Pre-Budget Statement (Implications for Wales)

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The Parliamentary Under-Secretary for Wales (Mr. Don Touhig): As usual, we have had a robust and vigorous debate. It has highlighted the real merits of the package announced by my right hon. Friend the Chancellor of the Exchequer yesterday, and 14 Members have taken part in it.

Objective 1 is a golden opportunity for us, but it must not become a comfort blanket. Our long-term aim must surely be to put ourselves in a position from which we can succeed economically without such special help. That is the Government's aim.

Yesterday's package is another step towards Wales achieving long-term economic strength that will enable it to decide and shape its destiny within the United Kingdom. We have set out our priorities, as the Chancellor did yesterday. It must be abundantly clear to everyone that the Government are looking at the long term. We have a long-term ambition to develop the economy in Wales and the UK. Wales more than anywhere else should appreciate the merits of such an approach. Few parts of the UK boomed as much as Wales did when coal was king, but then it suffered the consequences of the downturn after the first world war. Few parts of the UK have experienced busts as Wales has. Our history shows dramatically how important steady, long-term economic growth is, and the measures outlined yesterday by my right hon. Friend will move us towards securing that growth.

In the short time available, I want to respond to as many hon. Members as possible. The hon. Member for Montgomeryshire rightly drew attention to the appalling record on job losses and company closures under the Tory Government. He chastised our Government for holding to the previous Government's spending limits when we took office, which surprised me because the Liberal Democrats' 1997 election manifesto called not for a two-year freeze but a five-year freeze on spending. I have a copy if he wants me to pass it on to him.

We stuck to the previous Government's spending records for two years. In that time, we dramatically reduced the national debt, gave independence to the Bank of England and set new, low inflation targets. As a result, despite the world downturn, the economy is still growing, inflation is at its lowest for a generation, we have the lowest rates of any of our major competitors and 30,000 more people are now in work in Wales than when we came into power in 1997.

Lembit Öpik: As the Under-Secretary knows, his party endlessly made jokes about the fact that for many years we supported an increase in income tax to put money into education. His point about our wanting to maintain the Tories' spending plans for five years is simply incorrect.

Mr. Touhig: I have that information here and will pass it on to the hon. Gentleman later, because I do not want to take up time by quoting from his party's manifesto.

My hon. Friend the Member for Newport, West spoke eloquently on behalf of pensioners, as he has in the House. He reminded us that they were cheated in the Tory years, and he welcomed the measures that the Government have introduced to improve their quality of life. His contribution was well informed and well argued, although I cannot agree with him on the question of restoring the link, which was a point also raised by my hon. Friend the Member for Cardiff, Central in an intervention.

My hon. Friend the Member for Newport, West should take two issues into account. The first, which was mentioned by my hon. Friend the Member for Cardiff, Central, is the affordability in the long term of restoring the link. Secondly, and more importantly, by restoring the link we would not necessarily improve the lot of the poorest pensioners. By pursuing our policy, we are helping the poorest pensioners, which must be an absolute priority.

The hon. Member for East Carmarthen and Dinefwr showed his skill in the debate, as he needed to, because his argument was so weak. He was very selective in the statistics that he used, and I commend the advice given him by my hon. Friend the Member for Cardiff, Central about statistics. He should be wary of throwing them around like confetti, as he did this morning.

The hon. Gentleman did not welcome public-private partnerships, which is in sharp contrast to the response of Plaid Cymru-run Caerphilly council. It has welcomed the money to build two new comprehensives, one of which is a Welsh-medium school. He also referred to worries about operating aids. There have been significant developments as regards operating aids in objective 1 and non-objective 1 areas. My right hon. Friend the Secretary of State described in his statement how we would help people in Wrexham and Cardiff to get into work through new projects and the new deal. We hope that those projects will be successful and will be extended throughout Wales. Yesterday, my right hon. Friend the Chancellor of the Exchequer announced important measures for tax credits for research and development. A company is being established in my constituency that will create 500 new jobs, and is committed to developing a partnership with the Ministry of Defence and the university for research and development. That is good news, and should be welcomed.

The hon. Member for East Carmarthen and Dinefwr made great play of the issue of GDP, although the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) played that down a bit at the end, clearly recognising that his hon. Friend was using facts and figures like confetti. In the lifetime of this Government, GDP in Wales has increased. That should be taken into account.

My hon. Friend the Member for Preseli Pembrokeshire made an important speech, in which he stressed how valuable small and medium-sized enterprises are to Wales, as some 140,000 Welsh firms are SMEs. The Chancellor's announcement referred to easing the way for companies to pay their VAT, and payroll services and lower business taxes will also help small companies in Wales.

My hon. Friend the Member for Cardiff, Central welcomed the extra money for the national health service and, as a former Minister responsible for health in Wales, he made an important contribution to the debate. He recognised that there should be a major debate on how we might fund the continuing expansion of the health service. He made a contribution to that debate, and I hope that he will continue to do so in the coming months.

The hon. Member for Ribble Valley made some important points about manufacturing. We should put a few facts on the record. Yes, we have had problems with manufacturing, but the best help that we can give it is to have a sound economy, based on low interest rates and low inflation. We should note that despite the 2 per cent. slowdown this year in UK manufacturing, productivity is 13 per cent. higher than it was in 1997. The hon. Gentleman also made an important point about Swansea airport. I wish the project every success; it is important for that part of the world and I am sure that it will be good for Swansea and west Wales.

My hon. Friend the Member for Vale of Glamorgan welcomed the Chancellor's statement. He also welcomed the drop in youth unemployment in his constituency and in crime, to which he referred at Welsh questions a little while ago. He made a powerful case for improving access to Cardiff airport. It is the fastest growing regional airport in the United Kingdom, but difficult to access by road or by rail. I know that he is an articulate campaigner for improvements to that airport, and I wish him every success. In addition, he made points about the important matter of investment in transport infrastructure. My right hon. Friend the Secretary of State for Transport, Local Government and the Regions has already made it clear that the Government are committed to a £30 billion investment in the rail network over the next 10 years.

My hon. Friend the Member for Caerphilly talked of the economic development strategy of the National Assembly for Wales ``A Winning Wales''. He is right that it sets ambitious targets, especially that of increasing the GDP of Wales. He also mentioned unemployment—that has been a serious problem and we have taken some knocks during the past year with regard to job losses. However, the claimant count is now down in every constituency in Wales, and there are 30,000 more people in work than there were when the Government came into office. As we have seen with Corus and other companies, it is vital that we give every help possible when job losses occur. We must paint a picture of a vibrant, exciting and growing Wales. That is not the picture painted by Plaid Cymru Members. I did not even recognise the picture of Wales that was painted by the hon. Member for East Carmarthen and Dinefwr this morning—[Interruption.] The hon. Member for Ceredigion invites me to come west. He agreed with me in a recent debate in Westminster Hall that his constituency is the second fastest growing county in Wales after Cardiff.

It is important that we give a show of confidence for the economy in Wales. When the Secretary of State and I encourage people to develop their businesses in Wales and to invest in Wales, we are not helped by members of Plaid Cymru, who paint a picture of gloom and doom, as though Wales is some economic desert or wasteland. That is not the truth. The quotes from people who support what the Chancellor said yesterday, read out by my hon. Friend the Member for Caerphilly, reflect more accurately the views of the people of Wales than does the party that wants to tear Wales out from the rest of the United Kingdom. The thrust of the argument put by the hon. Member for East Carmarthen and Dinefwr was that they want two things from the United Kingdom—independence and money. That is not the way forward.

The hon. Member for Brecon and Radnorshire made an important point about the difficulties that face the self-employed in securing good pensions for themselves—that must be taken on board. He also mentioned unemployment. Unemployment in his constituency is, thankfully, quite low—it is 2.8 per cent., which is very good and much lower than it is in many parts of Wales. I do not agree that insufficient has been done to help the economy where it has been hit by foot and mouth disease. The Government have committed £2.7 billion to tackling the problem, as the Chancellor stated yesterday. He made it clear that the money is there—it would have been spent on other things, but the crisis has occurred and the money is being used to help areas hit by foot and mouth. Constituents in the hon. Gentleman's part of the world have also benefited from a £156 million agrimonetary compensation scheme.

The picture is not so damning as the hon. Gentleman paints it. There are problems, but by working in partnership with our colleagues in the Assembly, we are beginning to tackle them. My hon. Friend the Member for Monmouth stressed the value of taking measures to combat social exclusion—it is important that we do so.

We have had a very good debate. If I can take a cue from what the Chancellor said yesterday, the next big issue that we will debate as a country will be how we can sustain, fund and develop the NHS. We are prepared to accept the consequences of trying to expand it and meet the additional demands that it faces.

The value of this Committee is that it provides an opportunity for the 40 Members of Parliament representing Welsh constituencies to come together and to articulate our hopes, aspirations and desires for the people of Wales. Wales does not end at the Severn bridge. This place is a vital part of the legislature and democracy, and long may that be so. I commend the Chancellor's statement to the Committee.

Question put and agreed to.


    That the Committee has considered the matter of the Pre-Budget Statement and its implications for Wales.

        Committee rose at Six o'clock.

The following Members attended the Committee:
Griffiths, Mr. Win (Chairman)
Ainger, Mr.
Brennan, Kevin
David, Mr.
Davies, Mr. Denzil
Edwards, Mr.
Evans, Mr.
Flynn, Paul
Havard, Mr.
Howarth, Mr. Alan
Jones, Mr. Jon Owen
Knight, Mr. Greg
Lawrence, Mrs. Jackie
Llwyd, Mr.
Murphy, Mr. Paul
Ipik, Lembit
Owen, Albert
Powell, Sir Raymond
Price, Adam
Smith, Mr. John
Smith, Mr. Llew
Tami, Mark
Thomas, Gareth
Thomas, Mr. Simon
Touhig, Mr.
Williams, Mr. Alan
Williams, Hywel
Williams, Mr. Roger

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Prepared 28 November 2001