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The skills agenda was rightly highlighted when we found ourselves in somewhat uncertain economic climes, but it is now all the more important that we focus and refocus on it. We considered that in our report on globalisation. When the representatives of Higher Education Wales gave evidence to the Select Committee, they stated that higher education contributed £1.6 billion to the Welsh economy, which demonstrates just how important it is. As others have said, we are now moving on from developing the interface between traditional academia
in our universities and opportunities in the commercial world. Examples of that are the relationship between Aberystwyth university and Bangor university, the growing associations between the other higher education institutions in Wales, and the merger of the Institute of Grassland and Environmental Research and Aberystwyth university to form the Institute of Biological, Environmental and Rural Sciences. The Under-Secretary of State was there last week and heard about the development of biofuels, the academic scientific research into that development and the need and enthusiasm at IBERS to develop commercial partnerships to take these projects further.
Of course, that is all underpinned by the state of the national economy. My party certainly supported the recapitalisation of the banks last October. We share across the House the concern that, since October, £5 billion less has been lent to enterprises across the country. My hon. Friend the Member for Twickenham (Dr. Cable) has made our approach quite clear: we favour the acquisition of ordinary shares so that the Government can have a steer on lending and remuneration. The offensive news that we have heard last night about the £650,000 pension awarded to Fred the Shred, as I think he is called—[Hon. Members: “Outrageous!”] It is outrageous. It does not resonate strongly with what we have heard about the roles of the banks in relation to small businesses and with the difficulties that rural businesses have experienced.
In my constituency, small businesses account for two thirds of the work force. Indeed, 54.2 per cent. of people in Ceredigion are employed by micro-businesses—businesses with nine employees or fewer. That is the highest percentage in Wales. When we consider rural businesses, we must make the point that the collapse of small and micro-businesses has a direct effect on the broader rural economy. When young families are forced to move away, that has an effect on the pupil numbers in the village schools and on the ability of public services to continue. That can make the difference to a community’s survival.
I remain very concerned, as we all do, I am sure, about the attitude of the banks. Let me use an illustration that I have been aware of for the past couple of weeks. Two constituents of mine—I will not mention their business—came to Finance Wales in good faith two or three years ago, and achieved funding for their enterprise. Difficulties followed, the cost of bank loans has risen and they are now in talks with one of our high street banks to renegotiate the loan. The banks displayed stridency and determination in not budging from a repayment figure of £233 a month, whereas my constituents could raise only £200. That £33 is the difference between the threat of bailiffs hanging over them and their future viability as a business, which would be assured if the bailiffs went away.
One constituent of mine in the north of Ceredigion has the misfortune of having a range of empty business premises. Although the rate relief has been welcome—we heard about that earlier—for small business people with empty business premises, my constituent will not be helped by the scheme and faces an annual rates bill on empty properties of some £30,000, which directly affects his capacity to function in other areas. That is the reality of the operation of the banks on the ground.
I have read the Wales Office website in some detail, and have read about some of the schemes available. It states some of the criteria and whether they are applicable to England, Wales or the UK, and gives telephone number contact details. However, there is still a problem in getting that message through to some of our small business people. Two weeks ago, I went to a small business breakfast in Aberystwyth armed with the website page and went through it with those people. Much of it was fresh news to them, so I do not think the message is getting through to those businesses about the extent of the available help, which they desperately need.
Daniel Kawczynski: Does the hon. Gentleman agree that it is vital for local authorities to do more to give contracts to local firms? I am encouraging Shropshire county council to increase the amount of business it gives to local Shrewsbury firms and I am sure the hon. Gentleman is doing the same in his area.
Mark Williams: I thank the hon. Gentleman for that intervention. That action is certainly being taken by my local authority and by Cardiff. The Assembly Government summits have looked at procurement, which is important.
The closure of the tax office in Aberystwyth has been frustrating in the extreme, not least given the economic climate in which we are operating. It is frustrating given that on the basis of a saving of £83,000, the Aberystwyth tax office is to go, despite the fact that Her Majesty’s Revenue and Customs spent £50 million on consultants last year. The Financial Secretary asserted to me that the closure
“will not have an adverse effect on the services to small businesses.”
My goodness, if ever there was a need for services to small businesses, it is now. He said:
“Most of HMRC’s businesses can operate without the need for a local presence.”
I know that is the experience of other Members across mid and west Wales. The Financial Secretary asserted that
“the Department’s customers are increasingly using the internet as a preferred way of doing business and obtaining information. Where face to face services are provided these will be maintained at a level geared to meet local demand.”
According to the soon to be former HMRC employees in my constituency, that means pointing clients to a telephone linked to a call centre elsewhere.
Mr. Roger Williams: My hon. Friend is right to emphasise the loss of tax office services to small businesses. In these difficult economic conditions, a number of my constituents find themselves subject to tax inspections. They do not have the time for such inspections—they want to run their businesses. Surely, this is the time to lay off such things and allow businesses to ensure that they are still around when the upturn comes?
Mark Williams: I take my hon. Friend’s point, but the sad reality for inspections across mid-Wales and the extremities of Powys—so I am told by HMRC—is that the spectre will arise of a roving squad of two people serving the needs of Montgomeryshire, Brecon and Radnor and Ceredigion. Only two people will respond to the problems that arise.
Lembit Öpik: My hon. Friend is a feisty campaigner in defence of rural HMRC offices. Does he agree that one of the factors excluded from the closure calculations is the potential reduction in the tax take? The more remote the offices in any practical sense, the less connected some people will feel to their responsibility to pay tax. The closures could actually cost more than they save.
Mark Williams: I certainly agree and I thank my hon. Friend for that contribution. We are still trying to get the elusive figures in that regard.
Mr. Crabb: Is not the irony that in recent years HMRC has deliberately devoted more resources to targeting big business customers of its services and has de-prioritised small businesses? Large banks are not making any money, and HMRC needs to raise money efficiently from the small business sector, so the plan to decimate the network of tax offices in rural west, north and mid-Wales is counter-productive.
Mark Williams: I thank the hon. Gentleman for that intervention and pay tribute to his work trying to defend the office in Haverfordwest. He makes a valid point. I am amazed at the lack of thought behind the closures, not least in the present climate. All our calls for a moratorium on the closures have been ignored by the Government.
The hon. Member for Chesham and Amersham (Mrs. Gillan) mentioned broadband. Of course, the answer to HMRC’s problem is now broadband, but she mentioned the problems of “not spots”. Again, I pay tribute to the National Assembly for its work. There are six pilot schemes across Wales, one of which is Cilcennin in my constituency, which will now get some assistance after a long campaign for broadband, but we have a long way to go. All that, in my consituents’ context, is taking place in an area that is deemed to need convergence funding for good reason: it is an area of significant social and economic deprivation, as recognised by the National Assembly’s communities first programme.
Let me touch on another rural business—the family farm—and the anxiety that is being expressed, certainly among the farmers in my constituency, about the introduction of the compulsory electronic identification of sheep. Again, I will pay tribute where tribute is due: the Government have had some success in delaying the introduction of that scheme. None the less, EID is looming fast, and there is real anxiety in the countryside. It has been estimated—it is a low estimate—that 18 per cent. of farm income will be lost to the introduction of EID. I remind the House that farm incomes stood at £3,000 in less favoured areas—indeed, in most of Wales—in 2006-07. That was 63 per cent. down on the previous year, while income on lowland farms was down by 24 per cent. at £8,500.
I am sure that other colleagues have written to the European Commissioner who is responsible for EID. I was extremely disappointed by her response, which seems to go along the lines not of justifying the system, but of saying that we must proceed just because some countries have started their introduction of the scheme, despite the proven facts that, geographically and climatically, the problems that we have in Wales make the system completely inappropriate. It seems extraordinary that the Commission is not prepared to alter the policy. It
may have looked good on paper and ticked various boxes in Brussels, but it has been shown to face significant problems on the ground that will, at best, render it useless and, at worst, seriously undermine the continued viability of small family farms.
The Government have lobbied on the issue. I pay tribute to Elin Jones—we share a constituency—for working hard on the issue in the National Assembly, but I urge the Government to continue to push for a derogation and a non-compulsory model. I initiated a Westminster Hall debate on the subject, when there was remarkable unanimity between representatives of my party and other hon. Members. The hon. Members for Ynys Môn (Albert Owen), for Preseli Pembrokeshire (Mr. Crabb), for Meirionnydd Nant Conwy (Mr. Llwyd) and for Clwyd, West (Mr. Jones) were all there. We all argued the same way and sang very much the same tune, yet the scheme is proceeding.
Of course, the background for today—the sad reality—is the continued funding crisis, whether from banks to small businesses or family farms, or now because of the spectre of a £500 million cut in the National Assembly’s budget, made worse by the Barnett formula in all its manifestations. I reflect again on my constituency and I look at the tight local government funding settlement in a county where 40 per cent. of the work force are employed in the public sector. Some people have asserted that those public sector jobs would buffer us from the challenges of the recession, but as I look at NHS schemes, I am less certain that they will proceed. As we mark St. David’s day, I look even at a great, iconic institution, the National Library of Wales, which has had a marvellous success with the open-doors policy that has attracted tourists and academics alike to Aberystwyth and the county of Ceredigion. Because of cuts in its funding, the doors of that august institution will be locked on Saturdays. The Minister has visited the National Library of Wales and has seen some of the excellent work that is being undertaken there, and he will be aware of that dispute.
HMRC could now alter its interpretation of the rules for claiming back VAT, which will cost the National Assembly £500,000. The hon. Member for Carmarthen, East and Dinefwr (Adam Price) has been involved in that issue as well. Cuts in our budget are in prospect, and that will, no doubt, have implications for service delivery.
Members may be pleased to hear that I am now turning to my final point; they can rest assured that my hon. Friend the Member for Brecon and Radnorshire (Mr. Williams) will be back on the Front Bench, rather than being a boisterous Back Bencher. On what is nearly its 10th anniversary, I should like to say a little about devolution.
After nearly 10 years of the Assembly, this debate is as good a time as any to be positive about the contribution made by devolution—although I hesitate as I look towards the hon. Member for Preseli Pembrokeshire. Some of us have been frustrated by the operation of the Government of Wales Act 1998. The hon. Member for Caernarfon (Hywel Williams), who is not here this afternoon, talked about the 27 hoops and hurdles that have to be gone through and jumped over before measures can see the light of day in Cardiff. However, legislative competence orders represent progress. Some of us devolutionists passionately believe that anything that
can lead to the legitimate transfer of power from this place back to Cardiff should be welcomed. I look forward to the referendum, when the time is right, and I for one am glad that Sir Emyr Jones Parry will not be heading off to Bosnia but concentrating on the work at hand back in Wales. We wait to see what the all-Wales convention will produce when it reports at the end of this year.
While we have the system, we need to make it work. We have talked about the Welsh language legislative competence order. There are those here who stridently oppose the order—although, since the hon. Member for Monmouth (David T.C. Davies) left his place, there have not been as many as there were. I agree with what Front Benchers said about the need for the widest debate, and we have moved on from any assertion that this place should have a monopoly on the debate through the Select Committee. Of course we need the widest discussion, but my party cannot accept that it is not the place of Assembly Members to make the ultimate decision on the mechanics of the measure that they wish to put before us. We are clear on that. The role of the Select Committee is clear. There is a debate to be had about the effects of the LCO on small businesses, and there will be comment from this place. However, the ultimate legitimacy rests elsewhere and the ultimate decision should be made in Cardiff.
3.32 pm
Mr. Peter Hain (Neath) (Lab): I apologise to the House, as I will have to leave almost straight after I sit down; I have to go to Cardiff to join battle with the shadow Welsh Secretary on “Question Time” tonight. I am sorry that I will not be here for the winding-up speeches.
I was grateful that my right hon. Friend the Secretary of State responded positively to my request that he look into the South Wales police funding crisis. I suggest, however, that the problem lies more at the Welsh than the Westminster end in respect of the meeting that he might be attending. I hope that those who made the decision will reverse it in Wales.
Another policy area for which decision making remains at Westminster is broadcasting. The House should give proper attention to the impact on audiences in Wales of the decisions on the future of public service broadcasting that Ministers must take in the coming months. There is room for considerable concern, and I am grateful that, as my hon. Friend the Member for Aberavon (Dr. Francis) reported, the Welsh Affairs Committee will look into the matter.
ITV said publicly that the cost of its public service obligations will exceed the benefits of being a public service broadcaster earlier in Wales than in Scotland or Northern Ireland—in other words, the situation is more serious in Wales. In January this year, ITV Wales reduced its news output to four hours a week, and its general programming for Wales to a mere 90 minutes a week. Only a few years ago, its general programming amounted to nearly seven hours a week. There is no certainty that even that 90 minutes—that hour and a half—will last more than a year or two; we could go from seven hours a week to nothing in a few years.
I also understand that BBC Wales is having to find savings of £3 million a year for the next five years. That is bound to restrict the ambition and range of what it makes for Welsh viewers and includes, of course, the ending of BBC2W. Taken together, this represents a shocking reduction in service for Welsh viewers. The Assembly’s broadcasting advisory group calculates that between 2006 and 2013 the annual value of English language programmes made for Wales will have reduced by more than £20 million. There is a great danger that this will become permanent. That prospect raises economic and cultural issues for us in Wales, as well as questions about the role of television in our democracy.
There are some welcome conclusions in Ofcom’s final report on its public service broadcasting review, as there are in Lord Carter’s interim report, “Digital Britain”. I particularly welcome the support for the continuation of S4C, the recognition that we must retain a strong and viable competitor for the BBC in Welsh news, and Lord Carter’s suggestion that we should plan for a digital universal service commitment by 2012. I know that my right hon. Friend the Secretary of State, who also has a brief for digital inclusion, is considering that issue. However, neither Ofcom nor Lord Carter seems to have given sufficient weight to the issue of general programming made for audiences in the nations. Indeed, Lord Carter’s report does not address the issue at all, concentrating solely on the provision of news and production quotas for the UK networks. Ofcom recounts the proposals made by various bodies in the nations, including the Welsh Assembly Government and its broadcasting advisory group, but makes no firm recommendation.
Since 1982, an honourable provision has been made for the Welsh-speaking audience through S4C, which has provided a wide range of programmes, and successive Governments have given this greater care and attention. We must now show equal care and attention for programme services for the majority non-Welsh-speaking audience in Wales. Most Welsh viewers—indeed, 80 per cent.—speak English rather than Welsh.
Unless something is done, the BBC could soon be the only provider of general programmes in English for Wales; and even that is on a downward curve. Assuming the survival of Welsh news on ITV, in future English language programmes made specifically for the audience in Wales will be totally dominated by news and sport, leaving only 10 per cent. of the output for drama, music, arts, factual, and light entertainment programmes. By comparison, S4C’s service devotes about 40 per cent. of its output to news, current affairs and sport, and 60 per cent.—10 times the amount of English language provision on the BBC and elsewhere—to other programmes. It is important that we share the view conveyed to Ofcom by the Welsh Assembly Government that
“this is not a defensible proposition for a developed national community that brings to the table the sort of cultural legacy that Wales commands”.
One of the successes of devolution is that it has given a greater focus to cultural policy. The fact that our actors and singers, poets and artists are getting unprecedented attention is of huge value to Wales as a whole. We have all cheered at the success of “Dr. Who” and “Torchwood”, Michael Sheen and, of course, Duffy, who received those marvellous Brit awards last week. In television, we must not allow the soil in which many of these creative talents are grown to be carted away and
dumped. “Coronation Street” is important to us all, but especially to the people of the north of England; the same can be said of “EastEnders” for the people of London. They are both a permanent presence in people’s lives. Yet I gather that last year there were only four hours of television drama in English made specifically for the audience in Wales by BBC Wales—including, of course, the excellent “Coal House”. Drama has long disappeared entirely from ITV Wales’s service. The same sad picture could be painted in comedy and light entertainment.
As regards funding, there are options—I hope that my right hon. Friend the Secretary of State and my hon. Friend the Under-Secretary will look into this—that might solve the problem without further impinging on the public purse: for example, use of the proceeds from the sale of spectrum following the switch-off of analogue transmission, or use of the part of the licence fee that is dedicated to the digital switchover campaign, which will end in Wales at the end of this year.
The audience in Wales deserves better than this very sharp decline in general English-language programming provision, and I hope that whatever decisions are made in the current months, the restoration and development of a fully adequate English language programme service for Wales will get a high priority. I fully support the move towards the development of high-speed broadband services, but the fact is that traditional television will be a major factor in people’s lives for some years to come, and probably for ever in many respects. People in Wales deserve a full reflection of their lives on television in English as well as in Welsh.
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