INCREASE OF FINANCIAL LIMIT

HC Deb 29 November 1990 vol 181 cc1028-58

4.9 pm

The Minister of State, Welsh Office (Sir Wyn Roberts)

I beg to move, That the clause stand part of the Bill.

The purpose of this single-clause Bill is to raise the present financial limit of the Development Board for Rural Wales from £100 million to £175 million.

During our Second Reading debate last night, there appeared to be some confusion in hon. Member's minds about the precise meaning of the words "financial limit". The function of the financial limit is to limit the public funding of the board so that the scale and nature of its activities can be re-examined by Parliament at regular intervals. The limit has been increased on two occasions—most recently in 1981 to £100 million under section 2(3) of the Industry Act 1981, which amended section 12(2) of the Development of Rural Wales Act 1976.

I should explain that section 12(2) of the 1976 Act set a limit of £25 million. That was raised to £40 million in 1980 and increased to its current level of £100 million by the Industry Act 1981. The financial limit established by the 1981 Act has remained in place by virtue of the fact that some £33 million of the board's national loans fund debt, which at one time counted towards the limit, was written off in 1986. Similar action was taken at the same time in respect of the English new town authorities.

At the current rate of expenditure, the financial limit of £100 million will be reached during the financial year 1991–92. Board expenditure counted against this limit comprises grant in aid, housing subsidies, advances from the national loans fund and other borrowing to finance the board's activities.

When raising a financial limit, it is customary to provide an increase that should suffice for five years. We therefore propose to raise the DBRW's limit from £100 million to £175 million.

The Bill specifies a single new limit rather than a two-stage limit with power to implement the higher figure by affirmative order. The latter approach was adopted in the Development of Rural Wales Act 1976, but the Industry Act 1981 removed the higher limit in the 1976 Act on the ground that further financial needs should be provided for in primary legislation rather than by order. The Government regard it is desirable to maintain consistency in this matter.

The main activities of the board are to provide financial assistance to business in the form of grants and loans, to provide sites and premises for industry, to assist in the marketing of the area for tourism and industrial purposes and in product marketing, and to provide advisory services and training. Assistance is available to enterprise in the land, food, craft, manufacturing, tourism and science sectors. In addition to its economic development activities, the development board supports a wide range of social development projects, including the provision of support for the Welsh language and its culture and for the construction of houses for letting under the New Towns Act 1965 as amended in 1981.

Mr. Barry Jones (Alyn and Deeside)

The Minister is kindly fleshing out some of the matters that we discussed last night. Let me ask him a question related to the announcement by the Secretary of State yesterday. He may be able to answer it now. If not, perhaps he will ensure that it is answered later. Is the extra £1 million for the special rural action programme in 1991–92 included in the public expenditure White Paper for 1990 and, if so, under what head?

Sir Wyn Roberts

I shall certainly try to clarify that point. Last night my right hon. Friend the Secretary of State was speaking about the new money—Opposition Members are fond of talking about new money—amounting to £1.4 million which is to be available on top of this year's figure for the board in the coming year.

Dr. Dafydd Elis Thomas (Meirionnydd Nant Conwy)

We agreed all this last night. My advisers agreed with the Secretary of State's advisers that it was new money. The official Opposition could not work it out.

4.15 pm

Sir Wyn Roberts

I am grateful to the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas). It is no wonder that we are such good neighbours. If it will bear repeating, there has been an increase in Welsh Office support for the Development Board for Rural Wales from £.12.7 million to £14.1 million. I hope that that at least makes everything clear. There is no doubt that the development board has achieved considerable success in many of its activities. On Second Reading we covered many matters both inside and outside the board's remit.

There are no financial or manpower implications in the Bill. It will simply provide cover for the board's receipt of Government funds and for its borrowing. No change will be made to the board's powers and there are no implications for the European Community.

Mr. Barry Jones

Last night the Secretary of State skirted rather gingerly over the problem of housing. There is some classic evidence of the build-up of an intolerable situation. The problem is exacerbated by the emergence of the poll tax. For instance, in Brecon there are 601 applicants on the housing waiting list. On 3 October 1980 the housing stock was 3,962. In 1990 it is only 2,660, which is a 35 per cent. reduction. The others have been sold under the right-to-buy scheme. Up to 50 per cent. of housing stock where the right to buy applies has been sold.

The sale of council houses has been quicker in villages. There are some villages in which 100 per cent. of the stock has been sold. One example in the area is Tretower. It also has 55 housing applications.

Some of the houses that have been bought under the right-to-buy scheme are now being resold as holiday homes. If housing associations built 50 new properties a year, it would still take 12 years to house those presently on the waiting list. At present rates of new build becoming available, it will take 18 years to house those on the waiting list.

Mr. Richard Livsey (Brecon and Radnor)

The hon. Gentleman is referring to my constituency. I have not heard him mention development board houses. In Tretower almost half the conventional housing stock are second homes. There are no development board houses in Tretower. Does the hon. Gentleman know how many DBRW houses there are in Brecknock? There is an inadequate number. The hon. Gentleman is talking about local government housing stock. He is quite right. Fifty per cent. have been sold off, but we need to stretch the remit of the DBRW housing stock to give it more flexibility.

Mr. Jones

I am certainly more than willing to listen to the observations of the hon. Gentleman, who knows the area well.

The local authority says that if it could use all capital receipts, it could build 120 new houses. There is little chance of young people who live locally owning their own home, even with a 20 per cent. discount. I am told, and evidence has been submitted to the Select Committee, that in Crickhowell 61 per cent. of the houses have been sold out of a total of 216 and that 84 houses remain. It will be lucky if one house a year is available to be reallocated to people on the waiting list. Apparently there are six homeless families in temporary accommodation and four potentially homeless families in the area.

Housing in rural Wales is an issue of prime importance. Everyone is aware of the problems and of the impact on young marrieds and ordinary people who are really up against it. It is relevant to put it to Ministers that they have not yet tackled the problem effectively. Many tenants do not qualify for housing benefit because of restrictions. I am told that there is no prospect of any new-build accommodation in the borough, that credit approvals are not sufficient and that the authority still needs capital receipts for improvements and repairs.

The health authority in the area previously had houses to rent. That is no longer the case because it has sold them off. It is also said that Powys county authority has a policy of selling its properties in the same way.

The conclusion of the minutes of evidence to the Select Committee was, first, that there was a great need for affordable housing for both rent and low-cost purchase—a need which has increased—and, secondly, that the supply of both rented and low-cost housing had diminished. Thirdly, it was concluded that the Tai Cymru rural initiative and the provision of free or reduced-value land either from the local authority or through the planning process would help, but that the key must be recognition of the need to provide funding by subsidy to provide new dwellings.

I hope that Ministers will respond to the serious problem of housing. It is a problem which they have not solved and to which they did not appear to address themselves during yesterday's proceedings. They left the problem largely to the board, which has its problems.

The Secretary of State's speech yesterday contained three essential points. First, he endorsed the board's strategy. Secondly, he acknowledged that the board's finances had been neglected. He bowed to pressure and stumped up the extra £1 million. He said that it was new money. It was gratefully received. Thirdly, the Minister ducked entirely the chief problem in rural Wales today—agriculture. Nowhere in the Secretary of State's speech did I hear a sense of either strategy or urgency. The National Economic Development Council recently published a report entitled "Work in the Countryside", which predicted a fall of over 9 per cent. in the number of people engaged in agriculture in the United Kingdom during the next 10 years. It estimated that that would mean a loss of over 3,000 jobs in Wales. Some say that the number will be between 3,000 and 7,500. Already Ministers know and I know that the National Farmers Union in Wales is beating tracks to the door of the Secretary of State to tell him that it is deeply worried. No one can gainsay that. There is a sense of crisis in farming, particularly in the upland communities. Yesterday we did not have a response to that problem.

In Scotland a Minister for rural affairs has been appointed. Has such an appointment been considered by the Welsh Office? There is no doubt in my mind that the Secretary of State has a fine professional staff at his disposal. They are good. Some I know well and some I have worked with. Are there enough of them? Given the challenge facing the rural areas of Wales is not there a case for Ministers to devise a strategy and to come forward with some proposals that will show the people of Wales, the upland communities and those who live in rural Wales that the Government mean business? I want Ministers to consider seriously some initiatives. As I said last night, there is a call for more leadership in this sphere.

Mr. Geraint Howells (Ceredigion and Pembroke, North)

If the clay comes when the hon. Gentleman holds the reins at the Welsh Office, will agriculture be included in the remit of the Development Board for Rural Wales? Can he give the farming communities and the people of Wales that assurance?

Mr. Jones

I will not make policy on the hoof. The hon. Gentleman knows me too well for that. Nevertheless, I take the emphasis of his intervention. He knows that soon his party, mine and others will have to present their manifestos to the electorate. That is the moment of truth for Ministers as well as for Opposition parties.

I draw to the attention of Ministers the existence of a report by the Institute of Welsh Affairs. I commend it to them. It deals with the impact of inward migration, low birth rates, some heavy unemployment, low incomes and housing demand, which will be increasingly heavy towards the end of the century. It says that a strategy is needed. It wants plans to cope with the significant levels of housing demand. It says that priority should be given to raising low incomes. Ministers should study the report and I hope that it will help them to come to conclusions and to take initiatives.

Will the Minister of State promise to read the recent speech in another place of Baroness White of Rhyrnney, that distinguished ex-public servant who is respected and admired? The Minister will know that some years ago Lady White held the post that he now holds. She may be right to doubt whether Ministers can seriously influence Whitehall and European institutions about rural Wales. My conclusion is that Ministers do not have sufficient influence. They cannot. They are showing that they are overstretched and they may be showing that they are tired. I am saying that they are not giving sufficient leadership in this sphere, though the Minister must not take that as too serious a thrust today.

We recognise the importance of the increase in the financial limit to allow the current plans for funding the Development Board for Rural Wales to go ahead. That is agreed. We also recognise that an increase in the financial limit does not in itself provide any guide to the future level of expenditure for Government funding.

We are greatly worried by the Government's record on financial support to the development board. Its gross expenditure has fallen dramatically in real terms over the past decade, despite growing social and economic challenges in mid-Wales. Gross expenditure has fallen by nearly 15 per cent. in real terms since 1978–79. According to the 1990 public expenditure White Paper, gross expenditure, after taking inflation into account, is planned to fall by 8 per cent. this year. That is an example of short-sighted penny-pinching at the expense of the people of rural Wales.

Yesterday, I heard the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) express concern about Trawsfynydd. I appreciated why he felt it necessary to make those remarks, but the Minister seemed laid back in his response. When the nuclear power station closes, the loss of high status jobs there will have serious consequences. Now is the time for the Government to plan for the future of Trawsfynydd. Will the Minister consider setting up a task force, or at any rate doing something now, long before the closure takes place? The Government should be preparing to take action now, rather than waiting until the closure, and only then giving the impression of animation and preparation. The consequences of closure will be considerable. The Minister must make preparations now.

Trawsfynydd lies amid some wondrous scenery, but not for miles around is there certainty of alternative work. A task force or similar body could consider also the needs of Blaenau Ffestiniog, which is still struggling to come to terms with the consequences of the loss of its staple industry, slate.

4.30 pm

Dr. Thomas

In presenting the case for Trawsfynydd, it would be helpful for everybody if the hon. Gentleman would spell out in greater detail what he would do were he sitting on the Government Front Bench.

Mr. Jones

The former Labour Government had a good record in these matters. The development agency and the development board stand ready to help communities such as Trawsfynydd and Blaenau Ffestiniog. I am urging the Government to show intiative and to give leadership. Matters in rural Wales are not as good as the Government imply. A town such as Blaenau Ffestiniog, at nearly 1,000 ft above sea level, with about 60 in of rain a year, isolated and with poor communications, requires urgent action. The same applies to other communities in rural Wales.

Rural Wales has been let down by the Government, with the freezing of child benefit, the breaking of the link between pensions and earnings, the cut in housing benefit, soaring mortgate costs, the hated poll tax, the loss of jobs in the Laura Ashley company and the plight of hill farmers. It is fair to say that rural Wales has had enough of the Conservatives, who do not care. A Labour Government will be elected and will restore the fortunes of rural Wales.

Mr. Livsey

There is little that I wish to say because much was said last night, but a number of points come to mind as a result of one or two matters mentioned this afternoon.

The Bill is narrowly drawn. I had hoped to be tabling an amendment now to increase by statutory instrument the funding available to the development board, but I am told that the Bill is so tightly drawn that we cannot table amendments to that effect. It would be good if in future one were able to do that. I hope that that proposal will be considered.

Sir Wyn Roberts

I am not sure whether the hon. Gentleman heard my opening remarks when I explained the two-tier system of raising the financial limit which pertained before 1981. It was decided that it would be good practice to require primary legislation to raise the limit, rather than being able to do so by order. I think that the hon. Gentleman and the rest of the House will agree that what we now propose—using primary legislation—is better practice than that previously pursued.

Mr. Livsey

The Minister explains the position precisely. Although we can use that procedure and have a debate, the matter is almost a fait accompli; we cannot change the board's remit.

Many speeches have been made outlining the desirability of giving the board other functions, such as those relating to agriculture, which are important. I hope that in future legislation can be brought in to give the development board more wide-ranging functions. Although we have had a sympathetic ear from the Secretary of State and the Minister, we cannot change the board's remit to include agriculture. We should have that opportunity in the future.

The Minister also mentioned tourism, over which the development board has only limited powers. If this had been a wider-ranging debate, I should have liked to table an amendment to give the board clearer functions in relation to tourism. I understand that those powers are fairly limited at present. In future, will the development board be able to assist in building hotels, which could be leased to local entrepreneurs in various parts of Wales to raise the standard of tourist accommodation? That subject could do with our attention. Tourism is a massive industry in rural Wales and should be stimulated. I believe that the development board might well have the ability to do that.

The hon. Member for Alyn and Deeside (Mr. Jones) referred to housing, particularly in my constituency. The problems involved when young people try to find housing for rent are legion. The Government have ceased giving local authorities the ability to build houses for rent. Mid-Wales does not have an adequate housing association to provide sufficient housing to meet the demand. There is a Mid Wales housing association but it is extremely small, can obtain few resources and is thus unable to build adequate housing.

One of the development board's functions is to provide houses for key workers but, as I said last night, those houses are often empty for long periods in districts where the demand for rented housing is very great. It seems unsatisfactory that housing for key workers should be empty. That accommodation does not amount to a great deal of housing, and is but a drop in the ocean compared with the demand, yet even those few houses are empty.

I should like more flexibility. The development board should be able to let some of its housing not necessarily to people coming in from outside the area but to people working in the area. There are families in my constituency who have to live with their parents in council houses because the council housing stock has been largely sold off. Sometimes parents and a son and daughter-in-law and perhaps two or three children have to live in a three-bedroomed council house. That is unsatisfactory, especially since those people work in the local economy. The development board, with the Welsh Office, should be able to create a larger housing association in mid-Wales—if that is the way the Government want to finance housing for rent—to try to satisfy the insatiable demand for housing.

This enormous problem is causing the outward migration of some of our youngest and most able people.

Mr. Alan W. Williams (Carmarthen)

Like my colleagues, I welcome the increase in the borrowing limit from £100 million to £175 million and the extra finance—it will rise from £12.7 million to £14.1 million.

The annual report of the development board and the evidence that it has presented from time to time to the Select Committee on Welsh Affairs show that it is doing excellent work. Both the Development Board for Rural Wales and the Welsh Development Agency are interventionist agencies set up to stimulate new jobs—

Mr. Paul Murphy (Torfaen)

By a Labour Government.

Mr. Williams

Indeed. The agency was set up to stimulate new jobs and enterprises and to provide a stronger backbone in rural areas.

Last night we heard the Secretary of State say that the development board's budget of £12 million a year serves to generate more than 1,000 new jobs or to safeguard old ones. That works out at about £10,000 per job, which is remarkably good value for money—the more so since the multiplier effect means that other jobs live off the salaries created by the new jobs.

Unfortunately, my constituency, despite being the second largest in Wales and very rural, is not included in the board's boundaries. The development board covers 40 per cent. of Wales, but large parts of Gwynedd, Clwyd and Dyfed are not included. My predecessor as Member for Carmarthen, Dr. Roger Thomas, felt strongly about this. I remember going on a trip in the mid-1980s with the then shadow Secretary of State for Wales, Alec Jones, who was the hon. Member for Rhondda, and my hon. Friend the Member for Swansea, East (Mr. Anderson). We went to Newcastle Emlyn to point out to the shadow Secretary of State that Carmarthen district and the Dinefwr borough exhibit similar geographical features and should be included. Why is Lampeter included, but not Llanybydder? Why is Llandysul included, but not Newcastle Emlyn? Why are not Llandeilo and Llandovery included when Llandrindod and Llanwrtyd are? These are all similar towns, but, by being excluded from the areas of the development board, they are missing out on some of the benefits it can offer.

The WDA does excellent work in our area, but the development board has a broader remit. It is allowed to spend more of its money on social improvements and tourism facilities. I should like the board to have both more money and broader boundaries. I hope that any future Labour Government—and even this Government—will consider redrawing those boundaries.

4.45 pm

In the past 10 years the problems of rural areas have become immeasurably worse, as my hon. Friend the Member for Alyn and Deeside (Mr. Jones) said earlier. Rural depopulation presents a severe problem. Young people are leaving our countryside and looking for work in the towns—sometimes not even in Wales but across the border.

We hear a great deal about inward migration in Welsh-speaking Wales, but that is only the other side of the coin. I was brought up in the countryside outside Carmarthen where it was taken almost as a fact of life in the 1950s and 1960s that small farms had to amalgamate, that jobs would be lost and that people would move into the towns. The Welsh language suffered as a result of that emigration. This downhill slide became a haemorrhage during the recession of 1979 –81, when masses of manufacturing jobs were lost in rural areas and unemployment reached a peak of more than 20 per cent. in Dyfed. Between 1983 and 1988 unemployment there averaged 16 per cent.—that is what led to the haemorrhage of young people.

These people have been replaced and our population is growing, but it is different. I welcome retired people and people with new skills in craft industries, but that sort of population brings its own problems with it, particularly for the Welsh language.

Government policies in the past 10 years have hit rural areas disproportionately hard. There have been cuts in public spending on transport and road building. Not enough has been invested in road improvements or the surface of roads. There are terrible housing shortages. Rural villages contain run-down, unfit housing and there are acute problems of homelessness. We need far more public spending on housing, as the hon. Member for Brecon and Radnor (Mr. Livsey) said.

The poll tax has hit rural areas disproportionately hard, too. Small villages have few services, so they generally have low rateable values and contribute less to local government finance. In a sense the poll tax subsidises towns and penalises rural inhabitants. A gentleman in Llansawel wrote to me 12 months ago pointing out that his rates bill was just £80. He is a pensioner and he and his wife now have to pay poll tax of well over £300—yet they will enjoy no new services in their remote rural village. They have a very low income, but it is not low enough to qualify for a rebate.

Last night, several hon. Members mentioned low pay. The problem is at its worst in rural areas. I have here some information from the Low Pay Unit—

The Second Deputy Chairman of Ways and Means (Miss Betty Boothroyd)

Order. I hesitate to interrupt the hon. Gentleman, but last night's was a Second Reading debate and therefore much wider. We are now on clause stand part, and low pay does not relate to the clause. I hope that the hon. Gentleman will make his remarks relevant.

Mr. Williams

Thank you, Miss Boothroyd. I stand corrected. I was, however, trying not only to make general points about rural areas, pertaining to my constituency in particular, but to explain how the development board's work helps to counter the problems and why it should be given more money.

Average male earnings in my county—Dyfed—are lower than those in any other British county and the Government have, as a matter of policy, halved the staff of the wages inspectorate in the past 10 years. More interventionist policies are needed: the Government must take much more direct action to help rural areas.

Spending on roads has also been cut. My constituency desperately needs a road linking the M4 to Ceredigion; as the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) will know, the road to Llandyssul, Aberaeron and Aberystwyth has hardly been improved at all in the past few years.

I have already mentioned the mass emigration of young people from Wales, and the inward migration which is proceeding apace. Although I welcome the arrival of people who contribute to the local economy and enrich the life of the area, it has caused serious problems for the Welsh language. I am, of course, very pleased when new arrivals choose to learn Welsh, but the only real way of retaining the language is to keep young people in our Welsh-speaking heartlands.

Dr. Thomas

I do not wish to stray out of order, and I am well aware that the development board does not spend money on an education policy connected with language; it does, however, spend money on a bilingual initiative programme to develop enterprise and business expertise. Does the hon. Gentleman agree that that programme would be supported much more effectively in Dyfed and other parts of mid-Wales if he and some of his hon. Friends desisted from undermining the local education authority policy for bilingual teaching there?

Mr. Williams

I am not undermining it; I am seeking—I fear that I am out of order now—to modify it to allow room for choice, and equal opportunities for the Welsh and English languages in rural schools.

I welcome the increased allocations announced in the Bill, but far more needs to be done. Rural areas have had a very rough time over the past 10 years, but, unfortunately, there will need to be a change of Government before there is a change in their fortunes.

Mr. Paul Flynn (Newport, West)

Let me comment briefly on the latter remarks of my hon. Friend the Member for Carmarthen (Mr. Williams): obviously they were in order, Miss Boothroyd, or you would not have allowed him to proceed. Let me tell my hon. Friend—as gently as possible—that some of the recent controversy in Carmarthen has been very destructive. Communities have been divided quite unnecessarily on the subject of the language. My hon. Friend may realise in retrospect that emotive words like "Stalinist" are not appropriate when applied to Dyfed county council.

We all realise how explosive the language issue is in Wales. Welshmen are not divided on religious or ethnic grounds, but the language division is very sharp, and we must not be shy to promote its use or to come to its defence.

Yesterday afternoon, a Conservative Member—talking as English people often do about their language—suggested that it was less important to extend the BBC World Service's Romanian, Hungarian and Bulgarian sections, which I consider crucial, than to extend English language broadcasting. He received little support for that view, which typified the arrogance sometimes displayed by English speakers. If I were to start speaking Welsh now, Miss Boothroyd—as I have in the House on a number of occasions—I would be called to order; although other Parliaments can manage quite easily to deal with nine or 10 languages, in this Chamber the Welsh language has the same status as riotous behaviour, and I would be thrown out if I persisted in using it. This is now the only Parliament that Wales has, but perhaps the position will change when we have our own Parliament.

The people now migrating to Wales are different from those of my generation. In 1851, my forebear Morris Flynn and his family were stoned by the locals on their arrival in Wales. That was the greeting given to him and his family of five—three had been lost in the potato famine—as they walked down Bute street in Cardiff. As far as I know, there is no potato famine in Burton-on-Trent, and I do not believe that the Securitate in Guildford is persecuting the people and forcing them into Wales. People are coming to Wales looking for a better life, although many are leading a good life already. They are attracted by the beauty of the countryside and the lack of pollution.

None the less, we have the right to stand up and fight for our language. We remember what the old man of Pencader said about "this corner of the world", and we know that we are the only people who can defend our unique language. It is a shame that we should react with such venom to a foolish thing said by a frail, elderly visionary who gave so much to our country—although he certainly went too far. We should look to our visionaries, and to those who have the soul of our nation at heart, rather than indulging in the spiteful and petty controversies that have marred this last summer.

I hope that people in Carmarthen can come together, recognising the need to protect the Welsh language. The English language is not threatened; it is used throughout the world. Welsh, however, is in the perilous state in which all minority languages find themselves when all their speakers also speak a majority language. We must not be reticent; we must boldly defend the Welsh language.

My hon. Friend the Member for Carmarthen spoke of the poverty in the area covered by the development board. We hear very little about rural poverty. Let me briefly mention two issues. One is child benefit, which was recently increased. It is a shock to realise that at least 10,000 of the most .deserving families in Wales will not receive the extra £1 because they happen to have suffered a bereavement or serious illness: that is in addition to the 192,000 families throughout Britain who will not receive the benefit because the Government will claw it back. The Government's was an extremely mean act.

The last great ruler who took an interest in the first born, King Herod, was a Thatcherite of the old school. One would not, of course, expect even the present Government to employ the measures that he adopted to save public expenditure.

As we emerge from the dark age of Thatcherism, I hope that policies to help families with children will emerge. The most deserving cases are being cheated outrageously by being deprived of child benefit. Rural housing is a continuing scandal. For the past 40 years, all Governments provided a wedge of housing in every village throughout the Principality that was cheap to rent. Council houses have disappeared altogether in many villages. Council housing, by providing the choice of cheap housing, led to a balanced economy.

5 pm

My local authority, when it was Labour-controlled, provided council houses in order to create stable, mixed communities. Now, however, it is not run by altruistic people who want to solve problems; it is run by Conservative ideologues whose minds are obsessed with a few simple ideas that drive them on—in many cases, beyond all reason. There are no houses for rent at a reasonable price in some Welsh villages. When they change hands they are sold. Villages are therefore deprived of local labour and they become villages for stockbrokers—already so common in the south of England.

The farming industry faces a crisis. It has to compete with all the development board's activities. The decision that we take on the clause will have an effect on the farming industry. At Question Time today the farming crisis was referred to as a genuine crisis. Nobody is crying wolf. My hon. Friend the Member for Caerphilly (Mr. Davies) said, rightly, that the crisis does not face the whole of the farming community. The Minister of Agriculture, Fisheries and Food accused me today of trying to split the farming community. It is already split. The grain barons of East Anglia cultivate grain on huge prairies that provide them with huge profits and, in the case of farmers in south Wales, if there are large harvests, they receive huge subsidies. I believe that my hon. Friend said that 80 per cent. of the farming subsidies go to very rich farmers.

Farmers have become the victims of the policies of all parties. We told them that the country must rely on its own resources. They have been provided with subsidies to grow more food. That resulted in this crisis. The medicines of the past have become the diseases of the present. The answer is not to increase subsidies generally but to ensure that they are distributed fairly. Many of the subsidies that now go to rich farmers should come to Wales. The farming industry faces many crises. I commend the Labour party's policies. They would provide an answer to the farming crisis. Production should be scaled down, where necessary, and voluntary agreements should be entered into with the farmers—

The Second Deputy Chairman

Order. The hon. Gentleman has had a very good run. I must ask hon. Members to remember that we are considering clause I stand part and the functions of the board. It is a narrow clause. This is not a Second Reading debate. The clause relates not to farming and agriculture but to the financial limits of the board.

We have had a good debate; I have been tolerant in allowing hon. Members to range widely, both on Second Reading and, so far, today. Now, however, I must bring it to a halt. In future, hon. Members will not be allowed to range as widely as they have done so far in this clause stand part debate. The hon. Gentleman must, of course, finish what he wants to say, which must be relevant.

Mr. Flynn

That is very kind of you, Miss Boothroyd.

The Second Deputy Chairman

I am not at all kind.

Mr. Flynn

On reflection, I must admit that some of my comments were tangential to the main purpose of the clause.

As for the money devoted by the development board to planning purposes in Wales, the Council for the Protection of Rural Wales published recently a splendid report. Newport suffers from a particular problem, in that we have a pushy neighbour called Cardiff. Its urban sprawl is spreading like a stain across the fields towards Newport. It has come right up to Newport's border. If Newport had been as permissive as Cardiff over its planning permission, it would no longer have a green ring around it. It would be possible to walk from the civic centre in Newport to the city hall in Cardiff without crossing a field and seeing a blade of grass.

I urge the Welsh Office to consider introducing green belts around our towns. Strangely enough, we do not have them in Wales. Such a ring around our towns would make them much more attractive. That would represent a very good use of the money that is provided for in the clause. We must provide a better future for development board areas and for every other rural area in Wales.

Dr. Thomas

I thank you, Madam Deputy Speaker, for the generosity that you have shown towards hon. Members.

Madam Deputy Speaker

It has come to a halt.

Dr. Thomas

I am aware of that. I do not intend to make another Second Reading speech today. One of the reasons why it has turned into such a wide-ranging debate is that we have so few opportunities to debate on the Floor of the House matters relating to Wales. I wish that we could have more such opportunities.

I agree with the Minister of State that it is good to hold primary legislation debates on the Floor of the House, during which we can consider the work of the development board and other agencies. I only wish that the Welsh Office could introduce additional primary legislation, including legislation on language policy. That brings me to the language issue, though in relation to the development board's work, not in relation to Dyfed's education policy. Nevertheless, I commend what was said by the hon. Member for Newport, West (Mr. Flynn) about the activities of the hon. Member for Carmarthen (Mr. Williams).

The development board has deliberately focused cultural spending on language policy on business courses, business advice and bilingual handbooks. That has generated a good response in the western communities of Wales. The board's policy is to recruit, as members of staff, bilingual business advisers. The board has used the existing enterprise agencies to carry out work for it on a contract basis. It is therefore able to stimulate the development of an enterprise culture. That is an important part of our overall language development, conservation and enhancement policy.

The Welsh language is spoken by about 500,000 people. It is a minority language. I hope that it will become the language of business activity as well as of cultural activity, as well as being the language of all traditional forms of expression in culture and religion, as well as the language of the schools throughout the national curriculum. The language would then be able to survive in the complex world within which small cultures have to function. I pay tribute to the work of the development board, which stimulates the enterprise culture through the medium of the Welsh language. That is a very important part of its work.

Housing expenditure by the development board is limited to providing houses for key workers. The development board is not a general housing agency. Housing agencies have taken over the work of the previous new town development corporations. However, they have been giving their houses away. Houses in new towns have been sold rapidly. That creates housing problems. We need to match the decline in the role of local authorities throughout Wales and the decline in the role of the development board as the new town housing agencies' role is matched by the activities of Tai Cymru.

The Government need to look at the overall Welsh Office housing budget to ensure that the decline in available rented sector property is matched by the work of the housing associations. We need to look at the relevance of the clause to housing policy. There is a relevance to key-worker housing. That is a concept which can be seen to relate to a particular view of development. In the early years of development agencies, not just in mid-Wales but in other areas, activity seemed to be centred on in-moving large capital investment. That is important but it can sometimes be a diseconomy in terms of its effect on the existing network of local businesses. Incoming industries on a large scale can lead to a loss of jobs in the self-employed and small business sectors. We have seen that in some aspects of the development board's work.

Over the years, there have been positive critics of the board looking at supporting an economic, development strategy and at aspects of the strategy which might he improved. Those critics have stressed that the overdevelopment of Newtown and the growth town strategy has sometimes resulted in the appearance of overdevelopment in some areas and underdevelopment in others—[Interruption.] I see that the hon. Member for Vale of Glamorgan (Mr. Smith) agrees with me and I am sure that he will want to develop that.

I have mentioned Antur Dwyryd and Antur Teifi so I must mention Antur Penllyn and the activity in Bala. There we have a local authority and local entrepreneurs who are already successful on their own patch working with the development board to establish an atmosphere in which small local businesses can thrive. It creates an atmosphere in which young people can produce ideas for new enterprise, discuss their business plans and find support throughout the development of their business with the assistance of local banks, and so on. Many of us have argued for several years for that type of small scale networking enterprise and it is good to see the board pursuing it.

On Second Reading I received a firm answer from the Secretary of State about the future of the board. He made it clear that there would be no messing about between the Welsh Development Agency and the Development Board for Rural Wales. There will be a clear understanding that both authorities have a statutory responsibility and will have to work together. It was helpful to receive such a statement. However, I should like the Minister to deal with the possible privatisation of some of the board's activities. Concern has been expressed to me by those who follow the board's activities that there may be an intention to privatise existing complexes, industrial sites or other consultancy or development activities that the board has undertaken directly in the past. That may result in the officers responsible for such activities being less directly accountable. There have recently been internal management changes to the structure of the board.

Some of us are concerned that the social development aspect of the board's work is not receiving the high profile that it received in the past. We want an assurance from the Minister about the broad spectrum of spending. The social development money stands alongside the various directly enterprising schemes, building schemes and infrastructure schemes. We want an assurance that the social development money has the same value in terms of the board's policies as in the past. We have discussed that with the chairman and officials of the board and we shall have an opportunity to do so again fairly soon when the board will be visiting the House and giving us a presentation. However, I should be happy to have the Welsh Office view. It is important to emphasise the entrepreneurial and commercial activity of the board, but the social profile is also an important part of integrated rural development and we want it to be maintained.—[ Interruption.] I am pleased to see that my hon. Friends the Members for Ceredigion and Pembroke, North (Mr. Howells) and for Brecon and Radnor (Mr. Livsey) agree with me.

5.15 pm

I want to deal with the board's spending in the northern Meirionnydd area and its relevance to Trawsfynydd. I am grateful to the hon. Member for Alyn and Deeside (Mr. Jones) for raising that issue again today. I want to see the Welsh Office taking a longer look at the issue in consultation with the Department of Energy and Nuclear Electric. None of us wants to see premature closure of a functioning plant. However, that plant can function as a Magnox nuclear power station only within the tightest possible constraints and controls on environmental policy as governed by the nuclear installations inspectorate. We do not want an artificial extension of the life of the plant. Therefore, as I said last night, as a result of the closure we shall be facing the loss of 400 to 500 jobs directly. Obviously, that has a multiplier effect and there will be about 1,200 job losses overall in the local economy.

The response to that is not to look for another major utility of that sort because the economy of north-west Wales—Gwynedd—has been dependent upon major construction projects and big utilities in cycles. That is not necessarily good for the economy in the long term. We need to look for a resource-balanced economy in terms of its ability to sustain itself internally and have a good relationship with surrounding economies and regions. The answer is to take further the approach already adopted by the development board in the way in which it has ensured the development of in-moving new capital investment and encouraged grass roots networking enterprise within local communities. We need to match that with adequate funding. We want to ensure that the development board becomes the lead agency in replacing job losses at Trawsfynydd. The board is able to do that. The WDA and Welsh Development International are important. We are hoping for further international investment beyond Clwyd and into Gwynedd as a result of the Wyn Roberts memorial expressway that is about to be completed.

The Development Board for Rural Wales has as members representatives from local authorities and works closely with local authorities. As we know, the Meirionnydd and Gwynedd districts do not have the resources necessary for industrial promotion in the same way as the board, which is a central Government agency. I should like the Welsh Office to tell us that they are entrusting the task of the lead agency in providing jobs in the Trawsfynydd and northern Meirionnydd area to the board and that the funding will be there to match it.

I was hoping to have teased some new ideas from the Opposition. Unfortunately, I have failed yet again. In the past we have suggested several different models and if Opposition Members have any ideas I am happy to give way.

Mr. Alun Michael (Cardiff, South and Penarth)

I remind the hon. Gentleman that it was a Labour party idea in the first place. It would be better if he were less petty in his remarks.

Dr. Thomas

I do not wish to be drawn into the history of the development board, but it is well known that it was announced as an idea in 1970 by Viscount Tonypandy, who made that speech at a particular juncture in a general election campaign when Labour was looking for votes in west Wales. I have nothing against that, but we should put the record straight.

I am concerned now not about the future of the board but about finding new ideas from the official Opposition on how jobs can be replaced at Trawsfynydd. I offer the official Opposition that opportunity, but I hear nothing from them.

Mr. Alan W. Williams

When a nuclear power station reaches the end of its life, there follows the enormous task of decommissioning it. We are only just beginning to grapple with that problem in Berkeley. Nuclear experts say—this is why the City took fright when the Government tried to privatise nuclear energy—that that task is many times more difficult than was ever imagined. The budget involved is anything from £300 million to £1 billion, and for 10 years after the closure of a nuclear power station—perhaps even for decades—hundreds of jobs will be involved in its decommissioning.

Dr. Thomas

I am grateful for the hon. Gentleman's intervention, because nuclear energy is one of the few issues on which we see eye to eye. The cost of decommissioning is unlikely to come within the budget of the Development Board for Rural Wales, but the hon. Gentleman is right to say that decommissioning will provide a certain number of jobs. From my discussions with Nuclear Electric and its predecessor, the Central Electricity Generating Board, my understanding is that decommissioning would not require the same number of people as are required to run a station, and that the specialised and dangerous work of decommissioning would perhaps require only 150 to 200 people—so 300 to 400 jobs would still be lost to the local economy, with the multiplier effect that I mentioned earlier.

Parallel models are available in the form of the British Steel Corporation—in Shotton in the constituency of the hon. Member for Alyn and Deeside (Mr. Jones), and in areas of south Wales such as Ebbw Vale—and British Coal in the mining areas. In those cases, the existing utilities became agencies for replacement jobs.

The post-privatisation commercial structure of Nuclear Electric does not permit it to serve as such an agency, so we should look for ways of providing equivalent funding.

I want the northern Meirionnydd steel area to be treated as though it were an area subject to coal mining closures. Steel is a similar size of industry, and a comparable utility. I want the Welsh Office to signal tonight, or at a later stage, that it will respond positively to local activities in that respect. Recently, working parties reported to the district council, and the Antur Dwyryd agency produced its own plans for the 1990s which take account of the impact of decommissioning. We want an assurance from the Welsh Office that funding will be available within the development board's allocation to provide alternative jobs.

As for the current state of Welsh Office and development board crafts policies, had I not been participating in this debate, I would have joined a delegation to the Secretary of State on that very issue. However, I thought that it would be appropriate to be here instead, just in case Members on the Labour Front Bench tried to get at me again when my back was turned—[ HON. MEMBERS: "Oh!"]—as is their usual procedure.

Can the Minister say whether the crafts initiative or agency role by contract performed by Craft Consultants (Wales) Limited will continue in one form or another? There has been conflict between the crafts council for Wales and the DBRW and WDA as to who does what in promoting crafts. The former secretary of State produced a craft initiative as one of many that he devised, but I am not sure that its progress is as satisfactory as it might have been.

Competition of a kind that is not always useful exists in the provision of services to individual craft workers, as between the WDA and DBRW. Many of us are concerned about providing the right framework for all kinds of crafts development, very often in isolated locations, and some of us have had the privilege of visiting crafts persons on remote hillsides, where they produce items which end up being sold in Harrods. That is not always a test of quality, but at least it shows how widely Welsh crafts are now marketed. I want an assurance that there will not be an end to the crafts initiative and that a further attempt will be made to bring together the WDA and crafts workers so that they can co-operate more closely. The crafts council, through the agency work that it performs on behalf of its members, provides a voluntary support service.

We should not always look for clean lines to be drawn in our dealings with the rural economies, nor look just at the work of the WDA or DBRW—thinking that the only way to promote small businesses is through official bodies. We should consider also ways in which voluntary membership agencies such as the crafts council can undertake promotional and other work on behalf of its members, alongside and without duplicating that of public sector agencies. I shall be grateful if the Minister, having referred to the crafts sector as having a part in this debate, will make a response.

Mr. John P. Smith (Vale of Glamorgan)

I welcome the additional money that is to go to the development board, as does the whole Committee. My right hon. and hon. Friends in particular welcome it, because the DBRW was Labour's brainchild. We introduced it, together with many other successful Welsh institutions, such as the Welsh Development Agency. We are glad to see extra money made available to tackle some of the well-understood and well-established problems that confront rural mid-Wales—in particular, those associated with maintaining the rural economies and stopping depopulation.

I want to sound a note of caution in respect of the way in which the money is to be spent. I represent a Welsh constituency that is predominantly rural and which—unlike many others in Wales—has significantly benefited from the kind of money that, under the clause, is intended for other parts of Wales. I want to highlight some of the problems that can be associated with successful development if it is not properly handled.

Two themes have been taken up by other hon. Members. First, we need to know exactly what the additional money will be spent on. Secondly—this point has come up repeatedly—it is necessary to co-ordinate the development board's work with the work of other agencies such as the WDA, local authorities and British Rail, to mention but a few in the public sector, and the private sector, which will play an important part in these developments.

Unless we are careful about identifying the needs that go with new investment in jobs and industry, we will create great problems. That may sound like a contradiction, but it is an important political issue for the House to consider in relation to the Bill. Since I have been the Member for Vale of Glamorgan, the area has managed to attract a disproportionate amount of inward investment, totalling £1.1 billion. That is one of the highest concentrations of inward investment in the world and is certainly the highest in western Europe.

5.30 pm

Mr. Win Griffiths (Bridgend)

It is all to my hon. Friend's credit.

Mr. Smith

I refuse to take all the credit, but I am delighted by that investment. I recognise the role played by the economic development committee of the county council and the WDA, not to mention one or two by-elections. We welcome that investment and hope that there will be more, but it is creating problems and pressures in the rural part of my constituency. The three points of the economic triangle of success are Cardiff Wales airport, with the massive British Airways investment in precision engineering jobs—which we want to see in mid-Wales as well—the huge investment in the Ford plant in the north-west of my constituency, totalling almost £500 million, and the investment at Bosch, which will create nearly 1,300 new jobs.

The Second Deputy Chairman

Order. I am sure that the hon. Member will now relate his comments to the clause. Although his constituency is extremely important to him, it does not lie within the board's area.

Mr. Smith

Absolutely, Miss Boothroyd. I am glad that you have drawn my attention to that point. We must get across the point that, in spending this money, we must not make the mistakes that were made in the past. The development board should learn from past lessons and ensure that there is no repetition of previous mistakes.

Investment of this size will create a problem in the local labour market. We must ensure that there is trained, skilled labour to fill the occupations created in the rural areas or we will do one of two things: we will poach skilled people from existing employers in rural Wales or, worse still, we will add to the migration problem by encouraging skilled labour from outside to go into the rural areas. Some people believe that that is already happening in our area. The development board should recognise the fact that, unless the training challenge is met, the problem will get much worse.

We must also consider the impact of investment on transport. I have personal experience of this in my area and I know that the problem will affect the area covered by the development board. I warn the Minister that, if we are successful and we attract investment, it will result in huge pressures on our transport network. Because of the new investment in Ford and elsewhere, it is dangerous and almost impossible to attempt to cross the road in the little village of Llysworney. The high volume of traffic and number of large stone-carrying and goods-carrying vehicles going through the villages make a bypass necessary. A bypass is needed also in Dinas Powys. The main trunk road through that local area, the A4050, needs to be upgraded. In addition, the rail line through the rural part of my constituency should be reopened.

Those are the transport needs of an area that has been successful in attracting development and investment. When considering the allocation of moneys and the encouragement of investment, the development board should ensure that it first has an integrated transport policy, or it will create problems like those in our area. The effect of investment on the local labour market and on transport is of considerable concern.

Housing is another important matter in rural areas. The depopulation problem in mid-Wales results largely from the inability of the indigenous population to purchase houses, in the absence of low-cost houses for rent, because of low incomes and lack of employment. The development board should bear it in mind that that can also be a problem in areas of considerable developmental success. People may be amazed to hear that, although we have been successful in attracting investment, in the rural vale—where the population is increasing—there is an acute housing shortage. Because we have had so much success, property prices are high. The indigenous community in relatively well-off communities, particularly young people, cannot afford to stay in their villages, although they may have good jobs in Cardiff to which they commute daily and their parents may be reasonably well off and live in rather expensive houses. The capital values of property in the rural part of my constituency are among the highest in Wales, but there is an acute housing shortage. The development board should carefully consider the impact of disproportionate investment concentrated in certain areas—a matter to which the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) referred.

We need a housing strategy to provide low-cost rented housing for people in rural areas on low incomes and those who are out of work and for people in areas of success. My area is a popular place in which to live—

Mr. Derek Conway (Shrewsbury and Atcham)

Under the Conservative Government.

Mr. Smith

No, under a Labour Member of Parliament. The problem in my area is the opposite of the problem in some rural areas. The region is so popular that, I admit, some parts of my constituency are referred to as the filing cabinet of England. Civil servants who come down from Whitehall to the Welsh Office, the Royal Mint or the Inland Revenue know that my constituency is a nice place in which to live.

The Second Deputy Chairman

Order. I am sure that the hon. Gentleman's constituency is an excellent place in which to live, but he should get back to the geographical area that we are debating.

Mr. Smith

I will get back to the important point at issue. We have referred to the pressure that investment places on the labour market, to the effect on the transport infrastructure and to the importance of having a transport policy if we are to attract investment. We have also referred to housing. Another important point is that once we succeed in attracting investment to an area, we must ensure that it is followed by balanced development.

Other hon. Members have referred to the pressure on planning, to intrusions into the green belt and to the destruction of the countryside. In my constituency, there is a planning application for a golf course, for a new town, for a ski slope or for a race track on almost every open site and on almost every green field. Yet people have paid to live in this area because they want to enjoy a certain quality of life. The irony is that it is an area where such plans and development are not wanted, while we are crying out for development and investment—and doing what we can to attract it—in nearby conurbations.

I hope that the Minister will bear it in mind that when the board seeks, through strategic intervention, to attract investment and rural industrial activity, such development cannot be left to the free market. If we are to have economic and industrial growth, we must have the corresponding infrastructural changes to ensure that the quality of people's lives is not destroyed. There is a danger of that happening in my constituency, which is predominantly rural, and the environment will be under threat unless we get our act together. I am confident that, with institutions such as the Development Board for Rural Wales, we can do that.

Like other hon. Members, I want to draw the attention of the House to the importance of agriculture in the development areas. Some hon. Members seemed to imply—I am sure not intentionally—that the agricultural crisis in Wales is restricted to the hill farms and to the family farms which are typical of the catchment area of the board. I must remind hon. Members that the crisis goes beyond that. It affects the livestock and dairy farmers in some of the richer and more influential farming areas such as the Vale of Glamorgan. I can assure the House that the crisis in livestock prices and high interest rates affect all farmers.

Other hon. Members have said that only some sections of the farming community benefit from the huge farming subsidies, but that is not quite the case. By and large, it is not the farmers, but the retailers—and especially the five large supermarket chains—who do well out of the subsidies and they often fail to pass on the benefits to the consumer.

I hope that, as the Development Board for Rural Wales goes from strength to strength with its additional expenditure, it will take steps to meet some of the problems to which I have referred. I hope especially that the board will tackle those problems in rural areas, such as the one that I represent.

5.45 pm

Mr. Win Griffiths

In the speech of my hon. Friend the Member for Vale of Glamorgan (Mr. Smith), we have heard more analogies than there are sidesteps in a rugby match. I am sure that he will be known as "Smith the Analogy" as he wove his story so well. I could almost imagine that the Vale of Glamorgan had been transferred to mid-Wales.

Although my constituency lies outside the area covered by the Development Board for Rural Wales, I speak with an interest in mid-Wales because I was brought up in the town of Brecon, which is now in the constituency of the hon. Member for Brecon and Radnor (Mr. Livsey). My family history illustrates the need for the board and for the welcome increase in the money that it has available to finance the promotion of economic activity and, thereby, the social well-being and prosperity of mid-Wales. My parents had seven children; five of us are currently employed outside mid-Wales. The interesting point is that the two sisters who still live in the town of Brecon are married to men who came from outside mid-Wales.

Last night, the Secretary of State referred to the fact that, in the past decade, the population of the area has increased: inward migration has exceeded outward migration. That is only the beginning of a reversal of the trend that has been seen for generation after generation. It is important for the board to have its funds increased, because it will have to make up for generations of lost population and lost economic activity.

Mr. Alan W. Williams

I noted that my hon. Friend said that he was one of seven children and that only two of them now live in his home town, which is in a rural area. I am in an identical situation. I, too, am one of seven children and only two of us now live in Carmarthen. The other five now live far away—some outside Wales. That is at the heart of the problem of rural depopulation and the result is the decline of the Welsh language. Once people move away, they and their children will no longer speak Welsh, so the language goes.

Mr. Griffiths

I thank my hon. Friend for his intervention because it strengthens the case for the activities of the board to be extended in mid-Wales. My hon. Friend mentioned the Welsh language and the difficulties that it faces after years of decline. I believe that the board uses part of its budget to support the Welsh language. When I read the annual report of the board, I could not see just how much money went to support the Welsh language and I hope that the Minister can tell us.

Sir Wyn Roberts

If the hon. Gentleman looks at section 26 of the Development of Rural Wales Act 1976, he will find that it enables the Secretary of State, rather than the board, to devote money to social purposes, one of which is the promotion of the Welsh language. Under that section, the Welsh Office supports some of the activities in connection with the Welsh language.

Mr. Griffiths

I thank the Minister for that intervention. I was referring to the development board's annual report which mentions support for the Welsh language. I was brought up in Brecon, which is an English-speaking town, although in the 1950s Welsh was still to be heard in farming communities 10 miles west of the town.

Mr. Livsey

It still is.

Mr. Griffiths

Yes, it still is, in places such as Trecastle. Steps should be taken to help families with children who go to bilingual schools but who do not speak Welsh at home. Our children managed magnificently until the age of 11: our friends told us that, had they not known that my wife and I were monoglot in English, they would have assumed that our children were from a Welsh-speaking home. But our children had distinct problems after the age of 11 simply because there is not enough literature in Welsh to enable children to be educated easily in the subject at secondary level. When my daughter had to do a school project on Mozart, she had to read everything in English and then write everything in Welsh. The Development Board for Rural Wales could kill two birds with one stone if it made it its job to support printing in the Welsh language because it could then provide the books that are needed in Welsh schools, which are not available at present.

Dr. Thomas

The development board has assisted Mozart on a number of occasions. It has sponsored various concerts, including an excellent one at Llangollen international eisteddfod.

Mr. Griffiths

I am pleased to hear that, although I hope that the Minister will be able to tell us whether the development board could become actively involved in the provision of Welsh books for primary and, particularly, secondary schools. They are desperately needed.

Sir Wyn Roberts

I am sure that the hon. Gentleman will have heard of the Welsh Books Council, which receives £400,000-plus from the Welsh Office and whose main concern is the publication of Welsh language books. Other organisations supported by the Welsh Office are also concerned with the production of educational textbooks.

Mr. Griffiths

I thank the Minister for that answer, but I beg him to examine the possibility that, as part of its activities in supporting the Welsh language, the development board could become more involved with the other bodies in Wales that are producing Welsh language books. That could improve matters greatly.

I do not want to go over the ground that has already been covered on the need to provide housing at reasonably low cost in rural areas. Instead, I want to emphasise the need for rented accommodation. The Minister will know that the Government's mortgage-for-rent scheme has not had a very high take-up in mid-Wales. There are two reasons for the low take-up of what, on the face of it, looks like a bargain. First, despite all the inward investment that has taken place, despite the flourish of activity that surrounded the establishment of the development board and despite the fact that it is to be provided with the extra money that it needs for its activities, the feeling still prevails that the rural economy is fragile. We need to do more, not just through the development board, but through all apsects of Welsh Office policy, to promote the rural community in Wales.

Secondly, we must bear in mind the fact that many of those living in rented accommodation were not prepared to take the step of buying because they feared that they would not be able to sell if they wanted to move to another job. That emphasises one of the difficulties caused by high housing costs and high interest rates, which are bedevilling the expansion of the economy. Next year we shall have a downturn in economic activity which will make the work of the board more difficult and the rural economy more fragile.

Some hon. Members seem to have set on one side as almost irrelevant the work of the board in agricultural support, saying that there are other ways of supporting agriculture in Wales. It seems to me that a vital part of the board's work is in promoting agricultural production—finished and new products that can be made on the farm or off it—thus making a significant contribution to the income of the Welsh farmer. It is obvious that it will become more and more difficult for Welsh farming families to make sufficient money out of farming alone. That is why the board's activities are crucial in the provision of agricultural support—in the promotion of the production of new cheeses or whatever. There is so much that can be done. That is why I welcome the increase in the limit on the board's expenditure.

I am pleased that a Government who opposed the creation of the board should have recognised the usefulness of its activities in mid-Wales and I hope that the board will continue to flourish, because it will be needed for a long time to come.

Mr. Martyn Jones (Clwyd, South-West)

We are discussing the increase in the board's financial limit from £100 million to £175 million. On Second Reading, hon. Members on both sides of the House acknowledged the good work that the board and its staff have done. As my hon. Friend the Member for Bridgend (Mr. Griffiths) said, it is somewhat ironic that Conservative Members should now be supporting intervention in industry. They could not have done that in the past—at least, not openly—and one wonders for how long they will continue to do it. Nevertheless, it is nice to know that they support intervention as it is so obviously necessary to the rural areas of Wales.

Much of the money that will be made available under the Bill will be spent on maintaining jobs and blunting the effects of the recession which is hitting the areas of rural Wales covered by the development board. Such help would also be extremely valuable elsewhere, outside the development board's area. Had such help been available in my constituency, Biddulph's might not have been closing its factory in Denbigh this week, with the loss of 50 jobs. We could be maintaining jobs in an area which is just as rural as most of the board's area. In terms of rurality, the Vale of Clwyd and Glyndwr within Clwyd are little different for Brecon, Cardigan and other areas within the board's remit.

6 pm

On Second Reading, the Secretary of State said that he would look at the boundaries in 1991. Obviously, that will require more money. I urge him to try to extend the boundaries into Clwyd, Glyndwr and Gwynedd within this year, which means that the £175 million is probably inadequate and that we should vote for more money tonight. I urge him also to give development area status of some kind to those regions so that we can attract Euro-money, which would get him out of the financial hole in which he would find himself if he extended the boundaries before 1991.

The Secretary of State said that he was seeking every way in which to strengthen rural communities. That is probably best done by supporting agriculture, by removing the effects of the deregulation of bus transport, which is a major problem, and by encouraging rather than discouraging post offices in villages. That cannot be done by market forces—it can be done only by state intervention. As I have said, hon. Members are, in effect, supporting state intervention by their support of the Development Board for Rural Wales. That is an encouraging trend and I hope that it will continue.

Mr. Murphy

This has been a wide-ranging debate on a simple Bill. The clause would extend the financial limit of £100 million, which was set in 1981, to £175 million. I hope that hon. Members on both sides of the House are aware that that limit is not a limit of grant and that it also covers borrowing from the national loans fund, as well as Treasury guarantees.

Opposition Members welcome the extension of the limit to £175 million. It interests me in particular because, at one time, my constituency had within its boundaries the Cwmbran development corporation. At that time it was the only institution of its type within Wales, and the new town development corporations sprang directly from the one in Cwmbran. Many engineers, architects and others went to mid-Wales to set up the interesting experiment. My hon. Friends the Members for Clwyd, South-West (Mr. Jones) and for Carmarthen (Mr. Williams) rightly referred to the need to extend the boundaries of the Development Board for Rural Wales into Carmarthen and Clwyd. I hope that the Minister will take that point on board and report back to us.

According to its annual report, the objective of the Development Board for Rural Wales is to encourage the creation of a self-sustaining economy in its area, which, together with housing, is a crucial matter in mid Wales. My hon. Friends the Members for Alyn and Deeside (Mr. Jones), for Vale of Glamorgan (Mr. Smith) and for Bridgend (Mr. Griffiths) and the hon. Member for Brecon and Radnor (Mr. Livsey) referred to the important aspect of the board's work, which the £175 million will cover, in the creation of housing in mid-Wales.

When I again read the report of the Development Board for Rural Wales I was surprised to note that it states that housing continues to cause difficulties in rural Wales. That must be an immense understatement. Hon. Members have referred to the importance of the development board in tackling that problem. They rightly referred to the problem of the affordability of private housing within the area covered by the development board. For instance, last year about 1,300 new private starts were made in that area. However, the average Welsh house price is about £45,000, there are high interest rates, rural incomes are lower than their urban counterparts, and house prices are about 20 per cent. higher. The problem of getting a private house for people who live in those areas is becoming worse day by day.

Of course, the development board has to work alongside local authorities. There are six district councils within the area. All six of them have been losers in the battle involving the poll tax and the unified business rate. Local authorities suffer that burden and the loss of their position as housing suppliers in Wales. I should have thought that that responsibility would rest with the development board. The hon. Member for Brecon and Radnor rightly said that the development board should take over the functions of housing associations and work closely with them in mid-Wales. That is not happening.

Last year in the development board area, 801 local authority and housing association houses were sold and only 222 starts were made. Unquestionably, that has given rise to homelessness in the area. Also, 329 families were officially homeless in the middle part of Wales. Tai Cymru, to be fair to it, instituted research into what should happen with housing in mid-Wales. It came up with the inevitable result: there is much hidden homelessness in mid-Wales and the waiting lists with local authorities and the development board are probably much higher than the official figure of 6,000 people. As the Minister is aware, district councils in Wales have said that 6,000 more homes should be built within the Principality and many of them in the area of the development board.

Mr. John P. Smith

My hon. Friend has rightly referred to losses to Wales and losses in Wales. Will he take this opportunity to agree that the tragic loss this week of one of my constituents, Mr. Cliff Jones, arguably one of the greatest outside-halves to come from Wales—

The Second Deputy Chairman

Order. That has nothing whatsoever to do with the clause stand part debate. The hon. Gentleman will resume his seat.

Mr. Smith

rose—

The Second Deputy Chairman

Order. The hon. Gentleman will resume his seat. This is a clause stand part debate relating to the financial limitations of the board. The matter to which the hon. Gentleman was referring does not relate to that subject.

Mr. Murphy

I take the point that was made by my hon. Friend the Member for Vale of Glamorgan.

Whole communities are breaking up because of the lack of affordable housing in mid-Wales. My hon. Friend the Member for Bridgend referred to new housing development by the board which, in a sense, was used as a guinea pig by the Welsh Office and by the Government in respect of the rents-into-mortgages scheme. My hon. Friend told us that that has flopped and that, out of 1,400 tenants of the development board in Newtown, only 35 applications have been received. In Scotland, out of 123,000 tenants of similar boards, only 42 have applied. The Government's idea, which was to finish off all sorts of public housing in the centre of Wales, has flopped.

Section 18 of the Development Board for Rural Wales Act 1976 refers to housing subsidy. At the Conservative party conference, the Minister for Housing and Planning referred to the withdrawal of housing subsidy from local authorities and from new towns during the next few years. I hope that the money that we are discussing will not mean that subsidies for tenants in the mid-Wales development area will suffer as a consequence of what might or might not be Conservative party policy in the months and years ahead. Local authorities, the development board and Tai Cymru—Housing for Wales—should try to arrest the crisis in Welsh rural housing.

For instance, they should consider the problem of second homes, which has been mentioned several times in the past two days. They should also consider the planning laws and ensure that planning permission for second homes is carefully examined. Development land should be designated to house local people, not to make property developers richer. They should set up housing help centres in mid-Wales. They should have a crash programme on homelessness and certainly should ensure that the capital receipts that local authorities and the DBRW receive from the sale of local authority houses go back to them so that when houses are lost through the right-to-buy scheme they are replaced with new houses for people in the centre of Wales who look to the board to house them.

We have highlighted some of the problems in mid-Wales. We welcome the increased resources that have been allocated to the board, but we are convinced that the extra £175 million would be put to best use by a Labour Government, as a Labour Government set up the board in the first place.

Sir Wyn Roberts

With the leave of the House, I will reply to the debate. In all, 10 hon. Members have spoken in this clause stand part debate. If there is an excuse for the wide-ranging character of the debate, it is that, as I understand it, we propose not to have a Third Reading debate.

I begin by dealing with the speech of the hon. Member for Alyn and Deeside (Mr. Jones). I seriously suggest that he reads again what my right hon. Friend the Secretary of State said at column 936 of Hansard about the funding of the special rural action programme. Similarly, at column 967 my right hon. Friend dealt clearly with the interest taken in the problems at Trawsfynydd. The problems are some years ahead but the north-west Wales training and enterprise council, although only recently established, has begun exploratory discussions.

Dr. Thomas

I appreciated what the Secretary of State had to say about the training and enterprise council, but there is also a role for the development board and for additional funding to meet head-on the crisis that will emerge in the area in the next five years.

Sir Wyn Roberts

We certainly expect the efforts of the training and enterprise council and other agencies such as the Development Board for Rural Wales to provide alternative jobs to be intensified in the intervening period.

The hon. Member for Alyn and Deeside said that the gross expenditure of the DBRW had declined. He chose some curious years as examples of its expenditure. He chose 1978–79 and 1979–80, when there was exceptionally high expenditure at Newtown, but taking the period from the board's inception one sees that there has been an increase of some 15.4 per cent. in real terms in the board's gross expenditure. Similarly, from 1980–81 to 1990–91 there has been a 20 per cent. increase in real terms in the board's gross expenditure.

Several hon. Members talked about housing. Indeed, it would be easier to name those who did not refer to it. The Welsh Office has been aware for some time of the problems faced by people in rural Wales in securing affordable homes. I am glad to say that several measures are being taken. Although housing is an ancillary responsibility of the development board, hon. Members will be aware of the growing role of Tai Cymru, or Housing for Wales. It has directed about £25 million—no less than a quarter of its resources—to be spent by housing associations in rural areas this financial year. This year we have made available additional allocations or credit approvals totalling £2.8 million to rural district councils with severe second home problems to enable them to buy dwellings for rent or resale or to purchase land for housing development. To help mitigate the effects of inward migration and second homes, public sector landlords in national parks and certain designated areas may impose conditions on the resale of dwellings sold under the right-to-buy scheme. I did not agree with the hon. Member for Torfaen (Mr. Murphy), however, when he implied that we should deny the right to buy because houses bought under the scheme are somehow lost to the housing stock. He knows as well as I do that that is not the case.

6.15 pm

Mr. Murphy

The Minister completely misinterprets what I said about the right-to-buy legislation. I did not imply that the right to buy would not continue or that it was not a good thing. I said that the receipts from the sale of those houses should go back to the local authorities or the development board so that they can build new houses for those on the waiting lists in mid-Wales, who number over 6,000.

Sir Wyn Roberts

Unless things have changed drastically, the current year's receipts from right-to-buy sales can be used by the authorities to which they are paid.

Within the next few months we shall issue planning advice on land for low-cost housing in rural areas following consultation last year. Last year, Housing for Wales launched a rural housing initiative to assist local people, especially young people, to find suitable homes which they can afford in their own communities. The initiative is being run on a pilot basis in 31 villages across rural Wales. The majority of homes are being provided on shared ownership terms with a pre-emption right eventually to return the home to the relevant housing association.

More significantly, as the hon. Member for Torfaen mentioned, earlier this month Housing for Wales published the results of two vital research projects on the nature and extent of the need for housing in rural Wales. The second of those reports, which dealt with the importance of affordable housing for young people in determining their decision to remain in their home communities, goes further than housing issues. Housing for Wales intends to call a working conference early in the new year to discuss the findings of both studies. It will draw on the expertise of organisations with an interest in the quality of rural life.

You will probably not allow me to stray far on the community charge, Miss Boothroyd, but it is perhaps worth noting that within the development board's area some 29,000 chargepayers are obtaining transitional relief averaging £27 per person. The House will have heard what my right hon. Friend the Prime Minister had to say this afternoon about a review of the community charge.

Many references have been made to agriculture but, as my right hon. Friend the Secretary of State pointed out on Second Reading, agriculture is the direct responsibility of the Welsh Office agriculture department. Of course, we recognise that it is not an easy time for Welsh livestock producers. That is why we have introduced measures to deal with the position. Again, Miss Boothroyd, you will not allow me to stray far into what we have done for the beef sector by way of intervention. Neither would you allow me to say much about the way in which we have brought forward the two advance payments of sheep annual premium, and so on.

Mr. Win Griffiths

You will recall, Miss Boothroyd, that I raised the issue of agricultural support. In the development board's annual report there is a section entitled "Support for Agriculture". The point made in the report and the reason why we raised it is that, while we recognise that direct income support for farmers is entirely another part of the Welsh Office, the development board has a responsibility to promote the industry and income for farmers by other means. That is why we should like to hear something from the Minister about that.

Sir Wyn Roberts

Perhaps, Miss Boothroyd, you will allow me to say a little about some of the income which is flowing into the rural community as a result of the measures to which I have referred. Intervention in the beef sector alone is costing the Government some £11 million a week. Welsh sheepmeat producers have a cash flow benefit of nearly £25 million from the decision to bring forward the two advance payments of sheepmeat annual premium. Obviously, there are other developments in the livestock sector. The hill livestock compensatory allowance payments alone total some £33 million.

The Second Deputy Chairman

Order. The Minister is trying to be helpful to the House, but he is going too deeply into agriculture. I am looking at the report and he is taking us too far into another Department's responsibility.

Sir Wyn Roberts

I am seeking to say—

Mr. Win Griffiths

On a point of order, Miss Boothroyd. I am grateful for your intervention. As you pointed out, the Minister was exceeding his role. However, I asked what the Development Board for Rural Wales was doing to support farmers. It has a remit to support them. That is what I want to know.

The Second Deputy Chairman

That is not a point of order for the Chair to resolve.

Sir Wyn Roberts

I shall come to the hon. Gentleman's point. I was simply prefacing my answer to him by pointing out how much money was being poured into agriculture. The HLCA payments alone are worth some £33 million. Apart from all that, agricultural grants and subsidies, excluding intervention and so on, are worth some £100 million a year to Welsh farmers. Against that background, hon. Members are well aware that the role of the development board is to encourage industries and activities which are ancillary to agriculture. It is not a function of the board to administer grants and subsidies. That is the responsibility of the Welsh Office. Many of the activities covered by the development board are ancillary to agriculture and, indeed, life in general in the rural community which they serve.

Tourism has been mentioned—

Mr. Alan W. Williams

May I take up the point made by my hon. Friend the Member for Bridgend (Mr. Griffiths) about agriculture and the responsibilities of the development board? There is a crisis in agriculture, particularly regarding lamb and beef. Even worse are the 30 per cent. cuts in export subsidies being negotiated in the general agreement on tariffs and trade round. We are talking about small farmers. What is the Minister doing and what more can we do by using the development board to help and sustain the rural economy? Small farmers are critical to the rural economy. Is there not a case for a massive expansion of the hoard's role in supporting small farmers?

Sir Wyn Roberts

We all sympathise with that point. Indeed, I began my statement with an appreciation of the situation in agriculture. I also said that the administration of support for farmers in Wales was the prime role of the Welsh Office agriculture department, as in England it was for the Ministry of Agriculture, Fisheries and Food. There is a role for the development board. Its function is not to provide grants and subsidies direct to farmers—there is separate administration for that—but to encourage and promote businesses ancillary to agriculture and life in rural areas. I am sure that that is where its main thrust should be.

Mr. Geraint Howells

The Minister's positive approach has been welcome, in mid-Wales by the western initiative drive which has taken place in the past few months. It will bear fruit in the months to come. May I suggest that area offices should be opened in Ceredigion, Meirionnydd, Brecon and Radnor—the development board has opened a new office in Machynlleth which has been a great success in Montgomeryshire—so that young entrepreneurs and small business people who are keen for advice can go to a local office under the jurisdiction of the development board?

Sir Wyn Roberts

I note the hon. Gentleman's point. He will know that those offices cover rather more than the interests of farmers. Nor would it be appropriate for the development board to have specific powers that are not available to assist farmers in other parts of Wales. I am sure that the board will also note his point.

I was about to say a word or two about tourism. Although the development board has a role in tourism, it recognises that the main role belongs to the Wales tourist board. There is collaboration between the two boards. The section 4 scheme administered by the Wales tourist board began operating in 1971 and has greatly assisted tourism throughout Wales. Since then, in the development board's territory alone, nearly £8 million worth of grant and loan assistance has been provided, supporting more than 420 projects with a capital cost of £38 million, creating or safeguarding about 1,550 jobs.

On Second Reading last night, and again today, the hon. Members for Carmarthen (Mr. Williams) and for Clwyd, South—West (Mr. Jones), to name but two, made a plea for an extension of the board's area. I can only think that that is prompted by a lack of full awareness of what the Welsh Development Agency is doing. It plays an active role in furthering the economy of rural Wales and that part of rural Wales which comes under its jurisdiction. The effectiveness of the WDA's activities in rural areas is demonstrated in a variety of ways. It has 1.7 million sq. ft. of factory floor space, providing jobs for more than 5,000 local people. More than £4 million in private investment has been secured since the launch of the rural buildings conversion grant scheme, resulting in the creation of more than 1,000 jobs. The DRIVE scheme has generated substantial private sector interest, leading to private investment in excess of £2 million.

I could expand considerably on the work of the WDA in areas outside the remit of the DBRW. However, I shall resist that temptation, mentioning only one point that has been raised in the debate—the support that the WDA gives to Menter a Busnes, the initiative to encourage enterprise among Welsh speakers. There is close collaboration between the board, the WDA and the Wales tourist board.

6.30 pm

The hon. Member for Carmarthen referred to the availability of the social powers in the DBRW area. It is important to recognise that there is no legislative gap. The Welsh Office has the power to assist social development schemes throughout Wales, and some £3 million was spent on such measures last year. We have already referred to the Welsh language and the support given to it under section 26 of the Development of Rural Wales Act 1976, but that section gives the Secretary of State power to support the Welsh language in Wales. I know that that will interest the hon. Members for Newport, West (Mr. Flynn) and for Bridgend, both of whom referred to the matter.

Mr. Win Griffiths

Does the reference in the annual report of the DBRW to measures to support the Welsh language include initiatives taken by the Welsh Office rather than by the board itself?

Sir Wyn Roberts

Like many other organisations in Wales, the board is quite capable of doing—and has the power to do—whatever is appropriate in connection with the Welsh language. I am sure, without specific knowledge, that both the WDA and the DBRW would support a business venture with the language at the core of its operations.

Dr. Thomas

This is an initiative within the board, strongly supported by the WDA. It has been effective in obtaining a response within the bilingual community in western Wales and from a broader base of opinion.

Sir Wyn Roberts

I am grateful to the hon. Member, who referred to the craft initiative and asked for further information on it. The three-year period of the initiative comes to an end at the end of the financial year. If none of the parties to the agreement gives notice, the agreement allows for the current funding arrangements to continue. An early evaluation of the initiative is under way, at the request of those involved, and talks are also taking place about what support might be offered to the craft industry in the next financial year.

The hon. Member for Alyn and Deeside foolishly accused the Welsh Office of not having a strategy. Who does he think is behind the board? It is not for us to second-guess it, but its policy is clear, as the hon. Member for Torfaen said. The objective of our policy for mid-Wales is to create a thriving, self-sustained, market-based rural economy. We have witnessed a major improvement in the climate allowing private enterprise to flourish. The development board's policies complement the work of the private sector.

The development board can be viewed as a facilitator acting in a catalytic role for manufacturing industry and helping to create jobs, reduce unemployment, encourage growth, improve the balance in population and achieve higher income. Its key objective is directed towards the expansion and diversification of the economy of mid-Wales. Its focus is on encouraging and strengthening the private sector within its area. I was delighted to hear the suggestion made by the hon. Member for Merionnydd Nant Conwy (Dr. Thomas) that we should privatise as much as possible of the board's activities.

Our policy has helped to create an environment in which young people can find new jobs in manufacturing industry, in tourism and in the service industry, providing a much greater diversity of employment opportunities. Achievements in this help towards the creation of a much-improved quality of life for local people as well as attracting inward investment. All this helps to create a new confidence in the region.

To those who have pressed me for an extension of the board's work, I can only say that it has a full agenda already. It has wide-ranging specific powers on property development, business advisory services and the provision of finance for social and economic purposes. Its specific aims are to develop a flourishing enterprise culture within mid-Wales.

Mr. Win Griffiths

What consideration has the Department given to the activities of the board against the background of what is now admitted to be a recession in the coming year? What estimates has the Minister made of the rates of employment and unemployment in the area covered by the board?

Sir Wyn Roberts

I am coming to that.

The second aim of the board is to assist the private sector in building better businesses and creating the jobs necessary to sustain and diversify the base of local economies.

The third aim is to provide for the people of mid-Wales, with their unique social and cultural heritage, the opportunities to stay and prosper in mid-Wales. The fourth is to improve the quality of life in mid-Wales by improving the number and quality of social facilities and access to them.

The board's operational objectives relate mainly to the creation of viable jobs and the retention of the region's young people by providing the kind of social and economic opportunities that they require. Job creation is inextricably linked with economic, social and demographic structural improvement.

I was asked about the relationship of mid-Wales with the state of the economy. This and last night's Second Reading debate are about the only debates that I have heard for some time in which the unemployment figures were not mentioned once. There is a good reason for that. I am the first to mention the figures because the average rate of unemployment for October 1990 in the DBRW travel-to-work areas was 4.1 per cent. compared with the Welsh average of 6.7 per cent. That is a clear sign of the success of the DBRW, which has been acknowledged on both sides of the House.

The debate has been wide-ranging because it has represented an effort on the part of the Opposition to extend the debate beyond the remit of the development board. The new financial limit proposed under the Bill will provide the board with the headroom it needs to pursue the tasks that I have specified, not only now but in the years ahead. There is no question but that it has been a success and that it will be a success in the future.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

Bill reported, without amendment.

Bill read the Third time, and passed.