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Our real competitive advantage will be our knowledge base, and our capacity for innovation. In simple terms, we have to be smarter, quicker and more adaptable than our competitors. The world is undergoing a new industrial
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revolution-the knowledge revolution, fuelled by the pace of technological change. Wales must be at the forefront of that change.

The only way that countries such as Wales will be able to compete is by retraining and upskilling our people. We have to keep ahead with innovative ideas, and we must exploit those ideas fully in order to improve our skills. That also means opening up the excellent research facilities at our universities, so that small and large businesses can take advantage of them.

In my maiden speech, I said that my constituents and, indeed, people throughout Wales wanted work, not benefits. They wanted opportunities to enrich their lives through education, and no one will leave education today and have a job for life. Everyone will have to retrain and reskill throughout their working lives, and no one should sit at home surviving on benefits if they can work. Indeed, if we are to achieve the goal of ensuring that people throughout Wales have jobs, not benefits, we must face up to the challenge of the knowledge revolution.

Even though we live in a global economy, there are those who believe that we should embrace a narrow, nationalist and separatist agenda. They claim that Wales is so different from England that we would have a better future if we were independent but in Europe. They used to cite Ireland and Iceland, but people do not do that anymore; indeed, all of us have constituents who have lost their life savings in the collapsed Icelandic banking system. All the fantasies about an independent Wales simply do not stack up, because the world economic downturn has proved that the arguments for independence are intellectually, politically and economically bankrupt, and we should have nothing whatever to do with them. There is no logic in Wales leaving a British union of 60 million people to join a European Union of 350 million.

Mr. Jones: I share the right hon. Gentleman's concern about the attitude of the nationalists, but, given his concerns about that, how happy is he that his party is in coalition with them in the Welsh Assembly?

Mr. Touhig: The Labour party leads the Welsh Assembly, and the policies that the Assembly implements are those of the Labour party. There might be one or two add-ons from some of the other, minor people, but it is a Labour-driven and Labour-led Assembly. After the next election I have no doubt that it will be a Labour-majority Assembly.

We must continue to be positive about the British Union and the European Union. Europe, and all that it represents for us, means that we have to be a self-confident and outward-looking country, because Europe, which had an important role in our past, will have an important role in our future. The people I have had the privilege of representing in this House for the past 15 years know the meaning of struggle. Even now, despite the great improvements in public services, family incomes and the quality of people's lives, many face problems and worries because of the recent recession, which we are now coming out of. I spoke to traders in Blackwood high street in my constituency last week, and they are finding things tough. Despite that, there is a determination to get through our troubles. There must always be optimism.

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My right hon. Friend the Member for Torfaen referred to General Dynamics, and I well remember trying to persuade that company to go to Wales and, in particular, locate in Islwyn when we were losing jobs in the steel industry. While I was telling the bosses of General Dynamics here in London that Wales was a good place in which to invest and grow their business, others were saying that Wales was a step away from the soup kitchens, because we were losing those jobs in steel. The company is now established in my constituency, there are more than 800 jobs and it is an employer of regional significance. I echo my right hon. Friend's words and wish it well in its bid to secure the FRES contract, upon which the Ministry of Defence will soon decide.

No matter how difficult the road ahead may seem and no matter how hard it is to come to terms with the adversity and setbacks that we all face, we must not lose the faith that we, as a nation, will come through the current economic difficulties. There is still a strong community feeling in the valleys of my constituency-a feeling of belonging. Generations of families in the valleys have been tested in the white heat of the furnace of struggle and hardship over the years. Our fathers and mothers all went through that struggle, but, like people everywhere, the people I know, represent and live among want the best for themselves, their children and their grandchildren. They want work, not benefits, opportunities to enrich their lives through education and a decent standard of living and a decent health service.

People in Islwyn, like people throughout Wales and the United Kingdom, will soon have to make an important choice about the future of our country. It will be between a future with fairness and social justice at its heart and one that puts the recovery, public services and jobs at risk. The people will have to decide between a Tory party that will jeopardise the economy and risk our health service, education system and jobs, and a Labour party that will sustain the recovery and protect our public services.

My name will not be on the ballot paper in Islwyn when the general election comes. However, I feel sure that people there will choose once again to support the Labour party, which will ensure that they have a future. I feel sure that they will not turn to the same old Tories who let them down in the past. I fervently hope that, like the people of Islwyn, the people of the United Kingdom will have the good sense to return a Labour Government.

3.10 pm

Hywel Williams (Caernarfon) (PC): It is a pleasure to follow the right hon. Member for Islwyn (Mr. Touhig). We might not always see eye to eye on politics, but no one can doubt his passion, consistency and deep commitment to his people in Islwyn. I take this opportunity to thank him personally for the kindness that he has shown me and my family during my time in the House.

St. David's day is approaching, so this is a good time for Welsh people to look back and look forward-as a Welsh nationalist, I am certainly in the business of looking forward rather than back. I apologise on behalf of my hon. Friend the Member for Meirionnydd Nant Conwy (Mr. Llwyd), who is travelling to Cardiff for an engagement this evening and cannot be with us this afternoon.

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We are approaching St. David's day, Dydd Gwyl Dewi Sant. As a non-commercial break, there will be a service on Monday at St. Mary Undercroft. My hon. Friend the Member for Carmarthen, East and Dinefwr (Adam Price) will be reading, as will the right hon. Member for Swansea, West (Mr. Williams). This year, I am glad to say that Mr. Speaker has also consented to read during the service. I hope to see as many hon. Members there as possible.

St. David, or Dewi Sant, said that we should keep the faith, do the small things and be joyous-those were his injunctions. It might not be easy to carry them out in the current circumstances, for in the past year we have seen unprecedented economic turmoil and great difficulties, particularly in the financial sector.

It would be remiss of me not to begin by noting the tragedy of the continuing war in Afghanistan. Our service personnel have faced death and injury over many years, as have so many of the Afghan population. In making that point and extending my sympathy to the families involved, I wish to emphasise the Plaid Cymru policy. We have repeatedly opposed the war. We have called, and call now, for a phased withdrawal, peace negotiations and the installation of a United Nations peacekeeping force.

I turn to the domestic front. The banks have started paying enormous bonuses again, but unfortunately the people of Wales have yet to reap the full and disastrous effects of the economic whirlwind brought on by the barely controlled financial sector in the City of London. So few of the people of Wales benefited from that sector, although we are, of course, paying for it now.

I repeat a point made my hon. Friend the Member for Meirionnydd Nant Conwy that there was an opportunity to put more controls on the banks at an earlier stage. The Royal Bank of Scotland is, of course, publicly owned, and it is a disgrace that it seems ready to pay out so much money in bonuses. The people in Wales and the UK will come to their own opinion about that.

Albert Owen: Like me, the hon. Gentleman is really disappointed to see those large bonuses being paid out, particularly from banks that have received taxpayers' money. However, does he not acknowledge that, had the Government not taken an interventionist role in the banking and financial institutions, there would have been great turmoil for ordinary citizens in his constituency and mine? To have sat back, done nothing and left things to the market would have been an even worse path to follow.

Hywel Williams: I agree entirely with the hon. Gentleman in that respect, but I would look at the whole piece and go a bit further back to the rip-roaring days when people were carrying shed-loads of money out of the City of London, which was allowed to happen without sufficient regulation. Points could have been made earlier on about the way in which the banks, having received all this public money, with one of them being largely publicly owned, should have acted as regards bonuses.

Mrs. Gillan: I am not disagreeing with the hon. Gentleman, but in the lobby briefing this morning-we all receive "Gallery News" in our e-mails-it was pointed out that the Royal Bank of Scotland has agreed to give
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bonuses to people earning less than £39,000 a year, the lowest-paid members of staff. The briefing said that that was entirely in line with what the Prime Minister has been saying. The lobby spokesman said that RBS is a very good example of having taken on board what the Prime Minister has been saying on bank bonuses. I would have thought that the hon. Gentleman would welcome that news, as I do.

Mr. Williams: The hon. Lady has the advantage over me, as I have not seen that briefing. However, the fact remains that RBS is going to spend £1.3 billion on bonuses; whether that is the only way in which it can operate its businesses is another matter.

Lembit Öpik: Will the hon. Gentleman give way?

Mr. Williams: Briefly.

Lembit Öpik: I do not want to prolong the debate about the British banking system, but I gently highlight to the hon. Gentleman something that has been made clear to me by those in the banking system-that they regard bonuses as a traditional part of how they remunerate their staff. In order to get away from this situation completely, they will have to change their system completely, because it does not look good. However, I am cautious about completely condemning bonuses, because, as the hon. Member for Chesham and Amersham (Mrs. Gillan) has rightly pointed out, the banks seem to have listened to the Prime Minister's advice.

Mr. Williams: The hon. Gentleman makes his point.

There have already been increases in unemployment in Wales and, despite the efforts of the Government in Cardiff and, to be fair, the steps taken by the Government here-the future jobs fund is a welcome step-further increases in joblessness loom. As we in Wales are so heavily dependent on employment in the public sector, any cuts in the public sector will have a disproportionate effect. We are determined to foster and grow the other part of the Welsh economy-the part that generates the wealth. I am glad to pay special tribute to the work of the Deputy First Minister, Ieuan Wyn Jones, who has shown real talent in a big, and possibly the most onerous, job in the Welsh Government.

Let me look at the local situation in my own constituency. Last week, I visited a company called Welcome Furniture, which has rescued a furniture-making business in Caernarfon that crashed, mainly because it was Irish-owned-the acknowledged difficulties in the Irish economy meant that the subsidiary in Wales also faced difficulties. With a great deal of short-term help from the Welsh Assembly and the local authority, the business has been able to re-establish itself, and it now employs 77 people, which is more people than it employed previously.

Unfortunately, in the past year we have seen the loss of a large public sector project that would have generated large numbers of jobs in my constituency, as well as in Ynys Môn and other areas. I am referring, of course, to the prison project in Caernarfon. It was a particular disappointment that that was abandoned. The Welsh Affairs Committee looked into prison provision several years ago, at my suggestion, and we were very pleased to see the announcement about the prison in Caernarfon. The Committee is looking at the matter again, and we will be reporting on it. No doubt the hon. Member for Aberavon (Dr. Francis) will refer to that in his speech.

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Albert Owen: I shared the hon. Gentleman's disappointment when the Caernarfon project did not go ahead, and I backed the attempts by him and members of the Welsh Affairs Committee to ensure that there was a prison in north-west Wales. He will be aware that Isle of Anglesey county council and I have led a delegation to the Ministry of Justice to find suitable sites in Anglesey. Would he support any proposed development there?

Hywel Williams: I certainly support the prosperity that would come from such a project, which would spill over into my constituency. What is more, it would hopefully provide the prison facility that we have needed in north Wales for such a long time. I would like it to contain a facility for young people and one for women, but we await the announcements.

The people of Caernarfon, both the minority who were against the prison-a number had legitimate fears, although I believe that they could have been assuaged-and the rather larger group in favour, all engaged in reasoned and adult debate, and we did the necessary preparatory work in both the public and private sector. The latter was keen to take part. I pay tribute to Gwynedd county council, under the leadership of Dyfed Edwards. The prison project in Caernarfon might be no more, but any prospective investor in Arfon can be confident of meeting a positive and expert response, and it is definitely open for business.

In the past year we have also seen the passing, at last, of the Welsh language legislative competence order, which was of particular satisfaction to me and to many people across Wales who have been campaigning for a long time for the emancipation of the Welsh language. I was particularly glad of the positive contribution made by Cymdeithas yr Iaith Gymraeg, the Welsh Language Society. It has its campaigning methods and its work to do, and its tactics are not the ones that I would choose, but its contribution to the consideration of the LCO should be a matter of pride to it. It showed yet again that it is in the forefront of positive and creative thinking about the future of the language, and it certainly has a great deal more work to do in that field. I hope that soon, a Measure will be published setting up a language commissioner, which would be the first such step by the Assembly. There will be many more to be taken afterwards.

The right hon. Member for Cardiff, South and Penarth (Alun Michael), who is unfortunately not here this afternoon, scored a success yesterday with his Bill regarding marriage in Wales. It took about 10 minutes to pass through its Committee stage and attracted brief contributions from a large number of Welsh Members-it was a good-humoured occasion. I have no truck with envy, but I point out to Ministers and the official Opposition that my Bill to allow the registration of births and deaths in Welsh enjoys wide cross-party support and support across Wales. In the coming year, it would be fitting if the House were to match the Welsh Assembly Government's positive steps in legislating on the Welsh language by making available parliamentary time for what I claim is a most worthwhile Bill. While I am on the subject of my own efforts in this field, I point to my proposed bilingual juries Bill, which also commands support across Wales, significantly so in the legal profession.

It would be remiss of me not to note the quickening pace of change in the legal profession in Wales. We now have a Welsh circuit and a growing body of Welsh law. All the more reason, therefore, to establish a Welsh
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jurisdiction and make policing in Wales the responsibility of the Welsh Assembly Government.

Julie Morgan: In view of the points that the hon. Gentleman has just made, does he agree that it is important to retain a good representation of the Legal Services Commission in Wales, so that it can provide the services that are needed?

Hywel Williams: I agree entirely with the hon. Lady and I am very glad that there was co-operation on both sides of the House and in the Welsh Affairs Committee when we addressed that matter, which we have hopefully done successfully.

Less positively, I must note the problems with the housing legislative competence order, which has still not passed after some 32 months. The Welsh Affairs Committee raised some fundamental points about the first version, but as a Committee, we acted quickly-there are sometimes complaints that matters are held up by the Committee, but I do not believe that that happened in this case. Of course, there has been a great deal of to-ing and fro-ing between Cardiff and London, which I am sure will be the subject of the Committee's forthcoming report on Wales and Whitehall. Perhaps the Chairman of the Committee rather than I will say more about that.

The evidence that the Committee took, which is publicly available, shows a lack of awareness of the nature of devolution among civil service personnel in London. Interestingly, Rhodri Morgan said that dealing with Whitehall was like being the First Minister of the last colony. That may be a Rhodri-ism, but it is very revealing. We must struggle on with the LCO system, but many in Wales and in this House look forward to the referendum, and the establishment-at last-of full and proper law-making powers for the Senedd in Cardiff.

Looking forward to the election, Plaid Cymru has a number of policies on key issues, including child poverty, but I should like to talk about pensioner poverty and our living pension policy. According to Age Concern, older people say that tackling pensioner poverty and reforming the struggling care system are top priorities for them, so let me put this plainly: ending pensioner poverty should be at the top of the agenda for any party of government or any aspiring party of government, and Labour and Tory alike have failed to some extent in that respect over many decades. Indeed, coming up to the general election, the London parties seem obsessed with outbidding one another on cuts to public services and privatisation agendas.

The point is that so much of the policy debate is about English policy, but, for example, health and education-two major issues-are devolved to Wales. By the same token, of course, they are devolved to England, so it is a two-way street. By the way, I never hear people in Wales complaining about quasi-devolution to England; they seem much more concerned with devolution in Wales. The truth is that in the crucial matters of health and education, this Parliament often acts as England's Parliament. The Leader of the Opposition might pledge on billboards not to cut the NHS, but he should add, "in England", which would clarify the matter for people in Wales.

Mr. David Jones: Is it not the case that preserving the NHS budget would also benefit Wales through the Barnett formula?

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