Budget Statement and its Implications for Wales

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Mr. Ipik: Difficult as is it is for the hon. Gentleman to believe, I am listening to his arguments and considering them. I promise to respond to them, but for the moment I shall keep my comments brief.

Mr. Jones: I am disappointed that there was no intervention, because I was looking for an excuse. During our debate this morning, I intervened in the speech of the hon. Member for Brecon and Radnorshire, who is the leader of the Liberal Democrats in Wales. I said that the Liberal Democrat policy on the minimum wage was to pay less in Wales and he told me that that had not been their policy for a decade or more. However, I have in front of me a document entitled ``Investing in People and Assisting Enterprise'' dated September 1998, which is not 10 years ago. It states:

    ``We believe in regional flexibility in the minimum wage and that the Commission''—

which the Liberal Democrats intend to set up—

    ``should be specifically required to report and recommend on this.''

While I am at it, during the last but one Welsh Grand Committee, I intervened in the speech of the leader of the Liberal Democrats in Wales to point out that they do not support the new deal. He told me that they did, but they do not. That is a fascinating example of the confusion and hypocrisy that lies at the heart of Liberal Democrat policies. I know that the media are not usually interested in those policies—that is understandable, because they believe the Liberal Democrats to be an irrelevance—nevertheless, why do I, the Labour Member for Cardiff, Central, know more about Liberal Democrat policies than the leader of the Liberal Democrats in Wales?

Mr. Livsey: There was no minimum wage at the time to which the hon. Gentleman refers. He is correct to say that we changed our policy. Perhaps my comments included some licence because I could not remember the details; I apologise for that. At the time, our policy was to consider the matter, but we have changed it.

Mr. Jones: We are all clear now, then. I have documents from 1997 and from 1998 stating that that was the policy. If the hon. Gentleman says that it is different now, we are that much the wiser.

2.31 pm

Mr. Lembit Ipik (Montgomeryshire): I, too, regret that you will be leaving our company, Mr. Jones; not least because you always keep me to time. I thank you for the discipline that I have learned over the past few years under your chairmanship. I also pay tribute to my hon. Friend the Member for Brecon and Radnorshire, without whom I would not know half of what I know about Liberal Democrat policy, which is sometimes an education to me as well.

It is timely that I should follow the hon. Member for Cardiff, Central (Mr. Jones), who illustrates the importance of a dialogue and shows that it is possible for parties—in this case, the Liberal Democrats and Labour—to be in partnership in the Assembly, while maintaining healthy competition and different views on some aspects of policy. I shall return to the hon. Gentleman's questions, because he clearly thinks that there is a far greater likelihood than does the Secretary of State that we will form a Government.

I begin by taking an unusual line. Despite the strong and aggressive attack by the hon. Member for Cardiff, Central, I shall praise the Government, subjugating my feelings of anger to my values of honesty. As my hon. Friend the Member for Brecon and Radnorshire said, there are many good things in the Budget. It would be disingenuous to pretend otherwise. The Government have raised the tax take, albeit through indirect taxation, while improving economic performance. That is a credit to the Chancellor, who has shown himself to be in touch with his brief; although I disagree with certain aspects of the policies that he has chosen to pursue. The fact that the Government have used the surplus to pay back the national debt is a great advantage, especially given the enormous and out-of-control debt that they inherited in 1997 from the Conservatives. They have invested some money in transport, health and education, and they have shown that they have a long-term strategy based on their assumption that they will win the next general election.

Those are all macro-points at a UK-wide level, from which some specific points of interest spin off. I hope that the Budget will be translated into clearer support for farmers at this time of crisis. As other Opposition Members have said, we must recognise that farming is on the verge of collapse and that foot and mouth could ultimately destroy the fabric of the rural economy, with effects that go far beyond agriculture. Given the surpluses that the Government have amassed, it would be timely for them to make a strategic statement of their long-term commitment to ensuring that we continue to have a working countryside. So far, there have been many tactical promises of individual pay-offs, but I should like the Secretary of State, the Minister and, indeed, the Chancellor to make a strategic commitment to doing whatever it takes to prevent the collapse of the rural economy.

Will the Minister support other industries that are on the verge of collapse but are not directly related to farming? For example, the Redridge centre, which is run by Pete Jones, is a training centre; he has had to close all operations because it is in the heart of a rural area. He is losing thousands of pounds a day and he will go bankrupt if the crisis continues much longer. Can the Minister give a strategic commitment to support such industries?

Mr. Simon Thomas: I associate myself with the hon. Gentleman's remarks. Does he agree that the relationship between agriculture, tourism and other economic activities in the countryside, which has been demonstrated in the current crisis, gives the lie to those who have argued that agriculture does not contribute to the Welsh gross domestic product?

Mr. Ipik: The hon. Gentleman is absolutely right. I am sure that he will pursue that point in his speech. I anticipate that our views would not differ on that area of policy.

I shall criticise the Budget in case Conservative Members worry that we are blindly following the Government. First, the Budget is designed to win the 2006 general election. It is not especially generous because strategists in the Labour party assume that they do not have to hand out a huge amount of money, but want to prepare for 2006. The Secretary of State and his colleagues obviously judge that that will be the year when the Liberal Democrat party will challenge for the Government of the UK, which is something that they will want to be ready for. I am disappointed by the Budget because by playing long-term party politics, the Government have missed a chance to invest in health, education and pensions, which could have been done with the enormous surpluses that the Chancellor has achieved.

Will the Minister explain the importance of repaying the national debt when there are pressing problems in Welsh education and health? The perception is that inroads have not been made into waiting lists, which is a missed opportunity.

The hon. Member for Cardiff, Central criticised the Liberal Democrats for holding what he regards as a hypocritical position on indirect taxation. I understand why he said that but I must clarify our policy commitments, which include a shift towards direct taxation. We would introduce a 50 per cent. tax rate for those who earned more than £100,000. Furthermore, if we could not find sufficient money to invest in education, we would increase income tax by 1p in the pound. Our strategy is to shift back towards direct taxation, although every Government must use a combination of direct and indirect taxation. That is a philosophically important debate that all parties should engage with. I am concerned that we do not have that philosophical debate often enough because we indulge in what might be regarded as point scoring. I hope that my party and others will return to that debate, but I suspect that that will occur only after the next general election.

Another criticism of the Government, which has been mentioned previously, is their silence on the euro. In simple terms, if the economy continues to grow in strength it will ultimately be brought down by the strength of the pound, which is a self-regulating factor in Europe that will price us out of the export market. Can the Minister give us a commitment that the Government are seriously committed to fast entry to the euro? I fear that we shall lose the benefits that have been created in terms of a strong economy for simple fear of what the public might say about the euro.

I was recently involved in an experiment with the BBC. After a weekend of campaigning, we convinced 58 per cent. of a group of people, 65 per cent. of whom were initially opposed to the euro, to vote for it. The Government should not be scared about the euro.

It is dangerous for Conservative Members to remind us of their poor performance by criticising the Government's economic policy. Let us remember that the last Government were willing to borrow billions upon billions of pounds that they had no prospect of paying back only to save their skins. They did not even achieve that. It was a pity that the Tories were willing to mortgage the future to protect their party.

Mr. Evans: Why does not the hon. Gentleman stand for the Labour party at the next general election? He has completely forgotten that the Liberal Democrat party—and its predecessor, the Liberal party—had a great tradition of opposition. His party is now just part of the coalition. As the hon. Member for Cardiff, Central pointed out, he cannot have it both ways. His party is famous for sitting on the fence and it is about time that they got off it.

Mr. Ipik: The hon. Gentleman's jealousy is understandable. I point out that his group in the Welsh Assembly has chosen to exclude itself from serious political debate.

The Conservatives simply do not understand the difference between pursuing one's politics competitively and treating it as war. If people want negative, hectoring, accusatory and confrontational politics, they can choose the Conservative party in Wales. However, if they want a proactive approach with members who are willing to give credit where it is due and put forward a constructive, alternative case where it is needed, they should consider other parties, especially the Liberal Democrats.

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