is lower. The
forecasting has been dubious, but I believe that the Chancellor has
downgraded it from 2.25 to 2 per cent., with independent forecasters
suggesting that even that is somewhat optimistic and that the figure is
likely to be closer to 1.7 per cent. Inflation is supposedly up from 2
to 2.5 per cent., while real earnings have fallen by 2 per cent. over
the past two years. There have been even larger increases in the price
of basic necessities. I do not know whether the Secretary of State goes
shopping, but he should know that the price of butter has risen by 37
per cent., the price of eggs by 34 per cent. and the price of bread by
28 per cent.
Lembit
Öpik:
The figures that the hon. Lady cites are
obviously correct, but I am sure that she will agree that one of the
most frustrating things is that those price increases are not passed on
to our farmers. In other words, it is rare for farmers to benefit from
the price increases. That makes the situation even worse in rural
environments, where people have to pay more for their food, but the
money does not come back into the rural economy, because the
supermarkets make profits in between.
Mrs.
Gillan:
The hon. Gentleman has pre-empted a part of my
speech in so far as he mentioned the rural community. With my own
family farming in Wales, I am well aware of the pressures on the
farming community. The Secretary of State moved quickly over that
position because what is happening is that every man and
womancertainly every farmer and farming familyis
finding it much harder to get by. The cost of the shopping basket is
going up. Instead of easing the increasing financial pressures, in the
Budget, the Government have made a rotten situation worse for both
individuals and
businesses.
Mr.
Hain:
What would the hon. Lady have done in the Budget?
What would the Conservatives have
done?
Mrs.
Gillan:
The right hon. Gentleman knows that I have the
luxury of languishing in opposition at the moment. I am pleased to
welcome him to his place and
his engagement in the debate. When we are in government or much closer
to a general election, I am sure that he will find that our shadow
Chancellor of the Exchequer will lay out a rosy picture of Conservative
policies, particularly those that will benefit
Wales.
Mrs.
Gillan:
I will give way to my hon.
Friend.
Mark
Pritchard:
One of the things that Conservatives would have
done in their Budget, and will do when we form the next Government, is
to mention the national health service. That would be appropriate for
todays debate, when there is a 22-week in-patient waiting time
target in Wales and an 18-week target in England. Is it not disgraceful
that the Prime Minister and the Chancellor failed to include any
reference to the national health service in their
Budgets?
Mrs.
Gillan:
My hon. Friend makes a good point. The Chancellor
failed to make any reference to Wales in his Budget
speech.
Mrs.
Gillan:
It is like the old
days.
Mr.
Hain:
I am grateful; the hon. Lady is giving way to me
almost as often as I used to give way to her. My point is not to ask
the Opposition to propose a Red Book or to make a statement of the
length of the Chancellors. However, she attacked the policies,
holding them responsible for all the ills described but omitting to
mention the trebling of oil prices or the financial instability from
across the Atlantic. She ought to have and to show responsible
attitudes by saying what else should be
done.
Mrs.
Gillan:
The right hon. Gentleman will have what he
describes as a responsible attitude from the Opposition when we have
access to the Treasury and to the books. As we already know from
earlier in the debate, it is difficult to have access to the right hon.
Gentlemans correspondence on the legislative process. If he has
nothing to hide, he will be able to produce that correspondence for
us.
Wales is
officially still the poorest region of the United Kingdom. Business and
enterprise under Labour have been taxed to the hilt and tied up in
ever-increasing amounts of red tape. Not only does that present a
significant problem for Welsh businesses, but it discourages overseas
firms from investing in Wales. Investment has fallen by some
£176 million since 1999. We have also seen a huge drop in the
number of people employed in the manufacturing sectoran average
of 5,666 a year since 1999, which is 51,000 fewer jobs in that sector
since the creation of the National
Assembly.
Furthermore,
we have not only seen a decline in entrepreneurship in Wales, but also
a widening of the gap between men and women engaged in early-stage
entrepreneurial activity. A recent study revealed that, in 2007,
entrepreneurial activity among men in Wales was just over twice that
for women7 per cent., as opposed to 3.4 per cent. For the Welsh
economy to flourish, we need to change that trend by
encouraging entrepreneurship, including equal participation by men and
women, by being a help rather a hindrance to business and by making
Wales an attractive proposition for overseas
investment.
Adam
Price:
I agree with the hon. Lady that we need to support
entrepreneurship, particularly in Wales, which has a lower GDP. Why,
therefore, do we not do what is done in Spain for the Basque country
and Navarre? Let us give Wales the right to have lower taxes, so that
we can attract companies specifically into areas such as
Wales.
Mrs.
Gillan:
The hon. Gentleman would like me to lay out my
manifesto for the next general election as regards Wales, but he tempts
me too far down a path that he knows I will not venture
along.
The
enterprise White Paper published alongside the Budget acknowledges my
point and sets out a large number of policies and initiatives to
encourage small and medium-sized enterprises and entrepreneurship. We
were promised increased access to finance for small firms, a new
capital fund for female entrepreneurs, a goal of 30 per cent. of state
contracts to be won by SMEs over the next five years, reform of the
small business research initiative and simplification of the
enforcement of new regulations for small firms. Those are all good
intentions, but I do not believe that they are enough to reap the
results. Of course we welcome a development that would enable SMEs to
be given more state contractsit sounds remarkably like
a Conservative policy announced by my right hon. Friend the Member for
Witney (Mr. Cameron) in 2006.
We welcome the reform of the
small business research initiative; it is long overdue. However, the
increased access to finance measures only tinker around the edge of the
problem. More and more central spending is not the way to stimulate
enterprise in Wales or elsewhere in the UK. Central Government support
for small businesses has risen by £2 billion since Labour came
to power, yet start-up rates per 1,000 inhabitants in the UK have
declined during that period. For small businesses to have increased
access to finance, the economy needs to be in decent shape, and as we
have seen, that is simply not the case. Once again, the Government are
full of warm words and good intentions, but the Budget has failed to
deliver that substance.
The intention to minimise red
tape seems laughable given that the Labour Government piled on such
extensive new regulations, with an average of 14 new regulations every
day since Labour came to power. That has cost UK business £65
billion since 1998. The enterprise funda new capital fund to
encourage female entrepreneurshipis yet another questionable
gesture. The Womens Enterprise Task Force, which was set up in
2005 to tackle exactly the same problem, has only a year left to run,
yet the problem persists. The belief that this latest initiative will
have any effect is, at best, naive.
What about green taxes? The
so-called green measures in the Budget further exacerbate some of the
problems for Welsh tourism, farming, business and industry. The vehicle
excise duty band changes mean that VED will not just be a punitive tax
on so-called Chelsea tractor owners, but will affect the rural and
farming communities about which the hon. Member for Montgomeryshire
intervened on me earlier. That area of the economy in Wales is under
great pressure and makes up 4 per cent. of the total employment. People
will be forced to fork out even more because, in many cases, such
vehicles are necessary for them to do their
jobs.
Albert
Owen:
The hon. Lady raises some important issues about
fuel and rural areas. She does not want to look back, but does she
recall that the Conservative party introduced the fuel escalator, which
hit rural areas particularly in north-west and west Wales? Does she
suggest that that mechanism should be thrown out altogether? How does
that fit in with the green agenda mentioned by the Leader of the
Opposition?
Mrs.
Gillan:
The trouble with the Labour Members is that they
always want to drag us back into the past. It is easy to look back to
the past, but I look forward to the future and will continue to do
so.
The band changes
are a huge burden on the family, as the owners of ordinary cars, such
as the Vauxhall Vectra or the Ford Galaxy, face a £100 increase
in VED, on top of the spiralling costs of petrol and
diesel.
Mr.
Roger Williams:
The hon. Lady is reticent in spelling out
the Conservative policies on these matters, but does she agree that the
real challenge is for automotive designers and developers to develop
family cars and vehicles for small businesses that have lower emissions
and thus contribute less to climate change?
Mrs.
Gillan:
I do not disagree with the hon. Gentleman, but if
I may digress, we must look at another point. The issue is not just
about emissions; we need to look at the carbon footprint and the build
of vehicles. I have heard rumours that the carbon footprint of the
manufacturing process for some of the cars with lower emissions is so
enormous that it probably outweighs that of some of the cars on which
we are trying to charge extra VED.
Mr.
Roger Williams:
That is the
challenge.
Mrs.
Gillan:
Indeed, but it is not a political challenge; it is
a challenge for all of us. We will always applaud initiatives to tackle
climate change, but we believe that, if such taxes are introduced, they
must be offset with tax cuts elsewhere.
The Government have failed to
do that in this instance and have added to the rising cost of living
with what is effectively another stealth tax. That is particularly
worrying in the light of the Local Transport Bill, which will have its
Second Reading on the Floor of the House today and proposes to grant
powers to the National Assembly, enabling it to impose charges for the
use of trunk roads in Wales. That is effectively yet another tax on
Welsh motorist, farmers,
hauliers and tourism. It will also give the Assembly unprecedented
tax-raising powers, effectively by the back door.
Not only has the Budget let
down businesses and farming in Wales, but it will also make the
situation worse for families and individuals. The cost of living has
risen dramatically over the past few years and the Welsh people are
paying more than ever for day-to-day necessities, yet the Budget does
nothing to ease that situation. People in Wales, as the Secretary of
State alluded to is his contribution, pay more for their energy than
anyone else in the UKsome 11 to 18 per cent., with a
significant number on prepay meters. It was interesting that the
Secretary of State said that he does not believe that payment for
pensioners is the whole answer and that there needs to be a long-term
solution. The Chancellor raised that issue in the Budget and made a
vague allusion to working with the energy companies to tackle it, but
that has done nothing to reassure families who see the bills
fall on the mat every day.
Lembit
Öpik:
I was listening intently to the hon.
Ladys comments on the environment. The Conservative party does
not want to share its policies, but does she not accept that it is not
credible for a party that wants to be elected to government in no more
than two years to be unable to share a single specific environmental
policy? The Centre for Alternative Technology in Montgomeryshire can
provide her with many specific action steps that any sensible person or
party could adopt. Why are the prospective Conservative Government so
afraid of talking about specific policies that they will not even
embrace some of the common-sense measures that any hon. Member would
think are sensible political policies for a party that wants to
govern?
Mrs.
Gillan:
That does not surprise me, coming from a party
that can never realistically entertain the prospect of being in
government. I believe that the Conservative party in the Assembly was
ahead of the game on plastic bags long before the hon. Gentleman even
went down to the supermarket to collect his
shopping.
Mr.
Llwyd:
Will the hon. Lady give
way?
Mrs.
Gillan:
I will make progress to the end of my speech,
because many other hon. Members want to speak and I have a few more
points to make to reverse the rosy picture that the Secretary of State
painted.
Even after
the Budget, the hard-working Welshman will, thanks to the Chancellor,
pay even more for his pint at the end of the week. In addition to the
price increases in beer, particularly due to the surge in the cost of
raw materials, and unlike the Conservatives, who proposed targeting
duty increases on drinks more closely associated with antisocial
behaviour, the Government have now decided to punish everyone without
tackling the problems. In fact, the situation might well deteriorate.
Much of the alcohol associated with antisocial behaviour is purchased
at rock-bottom prices from supermarkets, which are more than capable of
absorbing the duty increase.
The tax hike is far more likely
to affect our local pubs in Wales, which are often at the heart of
communities, as they will be unable to absorb the extra costs and will
therefore have to raise prices by about 20p a pint, which could put
them in grave danger. In the UK last year, 1,567 pubs were forced to
close. In Gwent alone, 27 of its 576 pubsabout one in
20closed with an uncertain future in 2007. Not only have the
Government done nothing to address that, but the Budget has made the
situation worse. Local pubs have a marked impact on social cohesion,
and to allow them to go under for the sake of putting a quick buck into
the Treasury coffers will lead to a more disparate society and to more
of the sort of problems that a more targeted duty increase would have
helped to
prevent.
Mr.
Llwyd:
Will the hon. Lady give
way?
Mrs.
Gillan:
I will not give way now, as I have given way
generously and need to make progress to the end of my
speech.
The
Government seem to care little for our local communities. Since 1999,
107 schools in Wales have closed for good. There are 324 fewer post
offices, with 214 lost from rural areas. In fact, since 1999, more than
a quarter of the network has been lost, and the figure will increase to
around a third after the current round of consultations. Local
communities are crucial in addressing a wide range of problems facing
Wales today, from health and unemployment to antisocial behaviour, yet
Labours policies have led increasingly to a breakdown in social
bonds, and the Budget continues in that vein.
Many people in Wales already
find it difficult to make ends meet. Wales has over 197,000 incapacity
benefit claimants, over half of whom have been claimants for more than
five years. That not only makes things tough for the families and
individuals concerned, but places a real strain on the whole Welsh
economy. So what are the Government going to do to tackle the problem?
We are told that, from April 2010, all long-term incapacity benefit
claimants will attend work capability assessments. So will we see that
number slashed, as people head back to work, thus improving their lot
and freeing up resources for investment elsewhere? Unfortunately, we
will not, as the funding provided for that initiative is only
£10 million for the whole of the UK.
A similar scheme introduced in
New York cost around £100 per claimant. Yet the funding for the
initiative works out at less than £4 per claimant. Furthermore,
there is no commitment from the Government to a back-to-work plan after
the retesting has taken place. Individuals found to be capable of
working may well be given no support at all to find employment, and we
must remember that some of those individuals have been out of work for
five years or more. All the initiative will do is shift numbers from
incapacity benefit to the unemployment register; it will not free up
any resources or improve the situation for anyone.
More than one in 10 young
people in Wales is registered as unemployed, and a large contributing
factor is that, as the business community has warned us
for years, young people are leaving school without the necessary skills
to enter the labour market. The Government have utterly failed to deal
with the problem: a quarter of 19-year-olds in Wales lack NVQ 2 or
equivalent qualifications and around 10 per cent. of 16 to 18-year-olds
are not in employment, training or education.
In the Budget, we see the
promise of an extra £20 million a year for three years to help
young people across the UK to gain such skills. Yet not only are the
funds insufficient for their purposethey are only enough to
cover 6,154 apprenticeships or roughly 4.1 per cent. of the
Governments own targetbut the extra £20 million
will not come on top of the existing Department for Innovation,
Universities and Skills budget but must be found within it. The DIUS
must either divert funds from elsewhere or, as it has consistently done
over the past few years, find a spare £20 million lying around,
which is not over-efficient resource allocation by a Department.
Moreover, from wherever that £20 million is found, the
disaggregation it will undergo via the Barnett formula will leave young
people in Wales particularly underfunded.
I feel that it is appropriate
to point out, though, the excellent work that has been done. I should
like to mention in particular the Princes Trust, which has
helped 70,000 young people to set up businesses since 1983 and helped
7,000 young people in Wales every year through a combination of
self-development courses, mentor support and financial assistance.
Prime Cymru, another of the Princes Charities, has also helped
well over 1,000 people over 50 to start their own businesses. The
commendable achievements of those two organisations further serve to
highlight that there is something seriously amiss with the
Governments approach to enterprise among people of all ages in
Wales.
Not only has
the skills gap among our young people not been dealt with in the
Budget, but it once again fails to deal with an even more rooted
problem: child poverty. Around one in three children in Wales lives in
povertyan appalling statistic for the 21st century. How can we
expect individuals, families and businesses in Wales to flourish in the
future if we do not give our children a decent start? Now, even the
Department for Work and Pensions admits that the Government are nowhere
near achieving their targets on child poverty, and the Budget does
nothing to improve that forecast.
The increases in child benefit
and the changes to the child tax credit are a drop in the ocean, and
the intention to spend more money on developing new approaches to help
families is not really a commitment to do anything more than just have
a bit of a think about the situation. The children of Wales do not need
funds poured into yet another review of the status quo. Action needs to
be taken, and a Conservative Government would do so, putting an end to
the couple penalty in the tax credit system, thereby lifting 300,000
children out of poverty. By neglecting to resolve those issues, the
Government not only fail Welsh children, but seriously jeopardise the
future of the Welsh economy and people.
I believe that all members of
the Committee want the best for Wales, and I have heard the Secretary
of State pray in aid the worlds poor economic and uncertain
future. Of course, he would prefer that we
concentrate on what is happening in the rest of the world, but I prefer
to concentrate on what is happening in Wales and in the United Kingdom.
The truth of the matter is that far from supporting Welsh people, the
Chancellor forgot them completely, making no mention at all of Wales in
his Budget speech. Wales should be a hotbed of enterprise, and we
should be raising the standard of living for every Welsh family, giving
our children the best start and investing in our countrys
future.
These are
difficult times, but the people of Wales can come through and succeed.
They need the security and support of a Government who know what to do
when the going gets tough and are prudent enough in the good times to
put money aside to see people through the bad times. The Government
have not done so; they have failed in their role, and I believe that
they will be held to account at the ballot
box.
10.51
am
Dr.
Hywel Francis (Aberavon) (Lab): I welcome the recent
Budget for many reasons, but most of all for its significant
contribution to the creation of a knowledge economy against a
background of global insecurity, which the Secretary of State outlined.
I shall relate the Budget to the Welsh Affairs Committees
recent inquiry into globalisation and its impact on Wales, with
particular reference to the skills agenda and the need for a knowledge
economy in Wales.
The Budget announcements of a
national enterprise academy and the creation of a university enterprise
network will be generally welcomed, not least by the Welsh Assembly
Government and the Wales Office because of their commitment to a
knowledge economy in Wales. The Budget places great emphasis on further
progress towards implementing the recommendations of the Leitch review
and our version of that in Wales, the Webb review. The
Governments long-standing commitment to enhancing additional
funding for adult skills is reiterated in the Budget, and I am sure
that in Wales it will lead to employers taking on more
apprentices.
Mr.
Roger Williams:
I know about the hon. Gentlemans
commitment to education and training, but yesterday I met the
Federation of Master Builders, which complained about the lack of
skills coming up and the cost to the employer of an apprenticeship. In
the first year, when the apprentice is mostly in college, it can cost
the employer up to £12,000, with no certainty that the
apprentice will go on to work in their business. Can something be done
to make apprenticeships more attractive not only for the apprentice,
but for the employer?
Dr.
Francis:
I thank the hon. Gentleman for his intervention.
He anticipates several of my points. I am sure that he welcomes in
particular an initiative in Neath Port Talbot college, of which more
later.
The
Governments continued emphasis on greater support for science
and innovation is translated through the Budget into ensuring
Government procurement, promoting a further education, specialisation
and innovation fund, and a doubling of the knowledge transfer
partnerships. It will, however, be important for the
Secretary of State and the Wales Office to monitor how those key UK
initiatives play out in Wales, particularly given the need for the
better and closer synergy of UK research funding and knowledge transfer
locally and nationally in Wales, which is a matter of some concern for
Welsh vice-chancellors. That said, I believe that the Budget provides
an excellent context for skills enhancement through greater partnership
between the UK and Welsh Assembly Governments.
The Welsh Affairs Committee,
in its globalisation inquiry, identified skills as the major policy
issue, and that was mirrored in the recent Budget commitment to a
strong and sustainable future ensuring fairness and opportunities for
all. Our inquiry has shown that globalisation has raised fundamental
questions about not only the kind of skills required now, but more
importantly the kind of skills that the Welsh and UK economies will
require in 10 or 20 years time.
It is a given that in the 21st
century businesses will be clustered around universities and
colleges. Higher education, by its very nature, has
been and is international and is increasingly engaged with
globalisation. Universities attract talent into an area around which a
hub of economic activity can be built, and they should be seen as
generators of wealth. As skills are the essential element in adding
value in productivity and competition, universities will be the great
emblematic champions of the development of the essential knowledge
economy. Universities are at the forefront of the development of that
knowledge economy and must work with leading-edge companies to take
advantage of the opportunities presented by todays global
economy.
In his
evidence to the Welsh Affairs Committee, Sir Adrian Webbauthor
of the Webb review and its reportcautioned against
over-investing in skills and trusting that the economy will come right
automatically. What is required, he said, is a focused approach that
seeks to develop economic clusters supported by a cluster of skills.
Growing the research and development base of Welsh universities is
fundamental to creating the knowledge economy. Investment in that area
will bring a significant return in quality employment, high-level
skills, good jobs and economic development. The Budget inevitably
encourages that.
The
availability of skills in the universities plays an important role in
attracting companies to an area, not just for the research capability
within a university, important though that is, but to supply graduates
for local employment. Welsh universities must turn out graduates whose
skills are tailored to the needs of industry and commerce in Wales. In
his evidence to the Committee, Professor Merfyn Jones of Bangor
university said:
yes,
we need basic skills...but if we are to survive in the global
marketplace we have also got to have a competitive edge and the
competitive edge comes from higher level
skills.
Universities
are trying to attract higher valuefor example, Newport
university is working with the Metrix Consortium to see what they can
do together to support inward investment at St. Athan, to support jobs
growth in that area. A number of colleges and universities throughout
south and west Wales will also be engaged in that
work.
International research
contracts and collaborative links with universities in China and India
are increasingly important. Yesterday, I attended a meeting of the UK
India Business Council, where it was announced that a delegation of
British vice-chancellors would be soon visiting India. I hope that
Wales will be well represented. The links between Welsh universities
and China continue to grow apace. The Confucius Institutes at Lampeter
and Cardiff are evidence of that, and the Secretary of State was
prominently involved in the recent opening of the Cardiff institute.
When the Welsh Affairs Committee visited China last year, we saw how
important universities were at local, regional, national and global
levels and how they were making significant contributions. The Chinese
model of operating at all those levels is the sort of model that Welsh
universities are now adopting. We have learned from each
another.
Mr.
Roger Williams:
As Chairman of the Select Committee, the
hon. Gentleman will be soon meeting some young Chinese students here
who have links with Christ college in my constituency. That is an
example of links between schools rather than between universities. Does
he agree with me that it is important that those links should start at
an early age, rather than at university level, because they form the
foundations of enterprise and
co-operation?
Dr.
Francis:
Yes, indeed. In fact, we met students from Christ
college when we were in Shanghai and we were impressed with their
commitment. Christ college is to be congratulated. I know that the hon.
Gentleman has close associations with the college, and I endorse his
comment
entirely.
Mrs.
Gillan:
I agree with much of what the hon. Gentleman is
saying and I appreciate how important the university sector is to
development in Wales. Does he agree with me that some worrying trends
have developed since 1997? The number of graduates with a degree in
science becoming qualified teachers fell from more than 1,000 to 660 in
2005-06; research now shows that the drop-out rate of science and
mathematics teachers after five years is some 40 per cent., and 50 per
cent. shortly thereafter. Our universities in Wales will not get the
raw material that we need.
Dr.
Francis:
The hon. Lady makes an important and telling
point, but I remind her that golden hellos have slowed that problem to
a considerable degreeindeed, I know of examples in Wales where
the situation has been reversed; I believe that Swansea university is
such an example.
To
return to the question of learning from China, we are all familiar with
the old dictum, Think global, act local. We could
modernise that in the context of what is happening in China and Wales,
and say that we should think and act local and think and act
global.
Lembit
Öpik:
On that point, the comment about thinking
globally and acting locally resonates with my personal belief that we
should be the environmental
capital of the world. Does the hon. Gentleman agree that through our
links with China, for example, we could be exporting best practice? We
have already mentioned the Centre for Alternative Technology; through
that institution and other eco-businesses in Wales, we could ensure
that, in addition to reducing our carbon footprint in the UK, we could
prevent Chinas carbon footprint growing as fast as it might
otherwise grow, at the same time as bringing substantial revenue back
to
Wales.
Dr.
Francis:
Yes, I could not agree more with the hon.
Gentleman. Universities in particular could link more strongly into the
Centre for Alternative Technology. We made strong recommendations in
support of that centre. One of its difficulties is that it has not been
fully valued in Wales and at the UK
level.
Another aspect
of our globalisation inquiry was the interface between skills and the
broadcasting and creative industries, which form a rapidly growing
sector of the Welsh economy. In order to survive and prosper, those
industries are global by definition. They need to look beyond Wales,
but they also value their local roots. An excellent example of that is
Tinopolis, in the constituency of my hon. Friend the Member for
Llanelli, which has a good record of training local people to a high
standard.
I end by
paying tribute to my own university of Swansea; my local third
education college, Neath Port Talbot college; and my Labour-led local
authority, Neath Port Talbot county borough council. The council was
recently designated by the Western Mail as the best in
Walesnot only the best Labour authority, but the best authority
in Wales. The university, the college and the local authority all make
a significant contribution to building the knowledge economy in south
west Wales, in Wales and
globally.
The
university has decided to establish a second campus, which may in large
part be located in my constituency, so I welcome that development even
more. Its vice-chancellor, Professor Richard Davies, spoke last week
of
looking to a
visionary developmentand a first for the UK in terms of
innovative partnership with business and
industry.
I should
bracket my praise of Swansea university with praise for the development
of the new university in Swansea. In the way Swansea Metropolitan
university has interfaced with local business, and in adopting a
European and global perspective in its work, it has been
outstanding.
My
local authority has attracted the global company Amazon, bringing in
1,200 jobs, again to my constituency. Those two developments could well
be linked along the Fabian way by what is increasingly described as a
learning corridor. The chief executive of the Neath
Port Talbot county borough council, Mr. Ken Sawyers, has
described it in that way. That is the sort of language that we need to
use in building a knowledge
economy.
Equally
ambitiousthis comes back to the point made by the hon. Member
for Brecon and Radnorshireis the bid by Neath Port Talbot
college to host the national institute for construction in Wales. I
know that my hon. Friend the Under-Secretary has an interest in that.
That national institute would be a
campus to provide courses and qualifications to meet the needs of a
sustainable construction industry in Wales, and would become a centre
for excellence for research and development in construction. That
would, again, be in partnership with Swansea
university.
The
Budget has created an excellent framework for sustainable progress
towards building a knowledge economy in Wales. Indeed, Wales is in many
ways ahead of the game and ahead of the Budget, and my constituency of
Aberavon is very much in the
vanguard.
11.7
am
Adam
Price:
The hon. Member for Aberavon (Dr.
Francis) mentioned Confucius in his speech, and I am reminded by my
hon. Friend the Member for Caernarfon that one of the principles that
Wales shares with Chinese culture, which is influenced by Confucianism,
is a stress on meritocracy and fairness. We got from China the idea of
open competitions for the civil servicethat is where the word
mandarin came from. The idea of fairness is a foundation value for us
across the political spectrum in Wales. It defines our social values,
and it is through that prism that we evaluate this years
Budget, or any Budget. Indeed, the Chancellor mentioned fairness and
the idea of creating a society in which everyone has an equal
opportunity to be the best they can be and to achieve their full
potential. That is the right starting point for all
politics.
The picture
from the past decade and a bit is mixed. It is important to be fair in
politics, and it is fair to say there has been much progress on many
fronts, as well as some disappointments. The best way I can encapsulate
the situation is by saying that inequality has risen while relative
poverty has been reduced. That sounds like something of a
contradiction, but it is not when we remember that different things are
being measured. Inequality measures the difference between the very
bottom and the very top, whereas relative poverty is about the distance
between the bottom and the meanthe average.
It is important to acknowledge
that relative poverty is lower now than in 1997; important strides have
been made. The number of people with an income, after housing costs are
factored in, of less than 60 per cent. of the median is 12.8 million,
in the UK. That is 21 per cent. of the population, compared with 25 per
cent. when Labour came to power. In Wales, the figure is 600,000, which
is 22 per cent. of the population. That is slightly above the UK
average, but the fall has been greater in Wales; the figure was 27 per
cent. when Labour came to
power.
However, at
the same time as we have seen a reduction in relative poverty,
inequality has risen. The Gini coefficient, which is the most widely
accepted measure of inequality in a society, is higher now than when
Labour came to power, and the trend is accelerating, particularly since
2004-05. There seemed to be a reduction in inequality after the 2001
Budget, but that trend has now been reversedindeed, income
among the poorest fifth of the population fell by 0.5 per cent. in real
terms for the last years for which figures are available, between 2004
and 2006, whereas income for the wealthiest 20 per cent. increased by
1.7 per cent. above inflation.
We have been in a period where
reducing poverty and increasing inequality have been running in
parallel with each other, but there are worrying signs now that both
poverty and inequality could be increasing at the same time. What I did
not say earlier was that the figures for relative poverty, between
2004-05 and 2005-06the latest years for which data are
availableshow that relative poverty has increased for the first
time, by 700,000 from 12.1 million to 12.8 million. That was the first
year that relative poverty had increased since 1995-96 and therefore
the first time it had done so under this Labour
Government.
Lembit
Öpik:
The hon. Gentleman has done his research and
produced some very interesting analysis; I look forward to hearing the
rest of it. Does he agree that one of the reasons why these trends are
occurring is the Governments increasing shift from direct
taxation to indirect taxation? Indirect taxation takes much less
account of both the earning potential of individuals and what they
actually earn, and it is a much less equitable way of raising
Government revenues. Does he agree that the more we see the Government
trying to hide tax by making it indirect, the more likely it is that
the type of inequalities that he is describing will
persist?
Adam
Price:
The hon. Gentleman is absolutely correct. That is
something of which the Government must be mindful, because the shift
towards regressive, indirect taxes, particularly on cigarettes, alcohol
and fuel, has a disproportionate effect on poorer people. That is
reflected in their disposable income and it is certainly a
worry.
I must also
say that the increase that we have seen in relative poverty is not some
sort of statistical blip: it can be seen right across the different
measures of poverty. Child poverty has begun to rise again for the
first time under this Government, notwithstanding their sincere attempt
to focus on child
poverty.
Albert
Owen:
The hon. Gentleman has indeed done his research and
I do not dispute his figures for one minute. However, does he
acknowledgeI think that he doesthat the working
families tax credit is the mechanism that helps the poorest families
the most? Rather than whether taxation being indirect or direct, what
is important is that the credit goes straight to those families with
children to help to fight child poverty. In the Budget that we are
discussing today, there has been a move to reinforce that tax
credit.
Adam
Price:
I certainly acknowledge that. Of course, I want the
Government to go far further and far faster down that road. Indeed, the
calculation was made a year and a half ago that we need, I think, an
extra £4.5 billion a year to give the Government a 50:50 chance
of meeting their 2010-2011 target on child poverty. We had an extra
£500 million in this Budget and an extra £1 billion last
year, but the Government are still not giving themselves even that
50:50 chance of meeting their own
target.
Mrs.
Gillan:
If that is the case, why did the Joseph Rowntree
Foundation say that the reduction in child poverty in Wales stalled in
2004? I would be very interested to hear the hon. Gentlemans
answer.
Adam
Price:
The hon. Lady is right. The child poverty rate is
rising for the first time under this Government, according to the most
recent figures. That has to be a serious concern. Although it is still
lower than when Labour came to power it is rising. The Government have
concentrated on child and pensioner poverty for the right reasons, but
certain people are falling through the net. The poverty rate among
working-age adults with no children is higher now than it has been
since records began in 1961. That is an incredibly sobering fact. We
also need poverty reduction policies for working-age adults who do not
have children.
Mr.
Roger Williams:
The hon. Gentleman makes a good point
about tax credit and the need for more investment, but within the sums
of money that are now available from the Government, does he not agree
that couples on higher incomes are being supported when it would be
better to target that money on poorer couples? The problem with the
Government is that they are trying to please everybody and give
everybody a little bit, rather than giving the people in real need the
support they
deserve.
Adam
Price:
I understand the point that the hon. Gentleman is
making. I support the underlying principle of progressive universalism.
There is higher take-up of universal benefits because they are not
stigmatised by being means-tested. One has to have a balance: there is
a case for targeting, but there is also a case for creating a basic
floor of universal benefits that are available to all as part of a
decent
society.
Hywel
Williams:
Very briefly, the point here is that if benefits
are poor peoples benefits, almost inevitably they become poor
benefits too, because the people in society who have a stake and some
powermiddle-class peopledo not defend
them.
Adam
Price:
It certainly is the case that if we look down the
income scalethe hon. Member for Brecon and Radnorshire makes a
good point in this sensethe number of people on less than 40
per cent. of median income has increased under this Government. The
picture is very mixed. That is the message we get when we look at the
figures. There are some major causes for
concern.
Why is
relative poverty increasing again? We heard the point about regressive
taxes, and that is a strong point. One of the more general reasons is
that although the Governments record on unemployment has been
much better than that of previous Administrations, the number of people
in workless households, affected by high levels of inactivity and so
on, has remained stubbornly high. That is only in part a legacy of
historical heavy industry, because now it is increasingly women as much
as men who are joining the ranks of the economically inactive. It is
not just men who are suffering from stress or bad backs, which was the
classic of yesteryear. In particular, younger men in their
primebetween the ages of 25 and 49are also coming on to
the rolls of the economically inactive. That has to be a serious
concern for the Government. Something else seems to be happening here.
Some
people suggest that the cause is the high levels of stress in the
workplace and the longer hours that people are working.
There are complex reasons, but
that is certainly one of the drivers for poverty levels now rising
again. The other reason is casualisation within the work
forcethe flip side of the flexible labour market. Flexibility
sounds like a wonderful thing until one is on the receiving end of it.
Low-paid jobs tend to be casual, part-time, temporary jobs. They are
low skilled, because an employer does not want to invest in an employee
who may not be around for long or only works part time. That insecurity
in work, the lack of permanency and not having a foothold in life feed
through into other aspects of peoples lives. They end up living
stressful, more chaotic lives and suffer ill health as a result. There
may be upheavals within the family as a result of the stress, which in
turn makes it difficult for them to hold down a regular job and so
there is a vicious
circle.
We have to
remember that 46 per cent.almost halfof part-time
employees are low paid compared with only one in seven of those working
full time. The shift to part-time work is certainly a factor in the low
levels of wages, particularly in Wales, where we have higher levels of
part-time and temporary working than in other parts of the
UK.
Lembit
Öpik:
I do not have a big problem with part-time
work if that is what individuals want to do. It helps young mums get
back to work and so forth. Does the hon. Gentleman agree that the real
problem is that the temporary work force is hired and fired by
businesses that are trying to maximise their flexibility, but that that
creates great insecurity and instability in the homes of those
temporary workers? Does he, like me, experience many constituents
coming to his constituency surgery saying, We keep being thrown
about in our economic circumstances due to the hire-and-fire attitude
of some
employers.?
Adam
Price:
Yes. That is why it is essential that the
Government move forward and support the Temporary and Agency Workers
(Equal Treatment) Bill, which will create a level playing field for
workers, whether they are temporary or full time. That will prevent at
least some of the abuse referred to by the hon. Gentleman. I must make
some progress, because I am conscious of
time.
Another problem
has been that of rising property values. I know that my hon. Friend the
Member for Caernarfon will talk about housing, but property value
increases have reduced disposable income for many young people, in
particular, and have made renting more expensive and buying a house
unaffordable. An increasing proportion of income is taken up by housing
costs.
Wealth
inequality feeds through into income inequality and those inequalities
express themselves in a host of other areas. Last week, I think, the
Government in England accepted that health inequalities have continued
to widen under this Government. The gap in access to university, let
alone to Russell group universities, between children from lower or
even, increasingly, average income backgrounds and the children of the
relatively affluent
has continued to widen under this Government, with all the consequences
that that has for future life chances and social mobility. Part of the
reason for that, in England certainly, is that the number of children
going to private schools has increased, so the competition for
university places is unfair for those from working class backgrounds.
We are almost getting a 17-plus or an 18-plus, which mirrors the
11-plus of the 1940s and 1950s in differential life chances through
unequal access to
education.
The scale
of inequality that is developing, particularly the excessive wealth of
the super-rich at the top end, is starting to mirror the American
model. The Government really need to tackle that problem. There was an
opportunity to do so in the Budget, but in relation to non-doms, the
Government caved in to pressure from the City of London once more by
allowing non-doms offshore assets to continue to be tax
free.
It is
completely unacceptable that we are in a position where, as Warren
Buffet first pointed out in Barack Obamas book, the chief
executive of a private equity fund pays less as a proportion of their
income on tax than their cleaner or the receptionist. That cannot be
acceptable. If they pay any tax at all, they will pay capital gains tax
from 1 April at 18 per cent. The 20 per cent. starting rate of income
tax, plus
national insurance, that a low-paid worker must pay is therefore simply
unacceptable. What do we need? In summary, we need a
new
Mrs.
Gillan:
Will the hon. Gentleman give way on the point
about
non-doms?
Adam
Price:
I will give way to the hon.
Lady.
Mrs.
Gillan:
Will the hon. Gentleman clarify whether it is
Plaid Cymrus policy in Wales to suggest full taxation of
non-doms, including on all their properties
abroad?
Adam
Price:
I will continue on this point after the break.
Surely it is right, as a general principle, that the richest in our
society, who live here and take full advantage of living in the UK
economy and everything that that provides to enable them to run their
businesses, should be asked to pay their fair share towards the upkeep
of public services? Tax justice is an important principle that we
should all
support.
It being
twenty-five minutes past Eleven oclock,
The
Chairman
adjourned the Committee without Question put,
pursuant to the Standing
Order.
Adjourned
till this day at Two oclock.
Questions
Not Answered
Orally
Welfare
Reform
8.
Chris
Ruane
:
What discussions he has had
with the Secretary of State for Work and Pensions on welfare reform in
Wales.
[195517]
Mr.
Murphy:
I have regular discussions with Cabinet colleagues
on a range of issues including the impact of welfare reform in
Wales.
Our recent
reforms set out in In work better off; next steps to full
employment, demonstrate this Government's commitment to
fairness and employment for
all.
Arts Council
Wales
9.
Mark
Williams:
What discussions he has had with
the Secretary of State for Culture, Media and Sport on funding for Arts
Council Wales.
[195518]
Huw
Irranca-Davies:
My right hon. Friend the Secretary of
State and I regularly meet with Government and Welsh Assembly
Government ministerial colleagues to discuss a range of issues
affecting Wales, including the funding of the
arts.
Post Office
Network
10.
Mr.
Touhig
:
What discussions he has had
on the future of the post office network in Wales.
[195520]
Huw
Irranca-Davies:
My right hon. Friend the Secretary of
State and I have regular meetings with ministerial colleagues in the
Department for Business, Enterprise and Regulatory Reform and Post
Office Ltd about the future of the post office network in
Wales.
Unemployment
11.
Mrs.
Betty Williams:
If he will make a statement
on unemployment levels in Wales.
[195521]
Huw
Irranca-Davies:
Employment in Wales continues to be at
historically high levels with 122,000 more people now in work in Wales
since 1997 and with unemployment down by over 30 per
cent.
Môn and Menai
Partnership
12.
Albert
Owen:
What recent discussions he has had
with Welsh Assembly Government Ministers on the Môn and Menai
partnership; and if he will make a statement.
[195524]
Huw
Irranca-Davies:
I have regular discussions with Welsh
Assembly Government Ministers on a range of issues concerning Wales,
including Môn and Menai. The Môn and Menai partnership's
three-year action plan for the programme was launched by the
Assembly
Government at the end of February and contains substantive measures to
secure the future of the north Wales
economy.
NHS
13.
Lembit
Öpik:
What discussions he has had
with the Welsh Assembly Government Health Minister on cross-border flow
of NHS patients.
[195525]
Mr.
Murphy:
I have regular meetings with my colleagues in the
Welsh Assembly Government, including the Minister for Health and Social
Services, when we discuss a range of issues, including the cross-border
patients. It is important that both the Governments here and in Wales
work in partnership, to ensure that the highest standard of services is
delivered to people on both sides of the
border.
Welfare
Reform
14.
Dr.
Francis:
What discussions he has had with
the Secretary of State for Work and Pensions on welfare reform in
Wales.
[195526]
Mr.
Murphy:
I have regular discussions with Cabinet colleagues
on a range of issues, including about welfare reform in Wales. Our
recent reforms set out in In work better off; next steps to
full employment, demonstrate this Government's commitment to
fairness and employment for
all.
Antisocial
Behaviour
15.
Alun
Michael:
What recent steps have been taken
to tackle anti-social behaviour in Wales; and if he will make a
statement.
[195527]
Huw
Irranca-Davies:
My right hon. Friend the Secretary of
State and I have regular discussions with Cabinet colleagues and other
stakeholders on issues affecting Wales. The Government take the problem
of antisocial behaviour very seriously and have introduced tough
measures in recent times to try and eradicate that
issue.
Regional
Pay
16.
Nia
Griffith:
what discussions he has had with
Ministerial colleagues on the likely effects of proposals for regional
pay on Wales.
[195528]
Mr.
Murphy:
I have regular meetings with ministerial
colleagues to discuss matters of importance in
Wales.
Regional pay
is not a new developmentit is a reality in the economy as a
whole. The Government's policy is that pay should reflect local labour
market conditions. The key to addressing this is to foster and
encourage the development of a strong private sector with well paid
jobs in Wales, so the pay arrangements should reflect the wider labour
market fundamentals for this work force, especially recruitment and
retention. But I am aware that our approach needs to ensure careful
consideration of all the potential effects of regional pay, to ensure
that our pay policy promotes economic growth in
regions.
Olympic
Games
17.
Paul
Flynn:
What discussions he has had with the
Minister for the Olympics on the benefits for Wales of hosting the 2012
Olympic Games.
[195529]
Huw
Irranca-Davies:
We continue to work with Cabinet
colleagues, and the Welsh Assembly Government, to maximise the
potential benefits to Wales of the 2012 games. We all agree that the
2012 Olympic and Paralympic games will be UK 2012 and not just London
2012 games. We are also confident that the overall impact of them will
be beneficial to Wales. Wales has, in such places as the Newport
velodrome, the National Watersports centre at Plas Menai and the
National pool in Swansea, a number of Olympic standard sporting
facilities and venues that can provide world class training centres for
the best national teams or individual athletes participating in the
Olympics.
Public
Services
18.
Mr.
David Jones:
What recent discussions he has
had with Welsh Assembly Government Ministers on the provision of public
services in England for residents of Wales.
[195530]
Huw
Irranca-Davies:
I have regular discussions with Ministers
in the Welsh Assembly Government, when I take the opportunity to
discuss a range of issues, including the provision of public services
in England for the residents of
Wales.
It is
important that both Governments here and in Wales work in partnership,
to ensure that the highest standards of services are delivered to
people on both sides of the
border.