Welsh Affairs

HC Deb 27 February 1997 vol 291 cc457-75

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Coe.]

4.57 pm

The Secretary of State for Wales (Mr. William Hague)

The 12 months since we last debated Welsh affairs in the House have been 12 months of success for Wales—12 months of challenges accepted and met, and 12 months of increasing prosperity and opportunity for the people of Wales. In the past year, we have seen our policies and reforms continue to bear fruit and bring benefits. I want to mention some of our achievements and to set out how we intend to maintain the momentum to take a successful and prosperous Wales into the next century.

I have concentrated over the past two years on three themes above all—the economy, education and the environment. The three must be linked in people's minds and actions if we are to make sustained progress in a modern society. Taken together, they represent opportunity—the opportunity of learning, of gaining qualifications, of mastering a skill, of gaining a job, of continuity for communities, of a future for young people, and the opportunity to live in a healthy environment and to enjoy the variety of spectacular scenery that Wales has to offer.

Unemployment in Wales has fallen by more than 9,000 in the past three months alone, and last year we won inward investment promising 15,000 jobs: that is 15,000 opportunities for individuals, and more opportunities again for entrepreneurs and companies to capitalise on that success. Standards have risen in our schools, so that young people in Wales can be properly equipped to take those opportunities, and we are training more apprentices and technicians to take their places in this new industrial revolution.

Mr. Rhodri Morgan (Cardiff, West)

That is excellent news about the 15,000 new jobs, which possibly makes this a record year, but does the Secretary of State accept that most of those posts will not be filled until after the general election, and that most of the employers are well aware of Labour's 20-point lead in the opinion polls? That makes it absolutely clear that all those employers, both existing and new, have no fears about anything that an incoming Labour Government might do.

Mr. Hague

Most employers are far too wise to presume on the outcome of an election being determined by opinion polls, as the hon. Gentleman seems to do. If many of those employers were aware—as some of them are—of the many regulations imposed on businesses on the continent of Europe, they would have a different view on where to expand their activities.

Mr. Donald Anderson (Swansea, East)

The LG investment, as the Secretary of State knows, will generate the need for substantial additional housing, and there is a major question whether that will be clustered in one area, Coedkernew, or spread wider afield. The Secretary of State for the Environment has published a think piece on where people will live in England, because of the growing number of households and other factors. Can the right hon. Gentleman see a case, given that our problems are similar, for a similar think piece in respect of Wales?

Mr. Hague

I do not necessarily accept what the hon. Gentleman said about there being a great need for new housing because of the LG development. In the main, I should like the benefits of the project to go to people living where they live today. I cannot prejudge any decision that I would make on alterations to structure plans, but that is my general approach, and I believe that it will command the support of hon. Members of all parties.

Mr. Paul Flynn (Newport, West)

I am puzzled by one thing: the United Kingdom has won 78 Nobel prizes for science this century, and Korea has won none, so why are we spending large sums of money to buy scientific jobs from Korea?

Mr. Hague

The hon. Gentleman knows that the project will bring vast benefits to his constituency. The vast majority of the money that brings the jobs is coming from LG, from Korea, not from the United Kingdom. I think that it is right in some areas to give assistance to companies, wherever they come from—Korea or Wales, home-grown or overseas—to encourage jobs to go to those areas. The hon. Gentleman's constituency has been one of the principal beneficiaries of that policy, and he should not be in the business of criticising that.

Mr. Rod Richards (Clwyd, North-West)

Will my right hon. Friend give way?

Mr. Hague

Yes, but this will be a very long speech if I give way all the time.

Mr. Richards

I am grateful to my right hon. Friend. Does he understand the Labour party's proposals on employment? On the one hand, the right hon. Member for Dunfermline, East (Mr. Brown) says that a Labour Government would spend about £3 billion subsidising employers to employ approximately 250,000 people, on the basis that reducing employment costs increases the numbers employed; on the other, he wants to introduce a minimum wage, which would increase costs and, surely, reduce the number employed. Does my right hon. Friend agree that that is totally illogical?

Mr. Hague

Yes. My hon. Friend makes a pertinent point. There is no question but that Labour's policies would reduce employment, and they would certainly reduce employment opportunities for the future in Wales. The minimum wage would damage those opportunities, as the deputy leader of the Labour party has acknowledged in the past, as would the adoption of the social chapter.

I briefly mentioned education and industry. We are working, in addition, to sustain rural communities and to maintain a living, working countryside, bringing together agriculture, industry and tourism in a way that preserves a way of life, a culture, and the countryside itself.

We have succeeded in all that, not by looking inward and believing that our economy or our environment begins and ends at the Welsh border, but because we are part of one of the strongest and most flexible economies in Europe; because we look outward for investment and ideas; and because we are prepared to compete at an international level.

There is still the challenge of spreading opportunity and prosperity throughout Wales, and I shall outline in a moment some measures to achieve that; but before I go into detail on those and other matters, let me refer to one more piece of recent good news, one more opportunity for Wales.

When the European Council meets in Cardiff next year, we intend to make sure that it meets in an even more prosperous and dynamic Wales, a Wales that is fully part of a prosperous and dynamic United Kingdom with a strong, self-confident message about itself for the rest of Europe and a strong, clear voice in the decision-making processes of the United Kingdom, not a Wales distracted and weakened by a prolonged and bitter debate about yet another tier of government. I want not the devolution of despair but the devolution and extension of opportunity for more and more people in Wales.

Mr. Dafydd Wigley (Caernarfon)

Will the Secretary of State confirm that, if there is a referendum after the general election, with a real choice for the people of Wales, the Conservative party will not oppose it? If he opposes such a referendum, is it because he believes that the general election gives a mandate to an incoming Government to set up an assembly?

Mr. Hague

My right hon. Friend the Secretary of State for Scotland and I have said clearly that we would respect the outcome of a referendum and that people would be landed with the consequences of such a referendum for the foreseeable future. However, I have grave misgivings about the idea of a pre-legislative referendum. That is a misuse of referendums and creates a situation in which the Government of the day either say that they want the electorate to give approval before seeing the details or say subsequently to Parliament that a draft Bill has been approved in a referendum and Parliament must pass it whether it likes it or not. That is not easily combined with the parliamentary democracy that we cherish.

We are threatened with the misuse of a referendum by a Government with an overmighty attitude. If the disaster of a Labour Government were to happen, we would no doubt have to return to the subject. I intend that the Government of the United Kingdom after the general election will be one who will not go down that road of the ludicrous distraction of constitutional change but will continue to bring jobs and prosperity to Wales.

That prosperity is the subject to which I now want to return. Our overriding objective for the UK economy is to promote sustained economic growth and rising prosperity. The two cornerstones of our policies are permanently low inflation and sound public finances.

We have the fundamentals well in hand: inflation is well under control and stable—the best performance for nearly 50 years—interest rates remain low; public finance is under tight control; and the public sector borrowing requirement is forecast to fall further in the years to come. Independent observers, such as the Organisation for Economic Co-operation and Development, say that the UK economy is now more flexible, competitive and resistant to inflation.

Wales has benefited enormously from those policies. We have more than 300 overseas-owned companies operating out of almost 380 plants and employing more than 75,000 people. Wales is undergoing a new industrial revolution, transformed from a country heavily dependent on traditional industries to a modern and diverse growing economy.

Let us consider some of the facts. Since 1982, manufacturing productivity in Wales has been above the UK average—9 per cent. above in 1994. Provisional figures for 1995 show that Wales has a sturdy 14.6 per cent. advantage over the rest of the UK.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

Given those figures, is it not all the more dismaying that Bluebird Toys decided to close its Merthyr plant? It had been part of the diversification process and had received fantastic assistance from the Welsh Office, local authorities and the Welsh Development Agency. Even at this twelfth hour, I wonder whether collectively we could persuade the company to continue to locate some of its production there, so that it does not become an import-only toy company.

Mr. Hague

I share the hon. Gentleman's disappointment about that recent news, which, I think, involves 88 jobs. I recently wrote to him about the matter. Both the Under-Secretary, my hon. Friend the Member for Cardiff, North (Mr. Jones), and I have written to the company in the past to make it clear that we stand ready to offer any assistance that we can give. That offer stands, and if there is any other way in which we can pursue the matter, I am ready to do so. I am sure that the hon. Gentleman acknowledges that, although we regret that news, there has been much other good news for employment in his constituency in recent months.

Since 1979, the number of manufacturing businesses in Wales has increased by about 46 per cent. Indigenous companies work alongside inward investors. Welsh steel making has improved beyond recognition to become the most efficient in Europe. The number of people in employment in Wales has risen over the past decade by 95,000. Manufacturing industry has for a long time been a particular success story in Wales. We are the only region of Great Britain—

Mr. Wigley

Country.

Mr. Hague

We are the only part, the only country, of Great Britain whose manufacturing employment has increased over the past decade. Unemployment in Wales continues to fall: it fell by 9,200 over the past three months. Long-term unemployment dropped by 8 per cent. in the year to January 1997.

Mr. Walter Sweeney (Vale of Glamorgan)

Is my right hon. Friend aware that, in the Vale of Glamorgan since I was elected in 1992, there has been approximately £1.6 billion of inward investment and several hundred new jobs have been created? Would he care to comment on the implications for my constituents of the social chapter, a minimum wage and the other job-destroying measures proposed by the Opposition?

Mr. Hague

My hon. Friend rightly mentions his constituency, which has been one of the principal beneficiaries of the growth and success of home-grown companies, as well as of inward investors. It is an outstanding example of the growing success of Wales. He is right: the adoption of a minimum wage and the social chapter would gravely inhibit employment opportunities in Wales. There is no question about that. Jacques Delors himself thought that our opt-out from the social chapter would make the United Kingdom a paradise for investment. That is exactly what it has done. Adoption of the social chapter would destroy that paradise.

Mr. Flynn

Will the right hon. Gentleman give way?

Mr. Hague

No, I shall make some progress. I have given way to the hon. Gentleman once.

Business surveys published today show that firms in Wales remain optimistic for the coming year. Domestic orders and output are strong, with firms expecting growth to continue. Prospects for employment are good, and strong growth in investment in plant and machinery is expected. Professional forecasters are bullish about the prospects for Wales. Cambridge Econometrics expects the Welsh economy to grow faster this year than that of the United Kingdom as a whole.

Yesterday's newspaper headline, that south-east Wales is the "Best place in the UK to get a job", would have been unimaginable a few years ago. It is a measure of the achievement of the Government and of countless businesses in transforming the prospects for Wales. If south-east Wales is the best place in Britain to get a job, it follows that it must be one of the best places in Europe to get a job. Now our ambition is that, in the next few years, the whole of Wales will be the best place in Europe to get a job. We know that there is more to do. We will continue to help to create jobs across a broad range of businesses. We want stronger services to complement manufacturing with even more financial services and research and technology-based businesses in Wales.

The Welsh Development Agency has made a significant contribution to the Welsh success story. It has met, and exceeded, its targets. Its activities assist economic growth and job creation throughout Wales. In the past year alone, it has played its part in attracting £2.5 billion of investment through 150 projects. I want the agency to build on its successes and to consolidate its achievements by ensuring that the benefits are spread throughout Wales.

In response to the challenge of attracting more investment to areas outside the more traditionally favoured south-east and north-east of Wales, for the coming financial year I shall require at least 50 per cent. of the jobs safeguarded or created by the agency to be outside the eastern M4 and A55 corridors. That is a major increase from the current 20 per cent. target, which relates solely to capital and inward investment programmes. The 50 per cent. target would relate to all the agency's programmes.

The Development Board for Rural Wales will similarly concentrate at least 50 per cent. of its programme expenditure on its western areas, demonstrating the commitment to job creation in those areas, where unemployment is, on average, higher than in south-east or north-east Wales. Of the 12,500 jobs, 8,000 should come from inward investment, of which at least 3,000 should be from new, overseas projects. With the inward investment jobs target, I shall be looking for the agency to secure at least £400 million in associated planned investment.

The land reclamation programme of the agency will continue. It is working on several large schemes; the reclamation of some 1,400 ha—nearly 3,500 acres—will be physically progressing on site. Over the next two years, the agency has given a commitment that it will complete the reclamation of schemes totalling 750 million ha, or 1,850 acres. The target of completing the reclamation of 200 ha during the coming financial year is the first phase of that two-year commitment.

The success of Wales in attracting inward investment and consistently achieving 10 to 20 per cent. of all inward investment brought to our shores is envied by many of our competitors. The competition is fierce and sophisticated; it comes from elsewhere in the United Kingdom, from the United States and from the Asia-Pacific region. To remain successful, we must stay sharp and react to the needs of today's multinationals, as we have with LG, Sony, Ford, Newport Wafer-Fab and a host of others.

Mr. Donald Anderson

Will the right hon. Gentleman give way?

Mr. Hague

I shall be very generous and give way to the hon. Gentleman a second time.

Mr. Anderson

I congratulate the Secretary of State on his belated recognition of the growing imbalance between the more-favoured and less-favoured areas of Wales. If we are to build on his wish, we need resources. He knows of the WDA's complaint that, because of existing commitments, there is no headroom left to carry out the policies that he now favours. How will he deal with that?

Mr. Hague

We debated this matter in the House a couple of weeks ago. The WDA has many commitments, but that does not mean that its entire budget is committed. The hon. Gentleman knows that I increased this year, will increase again next year and plan to increase again the year after that, the amount of Government grant in aid that goes to the WDA. Some hon. Members have said that they would like to provide more resources for the WDA, but given that they have also said that they are committed to the total spending plans of the Welsh Office, they need to say where they would find the money and what reductions would be made to finance it—a subject to which I shall return.

Only this week, Ford announced another investment in Wales: £25 million will be spent at Swansea to make parts for the next generation of Escort cars. That is a demonstration of faith in the Welsh work force and secures the plant there for the immediate future. Today, there was an announcement by another long-standing investor in Wales: Hoya will spend more than £10 million at its Wrexham lens plant and more than double its work force of 100. I met the company president on a recent investment mission to Japan. The quality of the work force, and the company's positive experience in Wales, led to that expansion.

As Hoya and Ford have discovered, we offer a dedicated, reliable and flexible work force; good industrial relations; competitive overhead costs, made possible by low non-wage costs; good transportation links to markets in the United Kingdom and further afield; continued investment in quality infrastructure, such as the new A465 link and our private finance initiative schemes including the A55 across Anglesey, which is now the highest priority in our roads programme; a positive approach by those of us involved in economic development; and a stable economy with low interest and inflation rates and good prospects for growth.

Mr. Ieuan Wyn Jones (Ynys Môn)

The Secretary of State mentions an important issue in my constituency. He will know that the Under-Secretary, the hon. Member for Cardiff, North (Mr. Jones), attended a meeting in Anglesey a few days ago to discuss the matter, and it was put to him that, under the programme, even under the private finance initiative scheme, there should be a much earlier start than autumn 1998. Will the right hon. Gentleman announce today that he is looking seriously at that proposal?

Mr. Hague

I shall certainly consider any means of bringing forward the project, although the process of ensuring that the PFI scheme can go ahead and that the right bidder has been selected will take some time. I fully intend, however, that that road will remain the highest priority in our roads programme and I certainly intend—and continue to believe strongly—that we shall meet the target date for completing the road that was set even before PFI was considered for it. I hope that the hon. Gentleman will reassure his constituents on that.

Wales is now in an enviable position and we have a golden opportunity. We must now rise to the challenge of making sure that as many as possible of the spin-off jobs from major investments go to Welsh people working in Welsh companies spread throughout Wales. That is the task ahead.

Mr. Wigley

Will the right hon. Gentleman give way?

Mr. Hague

I should make a little progress, or other hon. Members will not have time to speak in the debate.

To rise to the challenge and take that opportunity, our young people must be better educated and more highly skilled than ever before.

In Wales, we have created an internationally renowned work force, responsive to change and with the initiative and skills to meet the demands of leading-edge and high-technology businesses. That is why we recently updated our framework for post-school training and education. A few weeks ago, I published a document entitled "People and Prosperity: Building on Success", which reports on what we have done to develop a competitive skills base and outlines the steps that we now need to take to build on that success. Those steps include opportunities for young people through high-quality national traineeships; increased funding for modern apprenticeships to allow another 4,300 young people to take part; doubling support for the adult technicians scheme; and getting demotivated young people back into education and training and on into jobs.

Earlier this week, the training and enterprise councils in Wales launched their own manufacturing skills plan for training to support the manufacturing industry that we have created. It is a vision for the next century and I commend them on their efforts and foresight.

The "Bright Future: Beating our Previous Best" programme is also at the heart of our efforts to promote improved school performance in Wales and it is working. It aims for continuing improvement. Everyone concerned with education knows that schools that rest on their laurels or are content with low expectations and poor results are selling pupils short. Schools throughout Wales are beginning to set themselves targets for improving performance. I have set more targets for education in the new "Bright Future" document. The targets that I am setting are ambitious and testing. I want everyone with an interest in education in Wales to take the opportunity to comment on them, and help shape them.

We are not only improving standards but increasing parental choice, two aims that come together in the popular schools initiative, which is providing £26 million to expand successful, high-achieving schools that are attracting more pupils than they can physically accommodate. In total, 24 schools and the work that we have funded will create an extra 2,000 pupil places. Two thousand more families will be able to send their children to their first-choice school as a result.

Our policy of extending choice also applies to the education of four-year-olds though the nursery vouchers scheme. Some 30,000 out of 35,000 have now registered. The scheme is giving parents a real choice in the education that they want for their four-year-olds. Opposition Members have frequently told us that nursery provision in Wales was so good that the scheme was not needed. Why, then, are we seeing such a sudden, marked improvement in provision? Flintshire, Wrexham and Denbighshire are all moving from quarter-time provision to at least half-time provision for all four-year-olds from April. Anglesey and Conwy also propose statutory notices, which will allow admission of four-year-olds earlier and will therefore offer all four-year-olds a full three-terms provision. Gwynedd has also announced its intention to expand nursery provision for four-year-olds from April, and for three-year-olds from September. If nursery provision was so good before, how come all those improvements are taking place now that the nursery vouchers scheme has been introduced? They are not the results of a failing, unwanted, unneeded scheme, as it has been described. They are the results of another measure to increase choice and opportunity, to which Opposition Members have been blindly opposed.

Our educational reforms are important for their own sake, but they are also part of our strategy for creating a modern and prosperous economy in Wales. Sometimes, people fear that our economic success will be bought only at a high cost to our environment. I take the opposite view. The countries with the worst environmental records in Europe were those bankrupt economies of the eastern bloc. Only healthy, prosperous economies can protect their environment, and we in Wales are demonstrating that economic progress and respect for nature can go hand in hand.

We have been able to fund the largest land reclamation programme in Europe, and I recently presented certificates recognising respect for the environment to companies ranging from National Power at Aberthaw to Kyushu Matsushita at Newport, and many others are working toward or achieving those high standards.

We have launched a business and environment campaign, making companies more aware of the impact of their operations on the environment. We have increased the funding of the Countryside Council for Wales for the second successive year, established a Wales biodiversity group, and launched the Environmental Education Council for Wales.

Those measures add up to a coherent and wide-ranging package to protect and enhance the Welsh environment. We already have a good record on improving the quality of our air and water. Some 98 per cent. of rivers in Wales are of good or fair quality. Bathing waters around Wales have never been cleaner, with results for 1996 showing a 93 per cent. compliance with European standards, compared with less than 50 per cent. in 1986 when testing first began.

Last year, I was involved in the launch of the green sea initiative. That is unique to Wales and involves Dwr Cymru—Welsh Water—the Wales tourist board and many others working together toward the ambitious aim of achieving 50 blue flags on the Welsh coastline by 2000. That will give Wales the edge in terms of both its coastal environment and its ability to attract tourists. Next week, I shall launch the Welsh Coastal Forum, to bring together all those involved in caring for the coastline and our coastal waters.

Mr. Alan W. Williams (Carmarthen)

The Secretary of State will remember that it is almost exactly 12 months since the Sea Empress disaster, when 70,000 tonnes of oil spilled mainly on to the Pembrokeshire coast, but also affected other parts of the south Wales coast. The Government refused to hold a public inquiry, but allowed the Department of Transport to hold its own internal inquiry. As the Secretary of State knows, that has not yet reported. Will he have a word with his colleagues in the Department of Transport? The people of Pembrokeshire and of Wales should see that report before the general election and before the Government run away from the problem.

Mr. Hague

That inquiry is being conducted by the marine accidents investigation branch, not by the Department of Transport as an internal inquiry. I understand that the report will be published shortly, and then the House can look at it.

As the hon. Member for Carmarthen (Mr. Williams) said, this month marked the first anniversary of the Sea Empress incident. One year on from the incident, we can look back on a successful clean-up operation, which, at its peak, involved more than 1,000 people from different organisations. That effort enabled all the main tourist beaches to be cleaned within eight weeks, culminating in Tenby north beach winning a blue flag award during the summer.

We also set up the Sea Empress environmental evaluation committee, to investigate the environmental impact of the oil spill, including consideration of clean-up techniques. Nearly £2 million of Government funds—half of it from the Welsh Office—has been made available for the costs of the programme of works identified in the committee's initial report. Its final report is due in the autumn. We shall learn a lot about how to help nature fight back from such blows and we shall spread the results of our research and monitoring as widely as possible.

It is almost a year since I published "A Working Countryside for Wales". It represented the most comprehensive review ever undertaken of the Government policies affecting rural Wales. In setting out a detailed vision and a framework for sustainable development, the White Paper has pointed the way for the future by balancing sound economic development against the protection of Wales' rich environment. It represents another opportunity—the opportunity of living in a healthy, working countryside, with jobs for young people who can sustain and develop their own communities.

I shall publish a review of the White Paper next month, but I can tell the House now that 63 of the 94 commitments have already been met, including the development of a food strategy for Wales; the launch of the DBRW's market towns initiative; the review of the various agri-environmental schemes, including Tir Cymen; support for communities; the creation of new employment opportunities; and measures to protect the environment. More are in the pipeline.

Farming plays an important role in the Welsh rural economy. In the past year, all three main sectors—dairy, sheep and beef—have been affected in some way by the bovine spongiform encephalopathy crisis. The Government have responded to the crisis by committing support to maintain the structure of the industry in the UK. In addition, more than 150,000 Welsh animals have been slaughtered under the over-30-months scheme and nearly 90,000 Welsh calves have gone through the calf processing scheme.

There should be no doubt about the Government's commitment to the livestock industry in Wales. We recognised the need to bolster confidence in hill cattle farming in the less-favoured areas by announcing last year that the Budget would ensure that an extra £60 million was paid to UK hill livestock compensatory allowance cattle claimants in 1997. In addition, sheep farmers' incomes receive a considerable boost from annual payments of sheep annual premium amounting to £138 million. Those measures have supported the industry in Wales through a very difficult period. Consumer confidence is now returning; we all know that British beef—including Welsh beef—is safe to eat.

A major part of the Welsh Office budget is devoted to health, and here too we are working hard to improve services and standards throughout Wales. We are committed to increasing health spending in Wales each year over and above inflation for the life of the next Parliament. The Labour party has been extremely shy of stating its intentions in that respect. We want to know whether Labour Front Benchers will match my commitment today.

In the coming year, spending on capital schemes for the national health service in Wales will take the level of capital investment to more than £2 billion since 1979. This year, Wales' second cardiac centre will open, providing patients in west Wales with access to a local facility of high quality. At Ysbyty Glan Clwyd, after so many years, work will begin on the cancer treatment centre that will be the centrepiece of a comprehensive cancer service in north Wales. Only last week, I announced a further £1 million in support of recommendations from an expert group to improve cancer services throughout Wales. A number of capital schemes for Cardiff are also going ahead. Spending per head has increased by 89 per cent. in real terms since 1979.

All health authorities in Wales have had increases in spending this year. It falls to them to determine their priorities within their budget. However, I am aware that the consultation document circulated by Dyfed Powys health authority has caused widespread concern and controversy, especially in relation to community hospitals. Any significant change in health services in Dyfed Powys, as elsewhere, that could not be agreed locally would have to come to me for decision. In considering any proposal, I would have strong regard to local views and local health needs. I want to make it clear that I am convinced of the important role played by community hospitals—especially between the primary and secondary care sectors—and would wish to see such hospitals retain their role in delivering NHS care.

Mr. Alex Carlile (Montgomery)

I am grateful to the right hon. Gentleman for his clear rebuke of the outrageous conduct of the chairman of Dyfed Powys health authority, who announced on 23 December that eight community hospitals in Dyfed and Powys would close, without it being her responsibility to close them and without even knowing which hospitals she was talking about. Will he now confirm that rebuke by sacking the chairman of the Dyfed Powys health authority at once?

Mr. Hague

I am not delivering a rebuke of any individual. Health authorities are entitled to consult on future actions and I am making clear the approach that I will take on the matter.

Local views are important in the health service, as they are in local government. I see a strong and continuing role for local government in Wales and have transferred additional powers to local authorities in the past year. I have provided for the coming year an increase of £64 million in central Government support for local government—an increase that is in line with inflation. Local authorities should be able to manage their resources within that increase, which is the limit of what is affordable.

Opposition Members have complained about the settlement—in fact, the hon. Member for Bridgend (Mr. Griffiths) is muttering about it at the moment—but they invariably refuse to say from where they would obtain extra money. They describe the local government settlement as "inadequate", but they have also made it clear that a two-year commitment to stick to our spending plans in total applies across the board, and therefore to Wales. They have yet to say how they would finance higher spending by councils within a fixed total, unless it is by sharp rises in council tax or reductions in spending elsewhere.

The Opposition have also said in the House that the budget of the Welsh Development Agency will not be sufficient, but how is a higher WDA budget to be financed out of a fixed total? In addition, there would be their Welsh Assembly to pay for—many millions of pounds to be spent on the most expensive roomful of hot air in the history of Wales. How would that be financed out of a fixed total, let alone a fixed total that already assumes continuing major reductions in the running costs of the Welsh Office and its non-departmental public bodies?

The fact is that the Opposition are trying to get away with a great illusion—a con trick. The problem facing them is that the form of words that they have adopted to please the City cannot be reconciled with the words they use to please every pressure group or authority that knocks on their door. It is time they answered the questions of how and from where they would finance the additional expenditure for which they continually call. I am sure that they will try their level best to answer those questions in the debate.

Wales is doing well: it is experiencing rising prosperity, growing employment, improved infrastructure and higher standards of education. Our priority for the future is to continue that record; the Opposition's priority for the future is to blunder into constitutional chaos. I have no doubts about which approach will bring the greatest benefits to the people of Wales.

5.35 pm

Mr. Win Griffiths (Bridgend)

This afternoon, we have witnessed an amusing presentation that faltered between the comic and the rose-tinted spectacles. I should apologise on behalf of the shadow Secretary of State for Wales, my hon. Friend the Member for Caerphilly (Mr. Davies), who is on his way to the Labour party Wales conference in Llandudno, which opens tomorrow and is the prelude to Labour Government in Wales. I also apologise for the absence of all the other Labour Members of Parliament who wished to be present at the moment of victory—of which we shall hear later today—in Wirral, South, which is conveniently placed for a short trip across to Llandudno for the conference the following day. My hon. Friend the Member for Caerphilly is not in Wirral, but on his way to Llandudno.

Sir Wyn Roberts (Conwy)

I wish to point out that it does not take three days to get to Llandudno—it takes three hours.

Mr. Griffiths

The roads of this country are so clogged up with traffic and in such a state of disrepair that one would be lucky to get from London to Llandudno in five hours, let alone three. If the right hon. Gentleman can get there in three hours, he must be breaking the speed limit most of the way.

Before speaking about the broader issues relating to Wales at the end of the 20th century, I want to say a few words specifically about the Sea Empress disaster. That event is no longer fresh in our minds, but we should remind ourselves of the scale of the pollution—the thousands of sea birds that were killed along with the damage caused to other marine life; the continuing ban on some sea food harvest; the damage to about 200 km of coastline; the increase in physical and psychological illness among people living in the affected coastal area; and the trauma caused to the pilots and to all those involved in the rescue operation.

Having reminded the House of the disaster, I want to ask the Secretary of State, who also referred to it, several questions. What involvement has he had in developments relating to the clean-up and investigation of the disaster? What guarantees can he give that a similar disaster will not happen in the future? Has he discussed with the Secretary of State for Transport and the Environment Agency the possibility of prosecuting the polluters? Is he now satisfied that the appropriate back-up services—suitably powered tugs and so on—are in place to cope with and ensure a more satisfactory outcome from a similar disaster, if we were so unfortunate as to suffer another?

Lastly, I repeat a question that the Secretary of State has been asked several times: why are the Government delaying the publication of the final report on the Sea Empress disaster? Surely the Secretary of State must be aware that, whatever criticisms it may contain of the conduct of the Government and their agencies, it is hardly worth keeping them from the public to protect the prospects of Conservative candidates in Pembrokeshire in the general election, as the latter are doomed to failure anyway.

Will the Secretary of State commit himself now to ensuring that the Secretary of State for Transport publishes the report before the end of March? Obviously the Secretary of State does not wish to intervene now; he may want to consider the matter and give some direction to the Minister for the wind-up speech.

Like the Secretary of State, I welcome all the good news that we have had this year—the LG investment, the continuing expansion of Sony, the additional investment in Ford, and today's announcement that £203 million of European regional aid is coming to Wales.

As my hon. Friend the Member for Cardiff, West (Mr. Morgan) said, surely the most significant aspect of that news is that those companies are coming to Wales knowing that in all likelihood there will be a Labour Government, and they are well prepared to support that Labour Government by investing in Wales. I draw a contrast between the attitude of those companies and the statements by the leaders of Unilever, British Aerospace and many other British companies, who are already implementing the social chapter and find no problem with it but are disturbed about the way in which the Euro-sceptics are running amok in the Conservative party and threatening to pull the United Kingdom out of Europe—or at least to make it Tory party policy to do so.

We want to welcome those good news announcements, but how do they fit into the pattern of Welsh economic performance under Tory tutelage? They are oases, places of beauty and hope, in a landscape that is still too hostile for the green shoots of growth and prosperity to flourish.

The recently published "Regional Trends" report reveals that Wales has the lowest income per household of any region in the United Kingdom. The Welsh Office publication of June 1996, "Meeting the Challenge—the Competitiveness of Wales," said: Welsh GDP per head has consistently been the lowest of any region in Great Britain. The most recent "Economic Trends" shows that in 1995, Welsh gross domestic product decreased in relation to the UK average. In 1994, it was 84 per cent. of the UK average. In 1995 it dropped to 83.3 per cent. Those are hardly the signs of a growing and flourishing economy.

A Welsh Office publication said: A smaller proportion of the working population (both males and females) in Wales is economically active than in other Great British regions. We are told that In Wales in 1993 and 1994 business Research and Development was roughly 0.5% of GDP compared to I.4%"— nearly three times as much— for the UK as a whole. Wales is an economic region of high unemployment. Of a total of 96,400 unemployed, 31,000 are long-term unemployed, 28,000 are young unemployed and of those 5,500 are long-term young unemployed. There are 61,000 fewer jobs in Wales than there were in June 1979 and 133,000 fewer men are in full-time jobs than in June 1979. Unemployment in Wales is costing the taxpayer more than £800 million a year. That is the true picture: high unemployment, low pay on average, and a GDP at best stagnant, at worst declining. Those are the characteristics of the Welsh economy.

Average earnings for Welsh men working full time are £331.40 a week—the second lowest figure in the United Kingdom. Only Northern Ireland's figure, at 50p a week less, is lower. Greater London is £170 a week ahead.

In 1979, we were near the top of the regional pay league; we are now firmly at the bottom. In 1979, men's average earnings in Wales were 96.2 per cent. of the Great Britain average; in 1995, they had dropped to 88.4 per cent. In 1979, women's weekly earnings in Wales were 97.4 per cent. of the British average; in 1995 they had dropped, like the Welsh men's earnings, to 88.4 per cent.

During that period, men's average weekly earnings in Wales have increased by 29 per cent. in real terms, but the Great Britain increase is 41 per cent. Women's average earnings have increased by 48 per cent., but in Great Britain as a whole the figure is 63 per cent. We are lagging behind; we have not been sharing the growth in income.

The Welsh Development Agency corporate plan records that Welsh living standards are now 76 per cent. of the UK average. Despite all the recent welcome announcements, investment is growing more slowly in the current recovery than in any other this century, and we invest less as a proportion of our national income than any European country.

Our investment record is feeble. Germany invests 60 per cent. more than the UK as a share of national income, Hong Kong 92 per cent. more, Singapore 128 per cent. more. It is hardly surprising, therefore, that manufacturing productivity is 77 per cent. higher in the United States, 44 per cent. higher in the Netherlands, 37 per cent. higher in Germany and 26 per cent. higher in France than in the UK. The list of countries that are out-performing us is almost endless.

Given the continuing under-performance of the Welsh economy, why is the Secretary of State seeking to cut the WDA budget in 1998–99 by about £8 million? Why is he directing it, as I understand it, to move out of urban, rural, environmental and business services for home-grown companies—the very companies that feel that they do not receive the same attention and support as major inward investors? Who will take over that crucial support for indigenous companies if it is moved from the WDA, as I understand the Secretary of State intends?

What consultation has the Secretary of State undertaken with the WDA and businesses in Wales before introducing that surreptitious shift of policy? Is he intent on turning the WDA into an inward investment agency only? Home-grown companies deserve an answer, as it would appear that the Secretary of State is turning them into the second-class citizens of the Welsh economy.

Mr. Hague

I do not know what the hon. Gentleman is talking about and I am not sure whether anyone else in the building knows what he is talking about. There are no plans for the WDA to do as he has described. It is very important to support indigenous home-grown companies as well as inward investors. I have issued no instruction or request to the Welsh Development Agency that it change its approach to that in any way.

Mr. Griffiths

So the Secretary of State is confirming that the WDA will not move out of urban, rural, environmental and business services to companies in Wales? I understand that some strategic directions are being given to the WDA—perhaps they are circulating internally—but I am pleased to hear the Secretary of State say that that will not happen.

The rural economy is not in good shape, either. It has been blighted by the continuing saga of the Government's incompetence on a grand scale in the handling of bovine spongiform encephalopathy. Ever since repudiating, about 10 years ago, the warnings of my hon. Friends the Members for South Shields (Dr. Clark) and for Caerphilly about BSE, the Government have always appeared determined to act when it is too late. That indecision has cost the Welsh taxpayer about £140 million, and Welsh beef and dairy farmers have lost millions of pounds in lost cattle sales, even taking into account the various amounts of compensation paid by the Government.

It has been estimated that, if the export ban continues, up to 3,000 jobs could be lost in the rural economy. On top of that, fears remain about the availability of licensed abattoirs and animal carcase incinerators to deal with the slaughtered cattle. What tests have been done to establish the ability of incinerators to destroy BSE prions, and what checks are made to ensure that the planning consents for those incinerators are not being breached?

Whether in rural or industrial areas, the Tory housing record leaves much to be desired. Over the past three years, local government housing renovation grants and housing capital provision have been cut by 24 per cent. in real terms. The Secretary of State may remember that, when he announced his Welsh Office budget for 1996–97, he allocated £85.1 million to Tai Cymru, from which he said that he expected Tai Cymru to finance about 3,000 housing starts in that year. Miraculously, last December, when the right hon. Gentleman allocated £25 million less to Tai Cymru than he had in the previous year, he said that he still expected it to make around 3,000 housing starts.

How does the Secretary of State expect to maintain housing starts when he has cut Tai Cymru's budget by nearly 30 per cent.? No wonder homelessness in Wales has increased by 68 per cent. in the last decade, with over 9,000 families accepted as homeless in 1995. No wonder the number of public housing starts has constantly fallen below Tai Cymru's preferred target of 4,000 a year. Indeed, in some areas the number has been 25 per cent. below that target.

The Government are ignoring the crisis in our education service. Despite recent improvements, far too many of their policies have resulted in the maintenance of a stubbornly long tail of under-achievement in our schools, and in low expectations among our pupils. The Government are ignoring the imminent shortage of engineers in south-east Wales—a problem that is already acute but which, when LG comes on line, will be brutal, with a knock-on effect throughout Wales. At present Britain is 42nd in the world skills league, and Wales, within Britain, is near the bottom of the table.

Only 58 per cent. of our 17-year-olds remain in full-time education, whereas the figure is 77 per cent. in the United States, 87 per cent. in France, 90 per cent. in Japan and 93 per cent. in Germany. We are nowhere near reaching the national targets on training, set—at least in part—with business. The target of two A-levels or their vocational equivalent, advanced GNVQ or NVQ level 3, is 60 per cent; in Wales we manage 44 per cent., less than the British average and miles behind France and Germany, which manage 58 per cent. and 63 per cent. respectively.

In 1996, 32 per cent. of students in Wales achieved grades A, B or C in maths, science and English or Welsh. The Welsh Office target of 50 per cent. will be very difficult to meet when the Government are cutting, in real terms, the resources available to schools through the local government settlement. Although the settlement was roughly in line with inflation, once the additional amount for the police and care in the community was taken out, the amount that local government could spend on its other services was about 1 per cent. below the level of inflation, and we are now seeing cuts across the board in virtually every local education authority.

At all stages of education and training, the Government are cutting resources because of their poor management of the economy. The 1990s in particular have been characterised by inadequate and unfair funding, which has led to cuts in teaching and support staff, class size and pupil-teacher ratio increases, the overstretching of special education support services to the point of breakdown and a deterioration in the condition of school buildings to the point at which some are health and safety hazards. The Minister shakes his head, but his chief inspector's own report comments on the bad state of many buildings.

The Parliamentary Under-Secretary of State for Wales (Mr. Jonathan Evans)

Perhaps the hon. Gentleman will tell us whether, on the basis of his researches, he is at least prepared to accept that all the information from the inspectorate suggests that the gap between the performance of Welsh students and that of English students has narrowed considerably during the life of the present Government. Perhaps he will also confirm that, when his party was last in office, the gap widened.

Mr. Griffiths

It is certainly true that the chief inspector has been very effective in ensuring that schools in Wales are given the advice, guidance and support they need in order to improve, but all that has been achieved very much despite, rather than because of, what the Government are doing. We need only speak to a cross-section of teachers in Wales to discover that that is their view.

Is it not strange that the enterprise centre of Europe—that, we are told, is what Britain is—seems to have been so badly managed by Conservative Members that the national debt has doubled since 1990?

Mr. Richards

A moment ago, the hon. Gentleman said that the local government settlement in Wales was too low, and that services had been cut. Will he tell us how much higher the settlement should be in the next fiscal year—1997–98—to become fairer?

Mr. Griffiths

When we have the opportunity to open the books in the Welsh Office, the right hon. Gentleman will be able to study, from his armchair—I do not know whether he still has his public house in Ystradgynlais— exactly how we are going to improve the position for local government and other sectors in Wales, because of our determination to use the money that is available much more effectively.

What is the Government's record? In primary schools in the 1990s, there have been unrelenting increases in the number of children taught in classes of over 30. At the last count, at least 74,000 children—25 per cent. of primary school pupils in Wales—were being taught in such classes. That is an increase of at least 16,000 since the last election.

In further and higher education, the good news of expanding numbers has been soured by reductions in spending per student. In 1997–98, the Further Education Funding Council for Wales and the Higher Education Funding Council for Wales will have their budgets cut by £1 million and £6 million respectively. Perhaps it is no surprise that nine of the 26 FE colleges are in deficit this year, and that it is predicted that 15 will be in deficit the year after next. Welsh higher education is also reporting cuts in critical areas. In Swansea, Cardiff, Newport and the university of Glamorgan, engineering and science courses are being dropped, at the very time when efforts should be made to encourage more participation to meet the need for skilled engineers and technicians when the LG investment in Newport comes on stream.

Again, the good news about the expansion of modern apprenticeships and the increase in the numbers of technicians is tempered by reductions that have been made in the Welsh Office's employment and training budget during the lifetime of the present Government, from £152 million in 1992 to £136 million in April this year. The sad fact is that, despite some progress in the past four years, Wales has a smaller share of 17 and 18-year-olds in full-time education than any other OEDC country except Turkey.

It is, perhaps, even sadder that, according to recent studies commissioned by the South and Mid Glamorgan training and enterprise councils, between 15 per cent. and 25 per cent. of school leavers within two years of leaving school have spent much of their time out of education, training or work of any kind—the so-called status zero. The Prime Minister himself said that our education system was failing 80 per cent. of our pupils; yet, after 18 years of Tory rule, the historic long tail of failure has hardly begun to be tackled.

By recognising the realities of Tory failure, we are not selling Wales short but facing the challenge of being prepared to tackle the unresolved problems of the Government's rule. The decline must be halted, and the key will be the extent to which the prospective Labour Government can forge new partnerships in Wales. We will place immense importance on the transition from the Welsh Office to the Welsh Assembly, where we can have a rational, national debate about the making of policy, which does not happen under the Government, where priorities chop and change at the behest of the Secretary of State with little or no debate.

One Secretary of State, the right hon. Member for Wirral, West (Mr. Hunt), was committed to partnership with Europe. Another, the right hon. Member for Wokingham (Mr. Redwood), wanted to avoid it like the plague. The present Secretary of State just follows the twists and turns of the Prime Minister. The current Secretary of State placed great importance on the role of the Countryside Council for Wales, while his predecessor sought to diminish it. There is no debate about these issues. They depend on the whim of the Secretary of State of the day.

All the historically strong European economies have strong regional institutions. Amazingly, the Secretary of State extols the virtue of Wales's links with Baden-Wurttemburg, Catalonia, Lombardy and Rhone-Alpes without seeing the strength of their regional government as an essential part of their economic success.

Mr. Wigley

I have been listening with interest to the way in which the hon. Gentleman is developing the argument with regard to the role that the Assembly will play, particularly in education. If there is an incoming Conservative Government in five years' time, and if they want to pass legislation to extend nursery vouchers to affect primary or even secondary education, how will the Assembly proposed by Labour deal with that? The Scottish Parliament will have law-making powers, whereas the Assembly that Labour proposes for Wales will not, and it will have to live with legislation passed by right-wing Tory Governments.

Mr. Griffiths

I am surprised that the hon. Gentleman takes such a dismal view of the future. We feel that there is no need to be troubled by those issues. We look forward to a future in which a Welsh Assembly can act as a democratic dynamo, inspiring participants from all the social partners and all parts of Wales to develop with Assembly Members and the Welsh civil service national strategies for jobs and wealth.

The Secretary of State is also developing the social partner concept—

Mr. Hague

Gibberish.

Mr. Griffiths

The Secretary of State calls it gibberish, but I note that on the Welsh Development Agency board are people who represent local government, trade unions and business in Wales. Perhaps he does not understand what the term "social partners" means.

We look to the sub-regional committees of the Assembly to focus on their parts of Wales and bring together the development agencies, higher and further education institutions, TECs, local authorities and representatives of local trade and industry to pursue commonly agreed objectives for sustainable economic development.

Mr. Richards

Will the hon. Gentleman give way?

Mr. Griffiths

No. I have given way to the hon. Gentleman once, and I want to complete my speech to allow others to speak.

An essential part of the process will be the regional education and training forum, bringing together Welsh Office and Welsh Assembly Members and officials, LEAs, higher and further education institutions, TECs, development agencies and employers to raise educational and skill standards, which are so necessary in any successful, advanced, modern economy.

We need a highly trained and adaptable work force to get the right inward investment and to develop our home-grown companies to broaden the base of our economy. Our emphasis on the need for a learning society in Wales in which the knowledge and skills of all people are extended in a process of lifelong education cannot be overstated. We must offer education opportunities for all people. Ours is a commitment to a universal high-quality education. We believe that every child deserves to go to a successful school.

As we approach he new millennium, we want a Wales in which well educated citizens contribute to a healthy and wealthy economy that offers continuing opportunities for self-fulfilment to all, not just the privileged few. Educational excellence is Labour's aspiration for the people of Wales in the 21st century. I look forward next year to Labour's aspirations being implemented by a Government headed by my right hon. Friend the Member for Sedgefield (Mr. Blair), whose declared priority is "education, education, education".