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The Secretary of State for Wales (Mr. Paul Murphy): The levels of employment show the continued effect that the global economic slow-down is having on the Welsh labour market. Although that problem requires a global solution, we are doing everything we can, in partnership with the Welsh Assembly Government, to help minimise the effects on Welsh families and on our economy.
Julie Morgan: I thank my right hon. Friend for his reply. Is he aware that 330 jobs are likely to be lost from Cardiff Gate and from my constituency if the International Baccalaureate continues with its plan to move to a mainland European city such as Amsterdam? Is he aware that one of the reasons given for that is that Cardiff and south Wales do not have an international mindset? Is that not extraordinary when we consider that the first full IB school was Atlantic college at St. Donats in south Wales?
Mr. Murphy: Yes, I very much agree with my hon. Friend, who rightly points out that the International Baccalaureate was started in Atlantic college, and that, far from being a parochial place, Cardiff is very much an international centre. I fully support her early-day motion. I have written to the director-general in Geneva about keeping the 300 jobs in Cardiff and I hope that her campaign is successful.
Mark Pritchard (The Wrekin) (Con):
The hon. Member for Vale of Glamorgan (John Smith) has claimed many times that hundreds of jobs will come to Wales as a result of the defence training review programme, but the programme has rising costs and increasing delays.
Indeed, in his desperation, the hon. Gentleman visited the Prime Minister this week, even though the latter has given no assurance that the defence training review will go ahead in Wales. Do we not need an early statement from the Secretary of State giving us the truth about the project and its rising costs?
Mr. Murphy: I have had no indication at all that there will be any change of plan concerning that huge investment in Wales. The Government are committed to it and I am sure that, when the time comes, there will be a proper statement to this House of Commons.
John Smith (Vale of Glamorgan) (Lab): Does my right hon. Friend agree that employment levels in south Wales will be greatly improved by the 5,000 jobs brought to the area by the defence technical academy? Does he also agree that it is about time that Opposition Members stopped knocking the project and began pulling together to ensure that it is brought in on time and within budget?
Mr. Murphy: That is what we all like to hear. My hon. Friend has been a great champion of the project. When those jobs come to Wales, it will be as a result of the biggest single Government investment in Wales ever.
Jenny Willott (Cardiff, Central) (LD): Since January 2008, 11,000 jobs have been lost in Welsh retail and services. That is more than in any other sector, and thousands more jobs are at risk because of the unreasonable conditions being imposed on small businesses by banks. For example, a business in my constituency is being charged 10 per cent. interest above the base rate on a loan of only £4,000, plus significant amounts in fees. Does the Secretary of State share my concern that, if that continues, more Welsh businesses will be driven into the ground, with significant numbers of redundancies? What extra help can he offer to businesses in those circumstances?
Mr. Murphy: Thank you, Mr. Speaker. The hon. Lady is absolutely right. Banks should be lending, particularly to small businesses, and the initiatives taken by the Government are designed to help them do so. She will be aware that Wales is especially fortunate, as we have the Welsh Assembly Governments initiatives and the schemes of the UK Government that help businesses in a very special way. However, I will make sure that the points that she has properly raised here in the House of Commons are raised at next weeks economic summit in north Wales.
Mr. Martin Caton (Gower) (Lab): My right hon. Friend will be aware that Corus has announced the closure of Coated Metals in Pontarddulais in my constituencya blow to the community and to the workers. However, all the workers have also worked at some time in Port Talbot, so will he urge Corus management to show flexibility and use a combination of voluntary redundancies and inter-plant redeployment to minimise the damage?
Mr. Murphy: Yes, I will. I had a conversation recently with the chief executive of Corus and the general secretary of Community, the steel industrys main trade union. The points that my hon. Friend has made are very valid, and I shall raise them again with them.
Mr. David Jones (Clwyd, West) (Con): Given the increasing numbers of job losses in south Wales, which of course include the 1,000 jobs lost at Corus this week, does the Secretary of State acknowledge the fundamental importance of maintaining flexibility in the labour market? Can he therefore confirm that the Government will continue to fight to maintain the British opt-out from the working time directive, notwithstanding the decision of Labour MEPs to support its abolition last months?
5. Sir Nicholas Winterton (Macclesfield) (Con): What recent discussions he has had with the First Minister on prospects for manufacturing industry in Wales.  The Parliamentary Under-Secretary of State for Wales (Mr. Wayne David): My right hon. Friend has regular meetings with the First Minister, and hardly a day passes when the economic situation and manufacturing is not discussed.
Sir Nicholas Winterton: Does the Minister agree that manufacturing industry is the only source of non-inflationary, sustainable economic growth? Bearing in mind that the Secretary of State for Wales said that manufacturing
will play an important role in bringing us out of recession[ Official Report, 26 November 2008; Vol. 483, c. 710.]
Mr. David: The short answer is a heck of a lot. The hon. Gentleman is correct in saying that manufacturing is still important in Walesit isand the last available figures show that some 13 per cent. of the work force were employed in that sector. That is why we have seen central Government and the Welsh Assembly Government being so proactive to ensure that policies are in place not only to help manufacturing but, importantly, to plan for the future. It is absolutely vital to give the greatest possible assistance and investment regarding skills and training, so that when the upturn comes, we are well placed to ensure that we take the maximum benefit of it.
Nick Ainger (Carmarthen, West and South Pembrokeshire) (Lab): My hon. Friend will be well aware of the £1 billion investment being made and, I hope, announced very shortly in my constituency to build a gas-fired power station. During its construction phase, it will employ 2,000 people. Will he agree to meet me and Alstomthe main contractorto ensure that we maximise the number of local Welsh people who are employed during the construction phase?
Mr. David: My hon. Friend is correct in stressing the importance of that utility initiative in his constituency, and I give a commitment that we in central Government will do everything possible, in partnership with the Welsh Assembly Government, to ensure that the processes to bring that about are fulfilled as quickly as possible. Specifically, I very much hope that I will be able to come down to his constituency in the very near future, and that is one of the facilities that we can visit and discuss.
John Battle: What we know from previous recessions is that the people who suffer most are those who have the least. So may I urge my right hon. Friend to ensure, in his forthcoming meetings and discussions with world leaders, that tackling the waste of poverty at home and abroad is now a top priority?
The Prime Minister: I applaud the work that my right hon. Friend does as chairman of the all-party committee on poverty and international development. It is precisely because of the dangers and risks to people who are poor and unemployed that we are taking the action that we are takingraising the pension and pension credits, raising child benefit and child tax credits, helping the unemployed and making sure that small businesses have the finance that they need. That is part of the plan that we are introducing now that is being adopted in many countries of the world to help those who are poor and unemployed. To protect savers by capitalising the banks, to ensure real help to families and businesses now, and at the same time to extend lending to small businesses and homeownersthat is the plan that will ensure recovery not just nationally but, when it is adopted, internationally.
Mr. David Cameron (Witney) (Con): In the last week we have discovered that Britain is facing the deepest recession in a generation. We have had the worst manufacturing figures since 1975, and this morning the Institute for Fiscal Studies said that the countrys debt burden will take a whole generation to pay off. How deeply will the economy have to contract before the Prime Minister finally admits that there is indeed an economic bust?
Our central forecast is that the UK will avoid deep and prolonged recession thanks to the enormous monetary and substantial fiscal stimuli already agreed.
Mr. Cameron: The Prime Minister seems to be denying now that a recession is taking place. Extraordinarily complacent! I asked a very specific question about his definition of a economic bustand I have discovered that he was asked that question before, in front of the Treasury Committee, and for once in his life he actually answered it. I have the transcript; let me read it to him. He referred to reductions in GDP of 1.5 per cent. He was asked by my hon. Friend the Member for Chichester (Mr. Tyrie):
So that is the minimum definition of a bust?
And the Prime Minister replied, Yes. Now we know that the economy shrank by 1.5 per cent. in the last quarter alone, will he finally admit something that every economist, every business and every family in the country knows to be truethat, even on his own definition, he did not abolish boom and bust?
The Prime Minister: This is a recession that is facing every country and continent in the world, and everybody except the Conservative party agrees that it is not a unique United Kingdom phenomenon; it is something that has got to be dealt with internationally. The right hon. Gentleman mentioned the Institute for Fiscal Studies; it also said:
In current circumstances, the cost of doing nothing...is larger than the cost of acting.
Mr. Cameron: Does the Prime Minister not understand the damage that he does to himself, and to his credibility, when he says things that are self-evidently nonsense? It is self-evidently nonsense to say that about the Opposition. Our jobs plan has been copied in his jobs plan. Our loan guarantees have been copied in his loan guarantees. When he says these things about the Opposition, he does not damage us; he damages himself. That is why his poll ratings are going back to Michael Foot levels. Let me ask him one more time. Even one of his own advisers said this week:
Its against Gordons nature to do a mea culpa but at some stage weve got to find the words.
The Prime Minister:
I have said that this is a deep recession. I have also said the truththat it is hitting every country in the world. I think that the Leader of the Opposition would recognise that we were the first to act to deal with the recapitalisation of the banks and to stop savers losing their money. He supported that until last week, when he walked away from that position. We were also the first to recognise that there needed to be a fiscal stimulus. He will see today that countries that he often quotes, such as Canada, are now announcing a big fiscal stimulus. He will also see that it is right to extend lending. That is the way forward. We can play his game of student politics as long as he wants to play it, but what the country is interested in is whether we
will take the action that is necessary to get us out of the difficulties. We are taking the action. His policies would cut public investment at a time when we need it: in other words, he would do nothing to help.
Mr. Cameron: Only one of us was a student politicianand he has never grown out of it. What is interesting about today is that in answer to the first question the Prime Minister denied that this was a deep recession, and in answer to the third question he said that it was a deep recession. I suppose that with this Prime Minister, that is progress. He talks about the global recession, and I want to ask him about that. In the same evidence to the Treasury Committee, he actually gave a definition of boom and bust. Let me read out what he said. [Interruption.] It will end when he admits that he did not abolish it; that is when it will end. What he said was:
what I mean [Interruption.]
what I mean by boom bust...is running a policy where you allow the economy to grow too fast and then it sinks far further than it has in other countries, even when there is a world downturn.
Is that not exactly what is happening right now? Yes, of course there is a world downturn, but our economy is sinking further and faster than the rest, so even on the Prime Ministers own definition, is it not true that he led us into boom and bust?
The Prime Minister: America went into recession more than a year ago. The euro area went into recession more than six months ago. This is a deep world recession, and I would explain to the Leader of the Opposition that past recessions in Britain have been caused by high inflation. They have been caused, as they were in the early 80s and the early 90s, by the Government allowing inflation to get out of control and interest rates having to rise. He should know: he was in the Treasury in the early 90s. This recession is not caused by high inflation; if anything, inflation is going to be near zero this year. This recession is not caused by high interest rates. This recession is a result of a global financial crisis. If he does not recognise that, he will not begin to be able to discuss or decide on the answers. I suspect that it is because he does not understand that that the Conservative policy is doing nothing.
Mr. Cameron: We have had all the Prime Ministers economic understandingand that is what led us into the mess that we are in now. The fact is that he let debt get out of control. He keeps saying that this recession all came from America. It was not America that gave us the biggest Budget deficit in the world. It was not America that made us the most indebted country in the world. It was not some American who designed our regulatory system that failed; it was him. If he will not retract something stupid that he said in the past, let me ask him about something crass and insensitive that he said this week. He said that thousands of people losing their jobs, homes and businesses was simply down to the
birth pangs of a new global order.
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