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House of Commons
Session 2007 - 08
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General Committee Debates
Welsh Grand Committee Debates

Oral Answers to Questions

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


[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. Gentleman’s 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. Gentleman’s 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. Lady’s 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 people’s 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 one’s 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 people’s 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 justice—its transparency and efficiency—and 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. Friend’s 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 here—13 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 saying—identifying 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.
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 deceased’s 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 done—not necessarily to shut down the sites because often they are offshore, in places such as Japan—to 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 settled—they 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. 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 introduced—more 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.


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 Government’s.
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. Lady’s 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 relations—in 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?
The second part of the hon. Gentleman’s 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 industry—steel—dominated 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 low—they are certainly low in Montgomeryshire—does 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 Government’s 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. Lady’s 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. Gentleman’s point.
Mr. Don Touhig (Islwyn) (Lab/Co-op): I welcome the Government’s 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 insult—he 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 about—“This has gone down by 0.7 per cent.”, “That has gone up by this or that”—they 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 party’s 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 people’s 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 election—whenever it might be—we 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 back—indeed, I always look forward. However, will the right hon. Gentleman tell me what progress has been made on the loss of the Her Majesty’s 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 areas—they are now called convergence fund areas—are safeguarded. Obviously, however, we must await progress on that.
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 Government’s 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. Friend’s 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 anybody’s 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 bags—an 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 Committee’s 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 world—the Secretary of State started his speech by exploring global issues—expect 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.
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 Chancellor’s 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 woman—certainly every farmer and farming family—is 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?
Mark Pritchard rose—
Mr. Hain rose—
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 today’s 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.
Mr. Hain rose—
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 Chancellor’s. 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. Gentleman’s 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 sector—an average of 5,666 a year since 1999, which is 51,000 fewer jobs in that sector since the creation of the National Assembly.
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 contracts—it 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 fund—a new capital fund to encourage female entrepreneurship—is yet another questionable gesture. The Women’s 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 UK—some 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. Lady’s 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 pubs—about one in 20—closed 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 Labour’s 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.
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 purpose—they are only enough to cover 6,154 apprenticeships or roughly 4.1 per cent. of the Government’s own target—but 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 Prince’s 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 Prince’s 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 Government’s 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 poverty—an 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.
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 Committee’s 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 Government’s 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. Gentleman’s 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 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 today’s global economy.
In his evidence to the Welsh Affairs Committee, Sir Adrian Webb—author of the Webb review and its report—cautioned 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 value—for 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 degree—indeed, 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.
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 Wales—not 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 development—and 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 ambitious—this comes back to the point made by the hon. Member for Brecon and Radnorshire—is 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 service—that 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 year’s 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 mean—the 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 reversed—indeed, 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 2005-06—the latest years for which data are available—show 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 Government’s 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 acknowledge—I think that he does—that 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. Gentleman’s 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 people’s benefits, almost inevitably they become poor benefits too, because the people in society who have a stake and some power—middle-class people—do not defend them.
Adam Price: It certainly is the case that if we look down the income scale—the hon. Member for Brecon and Radnorshire makes a good point in this sense—the 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 Government’s 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 prime—between the ages of 25 and 49—are 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 force—the 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 people’s 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 half—of 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 Obama’s 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 Cymru’s 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 o’clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.
Adjourned till this day at Two o’clock.

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.


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.


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 development—it 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.

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