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Mr. Chris Ruane (Vale of Clwyd): The hon. Gentleman mentioned the need for incoming companies to be attracted to Wales. What does he think of the comment made by Seimon Glyn, a Plaid Cymru councillor, who said that the English are a drain on Welsh resources? Does he think that that comment will attract or repel inward investors?
Perhaps Labour Members should look a bit nearer home. A serving Member of the House has been terribly abusive to incomers to north Wales, so let us not start insulting each other across the House on that subject--there is nothing in it for the Labour party.
Mr. Alan W. Williams (East Carmarthen and Dinefwr): The hon. Gentleman's main theory about the economy is that Wales is being treated unfavourably and is at the bottom of various league tables. I understand his argument, but will he concede that in his constituency unemployment has fallen by a third from 1,640 in December 1996 to 1,051 at present and that there have been parallel falls in unemployment throughout Wales? Despite the picture of doom and gloom that he is painting, the job situation in Wales, including in traditional industries, the rural economy and south Wales, is pretty good.
Mr. Llwyd: Modesty prevents me from saying why unemployment has fallen in Meirionnydd Nant Conwy, but I can assure the hon. Gentleman that the constituency has an effective Member of Parliament. If he were to listen to my contribution, he would realise that I am not whingeing but talking about what could be done to improve various areas of the UK. I say good luck to the south-east, but this is not a one-size-fits-all situation, as the Department of Trade and Industry appears to believe. I give due credit to the Government because unemployment has fallen, and of course I am pleased about that. However, manufacturing jobs have been lost, and we need to take our eye off one ball and keep it on another. We must ensure that we have a comprehensive regional approach to the problem, and that is what I am developing. I agree with the hon. Gentleman about the figures that he quoted.
The Welsh Affairs Committee made a recommendation about regional variations in tax, and I hope that the Government will respond in due course. Happily, Plaid Cymru policy accords with that recommendation.
The Secretary of State for Wales and I have fallen out drastically about what he said or did not say in answer to a question that I asked or did not ask about the vexed matter of the Barnett formula. The Committee concludes that the Barnett formula needs reconsidering and to be made more needs based. Lord Barnett said:
A preliminary glance at the figures shows that Wales has nothing to fear from a needs-based assessment as long as it is impartially conducted. Wales does not have to depend on the Barnett formula in its current form and would do better from a fairly calculated Barnett mark 2. We hope that the Government will take the initiative and develop a new formula after the next general election. There will be increasing pressure to reconsider an outmoded mechanism, which has worked well in the past, but should be re-examined after such a long time.
The Barnett formula constitutes a mechanistic approach and does not take account of the changing or current needs of Wales. The National Assembly has had much to say about that. It behoves us as Members of Parliament of all parties to chip in on the debate, further it, discuss it with our Assembly colleagues and try to devise a formula that is more needs based. I am therefore happy to endorse the Select Committee's recommendation that the Barnett formula should be reviewed or replaced by a needs-based system. Indeed, that is self-evident, given the huge disparity in GDP between England and Wales.
The hon. Gentleman said that pensioners had a raw deal last year. Will he acknowledge that they had the biggest increase in 25 years this year? They will get rises beyond the level of earnings and that of inflation. When will he produce the evidence to support his case that there is growing poverty in Wales?
Mr. Llwyd: I do not have to look far: the GDP of Wales is decreasing. Sometimes the hon. Gentleman is beset by prejudice. He described my remarks as jocular. They are not. He might find the subject funny, but I do not. It is serious, and other Select Committee members are fully aware of the evidence that was taken in the past 12 months. We know that poverty in Wales is increasing. Yes, the Government are attempting to address the problem, but GDP in Wales goes ever downward. Let us not beat about that bush.
When the Government were elected, the cry of "Things can only get better" was uttered ad nauseam. Things have not got better for students, schools, people on benefits--such as those who have been taken off invalidity benefit--coal miners, members of the farming community, rural dwellers or Welsh steelmakers. Things have, however, got even better for the well off. That is a grave indictment of the new Labour Government and their priorities.