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House of Commons

Wednesday 6 January 2010

The House met at half-past Eleven o'clock


[Mr. Speaker in the Chair]

Business before questions

London Local Authorities Bill [ Lords] (By Order )

Motion made, That the Bill be now read a Second time.

Hon. Members: Object.

Bill to be read a Second time on Wednesday 13 January.

Oral Answers to Questions


The Secretary of State was asked-

Aluminium Industry

1. Mr. Robert Goodwill (Scarborough and Whitby) (Con): What recent discussions he has had with the First Minister on the future of the aluminium industry in Wales. [308870]

The Parliamentary Under-Secretary of State for Wales (Mr. Wayne David): We remain committed to supporting the aluminium industry in Wales, as we demonstrated with our strenuous efforts to save jobs at Anglesey Aluminium over the summer.

Mr. Goodwill: To be fair to the Government, I guess that they did as much as they could to try to ensure the survival of Anglesey Aluminium, but is not the fundamental problem the operation of the European Union emissions trading system, which is making it increasingly difficult for primary metallurgical industries to operate in the EU? It would be all well and good if it resulted in the reduction of global CO2, but it merely results in carbon leakage to other economies such as China and India, which are not constrained in the same way.

Mr. David: The hon. Gentleman is perfectly correct about the Labour Government's efforts with regard to Anglesey Aluminium. We made strenuous and laborious efforts over the summer to try to save those jobs as far as we possibly could, but unfortunately, for commercial reasons, the company was not able to accept the offer that was made to it. I must say that we remain committed to the aluminium industry generally in Wales and, of course, in the whole of the United Kingdom, but it is
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important to recognise that we operate within a European Union framework. Naturally, we are concerned about the environment and carbon emissions, and we are doing everything possible to work with our European partners to ensure that those emissions are kept to an absolute minimum. It is important to recognise also that European Union directives have an important role to play in sustaining this country's economy.

Albert Owen (Ynys Môn) (Lab): A happy new year to you, Mr. Speaker, and to all Members.

The decision by Rio Tinto Alcan to cease production at Anglesey Aluminium has left a massive hole in the regional economy of north-west Wales, but I put on the record my thanks to the Wales Office and, indeed, to the Government for their efforts with their generous offer and intervention to keep production going. Unfortunately, the company's internal matters took precedence.

Looking forward to the future use of the land on the Anglesey Aluminium site and the concept of green energy, does the Minister agree that we need to move forward to ensure that those jobs are kept on Anglesey? Will he meet the First Minister to ensure that priority is given to Anglesey?

Mr. David: I also wish my hon. Friend a happy new year. I am sure that it will be a happy new year for Labour, too. The prospects for the island of Anglesey are rosy. For example, I welcome the decision by the Nuclear Decommissioning Authority to consider Wylfa as a potential site for new nuclear build, and obviously we are looking at various options to ensure that the available land on the Anglesey Aluminium site is used in the most productive way possible. I am aware that a very positive meeting occurred between representatives of a certain company, my hon. Friend and the Secretary of State for Wales, and I am sure that those deliberations will continue. I shall use my good offices to hold discussions with the First Minister as well.

Mr. David Jones (Clwyd, West) (Con): In 2007, when Lord Mandelson was European Trade Commissioner, he promoted a scheme for halving duty on the imports of aluminium to the EU. That was to the significant benefit of the Russian aluminium industry. To what extent does the Minister consider that that decision contributed to the demise of Anglesey Aluminium?

Mr. David: I do not believe that it was a factor in any way at all, because the aluminium industry throughout the world has faced difficulties. We are of the view that working closely with our European partners is entirely positive, and that is recognised by Rio Tinto, for example, which is an international player. Of course, discussions take place with the European Union, but it is important to recognise that we live in an international community, and the European Union is a big and positive player.

Car Scrappage

2. Mrs. Betty Williams (Conwy) (Lab): What assessment he has made of progress on the car scrappage scheme in Wales; and if he will make a statement. [308871]

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The Secretary of State for Wales (Mr. Peter Hain): Since its launch, the car scrappage scheme has generated more than 291,000 orders for new vehicles in the UK, with about 14,500 of those orders having been made in Wales.

Mrs. Williams: I thank my right hon. Friend for his response, particularly as it confirms my own view. Does he agree that the car scrappage scheme has been of greater value to the British and, indeed, Welsh economies than would have been the Opposition's proposals to cut inheritance tax for their wealthy supporters?

Mr. Hain: I could not have put it better myself; my hon. Friend has got it in one. Rather than wasting public sector money on the richest people in Britain, very few of them in Wales, with inheritance tax giveaways, our putting money into the car scrappage scheme has increased production by a fifth at Ford Bridgend and resulted in a fifth of all new car registrations throughout the UK. That is active government-government supporting people, not favouring a tiny, rich few.

Wind Farms (Montgomeryshire)

3. Lembit Öpik (Montgomeryshire) (LD): What assessment he has made of the potential effects of construction work on new wind farms in Montgomeryshire on the level of traffic and the environment in that area. [308872]

The Parliamentary Under-Secretary of State for Wales (Mr. Wayne David): We firmly believe in the long-term benefits of wind energy. Any assessment of traffic and the environment would, of course, be a matter for the relevant planning authority.

Lembit Öpik: Many in Welshpool, Cefn Coch and across Montgomeryshire are very worried about the thousands of slow-moving lorry loads required to build potentially 700-plus turbines, which will cause traffic gridlock. They are also concerned about the environmental impact of the turbines themselves. Will the Minister meet me to hear in more detail the concerns about the traffic flows and about the environmental impact of turbines, if they are built?

Mr. David: Of course wind energy is the most commercially viable renewable technology available, so it is important to go along and enhance its development whenever possible. I hear what the hon. Gentleman says and I was in Welshpool last year myself and saw the area that he talked about. We will continue to monitor the situation while recognising that responsibility lies with the Welsh Assembly Government, but I would be happy to have further discussions with the hon. Gentleman and other colleagues on this matter in future.

Economic Inactivity

4. Mr. Mark Harper (Forest of Dean) (Con): What recent discussions he has had with the Secretary of State for Work and Pensions on the level of economic inactivity in Wales.[308873.]

The Secretary of State for Wales (Mr. Peter Hain): Because of the actions my right hon. Friend the Secretary of State for Work and Pensions and the Government have taken to preserve jobs and get people back to work, the level of economic inactivity in Wales fell by 3,000 from the last quarter. We will not let short-term
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job losses turn into long-term unemployment. We will not allow Welsh communities to be scarred by worklessness again.

Mr. Harper: I am grateful for that answer. The Secretary of State recently said in the Welsh Grand Committee that unemployment in Wales may well keep rising for some time during 2010. Has he made any estimate of the level at which he thinks unemployment may peak during this recession?

Mr. Hain: What has been interesting is that all the commentators are now saying that unemployment will peak at a far lower level than has been said by the Opposition and was previously feared. We have now seen economic activity rates in Wales down 3,000; jobseeker's allowance and claimant count figures down 500; vacancies up 2,000; and unemployment still up 93,000 in Wales on what we inherited from the miserable Conservative Government last time.

Ann Clwyd (Cynon Valley) (Lab): My local authority of Cynon, Rhondda and Taff is particularly pleased with the future jobs fund and the impact it is having on employment in the Cynon valley. Will my right hon. Friend assure me that the Government will continue to protect those who are out of work-unlike the Conservative party in the 1980s, which threw people on the scrapheap?

Mr. Hain: Again, my Back-Bench colleagues are eloquent in their denunciation of failed policies on the other side of the House.

Michael Fabricant (Lichfield) (Con): They would be, wouldn't they?

Mr. Hain: Well, they would be because they represent Welsh seats that were devastated by Tory policies in the 1980s and 1990s when the number of people on incapacity benefit in constituencies such as that of my right hon. Friend the Member for Cynon Valley (Ann Clwyd) and mine tripled. It has been coming down under Labour. My right hon. Friend is absolutely right that we have seen active Government intervention, spending and investing over the past two years-continuing into the future-rather than a Government who will slash spending and condemn people to losing jobs, bankrupting businesses, plunging Britain and Wales into exactly the same cycle of decline and depression from which we rescued Britain and Wales when we came to power in 1997.

Hywel Williams (Caernarfon) (PC): In the Witney constituency of the Leader of the Opposition, 10 claimants are chasing every vacancy. In the Rhondda, 75 claimants are chasing every vacancy, while in Neath it is 35. Will the Secretary of State press his colleague in the Department for Work and Pensions to modulate the pressure on claimants to find work, reflecting local conditions such as those I mentioned? To do otherwise, I think, would be both impractical and inhumane.

Mr. Hain: I take the hon. Gentleman's point, and if he has any concrete examples, I would be happy to take them up with my right hon. Friend the Secretary of State for Work and Pensions. The hon. Gentleman will understand the imperative of encouraging people to stay in the world of work. If, sadly, people have been
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made unemployed, what we are doing, which was not done in the 1980s and 1990s, is to provide them with job opportunities, training and support so that when vacancies arise-there are more and more of them in the Welsh economy generally- they can take that opportunity locally. About half the claimants leave jobseeker's allowance within three months and more than 70 per cent. within six months-a far better record than in the miserable Tory 1980s and 1990s.

Julie Morgan (Cardiff, North) (Lab): Does my right hon. Friend agree that the growth in the manufacturing industry that was noted in the purchasing managers index survey published on Monday will be good news for Wales, bearing in mind our above-average dependency on manufacturing industry? Does he not think that that will help to bring down the level of economic inactivity?

Mr. Hain: I do indeed. No one is suggesting that this recession has been anything other than extremely difficult for businesses and for those whose jobs have been under threat, but my hon. Friend is absolutely right: the latest PMI index report shows that private sector growth in Wales increased in November for the seventh successive month. Manufacturing is up, and employment rose for the first time in two years. Wales was the only UK region to record job creation during November, and the latest figures show that the growth in exports from Wales since 1999 was greater than in all the rest of the UK put together. That is a good record under Labour.

Mrs. Cheryl Gillan (Chesham and Amersham) (Con): Perhaps the Secretary of State will take off his rose-tinted glasses. Under Labour, more than 100,000 more people are economically inactive in Wales than the entire population of Cardiff. In the past year, the number of long-term unemployed has more than doubled. Welsh gross value added has gone backwards compared with the rest of the UK, and Wales is the poorest part of the country. What effect does the Secretary of State think that that is having on the social fabric of Wales?

Mr. Hain: The difference between this, the deepest recession that Britain has faced in generations, and the much lighter recessions that the Tory Governments completely failed to deal with in the 1980s and 1990s in Wales is that people are now being helped out of difficulty and the economy is starting to recover. It is recovering much more quickly than people expected, and much more quickly than the doom merchants on the Conservative Benches who have been talking Wales down have been saying it would. That is because we have adopted active government policies to invest in jobs and support businesses, rather than turning our backs on businesses as was done in the Tory 1980s and 1990s.

Mrs. Gillan: I do not live in the 1980s; I live now. Given the importance of employment in agriculture, is the Secretary of State concerned that under Labour, gross value added per capita for Welsh agriculture has fallen by more than 68 per cent., or more than two thirds? This shocking decline is worse than in any other part of the United Kingdom. Is it not a fact that the legacy of Labour in Wales will be more unemployment, more poverty, more debt and a devastated rural economy?

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Mr. Hain: The problem is that hundreds of thousands of people in Wales had to live in the 1980s and 1990s under a Tory Government. That is why we are determined to prevent the Tories from inflicting such misery on them again. The hon. Lady does not acknowledge that there are now 93,000 more jobs in Wales than when we followed the Tories into power, despite this being the most difficult recession for 60 years. That is a record of Labour success against Tory failure.

Funding and Finance for Wales

5. Nia Griffith (Llanelli) (Lab): What recent discussions he has had with the Chancellor of the Exchequer on the operation of the Barnett formula in Wales. [308874]

8. Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) (PC): What assessment he has made of the recommendations of the Holtham commission on funding and finance for Wales; and when the Government plan to implement the recommendations that they accept. [308877]

The Secretary of State for Wales (Mr. Peter Hain): The Holtham report made it clear that, although funding is currently at a fair level, spending allotted to Wales could decline in relation to that of England. That is why I have fought hard for an historic new commitment from the Treasury on funding, to prevent the people of Wales from being disadvantaged in the future.

Nia Griffith: I fully recognise the autonomy of the Welsh Assembly Government in determining specific spending priorities. What can the Secretary of State tell me, following his discussions with Welsh Assembly Ministers, that will reassure my constituents about the overall level of funding available for public services in Wales?

Mr. Hain: I remind my hon. Friend, the House and the people of Wales that the Welsh budget has more than doubled under Labour, going up from about £7 billion to nearly £16 billion next year. Again, that is a fantastic record compared with the Tory years. Spending on health services in Wales has more than doubled, for example, and there are now more nurses, more doctors and more health workers. That is a record of Labour's success that should reassure my hon. Friend, but we must protect Wales's budget in the future.

Mr. Llwyd: Now that there is irrefutable evidence of the unfairness of the Barnett formula, the time is surely right for a new formula to be devised on the basis of need. The Secretary of State said that he had an understanding with the Treasury, but Ministers have always been able to argue for more money for their Departments. What we really need is a fair structure. Can we not work together to achieve that?

Mr. Hain: I congratulate the hon. Gentleman on his modesty. Before Christmas, he told a media outlet that his favourite literary character is Superman. "Is it a bird? Is it a plane? No, it's the hon. Member for Meirionnydd Nant Conwy!"

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