Budget Statement and its Implications for Wales

[back to previous text]

Mr. Jon Owen Jones: I am sure that the hon. Gentleman would not want to mislead the Committee. He said that spending on education has fallen in comparison with spending by the previous Government. I am sure that he meant to say that spending on education as a proportion of GDP has fallen but that because GDP is far higher as a result of the Government's successful running of the economy, education spending, like other public spending, has risen.

Mr. Livsey: As we know, GDP has gone backwards in Wales; only in the past 12 months has it increased by a minuscule amount. The hon. Gentleman's argument does not stand up and I should be grateful to be told the equation on which he based his calculation. Mickey Mouse economics should not feature in a Budget. GDP has fallen in Wales, although the hon. Gentleman does not acknowledge that.

Mr. Jones: The argument holds because GDP in Wales is in proportion to GDP throughout the United Kingdom. If UK GDP rises by 10 per cent., more money is available for public spending. The proportion may not be what the hon. Gentleman wants, but it does not mean that total spending has fallen.

Mr. Livsey: That is a stark contrast. If UK GDP has risen by 10 per cent. but GDP in Wales has fallen, something is seriously wrong somewhere.

Mr. Ipik: Does my hon. Friend agree that the size of some classes in Wales has increased? Whatever the hon. Member for Cardiff, Central (Mr. Jones) says about the figures, the reality is that teachers in Wales are still waiting for a substantial improvement in both morale and resources.

Mr. Livsey: I agree.

I do not want to annoy Labour Members too much, so let me say that there is no doubt that some of the special provisions in the Budget—especially those for tax credits—will benefit some of our more deprived areas. They include abolishing stamp duty in assisted areas, introducing community investment tax credits for those areas, tax credits for cleaning up contaminated industrial sites, corporation tax relief for urban and industrial regeneration companies, capital allowances on flats over shops and reduction of value added tax on residential property conversions in assisted areas from 17.5 per cent. to 5 per cent. All of those are extremely welcome, but we should have liked more action, especially in objective 1 areas, to reduce national insurance and to take other measures that are legal under European Union rules.

The Budget shows a definite social conscience, which we support through and through, but more could have been done to re-establish economic support for those parts of the urban economy that have been hard hit—steel, agriculture and tourism. Those sectors will also need massive help if they are to survive even for the next 12 months.

The Chairman: Before I call the next speaker, let me say that 10-minute speeches will help everyone.

12.12 pm

Mr. Huw Edwards (Monmouth): I welcome you, Mr. Jones, and other members of the Committee to county hall, Cwmbran. It is a great pleasure to follow the hon. Member for Brecon and Radnorshire. His sincerity and expertise in farming is acknowledged throughout Wales and he will be a loss to the Committee and the House of Commons should this be the last time that he speaks as a member of this Committee.

It is a great pleasure to be here in county hall, Cwmbran. The Committee has visited different parts of Wales and it gives me great pleasure that it has come to my constituency at this time. County hall is also the administrative centre of Torfaen county borough council, and I regularly visit to meet council officers. Only two weeks ago, I came here with a representative of the United States embassy to discuss economic development in Monmouthshire, Torfaen and south-east Wales in the light of the Corus announcement and Torfaen's recent success in securing world heritage status for Blaenavon. Two years ago, we celebrated the 50th anniversary of Cwmbran new town, and a section of Cwmbran lies in my constituency—the area of Croesyceiliog, Llanyrafon and Llanfrechfa—which provides a good example of new town development and good social housing, much of it now in private ownership.

Clearly the dominant issue in Monmouthshire for the past couple of weeks has been the foot and mouth crisis. When I last spoke to the National Farmers Union on Friday afternoon, I was assured that there had been no direct outbreaks in Monmouthshire, but the area has certainly been affected by outbreaks in Herefordshire and, I heard today, in Gloucestershire in the Forest of Dean. I pay tribute to all those who have taken such a responsible attitude here in Monmouthshire, despite the serious losses that many of them may experience as a result. Yesterday, I drove past a market garden centre that had closed because of the crisis, even though I understand that there is no requirement that such places should close. Caravan sites were much emptier than is normal for the time of year. Farmers and walkers have been responsible, and I would be appalled to hear that people were walking in this area, as they were through Snowdonia a couple of weeks ago, in defiance of requests by the local farming community to keep out to avoid the spread of foot and mouth.

I was worried to hear from local farmers over the weekend that when they telephoned the Cardiff MAFF office, they found that it was closed. They were being advised by the foot and mouth helpline, whose office—in the north of England, I believe—was open. I telephoned the Cardiff office myself at 1 o'clock on Saturday afternoon only to hear a recorded message saying that it was closed.

I understand the anxiety of the farming community. At the beginning of the crisis, when there were about six or seven outbreaks of foot and mouth, horse racing was cancelled, whereas now that there have been 160 or 170 such cases, it has been resumed. I have sympathy with those members of the farming community who believe that double standards are at work in relation to what is and what is not being closed.

I commend the speech of my right hon. Friend the Secretary of State for Wales and express the pleasure of the people of Cwmbran that he now occupies that office, having formerly been the Minister of State at the Northern Ireland Office. The people of Croesyceiliog, Llanyrafon, Llanfrechfa and Ponthir in my constituency have benefited greatly from the economic stability seen under the Labour Government, who have given us stable interest rates that are 4 per cent. lower than the mortgage rates that we had under the Conservative Government. We have also had steady economic growth and falling unemployment.

However, that is not to say that there have not been difficulties, some of which members of the Committee have mentioned this morning. Several of my constituents work at Llanwern; many more of them used to work there, but they paid the price for increased productivity at that plant in early retirement and redundancy. The people who are now working there are being rewarded—if that is the right word—with the closure of the heavy end of its steel-making process.

My colleagues on the Welsh Affairs Committee and I were appalled when we received evidence from the chief executive and chairman of Corus the other day. He came out with a startling statement. My hon. Friend the Member for Gower (Mr. Caton) put to him that the Bryngwyn plant was making a profit, yet it was still being closed. We shall never forget his reply, which was, ``I don't know whether it is making a profit or not.'' The company says that it is losing £1 million a day; it does not know which of its plants are profitable and which are not, but they are being closed anyway. That appalling management comes from someone applying a financial analysis with little understanding of the human impact of his business decisions. I hope that Corus will reconsider its actions and work with the Government. They have offered support, even though Sir Brian Moffat has denied that. The National Assembly is trying to resolve the crisis. I hope that people can work together as stakeholders in Corus and that as many jobs as possible are retained.

Mr. Martyn Jones (Clwyd, South): My hon. Friend may remember that Sir Brian Moffat said that he been offered help, but that he did not think that it would fit the requirements of the law. He just ignored the offer.

Mr. Edwards: My hon. Friend, who is the Chairman of the Welsh Affairs Committee, makes a powerful point. We look forward to Sir Brian Moffat and his colleagues—who did not contribute much to those discussions—expanding on their analysis of which of their plants are profitable and what help they have or have not been offered by the Government.

No Government since 1945 have done as much to help families as the current Government. The 1945 Labour Government began the new peace and the reconstruction of Britain after the war. Having defeated Nazism, we had to defeat the social injustice that characterised so much of south Wales, especially in the valleys. That Labour Government introduced some good measures, such as family allowances, but for the second and subsequent children only. They continued the system of child tax allowances, which were eliminated when child benefit was introduced in 1976. There was no particular support for the working poor and there was no minimum wage at that time, but the current Government have continued with child benefit for all children and in April will reintroduce child tax allowances. That will be worth about £500 to families. The current Government have introduced the working families tax credit, which is a real benefit to low-income families. They are helping those in full-time and part-time work. They are providing a child care credit to encourage people to get off benefit and back into work by making work pay.

Last week, I talked to one of my constituents, Miss Ashleigh Clements, a single mother with two children who lives in Abergavenny. When I first met her, she was on benefit, but she now works in the local pub, she is training to work in the catering trade and she is benefiting from the sure start programme. She has admitted that that it has made a significant difference to her life, including giving her a better social life. I am sure that we shall hear more about Ashleigh Clements and other people who have benefited similarly from the working families tax credit. At my surgery on Saturday I met another single parent who needs to move into training. I was pleased to be at the launch of Monmouthshire community council for education and training, which is a major new initiative in Wales for education and training for the over-16s.

Wales is also benefiting from the national minimum wage, which rises to £4.10 an hour in October. It has been a great method of attacking poverty wages, reducing inequalities between women and men, reducing unemployment and boosting employment, especially for women, as was the Equal Pay Act 1970. A couple of weeks ago, I visited the Abergavenny job centre and was pleased to see the jobs advertised there. I remember when many advertisements in job centres contained the term ``Neg'', which was supposed to mean that the wage rate was negotiable, but effectively meant that it was negligible. I have done reports and research on the matter and I am pleased that, now, every job advertised in job centres must be minimum wage-compliant, although I think that advertisements should state, ``at least £3.70 per hour''.

My hon. Friend the Member for Cynon Valley said that the minimum wage should be £5 an hour-plus. I agree with her in many respects, but I assure her that advertisements in job centres now state that if applicants have dependent children, the minimum wage will, in effect, be £5.60 an hour. It will be even more later this year. I suggest to the Government that there should be a minimum wage for working parents of £5.60 an hour, which should be advertised as such. That is what the minimum wage is, because of the impact of the working families tax credit.

A couple of weeks ago in Monmouth, I met a young man who is benefiting from the new deal. He had left the army and was on jobseeker's allowance. He wanted to do training at Simone's fitness centre in Monmouth, which took him on under the new deal. That is not a Mickey Mouse job like those provided under Government schemes in the 1970s and 1980s. As a result of the opportunities under the new deal, he will be able to qualify as a fitness instructor and might manage a fitness centre such as Simone's in the future.

The Budget gave a great boost to public services. Here in my constituency we have seen the benefits of the Government's investment in the national health service. A new day surgery unit has been opened at Nevill Hall hospital in Abergavenny, and a new community hospital has been opened in Chepstow, which I visited a couple of weeks ago.

I hope that the National Assembly for Wales will soon make a positive announcement about the new health and social care facility for the people of Monmouth, and that there will be a more rigorous examination of the development of mental health services for people in the area. I remember making a representation to Gwent health authority after the general election about the need for the Red Barn centre, which was going to be a new psychiatric centre. Unfortunately, it was never developed, although alternative facilities may have been built elsewhere. Recently, I met the parents of a young man who committed suicide as a result of his condition, and, perhaps, of the lack of adequate secure accommodation for such people. Mental health services have been neglected throughout the 20th century and require extra investment.

There has also been extra investment in our comprehensive and primary schools. Across the way from here is the Croesyceiliog comprehensive school. I assure members of the Committee that there are no bog-standard comprehensives here and I resent that phrase being used about comprehensive schools. None of them can specialise in anything apart from providing comprehensive education, although many would be helped by improved facilities and refurbishment. I recently visited Caerleon comprehensive, which has a good academic record but could do with more investment in the form of a sixth-form centre, better facilities for the staff and better sports facilities. I hope that those schools will benefit from the Government's Budget.

It has been an honour and pleasure for me to speak in the debate in my constituency. The people of Monmouthshire and Torfaen recognise the ability of the Government to secure economic stability and social justice. It has been a pleasure for me to represent them in Parliament and will be my pleasure to do so for many years to come.

12.26 pm

Previous Contents Continue

House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index

©Parliamentary copyright 2001
Prepared 12 March 2001