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I have met the Auditor General for Wales, but that was before the issue of the Icelandic banks and local authorities arose. In discussions with
my ministerial colleagues, I will look at the question of advice, but I repeat what I said to the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd): the advice generally from the Treasury and the Assembly is that the investment should be spread, and that security should be balanced with investment.
Mrs. Cheryl Gillan (Chesham and Amersham) (Con): On behalf of the official Opposition, I issue a warm welcome to the hon. Member for Caerphilly (Mr. David) in his new role on the Front Bench, and I send our best wishes to the hon. Member for Ogmore (Huw Irranca-Davies) in his new duties.
Given the well-reported increasing risk attached to Icelandic financial institutions, why was no revised advice issued to Welsh public institutions earlier? In the light of the risks posed by further investments in foreign banks, can we be assured that new advice will now be issued regularly that takes these risks into account?
Mr. Murphy: I was told by the Treasury that so far as its advice was concerned, it did not provide a list of individual banks or institutions in recent years and months, and it was up to individual authorities to judge what a prudent investment might or might not be, and of course, there would be professional advisers, as well. However, I repeat what I have said twice already: that that guidance had to be balanced between a breadth of investment and security, and every council has a responsibility so to do.
Mrs. Gillan: I thank the Secretary of State for that answer. In the joint statement from his Department with the Assembly Minister, the Minister said that there would be no immediate impact on services or council tax levels following this debacle, but as local authorities are now switching investment strategies toward low-risk, low-yield funds, their budgets are based on figures that cannot be achieved, and something has to give. When can we expect to see the council tax rise, assets sold or spending cut in Wales?
Mr. Murphy: I obviously hope that none of that occurs, but the issue first, as I said, is to get the money back from Iceland. When that is done, it is for each individual authority in Wales that feels it has a difficulty to approach the Welsh Assembly Government, and then proper advice will be given to it. Of course, as the hon. Lady knows, nine authorities are involved to varying degrees. All of us have been told by the Local Government Association that there is no immediate threat to services or, indeed, to the level of council tax.
The Parliamentary Under-Secretary of State for Wales (Mr. Wayne David): My right hon. Friend the Secretary of State and my predecessor have had regular discussions with the Welsh Assembly Government and UK Government Ministers on cross-border transport links.
Mr. Hollobone: Does the Minister agree that the upgrading of the A494 at Ewloe is essential to link north Wales effectively with the national motorway network? Will he urge the Welsh Assembly Government to prioritise a new scheme to replace the one abandoned in March?
Mr. David: It is important that discussions take place between the Government here in Westminster and the Welsh Assembly Government. Obviously, transport is a devolved matter, but that does not necessarily mean that it is simply the responsibility of the Welsh Assembly Government, full stop. It is important to pick up the point made by my hon. Friend the Member for Vale of Clwyd (Chris Ruane) about ensuring that there is the greatest possible voice here in Westminster, as well as in Cardiff, to secure the best deal for the people in Wales.
Nia Griffith (Llanelli) (Lab): Will my hon. Friend undertake to have discussions with the Welsh Assembly Government and the Department for Transport about extending the concessionary bus pass scheme so that it can be valid cross-border and pensioners in Wales can undertake bus journeys in England using the passes issued to them in Wales?
Mr. David: My hon. Friend makes a good point. When we talk about bus passes, it is important to remember that devolution is a partnership, and it is good to see that England is learning some lessons from what has happened in Wales because of the Welsh Assembly Government. It is early days in the introduction of a bus pass in England for senior citizens, but it is important that we encourage discussions to take place so that the two schemes have complementarity and all our citizens can benefit from the introduction of the schemes in both our countries.
Mark Williams (Ceredigion) (LD): I congratulate the Minister on his new role. Has the issue of train services to mid-Wales been a feature of his early discussions with the Welsh Assembly Government? He will be aware that the programme for an hourly service from Shrewsbury to Aberystwyth is slipping; we were anticipating that it would be in place in December. Will he urgently raise the issue of funding with both Network Rail and the Welsh Assembly Government?
Mr. David: The issue of rail services is important. There is always room for improvement, and we must have ongoing discussions to ensure that improvements take place. It is also important to recognise that meaningful improvements have been made to a number of services within Wales, and between Wales and England. For example, the Arriva Trains service is operating a new timetable involving longer routes and more stations in 2007-08, and it is better than the timetable in any previous year. Although there is room for improvement, significant improvement has been made in Wales.
Mr. David Jones (Clwyd, West) (Con):
Further to the question from my hon. Friend the Member for Kettering (Mr. Hollobone), the Minister will be aware that the single consent regime to be introduced in the Planning Bill will not apply to highway projects in Wales. Consequently, there will be lengthy planning inquiries and cross-border routes will take much longer to upgrade.
Can he say why the Welsh Assembly Government declined the opportunity to participate in the single consent regime? Does he agree that it is an enormous missed opportunity for Wales?
Mr. David: The hon. Gentleman has raised an important point, on which discussions have taken place. Those discussions must continue, so I would not jump to his conclusion that delays will be inherent in this regimewe must ensure that that is not the case. We must ensure the greatest co-ordination possible, and I assure him that I shall make it one of my priorities over the next three weeks to ensure that the situation is facilitated as far as is humanly possible.
The Secretary of State for Wales (Mr. Paul Murphy): I have regular discussions with Welsh Assembly Government Ministers on a range of topics. Numerous initiatives are in place in Wales to support small businesses, including in my hon. Friends constituency.
Julie Morgan: I thank my right hon. Friend for that response. Is he aware that Whitchurch in my constituency is one of the two places chosen by BT to pilot its super-fast broadband system? Does he agree that that will be a huge boost to local small businesses, giving increased access in a more effective way?
Mr. Murphy: Yes, I do, and I welcome that news from my hon. Friend. It is one of only two pilots in the whole of the United Kingdom. On Friday, the Government will launch our digital inclusion action plan, which tries to meet the needs of 17 million people who are not actually connected to the internet. I welcome that announcement and the work of my hon. Friend.
Mark Pritchard (The Wrekin) (Con): The Government say that they want to help small businesses, but many are unable to access Government contracts, so 10-day payment will be irrelevant to them. If the Government are serious about helping small businesses in Wales, the Secretary of State might advise Her Majestys Revenue and Customs to repay overpayment of corporation tax more quickly.
Mr. Murphy: Certainly, prompt payment is important. I talked this morning to the Minister for Finance and Public Service Delivery in Cardiff, who assures me that all public bodies in Wales will now work towards the aim of paying their bills within 10 days. That includes local authorities and health authorities, as well as other public bodies.
The Prime Minister (Mr. Gordon Brown): Before I list my engagements, I am sure that the whole House will wish to join me in sending our profound condolences to the family and friends of Trooper James Munday of the Household Cavalry Regiment, who was killed last week in Helmand province, Afghanistan. We owe him and all those who have lost their lives in conflict a huge debt of gratitude.
I am also sure that the House will wish to join me in sending condolences to the family and friends of Gayle Williams, who was killed by the Taliban in Afghanistan on Monday. She worked for the charity Serve Afghanistan, which offers education and training to people with disabilities. It was a barbaric act by the Taliban against someone devoted to improving the lives of ordinary Afghans. I believe that her family and the House should be extremely proud of the work that she did.
Jim Sheridan: Despite the best efforts of the Government during this economic and financial situation, many of our constituents are still worried about losing their jobs and the impact that that could have on their ability to pay their bills and mortgages, which could lead to them losing their homes. Can my right hon. Friend assure the House that every option will be explored to ensure that any support that we can give these people will be given?
The Prime Minister: I can announce today new guidance [ Interruption. ] New guidance will be given to the judiciary to halt or adjourn court action on repossessions unless alternative options that help the home owner, including extending the terms of the mortgage, changing the mortgage type and deferring payment, have first been fully examined. We are determined to do everything that we can to help home owners avoid repossessions.
The Governor of the Bank of England said last night that not since the first world war has the international banking system been so close to collapse. I agree with him. Having taken action on the banking system, we must now take action on the global financial recession, which is likely to cause recession in the US, France, Italy, Germany, Japan andbecause no country can insulate itself from itBritain too. That is why we are giving our undivided attention to helping families and businesses [ Interruption. ] I expect later this afternoon an announcement of an early summit of global leaders, which I shall attend on behalf of Britain.
Mr. David Cameron (Witney) (Con): I join the Prime Minister in paying tribute to Trooper James Munday who was killed in Afghanistan last week and to aid worker Gayle Williams who lost her life this week. The Prime Minister was right to pay such a fulsome tribute. Their deaths are a reminder of the sacrifices that our armed forces and humanitarian aid workers are making, not only on our behalf, but on behalf of people in Afghanistan. We pay tribute to their memory.
In the first six months of the year, the Government borrowed more than £37 billion. At the end of a long boom, and just as the downturn is beginning, Britain
has one of the biggest budget deficits in the industrialised world. Does the Prime Minister think that that is a mistake?
Borrowing goes up. Thats inevitable and you have to allow that to happen.
we have reached the limits of acceptable...borrowing.
He must make up his mind which side he is on. Let me explain to him that the reason that we can afford to borrow is that we have low national debt. We have lower debt than America, France, Germany, Japan and Italy. It is right, when we are facing global financial problems, for the Government to increase economic activity in the economy by borrowing to do so. Which side is the right hon. Gentleman onthe side of what he said two weeks ago or the side of what he said a week ago?
Mr. Cameron: Of course borrowing goes up in a downturn, but the Prime Ministers problem is that he racked it up to record levels before the downturn began. How can he possibly think that it is right to go into recession with such a high level of debt? Why cannot he just admit for once that he got it wrong? He keeps quoting the national debt figures, but let us look at what that does not include: billions of pounds spent on PFI, Network Rail and pension liabilities, even before we get to Northern Rock and Bradford & Bingley. He could not lecture the banks on borrowing because he was borrowing so much, and he cannot lecture them on transparency because he is hiding so much [ Interruption. ]
Mr. Cameron: Half of the OECD went into the downturn with budget surpluses that they can use to cut taxes for families. Does the Prime Minister really have no regret at all that borrowing is so high just as the recession is beginning?
The Prime Minister: We cut the level of debt in national income. We cut it from the level that we inherited from the Conservative party. Is the right hon. Gentleman really now saying that to finance Network Rail we should close hospitals, we should close schools and we should close down the rest of the transport system? That is the implication of what he says. I repeat to the House that net debt in the UK, on the IMF figures published a few weeks ago, is 38 per cent. In France it is 55 per cent., Germany 56 per cent., Italy 101 per cent., Japan 94 per cent. and the USA higher at 46 per cent. We have the ability to borrow to take ourselves through these difficult times. May I just remind the Leader of the Opposition of what he said only a few days ago:
People will want to see cross-party support rather than perhaps what weve seen in the US because we have to try and take public opinion with us for difficult decisions that may have to be taken.
Mr. Cameron: The Prime Minister knows perfectly well that he has cross-party support for the banking rescue, but he does not have cross-party support for the record debt that he has racked up in this country. As he is fond of quotations, perhaps he will try this one from the Institute for Fiscal Studies, which says that he
did not leave his successor as Chancellor with the fiscal room to cope with even a modest economic slowdown, let alone the problems we currently face.
For years, the Prime Minister was telling us about the beauties of prudence with a purpose. Now he is telling us about the joys of borrowing without limit. Does that not show how ridiculous he now sounds? Let us have a look at another of his claims, which is particularly relevant on this day when the Governor of the Bank of England says that we are going into recession. Will he finally admit that he has not abolished boom and bust?
The Prime Minister: I have already said that I agree with the Governor of the Bank of England. As for the issues that the right hon. Gentleman raises about debt, is he really saying that we should not have stepped in to save Northern Rock, that we should not have used public money to save Halifax Bank of Scotland and that we should not have used the public money that we have used to save the Royal Bank of Scotland? I believe that he needs to look again at what is happening in the global economy and its effect on every country round the world. If he were to look at what the cause of the problem was, he might be able to have a better idea of what the solution is. Let me remind the House of what he said:
I always think Leaders of the Opposition have to be...careful not to...talk down the economy. You know there are some...strong fundamentals in the British economy and we should celebrate those and point them out.
Mr. Cameron: The Prime Minister asks me to recognise the causes of the problems that we are now in. Well, I can tell himwe are looking at them. Why can he not answer a direct question, just for once in his life? He has said dozens and dozens and dozens of times that he had ended boom and bust and rewritten the laws of the trade cycle. Now, with unemployment rising, growth stalling, repossessions up, businesses closing and the Governor of the Bank of England saying that we face recession, will the Prime Minister finally admit that he did not abolish boom and bust?
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