Pre-Budget Statement (Implications for Wales)

[back to previous text]

The Chairman: I remind the Committee that seven or eight hon. Members wish to speak. I ask them to remember that when making their contributions to the debate.

4.28 pm

Mr. Jon Owen Jones (Cardiff, Central): I shall not follow the same line as my hon. Friend the Member for Preseli Pembrokeshire (Mrs. Lawrence), except to say that she encapsulated very neatly the meaning of our devolution settlement and our aspirations to see it work.

I, too, welcome yesterday's pre-Budget statement, particularly the Government's commitment to deliver £1 billion to the health service in the United Kingdom and the consequential £49 million that I hope will be used for health services in Wales. I was also pleased about the publication of the Wanless report, which I have been reading assiduously.

I am a firm adherent of new Labour's oft-stated philosophy. We believe in what works—in other words, that our policy should be based on evidence and not dogma. That evidence must be collated, researched, tested, independently assessed, and, whether critical or embarrassing, it should be openly presented and debated to allow us better to deliver improved policies and services.

The Wanless report is a good start to the vital process of improving the health service. I have not had time to read the report in detail, but the Prime Minister referred to it in Prime Minister's questions only an hour ago. He referred to three of the four mechanisms that it identifies for funding the health services of most countries similar to ours—general taxation, social insurance and private insurance. The fourth, which is out-of-pocket payments made by patients for the use of particular parts of the health service, is used quite a lot in some countries but not here.

The report compares our spending with that of other countries. In Britain, we spend about £1,100 per person on our health service, which is about 6.8 per cent. of GDP. In Wales, we spend considerably more than that per capita. The average of the countries compared in the report is a good deal more again; for instance, it is about 8 per cent. of GPD in France and Spain, which is roughly another £200 per person.

The Prime Minister said something else of interest in Prime Minister's questions—I do not know if he meant to—when he reiterated his aim to ensure that we meet the average levels of expenditure of other European countries by 2005, which is three years from now. My rough calculation tells me that that will mean finding an extra £600 per taxpayer within the next four years. That change will not be popular in all quarters. The interim report does not deal with whether the general public will accept paying that sort of increase in taxation. I do not know whether the full report will discuss that, but I am sure that that important consideration will be occupying the Chancellor's mind, if not the Prime Minister's, as I speak.

The report also deals with the health service changing to meet the requirements of modern society, which demands far more of the service than it did when it was created in 1945. We demand far more choice. A one-size-fits-all health service will not be seen as modern in the way that consumers of services usually expect. Should charges be made for some services? What services does the NHS provide that are not intrinsically clinical? For example, some people might want television sets next to their beds. Should they be provided through taxation for the NHS? A year ago, my two-year-old daughter was recovering from pneumonia. A television next to her bed would have been helpful. I could have even argued that it was a clinical necessity. However, if I were ill in hospital, the taxpayer should not pay for me to have a television. Some of my colleagues—not me, I am a technophobe—might want a computer next to the bed. They might want to conduct business in hospital. That is reasonable, but it should not be paid for out of taxation. How should we provide choice? Should there be charges in the system? To carry on as before will not meet people's expectations of the health service in future.

The report provides evidence. Derek Wanless and the other people who prepared it will provide us with more evidence about how the health service should develop. The Western Mail published more evidence today. The report was titled ``Damning report into hospital failing'', which is how sub-editors like to write headlines. The article details a report of the Comptroller and Auditor General into hospital building management:

    ``In a comprehensive analysis of the . . . NHS estate, Auditor General Sir John Bourn also found that a fifth of the estate is underused and 3 per cent. is simply empty. According to Sir John, better management of this space could reduce running costs across Wales by around £25m a year—enough to build an entirely new hospital.''

It is vital that independent organisations audit and examine the use of public money so that we can learn from that evidence, no matter how embarrassing it is, and improve services.

On a more positive note for Wales, about six or seven weeks ago, the CAG published a report that stated that accident and emergency waits in London were the worst in the United Kingdom—some waits lasted six or seven hours—but that, in Wales, they were the shortest. That report prompted an immediate response from my right hon. Friend the Secretary of State for Health and I am sure that services will improve.

During this morning's sitting, I drew the attention of my right hon. Friend the Secretary of State for Wales to an independent report on local authorities' service delivery. In case you are tempted to stop me, Mr. Griffiths, I remind you that the Welsh Assembly is entitled to use £49 million for any services. Perhaps it will decide to spend that on local government. The report refers to a worrying performance gap. Of the services that were considered in Wales, it is estimated that only 33 per cent., or a third, were likely to improve as a result of plans that local authorities have developed. When the same system was used in England, it was found that 63 per cent., or two thirds, of local authority services were likely to improve. That is interesting and worrying.

There have been different responses to the report. Local government in Torfaen, the Secretary of State's constituency, reacted most positively in its response to a questionnaire from the Welsh Local Government Association:

    ``We are happy to share our own reflections on the first year of Best Value as a statutory duty through the WLGA `First Year Stocktake' questionnaire. Our general view is that Best Value remains an important driver of change and of service improvement. There have of course been some problems in implementing the new framework, and we share the frustrations and irritations that have clearly prompted this questionnaire. However, the view of the political leadership of the authority, echoed by our own experience as officers, is that we are determined to make this work, and that we would not wish to throw the baby out with the bathwater.''

I have a message from the Whip, who indicates that I should make my other points as briefly as I can.

The cultural problem that affects services in parts of Wales must be addressed by Government, whether in this place or in the Welsh Assembly. A MORI survey of local government officers and members in England and Wales reported a wide range of views about the audit. I had planned to read out several of them but will not.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy): Keep it for tomorrow.

Mr. Jones: These matters are important to Plaid Cymru, as well as to everyone else. We are all responsible for service delivery; it is not simply that we need more money. Money helps, but we also have responsibility for ensuring that the money is spent wisely and effectively. The report highlighted another distinction:

    ``A startling difference was seen between Welsh and English respondents to this question. Respondents from Welsh local authorities voiced the difficulties they had found complying with the statutory requirements for best value, 76% of respondents expressing difficulty''.

In England, 37 per cent. expressed difficulty with exactly the same system. Why do Welsh local authorities find the system more difficult than English authorities? Perhaps part of the answer is given by a response to another question in the survey, which was asked of officers but not members: how easy is it to get direction and support from members? In Wales, 38 per cent. said that it was easy; the figure for England was 51 per cent.

For whatever reason, there is a clear difference in attitude between some local authorities in Wales and the majority of local authorities in England. That is a worry, because the system is the same. If we reform the system—by all means, make it less bureaucratic—let us not take a position in Wales that, because difficult issues have been raised by an independent audit, the response should be to drop out of the audit, have nothing to do with it and set up our own system, which will not be so embarrassing. If we went down that road, we would be moving away from efficient public service delivery. Some parties might be happy with that, because they could carry on asking for more money without having to pay attention to how efficiently it is being used.

4.45 pm

Mr. Nigel Evans (Ribble Valley): First, I should declare that I have a retail business in Swansea that employs eight people. Secondly—I think that I forgot to do this earlier—I thank the Secretary of State for giving me advance notice of his statement. It is his usual courtesy, and I am grateful for that. I, at least, intend to stick to the Labour party Whip's request and speak for only 10 minutes. I will cover four important topics, which are manufacturing in Wales, Swansea airport, the national health service and agriculture. I hope that the Secretary of State will take my comments on board.

We know that manufacturing in Wales is important. More people are employed in it as a percentage of the population than in the rest of the UK and it forms more of our gross domestic product: 27 per cent. in Wales compared with 20 per cent. in the rest of the UK. Therefore, all hon. Members and everyone involved in politics and business in Wales should be concerned by the large reduction in the manufacturing base in Wales. In December 1997, 218,000 people were employed in it, but by June 2001 that was down to 197,000. Indeed, it was reported yesterday that 113 workers at the Meridian Foods plant in north Wales would lose their jobs. The report said also that the announcement brought the job losses in the region to approximately 1,000 in two months. It mentioned 436 job losses at Corning in Deeside, 189 at Alcoa, 124 at Trefn, and 90 at Burlington toiletries. Manufacturing is important, and we should all be concerned by those job losses.

We should also be concerned about the amount of rules and regulations that are heaped on our businesses. I am not the biggest fan of the European Union, but when, after surveying 4,000 companies throughout Europe, it states that Britain is the least competitive EU member, with more rules and regulations than any other country, we should listen carefully. It was estimated that there were more than 3,000 extra rules and regulations at an annual cost of £10 billion. Wales will have more than its fair share. One costly example is the climate change levy and we must examine how that will affect manufacturing in Wales.

I mentioned this earlier to the Secretary of State, but another important matter is the supplementary business rate. He could give me no assurances on it, because he said that it is the responsibility of the National Assembly for Wales, but I hope that he will at least make representations. The Confederation of British Industry in Wales stated:

    ``The differing transitional arrangements for business rates in Wales compared to England already places Wales at a competitive disadvantage. The National Assembly would send the wrong message to the business community and investors if it were to seek primary powers to levy a supplementary rate on business. This must not be pursued.''

I do not want businesses in Wales clobbered or put at a competitive disadvantage to other parts of the United Kingdom. The Secretary of State must lobby to ensure that that does not happen.

Several Members spoke about the importance of the public services. They are vital and I agree with the hon. Member for Cardiff, Central (Mr. Jones) that it is not just the amount of money that is spent, but how it is spent. It must be effectively spent and the audit report said that £25 million could be saved in Wales if there was better management of our hospital estates. That means £25 million could be saved, not to go back to the Treasury, but to be funnelled back into the health service to provide a better, more efficient service for the people of Wales.

We must examine how the money is created and we need good and vibrant businesses in Wales to create wealth. We know that the United States is officially in recession, that there was an economic downturn there before 11 September and that it will be worse post-11 September. The percentage of gross domestic product for businesses in Wales is already forecast to decline and the CBI business trend survey talks about Wales operating at 41 per cent. below capacity. Orders are said to be declining by 19 per cent. and business confidence is down. In that light, we must determine what we can do to support Wales.

The Secretary of State said that many powers now reside with the National Assembly. Is it not time that someone was based there as an economic development secretary—someone separate from the leader, who can concentrate on providing assistance to businesses in Wales? The two jobs should be separated. Will the Secretary of State talk to Rhodri Morgan and explain the importance of supporting Welsh businesses in that way? It is useless having two jobs, and it is useless being besotted with the name of the Welsh Assembly rather than with businesses in Wales. It is important to make effective use of taxpayers' money.

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 28 November 2001