Welsh Affairs

HC Deb 25 February 1999 vol 326 cc562-627

Question again proposed, That this House do now adjourn.

1.48 pm

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

The hon. Member for Woodspring (Dr. Fox) began his speech by referring to the hope and aspiration that the Welsh day debate would continue. I also hope that that will happen. Let us briefly remember the origins of the Welsh day debate. It was a substitution for a Welsh Office and Secretary of State for Wales in the 1944 to 1948 period. It was offered as an alternative to the appointment of a Secretary of State and a Welsh Office.

If my memory serves me rightly, the first debate was replied to for the Government by the then President of the Board of Trade, Mr. Hugh Dalton. I was looking forward to the Secretary of State for Trade and Industry replying to the debate. I was particularly looking forward to the previous Secretary of State for Trade and Industry, my right hon. Friend the Member for Hartlepool (Mr. Mandelson), answering a Welsh day debate. Nevertheless, I hope that we will continue to have one. I hope that the business managers realise that it is wanted. It is only in the past 30-odd years that the Secretary of State for Wales has been present for such debates. Before that, they took place without one.

As we look forward to the future of the National Assembly and to a United Kingdom devolved, we should do so without carrying too many myths about the past, particularly the past performance of the British state. In many Welsh circles these days—not only in nationalist circles, but in wider ones—the British state is talked of pejoratively. I should like to make a case in defence of the British state's past performance, at various times, in serving the Welsh nation and the Welsh economy.

I am sorry that the hon. Member for Ceredigion (Mr. Dafis) is not in the Chamber. In the most recent Welsh local government finance debate, he made the case against the British state. He said that the parlous condition of the Welsh economy has something to do with the construction of the British state … The problem can be traced back to Wales's ridiculous over-dependence on heavy industry, the failure to introduce a more varied industrial base". If it had not been for that ridiculous over-dependence on heavy industry, the communities whom I represent—and whom my predecessors for the past 100 years or so represented—would barely have existed. They certainly would not have been able to develop their rich character, or to make the rich contribution that they have made to the whole idea of a Welsh identity. More important, however, was the hon. Gentleman's reference to the failure to introduce a more varied industrial base".—[Official Report, 11 February 1999; Vol. 325, c. 502.] As we embark on the new and exciting constitutional changes that the House has approved, let us remind ourselves that it was a British state and a British central Government who, in legislation from this place, created something that did not exist previously in Wales: a Welsh manufacturing and industrial society.

There was no Welsh manufacturing or Welsh industrial society until the late 1930s. Such a society barely existed until after the second world war. We were not a factory or manufacturing society. A complete absence of the skills necessary for that type of society was one of our major problems and one of the major causes of the depression and the problems of the inter-war years.

Welsh manufacturing society was initially created by a British state and a British Government, legislating from this place. Their redistribution of industry to Wales—not from other parts of the world, but from Birmingham, Coventry, Oxford and the Greater London area—created the Welsh manufacturing base. If nothing else, let us dispel some of the silly myths about the failure of the British state.

Of course, at various moments in history individual Governments have failed Wales. However, the British state created in Wales a fundamentally varied industrial base—as the hon. Member for Ceredigion used the term—that did not exist previously. Moreover, it achieved it by using the centralised powers of central Government, of the British state and of the House.

Mr. Wigley

Surely the hon. Gentleman is being incredibly complacent in his attitude. As a result of the cumulative policy of successive Governments since the post-war period, Wales has the lowest income per head of any country or region in Britain. An immense amount needs to be done. Surely that is not something of which we can boast.

Mr. Rowlands

The right hon. Gentleman takes a selective view of Welsh history. He should recall the state of the Welsh economy after the collapse of our basic industries—coal and iron—in the 1920s and 1930s, and how the economy was reconstructed. I am saying only that the British state made a major contribution to that reconstruction.

I accept that at various times the British state has not been able to match that achievement, and I shall deal with the current situation later in my speech. At times, Governments have of course failed us and failed Wales. However, if the right hon. Gentleman asks where Welsh manufacturing industrial society began, the answer is that it began in a deliberate policy established by British Governments and passed in legislation by the House.

There would not have been a Welsh manufacturing base were it not for central Government exercising power in redistributing industry and in using the other redistributive instrument available to them—public expenditure. Those two elements have played an important role. They were the core of the practical, centralised socialism that was an example of the joined-up government that it is now popular to talk about. As a signed-up member of the process for the past 40 years, I am not prepared to hear it rubbished, as it now is, from a variety of quarters.

Dr. Fox

Does the hon. Gentleman also think it worth pointing out to those who seek to break up the United Kingdom that it is because that Welsh heavy industrial base was allied to other manufacturing and defence capabilities in the United Kingdom, not least an allied defence force, that all parts of the United Kingdom are free today?

Mr. Rowlands

We have made a fantastic contribution to rearmament programmes at various times through the steel and iron industry. I hope that the hon. Gentleman will read my book when it comes out. He will find, however, that Whitehall had an enormously bilious view of the capacity of Wales to assist in the wartime effort. War, not the Government of the day, revalued our greatest resource—our people and their skills.

I have common ground with the right hon. Member for Caernarfon (Mr. Wigley) in that considerable damage has been done to the rebuilt Welsh economy in the past 20 years by deindustrialisation and the erosion and collapse not of our coal and steel industries—although that happened as well—but of the manufacturing base that had been created by post-war Governments. The charge against the Conservative party relates to the decade or more when the number of people in employment fell in Wales while it was growing elsewhere. That led to the serious problems that we now face, with the remorseless increase in the number of workless households and the serious social consequences that have flowed from that. Those consequences are reflected in the recent survey that revealed the deprivation in communities.

My worry and horror is that deindustrialisation is not yet complete and we may be in for another bout of it. The Minister, my hon. Friend the Member for Neath (Mr. Hain), has a particular concern about Ystradgynlais. Anyone who represents communities such as mine will be desperately worried about the impact of the closures that such places are facing. Anyone who knows about the problems of the European or global steel industry will be deeply concerned about the potential impact on our society.

Many interesting things are going on in our economy. In the past two years we have created more than 15,400 new manufacturing jobs, but we have lost about 17,600. The number of people in employment has stalled. That is a challenge to current policies and it will certainly be a challenge to our new National Assembly and economic powerhouse.

The challenge to our existing policies comes because we depend so heavily on the new supply side of the economy that we have devised—training and education. My hon. Friend the Minister knows how much I support our efforts, locally and beyond, on the new deal, training and education to create a better educated, more talented and more highly skilled society, because we believe that that will make people more employable. If we depend heavily on that, we must get our policies right. I am worried that we are likely to produce a large number of educated but unemployable people. I hope that my hon. Friend will take another hard look at the education and training advisory group report, which got the priorities and the balance of the training and education programme wrong. We must ensure that our training and education programmes meet the needs and demands of the Welsh economy in the near future.

My second point relates to the broader macro-economic scene. Historically, the communities that I represent have been far less worried about inflation than about deflation. Deflation has been their curse as it creates unemployment. Banks and bankers have been major contributors to deflationary policy. That is why during the past 18 months to two years I have not shared the Government's enthusiasm for creating an independent Bank of England. I was even less enthusiastic about the creation of an independent European bank that might hold our destiny in its hands.

Welsh economic history shows that Wales is not saved from our British bank, nor does its salvation—despite the usefulness and importance of objective 1 status—rest in Europe. Wales requires a macro-economic policy based on growth and expansion. Jobs and employment need to be at the centre, not at the periphery of economic policy. That is one of the lessons of Welsh history.

At present, the great danger and threat to our economy and to jobs in Wales is not inflation or price stability. Price stability means that small manufacturers and enterprises in my community are not making surplus profits and capital to refinance and invest. We already have price stability and so has Japan, but it has been demonstrated that price stability does not create growth or jobs. The last thing that we need is deflation or deflationary policies of any kind or character. That is the bitter understanding and memory of the communities that we represent.

We welcome the new National Assembly and its economic powerhouse. We have had the slogan "education, education, education". I offer the new Assembly the slogan, "jobs, jobs, jobs".

2.2 pm

Mr. Richard Livsey (Brecon and Radnorshire)

This is the closest date to St. David's day—the last St. David's day this century is on Monday. It is a time to reflect and to look forward. In the words of an old song: "What a difference a day makes". In this context, what a difference a century makes.

Our predecessors in the House of Commons would be astonished that it has taken so long to achieve their cherished dream of a measure of home rule for Wales. The 20th century has not been dominated by radical politics in the United Kingdom, and to testify that, it has taken the entire 20th century for Wales to achieve a measure of devolution. Even now we are only just putting our toes in the water. What Gladstone, Lloyd George, Tom Ellis, Keir Hardie, Mabon and many others would have made of such slow progress I shudder to think, but a Welsh Assembly—not a parliament—is at least in sight.

As the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) said, the milestones of the century in Wales have contributed to the delay. They include the emigration of our young people around the world and the loss of tens of thousands in the first world war, among them the flower of our youth—on the fields of Flanders and northern France they fell. That was followed by the 1926 general strike and unemployment; lock-outs and poverty; the second world war; the hopes born in 1906 and 1945; the creation of a more comprehensive Welsh Office and, in the 1960s, a Secretary of State for Wales; the fiasco of the 1979 referendum and the dark years of the 1980s and 1990s when for 18 years a Welsh Assembly seemed all but impossible; the triumph of the 1997 referendum and the yes vote; a Wales Bill on the statute book; and next May, our very own Welsh Assembly. All that has occurred in the space of 100 St. David's days.

Mr. Evans

The hon. Gentleman said that Wales was putting its toe in the waters of devolution. Is it still his party's policy to give the Assembly tax-raising powers, and would he like that to happen without a fresh mandate from the Welsh people via a referendum?

Mr. Livsey

I know that the hon. Gentleman will not like the word, but we are federalists and believe in tax-varying powers for the regions and countries of the United Kingdom, as well as primary legislative powers. That applies to Wales as much as anywhere else. That has been our policy for a long time.

Mr. Evans

What about a referendum?

Mr. Livsey

In what sense?

Mr. Evans

Would it be Liberal Democrat policy to seek tax-raising powers for the Welsh Assembly without consulting the Welsh people via a separate referendum?

Mr. Livsey

We will put these matters in our manifesto, and if we are elected to power they will be part of our reform programme for the Welsh Assembly. It is up to the electorate of Wales to decide whether they approve.

Those catastrophes and lost hopes of the past 100 years are still, in a sense, there. Sadly, Lucas-SEI decided only last month to close its manufacturing operation in Ystradgynlais in my constituency, which will cause 750 employees to be laid off. They received only four hours' notice, which is really more like something from the first quarter of the 20th century than the verge of the 21st. The work is being transferred to Poland, and the work force in Ystradgynlais trained the Polish workers. That is more or less the equivalent of digging one's own grave and falling backwards into it.

The takeover by TRW of the Lucas Varity corporation, of which the managing director, Victor Rice, will get a cool £17 million—a sum, incidentally, that could keep the Ystradgynlais plant running for another two years—is a disgrace and a scandal. I hope that the Minister will ask the Secretary of State if he will take the opportunity, when he visits the United States soon, to go to the TRW headquarters in Cleveland and ask whether some work can be transferred to Ystradgynlais.

The task force, in which Ministers, local councillors and I have been involved, is there to produce a solution to this terrible problem. Every avenue must be explored.

The Parliamentary Under-Secretary of State for Wales (Mr. Peter Hain)

I was in touch with TRW in America yesterday, to discuss the future of the Ystradgynlais site. I pay tribute to the work that the hon. Gentleman has done on behalf of the work force there, and look forward to working in partnership with him to solve the problems that have been created.

Mr. Livsey

I thank the Minister very much indeed for those remarks. I am sure that the people of Ystradgynlais will also be grateful. We are all working extremely hard to ensure that the problem is solved. The plea by the hon. Member for Merthyr Tydfil and Rhymney for jobs, jobs and more jobs is absolutely correct. We can train as many people as we like, but if the right kind of employment is not there, we will not produce jobs for people in our communities. Whole families have been sadly affected by the proposed closure and we need to find solutions that involve real employment.

There is a huge slump in farming in Wales. The farm management survey shows that the net income of the disadvantaged area farms in 1998–99 is forecast to be a mere £48 for the whole year. In the severely disadvantaged areas and the lowland beef and sheep areas, farmers are at present earning the equivalent of £2.20 an hour. That looks pretty stupid in comparison with the proposals for the national minimum wage, which I support. Those figures are calculated on the basis of a 40-hour week. That problem has to be solved, and quickly.

Our family farms are in terminal decline and unless much more attention is paid to that, I am afraid that there will be an exodus from the land. Help could be given immediately by ensuring that payments such as hill livestock compensatory allowances are made immediately. That would assist the cashflow of farmers in a desperate situation. The Office of Fair Trading report, which will be published shortly, about the pricing policies of supermarkets is important, but there is no accountant on the body considering the issue and it appears to concentrate on groceries rather than the problems in the meat chain that directly affect the farming community.

We also face the problems of Agenda 2000 and CAP reform. Changes are now being made to the original proposals for Agenda 2000. The national envelope and co-financing are problems that I am sure that the Under-Secretary, the hon. Member for Cardiff, Central (Mr. Jones), has been studying in the past week in the Council of Ministers meeting in Brussels on CAP reform. I am alarmed to note from yesterday's Western Mail suggestions of changes to the original Agenda 2000 proposals from a maximum of direct support to farms of £70,000 to a maximum of £3,700. If that goes through, it spells disaster. What impact would it have on the Welsh Office's agriculture department budget, which has reached £300 million of support for farming in Wales? I have noted references in Welsh Office documents to sums of more than £200 million. That could mean a substantial reduction in support for the farming industry from the Welsh Office, much of it European money.

We have discussed the objective 1 situation and the question of matched funding at length, and I shall not go back over that ground, except to remind the Secretary of State that the Lucas factory is only 200 yards from an objective 1 area. That is a problem in its own right, because the people of Ystradgynlais cannot benefit directly from objective 1 money. I know that the Minister is trying to do something about that and I am sure that he will work hard to obtain additional funding for the upper Swansea valley.

Powys and parts of east Wales are in dire need of objective 2 funding and I have been promised before that those areas will get it. However, the question of matched funding arises again. I was in Brussels last week and I discussed the issue of European structural funds with some of the Eurocrats. It was stressed to me that grass roots projects were an important method of obtaining objective 1 and 2 funding. It is not top-down action that is required, but local communities coming forward with proposals. That is an important way to tackle the problem.

How will Wales look on St. David's day in 2000? St. David's day is a special day in the calendar, when the daffodils emerge from the bud on every hillside and in every garden, and in every lapel. However, St. David's day is also a genuine sign of the gathering spring. It is a time of hope, singing and poetry, as every schoolchild in Wales knows. One has only to visit a primary school in Wales on that day to be greeted by the spirit of St. David.

By this time next year, Wales will have had its National Assembly for almost a whole year, including the first elections, a new First Minister, the first ever Cabinet for Wales and a Committee structure that I hope will be founded on true democratic principles, perhaps including one member, one vote.

I do not believe that the Government of Wales model will be as radical as some people think. There will be welcome change, but not a revolution. Will it be the personalities or the parties that will reign supreme? There is no lack of characters in Wales and I am certain that many will emerge in the new Assembly. Many are likely to be women, and that will be a change for the better. In fact, the personalities are likely to prove more influential than the political parties.

Time will put the Members of the Assembly on a steep learning curve. It will not be long before they come to realise what they cannot do, as much as what they can do. Let us hope that in a year's time they will not be too frustrated. Secondary legislative powers may sound superficially attractive, but in 12 months' time they may be seen as no big deal! Balancing the books will also be a frustrating experience and priorities will demand hard choices. I can envisage cries next March for primary legislative powers and tax-varying powers, just like Scotland.

Building up new traditions in our Assembly will be a challenge. I make a firm prediction that the deep sense of fairness in Welsh society will mean that the twin values of liberty and social conscience will be much to the fore. I hope that tolerance and inclusiveness will underwrite those values. That does not mean that the traditional fiery Welsh radicalism will not have its place, but it will be fashioned into a more egalitarian democracy suited to the 21st century.

The proportional system of top-up seats should give us political representation that is a truer reflection of people's views in Wales. Wales is nothing if not a community of communities, so the proportional system of top-up seats should therefore be welcomed. Let us hope that we see the end of machine politics. There is a danger that if the power of the Executive is misused, people will feel excluded from the Assembly process. The Assembly's Committees, both subject and regional, will be vital. I am hopeful that with an enlightened leadership the disparate views that characterise Wales will begin to be welded into a more cohesive force for good. Wales is too small a country for us to fall out among ourselves.

In particular, we desperately need vision and leadership. Every Committee in the Assembly must have its strategies worked out in 12 months' time. The Education Committee must have set its targets and the Health Committee's recipe for tackling the many problems in Wales must be in place. The Economic Development Committee must have developed its strategies for better job opportunities and wealth creation. The Rural Affairs and Agriculture Committee must have its plan to revitalise our family farms and the rural economy. We may even be considering an integrated transport policy that may provide a solution to join up north and south Wales.

We should know by next year where we want to go as a nation and how we are going to get there. The next years will be spent in engaging the participation of the people of Wales to build a new Wales, with a more caring and entrepreneurial society in which young people can gain skill and jobs in a quality environment, the old know that they will be cared for properly, and where music, sport, the arts and all kinds of recreation are an everyday experience. We will not reach that state in one year, but by next March the signposts will be there to a Wales where it is not always necessary to leave to gain recognition, because it can be achieved at home in our own country. Is that idealism? Yes. Is it possible? Yes. On St. David's day 2000, there will be new stars on the horizon and more than a few poets celebrating the rebirth of our nation.

2.19 pm

Mr. Don Touhig (Islwyn)

I first spoke in this Chamber in the annual St. David's day debate on 2 March four years ago, and I speak now in the final such debate before the historic Welsh Assembly elections. However, I hope that there will be many more St. David's day debates in the years to come because, as we move forward to a historic change in the way in which our country is governed, we must not lose sight of the fact that, in Britain and Northern Ireland, there are four nations but one country. The Parliament of all the nations of Britain and Northern Ireland is, by the consent and desire of the people, here in Westminster.

This Government have delivered on their pledges to the peoples of Wales, Scotland and Northern Ireland to bring about devolution. I welcome that. We have done it in the face of stiff resistance from the Tory Opposition, but we recognise that, if we are to release the potential of all our people and give them a new vision for a new century, we must put in place a modern system of Government to demonstrate a renewed confidence in being Welsh, and in being British.

In my darkest moments, I sometimes think that the one thing that unites all of us who are Welsh is a lack of self-confidence. We lack self-belief, and feel that we cannot achieve things. Some say that that is due to the melancholy in our natures, to the dark, brooding and often romanticised element of what it is to be Welsh. That element may make for wonderful poetry and help to define us, but we must not let it blind us to the future.

Wales is a small country on the edge of a great continent. We may be at the margins of Europe geographically, but there is no reason why we should not be at the heart of Europe economically, socially and culturally. Moreover, I believe that the Welsh people recognise that all our interests can be best served by truly being part of the larger political unit that is the United Kingdom. Not for us the narrow argument of the nationalists, who want a separate and isolated Wales. The people of Wales will not be looking to the nationalism of the 19th century to find the answers to the problems of the 21st century.

I support devolution, and am certain that the Assembly will provide the basis for greater accountability and transparency in decision making. Devolution gives us a chance to put an end to the quango culture, which allows decisions affecting the lives of people throughout Wales to be made by people meeting in secret behind closed doors, who spend millions of pounds of taxpayer's money and yet remain unaccountable for what they do.

Devolution is an opportunity to put a stop to the over-centralisation of decision making which was the hallmark of 18 Tory years. It will help breathe new life into local government, with the Assembly forging a new partnership with councils and with Parliament in Westminster. Many of my councillor friends who were sceptical about devolution are now excited and enthusiastic about the prospect. As the main service providers, they can see many potential benefits of an effective partnership between local authorities, the Assembly and the Government in London.

Partnership right across Britain is one reason why the creation of the Assembly does not mean the break-up of the Union. The purpose of devolution is to create a better system of government for the Welsh people, not to cut us off from the rest of Britain. Indeed, the overwhelming majority of people in Wales do not regard the creation of an Assembly as an opportunity to go down the separatist path.

The referendum gave one clear message: the people of Wales are not yet convinced of the benefits of devolution, and it is no good hiding the fact that the jury is still out. The big challenge for us all is to make devolution work and to show the Welsh people that it has considerable benefits for them.

One key area in which we must make devolution work is in meeting the economic challenge. The Assembly must help provide the motivation, and be the powerhouse to transform the Welsh economy. It must, as my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) said, create jobs to bring about lasting prosperity. It is as a result of the policies pursued by this Labour Government—the Government of all Britain—that the Welsh people will gain.

Labour's vision is of a Wales where social justice is put before separatism, where investment in education and the reskilling of our labour force is at the top of our priorities. We are not going to compete in the world economy of the next century if we have low wages and a low-skilled work force, with an industry desperately lacking investment and less productive than our competitors. We need a Wales where we tackle poverty and social exclusion by creating opportunities and providing work, so that people are not left to depend on benefits; a Wales in which we recognise that decent, affordable housing is as much an investment in our people's health as money spent on hospitals.

This year of 1999 is truly a year in which Labour will deliver on its pledges—to extend democracy by means of the Assembly, and to tackle poverty root and branch. We want to begin by helping people on benefit who can and want to get work to be given that chance. However, we must recognise that it is no use moving people from poverty on benefit to poverty in work. That is why we need a national minimum wage.

When it is introduced in April, the national minimum wage will benefit tens of thousands of people across Wales, many of them women. The minimum wage, linked with the working families tax credit to be introduced in October, will guarantee low-paid families with a full-time worker at least £190 a week, with no tax to pay on earnings below £220. That, together with the reduction in employees' national insurance contributions due in April, will be of considerable benefit to families on low or middle incomes.

All those measures to help the poor in Wales have been opposed by the Tory Opposition. Is it any wonder that no Conservative Members of Parliament represent Welsh constituencies?

There is much more that we must do to tackle the culture of poverty in Wales. Children and old people are the most vulnerable, and are often locked in a cycle of poverty from which it is almost impossible to escape. That is why, from April, child benefit is to be raised by a record amount of £2.95 for the eldest child. There will be equivalent increases for poorer families with rises in family premium, income support and jobseeker's allowance.

Building on the package of measures already announced for pensioners, from April eye test charges will be abolished, and all pensioners will have a minimum income guarantee of £75 a week for a single pensioner, and £116 for pensioner couples.

As my right hon. Friend the Secretary of State said when he opened the debate, the new deal has been a great success in Wales. Thousands of young people are now in work and being given opportunities, where before they had no hope and no chance. Supporters of the Welsh nationalist party in my constituency have labelled the new deal slavery, but we are creating opportunities. From April, those opportunities will be extended to people over 25.

On top of that, the Government have cut business taxes to an all-time low to encourage investment. At the same time, they have put a massive £1 billion extra into health in Wales and £850 million into education.

If the other parties had been told before the general election that, in two years, we would do half as much as I have described, they would have called us fantasists and claimed that we would be unable to achieve anything at all. So let me remind the House what the Government have achieved in those two years.

Class sizes have been cut. Hospital waiting lists are down. Handguns have been banned. There are new rights for people at work. The national debt has been reduced from £28 billion to £8 billion. Interest rates have been cut to their lowest long-term rate for 35 years. Value added tax on fuel has been cut to 5 per cent. Extra money has been devoted to breast cancer screening. Councils have been allowed money from the sale of council houses to build new homes and improve existing ones. The largest hospital building programme in our history has been launched. The biggest-ever child care programme is under way. There has been legislation to raise standards in schools. The Bank of England has been given independence to set interest rates. There has been a massive shake-up in the criminal justice system—I could go on.

In a couple of days, we shall be celebrating St. David's day, our saint's day. After two years of this Labour Government, there is much to celebrate, for Wales and for Labour in Wales. Working in partnership with the Assembly that will be elected on 6 May, the Government will take forward the policies that I have talked about this afternoon, for the benefit of all the people in Wales. The policies that concern them are investment in health and in education and training. They want job opportunities, safer streets, better public services—those are the priorities of the people whom I represent. They are the policies of the Labour Government in Westminster, and they will be the policies of the Labour party that will run the Assembly.

The people of Wales will respond to Labour's vision for the 21st century—partnership within the United Kingdom—rather than the narrow nationalism of the 19th century. They do not want to operate at the margins of politics, like the increasingly desperate Tory party. They do not want the publicity without responsibility of the Liberal Democrats. The people of Wales consistently rejected the separatist agenda of the nationalists. They reject policies that benefit the few, not the many, as advocated by the Tories. They have certainly rejected the Mickey Mouse tactics of the Liberal Democrats.

We are approaching the biggest shake-up in the government of Wales. We can make that change with confidence and without fear. The people of Wales will look to Labour—the real party of Wales—to make an historic process work.

2.30 pm

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)

I wonder why the hon. Member for Islwyn (Mr. Touhig) left the Green party free of his venom.

It is often said that, when political parties unite, they do so for a serious cause. There is no doubt that all the political parties in Wales—notwithstanding the long spat between my right hon. Friend the Member for Caernarfon (Mr. Wigley) and the Secretary of State—have worked together to try to obtain objective 1 status for west Wales and the valleys. I have rarely seen such a concerted effort, and I have worked closely with members of the ruling party in north Wales to secure that all-important designation, which would be a tremendous social and cultural boost for Wales.

The underlying principle that should guide us in considering objective 1 status is the impact that it could have on economic and social cohesion. We must consider additionality: significant improvements have been made in demonstrating additionality at national, regional and local level. However, there is a need to ensure that mechanisms are in place that fully demonstrate the transparency and improved measurements of the concept.

Complementarity—the relationship between structural and domestic funds—has never been adequately addressed. A grey area remains over, for example, the differences between the European regional development fund, the European social fund and the European agricultural guarantee and guidance fund. Matters still require to be ironed out in that complicated area, and we should all consider them more often than we do, standing, as we are, on the threshold—possibly—of obtaining objective 1 status.

The Secretary of State referred to partnership—a buzz word in politics, but an important feature of structural fund policy in Wales—which will be a prerequisite of policies related to objective 1 status. I have the privilege of representing a constituency that falls into two unitary authority areas—Gwynedd and Conwy. Both would benefit substantially if objective 1 status came to Wales. Mindful of the time constraints, I shall today talk only about Conwy county borough council, which covers what was previously Aberconwy borough council and part of Colwyn Bay borough council.

The area has suffered greatly over the past 12 or 13 years. Aberconwy qualified fully for objective 2 designation 10 or 12 years ago, but lost out. I visited Brussels, and a number of members of the Commission confirmed that there was no shadow of a doubt that the area qualified on all basic criteria. Alas, however, it did not happen. Over the past 10 or 12 years, the area has undoubtedly suffered. I do not doubt that the luck of Merseyside—good luck to that area—in obtaining objective 1 status was an active disincentive to inward investment into Conwy.

Conwy has the lowest gross domestic product in Wales, the lowest-wage economy in Britain and a low rate of inward investment. It is incredible but true that only 18 new jobs were created between 1994 and 1997. Yet the area gains no assistance from designated status.

The economy in Conwy depends on jobs in the tourism, public and agricultural sectors. Changes in tourism and agriculture are putting significant pressure on the viability of businesses in both sectors. The economy of Conwy desperately needs to diversify to strengthen its base if it is to be socially and economically sustainable. Recognition of the county's problems, and its inclusion in the west Wales and valleys sub-region which has the prospect of obtaining objective 1 status, is a tribute to all who have striven in partnership to have Conwy and Denbighshire included in that designation.

Led by the county borough council, partners are developing a county-based development strategy based on the themes of competitive business, countering social exclusion and balanced development. That strategy will be integrated into the broader west Wales objective 1 strategy, providing a clear framework from 2000 to 2006. I hope that that will help the area to overcome its structural problems.

The strategy will seek to create a balance of indigenous and inward investment, a matter that has, of late, much concerned the Select Committee on Welsh Affairs. A report has been prepared, and the Committee, of which I am a member, took evidence from many areas on inward investment and indigenous expansion in parts of the UK and beyond.

A full range of support services will be developed for existing and potential small and medium enterprises. Perhaps simplistically, I believe that we do not pay enough attention to SMEs, which, if my figures are correct, account for 90 per cent. of employment in Wales. The stark fact is that, if every SME created one more job, there would be hardly any unemployment in Wales. We must concentrate on that sector, and—although I hope that I am wrong, and that LG will come on line—there are lessons to be learned from putting too many eggs in one basket. It takes creative thinking to expand SMEs and to create an atmosphere of expansion. However, we would do well to target that area as the benefits would be considerable.

The hon. Member for Brecon and Radnorshire (Mr. Livsey) said that the difficulties of the agricultural sector, and the knock-on effects that they have on the whole community, have extremely serious ramifications for his rural community. The same is true of Conwy. It is essential that the quality and value of agricultural produce from Conwy—and from all of rural Wales—should be maximised locally. Objective 1 status can assist us in that area.

The Welsh Office has recently confirmed that the new development authority will have a far more extended agricultural brief, and that is welcome. I hope that we may see such things as a substantial chilling plant for meat in mid-Wales, which could serve Wales and beyond. We lack that at present, and it is an area on which we could concentrate. We should add value locally to meat—the new prepared foods such as lasagna and other meals that are very popular nowadays. By producing such food locally, we would add value to the product. We have a good product, and we should add value as locally as we can to the point of production.

There has been an historic lack of both investment and investment opportunity in Conwy. Several barriers need to be brought down. I am very pleased that Conwy has been included in the European objective 1 designated areas; it is critical that people now concentrate fully on the way ahead and on drawing up plans in good time. If the county of Conwy is to succeed, it is important that projects are proposed as soon as possible, partners found and all potential European and other funding effectively sought.

I could repeat that message on behalf of Gwynedd, but I am mindful of the time constraints and aware that several other hon. Members want to speak. Last year, as part of a delegation from the Select Committee on Welsh Affairs, I visited Inverness and the highlands and islands of Scotland. The problems of those areas were not dissimilar to Gwynedd's problems—the feeling of remoteness and declining economic activity in a rural setting. The visit was most instructive, because it brought home starkly to me the potential benefits of objective 1 status, if properly used—opportunities for small businesses to expand, and for a hard-pressed agricultural sector to expand and diversify to meet the challenges that will inevitably flow from Agenda 2000.

I also learned of the utmost importance of matched funding. I was told that, because of the effective drying up of matched funding, little use had been made of objective 1 structural funds in the preceding 18 months. In other words, because of the absence of matched funding, the European funds could not be drawn down; the process was at a standstill. Members of Parliament from the north of Ireland have told me of their similar experience of stop-go—when matched money is not available, everything is put on hold. Because any scheme under objective 1 lasts for only a given period of time—six years—if we fail to do our level best to get as much as possible out of objective 1 status, money is wasted. We have all seen the prosperity that has been created in Ireland, largely because of objective 1 funding. Many of us trumpet Ireland's economic success: now, at long last, there is net immigration of Irish people to Ireland, as highly qualified youngsters come back to the good jobs on offer in an economy that appears to be booming.

I do not care greatly that, by raising this important subject, I risk incurring the venom of Ministers—not that venom rests comfortably in the Under-Secretary of State for Wales, the hon. Member for Neath (Mr. Hain), who is sitting on the Treasury Bench. There are, and will be, serious difficulties if matched funding is scarce: we need a greater commitment from the public sector and, more important, from central Government, especially for the long term. Consideration for matched funding should be agreed at programme level, not by project; and there should be further exploration of the global grants system and far greater co-ordination of domestic funds, with better clarification of the rules governing private sector involvement.

I mentioned the general concordat—to use a word of the moment—between the political parties during the campaign to secure objective 1 status. When the Government submitted the plans to Brussels, opposition parties were asked not to rock the boat, lest that should in some way damage the chances of obtaining objective 1 status. I found it offensive when the Secretary of State said that my party, of all parties, was creating difficulties. Far from it—we did everything that we could to assist and we shall continue to do so. In that vein, I shall ask the Minister one or two questions; I trust that, in that vein and in this context, he will find my questions helpful. I shall find it helpful if the answers are forthcoming.

I have campaigned for objective 1 designation for a long time, as have other right hon. and hon. Members. On each and every occasion when the Secretary of State for Wales, the Prime Minister and the Chancellor of the Exchequer have been asked to give an assurance on the subject of matched funding, they have fallen silent, despite their having, rightly, trumpeted the fact that the Government have done everything that they can to secure objective 1 status. There is now grave concern because, without adherence to the principle of additionality and, of course, securing matched funding from additional Treasury money, the whole campaign could come to nothing, like a handful of sand seeping through one's fingers. I am not encouraged by the Government's predisposition to hide behind the Fontainebleau accord—for example, to deny the farmers of Wales proper agri-monetary compensation. The whole question of matched funding has a similar flavour and I am greatly concerned, as is my right hon. Friend the Member for Caernarfon.

In his opening speech, the Secretary of State referred to a recent press release. Professor Kevin Morgan and other members of the Institute of Welsh Affairs have expressed their concern sensibly, not in a headline-grabbing manner. They say that at stake is as much as £1.8 billion between 1999 and 2006, and they quote a letter that they received from the Economic Secretary to the Treasury. The hon. Lady was asked how much matched funding would be available, to which she replied: If Western Wales and the Valleys were to qualify for Objective 1 status after 1999 I can give no assurance that all the additional receipts (assuming that the total allocation to Wales did, in fact, increase) would be reflected in an increased public expenditure allocation". She added: For Scotland, Wales and Northern Ireland, cover for Structural Fund spending must be found within their respective blocks, determined on the basis of the Barnett formula. That is an extremely worrying response.

The Secretary of State was probably right to say that we do not yet know what decision will be made; however, if we do not yet know but such a negative response has already been forthcoming, questions must be asked. It behoves all of us across the political spectrum to ask the appropriate questions and not to leave them until some future date. Why cannot the questions be asked now? More important, why can they not be answered now?

Professor Morgan says: The realignment of the Wales funding map that has now been approved in Brussels is only the first stage in this crucial battle. Two more battles need to be won, the first in Brussels and the second in Whitehall … Brussels has since been convinced that the GDP of the new west Wales and the Valleys region is below 75 per cent. of the EU average. So there is a strong case for the Treasury in London to approve Public Expenditure Survey cover for new funds. Assurances need to be sought by our political representatives that this will be the case. Failure to secure PES cover from the Treasury will mean that up to £1 billion will come from the existing £7 billion Welsh Office block grant. The economic and political implications of this could be disastrous. The Objective 1 victory would be a cuckoo's egg. I call on the Minister to give a full, frank and straight answer to that vital question. Failure to do so will mean that, once again, the Government can be summarised best as a Government who are always ready to raise hopes and expectations, but who are unable to deliver.

I strongly urge Welsh Office Ministers to contact the Treasury and obtain a full, clear and unequivocal answer to the question. All the hard work that has been done throughout Wales and across all the political parties might yet come to nothing unless that assurance is available. I would go so far as to say that, if the additional moneys are not available, the Welsh Office will have let down the people of Wales, because the Treasury will have denied the Welsh Office. The current devolution proposals, good as they are, will not affect that betrayal.

2.50 pm

Mr. Rhodri Morgan (Cardiff, West)

I also wish to return to the subject that caused such a conflagration in the House two hours ago. I hope that my remarks about objective 1 funding and its effects on Wales do not re-ignite that tinderbox.

We all accept that it is crucial to secure objective 1 and matched funding. However, no one should be cheering about the prospect of achieving objective 1 funding because one does not get it for nothing. It is like compensation for mine workers. Someone might think, "Isn't it wonderful: I'm getting 50 per cent. compensation from the National Coal Board for having pneumoconiosis", but it is terrible because that person has pneumoconiosis. The same deduction applies to objective 1 funding: we will receive it because Wales has economic pneumoconiosis. Our gross domestic product levels are so low that we require the maximum rate of European grants to help us put the economy back on a sound footing.

I understand why objective 1 funding causes such excitement. There are two reasons: first, because the timing is so critical relative to the commencement of the Assembly; and, secondly, because objective 1 funding is the jam on the bread for the Assembly's public spending capabilities. We have the Barnett formula and the three-year comprehensive spending review programme—which will begin in a few short weeks on 1 April—and objective 1 funding is a way of going beyond the limit.

If we ultimately secure objective 1 funding and there is no real problem with the provision of matched funding, there could be lots of jam on the bread for the Welsh Assembly. Therefore, the prospect stirs a certain amount of interest. If the figures that we have heard bandied around are correct, in theory, it might mean up to £500 million a year extra in public expenditure for different kinds of infrastructure in Wales for each of the seven years from 1 January 2000. Bearing in mind the fact that the Welsh Office's comprehensive spending review budget is £7 billion, an extra £500 million—if it is as much as that—amounts to an 8 per cent. increase. That is a pretty substantial increase to have running for the next seven years.

That £500 million is the top whack figure—it might be £450 million or £400 million if things go reasonably well but not perfectly. I understand that £300 million a year in European money would be provided for seven years, which we would expect to be matched—perhaps not pound for pound—by British Treasury sources. If that European funding were matched two thirds of a pound for a pound, it would mean that the additional £300 million would be matched by perhaps £150 million to £200 million in Treasury money, which would total £450 million or £500 million. If my calculations are not correct, the Minister will no doubt set me straight at the close of the debate. It is natural for people to want to examine the subject in considerable depth.

I mentioned that the timing of receipt of objective 1 funding is crucial. We all know why that is so. The three-year public expenditure programmes of the Welsh Office, which begin on 1 April this year—and will be inherited by the Welsh Assembly a month later—will continue for three years until 2002. Objective 1 funding should have been determined by then—perhaps at the European Union Council of Ministers meeting in March—and, if we are to receive it, will begin on 1 January. That will be some seven or eight months after the Assembly has taken charge of the bulk of Welsh Office powers. That funding will certainly stir the pot and be an integral and dominant part of the early activities of the Welsh Assembly.

The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) referred to the interesting reply given by the Economic Secretary to the Treasury. We could debate for at least all of today—and probably on several other occasions—whether that response was a bit of a downer or left the door open for the Treasury to agree to matched funding. Let us try to view the matter positively. It is a chicken and egg situation. There is no way that the Treasury will say, "Here's an extra £200 million a year for the next seven years, provided Europe gives you objective 1 funding at the March Council of Ministers meeting". Unfortunately, it also works the other way. There is no way that the European Commission will agree to confer for fun the objective 1 funding designation—as though it were referring to a map—in the March Council of Ministers meeting.

The EC will confer objective 1 status only if it receives some sort of serious signal from the British Government that matched funding is being negotiated and is on the way. The Government must demonstrate that they are agreeing the details and taking a serious approach to securing the whole package. If there is no matched funding, there will be no objective 1 status. If there is no objective 1 status, there is no point in having matched funding.

We must somehow address that chicken and egg situation. The resolution of that problem should not be left until the early weeks of the new Assembly when Assembly Members will be finding their feet. We must sort it out before 7 May and the elections to the Welsh Assembly. The more clarity that we can lend to that chicken and egg situation, the better.

I think that the Secretary of State said earlier—I repeat the point now—that the Welsh situation is unique as regards objective 1 funding. It is not a problem in Northern Ireland, Scotland or England: it is only a problem in Wales. Scotland and Northern Ireland have received objective 1 funding before, so it is programmed into their three-year public expenditure programmes that start on 1 April. Wales has never had objective 1 funding. Although it is true that Cornwall and south Yorkshire have never received objective 1 funding, it is possible within the big block of public expenditure in England—comprising the Department of the Environment, Transport and the Regions, the Department of Trade and Industry and several other blocks—to rob Peter to pay Paul. However, it is not possible to rob Eddie to pay George—as we now say—within the Welsh block because almost all areas of Wales that are not objective 1 designates are objective 2 or objective 5b areas and will continue to receive European assistance.

The European Commission will not allow the British Government to take funds away from areas with objective 2 entitlements—which is the next level down in European grant—and give them to objective 1 areas by switching around expenditure within the Welsh block. That will not be allowed because it will infringe the additionality rule. Europe will not allow the British Government to tell the Welsh Office now—or the Welsh Assembly in the future—"Take it from Cardiff, Newport, Powys, Wrexham, Deeside, and so on, and give it to the objective 1 areas", when the Government are also claiming that the eastern strip of Wales along the English border remains sufficiently lacking in prosperity to require a lower level of European assistance.

Wales does not have the flexibility of the English block to take money from wealthy areas—such as the home counties—in order to provide matching funding in Cornwall and south Yorkshire, for example. That is not possible in Wales because of our double poverty gap problem. In other words, the whole of Wales is 18 per cent. behind England and, within Wales, the areas that we hope will receive objective 1 funding are another 10 per cent. behind the Welsh average. Therefore, they are 28 per cent. behind the British average or standard of living evaluation in England.

We must somehow solve that problem during a critical period of constitutional change. The House of Commons was devised to debate and resolve that sort of difficulty. There will not necessarily be any answers today because we have a few months to go, but we need maximum clarification of that issue.

The Welsh economy is undergoing a serious period of change, so objective 1 funding is critical. There is nothing we can do using objective 1 funding that we cannot do under the programmes of assistance provided by the present designations of 2, 5b and 3. However, the objective 1 category offers more money and a higher maximum rate of grant and encourages long-term planning and projections because the funding is available for seven years. The maximum rate of grant is higher. However, the essence is the same as that of the programmes that have been running for the past 10 years.

We must get away from the classic methods of regional development that we have used since the days of the big pit closures in the 1960s and 1970s. The aim of objective 1 funding is not to provide additional sheds and roads or to give the building industry grants to construct large highways or extrude vast quantities of 25,000 sq ft advance factories all over Wales. We have too many factories lying empty. We must find a way to fill the factories that we have with activities, rather than build more. We live in a world of surplus in such facilities, and we must modernise our products, processes, management and skills, improve training and upgrade apprenticeships. We must increase research and development and seed capital and widen access to venture capital.

Objective 1 funding is oriented towards those aims rather than providing static factors such as bricks and mortar and highways. It is concerned with how to make the economy more dynamic by improving access and the part of the infrastructure that will lead to faster economic growth.

We shall need that growth, because recent closures have revealed that this winter has been a difficult period for the Welsh economy. The closure of Lucas-SEI in Ystradgynlais in the constituency of the hon. Member for Brecon and Radnorshire (Mr. Livsey) is a symptom of a widespread malaise in the Welsh economy of dependence on the middle level of technology in electronic assembly or automotive components which is coming under huge pressure from the shift towards eastern Europe. Factory facilities such as the Lucas-SEI plant in Ystradgynlais can be shipped to Poland where the workers are paid wages that are, perhaps, one sixth of the prevailing rates in Wales.

American factories have faced similar problems since the signing of the North American Free Trade Agreement, because wage rates in Mexico and north America have roughly the same relationship as wages in eastern Europe do to those in western European areas such as Wales. Low to intermediate technology assembly line skills are gained with tremendous speed, and for the past 20 to 30 years, through no fault of our own, Wales has specialised in those skills and in automotive and electronic components, without housing the headquarters of the firms that are using design skills to upgrade and plan the next generation of products.

We have been developing the assembly line skills that are now at risk because the pound is relatively high and the next wave of European Union expansion points eastward to low labour cost countries. That sector will be under huge pressure unless, for any reason, the pound comes down sharply.

New and exciting economic prospects are opening up in sectors in which it is very difficult for us to compete, such as software and the globalised market for what are known as traded services. Those arise from huge mergers between, for example, merchant banks, which suddenly want 150,000 sq ft office blocks so that they can house their whole human resources department, finance office or back-office operation in one city. At the moment, for various reasons, Welsh cities are not seen to be as exciting as Dublin, Edinburgh or Barcelona, and we cannot therefore compete in the globalised traded services office market.

We are losing out in manufacturing and we are not at present in a position to gain in other sectors because we do not have the necessary software skills. The Republic of Ireland targeted software 10 years ago. It trained people in those skills and then succeeded in attracting inward investment. I am not saying that Wales should target software—we could target something else—but Ireland demonstrated what could be done with objective 1 funding, and that is one reason why its gross domestic product has overtaken that of Wales and, on some measures, that of Great Britain. I hope that, with the Assembly, Wales will be able to do the same.

I am looking forward to finding out how we can creatively use objective 1 funding to provide a more secure future for everyone in Ystradgynlais and other communities throughout Wales where there are job losses in intermediate technology.

3.4 pm

Sir Raymond Powell (Ogmore)

I want to put it on record that in the election of the Secretary of State for Wales last Saturday, the Labour party conducted itself fairly, and both candidates should be congratulated on their conduct during the whole campaign. It was an historic election because the winner will be the principal person in Wales with great responsibilities.

I worked with my right hon. Friend the Secretary of State when we were in the Whips Office and when he was a shadow Welsh Minister. I know from personal experience that he has great talent and ability and that he is definitely a workaholic. When he came into the Whips Office he always had a bundle of papers under his arm. I have seen many hon. Members with such bundles and I always wondered whether they were for show or whether they actually read the documents, so I brought a bundle of papers to the Chamber today to try to impress people that I, too, read.

This week, hon. Members from all parties who represent Wales have had the gigantic task of reading documents and attending Committee sittings to consider statutory instruments dealing with the disqualification of Members. That needs to be carefully considered because Lords will be allowed to stand for election in Wales, even though they cannot stand for election to this place. Members leave this place to go to the other place and now we are affording Lords the opportunity to stand for election to the Welsh Assembly.

Mr. Evans

I find the hon. Gentleman's point inconsistent, and it is the second time that he has argued it this week. Why should Members of the House of Commons be able to stand for election to the Welsh Assembly and retain their seats here, while he would deny that chance to Members of the House of Lords?

Sir Raymond Powell

To be frank, I entirely agree with the hon. Gentleman because of the responsibilities that will be involved. Only yesterday, when we were discussing in Committee the functions that we shall hand over to the Assembly, it was pointed out that Members of Parliament will have enough work to do here without going to the Assembly.

Mr. Llwyd

One of the main criticisms of the other place is that it is undemocratic because its Members do not stand for election. Surely it is welcome that they will now be able to put their head above the parapet and stand for election somewhere else.

Sir Raymond Powell

Yes, but they will be standing for election to a Welsh Assembly, and the number of Lords left without a seat when we disqualify them within the next couple of months will mean that hundreds of Lords might go to Wales, looking for seats in the 60-seat Assembly. That is my great objection.

I have another objection. Roaming around Wales, we hear whispers from many members of all parties, and I have been given to understand that a prominent Welsh nationalist who is a Member of the House of Lords has already been promised a place as the president of the Assembly—the Presiding Officer. I do not know by whom because no one has been elected in Wales yet. If that is true, a Lord will not only be elected to the Assembly, but will be the Presiding Officer of an Assembly controlled, in all probability, by the Labour party. There would be something wrong if we allowed that to happen. I hope that people are listening to the party in Wales and to the debate today and have realised that we should not tolerate such a situation in Wales.

Mr. Llwyd

I am grateful to the hon. Gentleman for generously giving way a second time. He may correct me if I am wrong, but I understood from the Standing Orders for the Welsh Assembly that the Speaker or the Presiding Officer—whatever that person is called—must come from the majority opposition party. If that is the case, what is the hon. Gentleman's worry?

Sir Raymond Powell

Let us wait and see what happens. I would not want the Welsh Assembly to have a Presiding Officer who did not enjoy the support of all Members. I would not want that for the Welsh Assembly or for Parliament.

I am speaking of my concerns on Welsh day, and I suppose that you would share some of them, Mr. Deputy Speaker, if we were speaking of Scotland. When we debated the Government of Wales Bill and also the Scotland Bill, I noticed that one hon. Member sat in the Chamber on his cushion through all the debates, taking note of every word that was uttered by every hon. Member. He wrote an article recently about what will be left for Scottish and Welsh Members of Parliament to debate. That is a question that we should consider.

My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) sat on the Committee yesterday that dealt with 506 pages of concessions, options and responsibilities that are to be given to the Welsh Assembly. Other hon. Members and I sat on another Committee on Tuesday which made representation of the people in Wales different from the election of parliamentary candidates.

That brings me to an important matter that affects my constituency and that of my hon. Friend the Member for Bridgend (Mr. Griffiths). The document that we debated on Tuesday dealt, among other things, with polling stations. We accepted the proposal that all constituency polling stations that were used during parliamentary elections should be used for the election of Welsh Assembly Members and councillors.

In the Bridgend county borough council area, a number of polling stations are to be closed to save the funding that would be necessary to keep them open. I protested on Tuesday and received an assurance from the Secretary of State that he would take up the matter. I understand that in today's press the closure of the polling stations is announced.

The existing six polling stations in the area are to be reduced to one. That will cause considerable difficulty for many of our electors in an area such as Nantymoel in the Ogmore valley, which is very hilly. The majority of people living there are elderly and cannot climb the hills. It is time that we understood that polling stations—such as the ones in which we were elected to Parliament—are usually sited near homes in order to get the electorate interested enough to vote. That will be even more crucial on 5 May—

Mr. Win Griffiths

On 6 May.

Sir Raymond Powell

I am glad that my hon. Friend corrected me—I would not want voters to turn up on the wrong day. In the elections on 6 May, people will be voting not only for Members of the Welsh Assembly—that will be an historic election throughout Wales—but for local councillors. However, councillors have decided to reduce the number of polling stations. Perhaps they do not want people to vote for them, but I am sure that candidates for the Welsh Assembly, who have worked hard to be selected, would expect all the polling stations to be open.

A few weeks later, some time in June—I do not remember the exact date—there will be European elections and community council elections. The Ogmore constituency has within it 22 community councils, each with a mayor and councillors, so those elections are important to the local community. That is why the council should take the decision to allow all the polling stations to remain open.

Another domestic issue that is causing concern in my constituency is the campaign that has been waged for years for the reopening of a station at Llanharan. That would serve the population of Bryna, Llanharan, Llanharry and an extensive surrounding area. The weight of public opinion and the thousands of signatures in support of the campaign that have been sent to British Rail, and which I shall pass on to the Secretary of State, should persuade him to support the moves to have the station reopened.

I do not want to take up too much time and prevent my hon. Friends from speaking in the debate. When I listened to my right hon. Friend the Secretary of State for Wales speaking today, I realised that there is compassion in him. That was evident when he became justifiably annoyed by the remarks of the right hon. Member for Caernarfon (Mr. Wigley). My right hon. Friend spoke about the suffering of the families of people—male and female members of society—who are unemployed, and the problems that they face when they lose their jobs. I recall the difficulties that we have experienced in the Ogmore constituency since 1979. For instance, all our mines were closed when the Thatcher Government started closing all the mines and demanning the steel industry. Ten thousand workers were deprived of their jobs at the Margam steel works, and 8,000 miners lost their jobs. In the Ogmore constituency alone, 20,000 people were made unemployed in four years. Such people could not secure new jobs even in 10 years; but we endured 18 years of Tory government. We have suffered ever since, and we have not yet recovered.

Is it any wonder that people such as my right hon. Friend the Secretary of State, and other Labour Members, are now eager to implement the policies that they promised the electorate that they would implement? I do not want to go into the details of what we have achieved during the time—nearly two years—during which Labour has been in government, because my hon. Friend the Member for Islwyn (Mr. Touhig) has already done so. I listened carefully to his speech, to that of my right hon. Friend the Secretary of State and to other speeches that have been made today, all of which referred to what we have already achieved.

Not enough has been achieved, however, and not enough will have been achieved until everyone has a job and my constituents have no problems in obtaining jobs. My right hon. Friend the Secretary of State should consider renewing schemes that were introduced years ago, before the invention of training and enterprise councils. TECs seem to restrict what we can do to encourage new employment.

In Ogmore and Bridgend we had a take-up scheme, which worked differently from TECs. It was a wide and varied scheme, creating 650 training places for adults and 250 places for young people. After two years in training, 95 per cent. of young people were given jobs. Why? Because of the diversity of jobs provided by the scheme. It was described as a community enterprise scheme, and it is time that the Government readopted it. Perhaps my hon. Friend the Minister will consider that. The scheme was well known in Wales and well known to the Government, and at the time it proved so successful that the Government decided that they must change it. As a result, Ogmore lost 650 adult places and 250 places for young people.

Even at this late stage, we should reconsider implementing the Government of Wales Act 1998. We have gone through the procedures determining whom we should disbar, and other procedures determining what functions are to be devolved. Most hon. Members will remember the local government reorganisation that took place in 1974, as a result of which representatives were elected as shadow representatives for 12 months. Five local authorities in Bridgend were merged into one, Ogwr borough council, and it was essential for their councillors to be in at least a shadow position for 12 months.

During the last few years, we have experienced a different kind of local government reorganisation, and unitary authorities have been established. The same has applied: councillors have been in a shadow position for 12 months. How on earth can we expect Assembly Members to take over all the responsibilities that the Government of Wales Act confers on them, and to implement those responsibilities overnight? The election is on 6 May and they have until June to start working legally as an Assembly. That is unfair and unjust.

Mr. Win Griffiths

I understand what my hon. Friend is saying, but I think that there is a difference between local government reorganisation and the creation of the Welsh Assembly. Local government reorganisation involves the merging of four or five administrations, but the overall administration will be the same, and, as we know from all the work that was done on the Government of Wales Act, they have done a superb job for us. Given the quality of the Labour candidates—members of my hon. Friend's family, for instance— I have every confidence in their ability to assist in the creation of the Assembly.

Sir Raymond Powell

As one who had close connections on the Front Bench, was well acquainted with the Act and made a great contribution to it, my hon. Friend would know far better than I whether the newly elected Members will be in a position to serve. One person who will be a great asset, and will probably not have to wait for 12 months, is Janet Gregory—my daughter. She is absolutely marvellous. Of course, I could not have said anything different. She was bound to follow her father, although she has not listened to him since the day when she was born. I hope that she will be elected; she has a very good name.

I must now conclude my speech. Another intervention and another drop of that orange squash, and I will be off. I do not know whether anyone put gin in it! In any event, I am grateful for the opportunity to speak on an historic occasion. I hope that although by this time next year we shall have a Welsh Assembly, we shall continue to have Welsh debates in the House of Commons.

3.28 pm

Mr. Denzil Davies (Llanelli)

I am sure that my hon. Friend the Member for Ogmore (Sir R. Powell) will have many more opportunities to regale us and interest us, even after devolution. I do not know whether this will be the last Welsh day debate, but, in any event, the House of Commons will still be the final arbiter—the final fund, as it were—in regard to money for the Welsh Assembly. It will also determine the level of public expenditure for areas outside the remit of the Assembly. I believe that all parties in the House have agreed to that system of financing, which will be annual. The Treasury will negotiate, following which—in theory at least—the estimates will have to be dealt with by the House.

Presumably, that could have been arranged differently. There could have been a charge on the Consolidated Fund, along the lines of—I hate to say this—the system of contributions to the European Union, which do not have to be dealt with by the House. Similarly, judges' wages need not be dealt with by the House: their salaries are not cut, for reasons that are fairly obvious in the administration of justice.

We could have chosen a different system; but all parties agreed that there should be an annual system, so we must not complain about the fact that it must come back to the Treasury and, indeed, the House, and that the House must debate it in some form or other.

Sadly, we are again debating Welsh affairs when the Welsh economy is not in very good shape, which is a source of great concern to us all. I have been a Member of the House for a long time and I am not talking my own country down. Every year for the past 18 years—although I do not think it was the case in 1979—Wales has been the poorest country, region or area in Britain and its level of gross domestic product is fairly close to that of Northern Ireland. That is not something to be happy about, but it is the reality that we face.

I represent a constituency where almost 30 per cent. of the employed work force still works in production and manufacturing. Manufacturing industry is under pressure because of the global economic situation and global deflation. It is also under pressure, I am sorry to say, because the Bank of England put interest rates up when it did not need to do so. At that time, of course, the Bank of England thought it was living in a world of inflation, and central bankers take a long time to change their orthodoxy.

I am not sure whether the central bankers have changed that orthodoxy, but we are living in a world of deflation. My right hon. Friend the Secretary of State said that one of the virtues of the present Government's tenure is that long-term interest rates are at their lowest for 40 years. That is a mixed blessing. Japanese interest rates are at their lowest for 40 years as well, but that is a consequence of deflation, and that is also the case in this country. If prices are falling, which they are not yet, interest rates fall, too, but one should not necessarily welcome that. We are living in a world of deflation and, as my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) said, that is having an effect on manufacturing industry in particular, which seems to have far less ability to increase prices than service industries.

We have talked about devolution and the Welsh Assembly. One consequence of devolution is greater transparency in respect of the amount of money and public expenditure that goes to the devolved areas and the amount of taxation and public money that is produced by those areas. Years ago, the Treasury would set its face against producing budgets for various regions and countries in the United Kingdom. It would argue that the United Kingdom was a unified state—a single market, to use the language of Brussels—with a single currency, no trade barriers and complete freedom of movement of capital and labour: the ultimate in political, economic and monetary union.

Quite apart from the difficulty of doing so, the Treasury would say, "Why do we need to produce budgets for Wales, the north-west of England and Scotland, because we are living in a unified economic and monetary state?" There was also the difficulty of finding the figures. All that has changed because of the political pressures of the past 20 or 30 years and through the use of computers, which can store so much more information. We are now in a position to produce devolved budgets, or budgets for devolved areas, showing the amount of money that goes into the area and the amount produced by it. That transparency will become more and more relevant as the budget of the Welsh Assembly and of Wales has to be considered.

The figures show that the position of Wales is not good and we should not go into the Welsh Assembly with some starry-eyed idea of the prosperity of the Welsh economy. Figures for Government expenditure—not only that of the Welsh Office, but of other Departments—and for the tax base in Wales from the past few years show a massive fiscal deficit, and we might as well face that.

The fiscal deficit is probably about £5 billion or £6 billion. One could argue a little about the figure, and it is never possible to be completely precise, but let us round it down to £5 billion. About £10 billion or £11 billion is raised in taxation, and there is about £16 billion of public expenditure, including the £7 billion that will go to the Welsh Assembly. That is the order of the deficit that has to be financed.

Let us be clear about the fact that that £5 billion comes from the United Kingdom—the London Government, or the dreaded British state, as some people call it. We can call it what we may, but that money comes from the centre—the dreaded Treasury, which, apparently, will not give us any additionality money on top of the £5 billion.

The £5 billion can be broken down into regional budgets, but it does not come from Scotland, I am sorry to say. It does not come from Northern Ireland. I do not know how much of it comes from the north of England. It must come from the more prosperous areas of England. The English will be providing the £5 billion that is necessary to fund the Welsh economy. They are doing so now, and have been for the past few years. There is nothing wrong with that in a unified state, but we must be clear about where the money is coming from. It probably comes from the home counties.

Mr. Hain

Does my right hon. Friend agree that that is one reason why the economics of separatism, which are pursued by the nationalists, are pure fantasy?

Mr. Davies

That is what I am trying to say, in my less dramatic way. They are, indeed, pure fantasy, because Wales could not possibly sustain a borrowing requirement of £5 billion: it could not possibly borrow that kind of money. We would either have to raise taxation—which we could not do, because we do not have the tax base—or cut public expenditure. Without that £5 billion, the Welsh economy, certainly in terms of public expenditure, would lie somewhere around the level of Slovakia, or one of the other countries that have left the Soviet empire. That is the reality, and it is better for the Welsh Assembly to face it.

Dr. Fox

The right hon. Gentleman is arguing that the taxes that finance the block are levied across the United Kingdom as a whole and under policies set by this House. Does he therefore agree that it is logical to retain in this House a mechanism for scrutinising how that money is spent?

Mr. Davies

Logical or not, such a mechanism will be retained. That is the reality of devolution. These days, we are apparently all in favour of transparency, which is the vogue word. There will be transparency. When my right hon. Friend the Secretary of State negotiates with the dreaded Treasury, the figures will be on the table and will show quite clearly the payment of £5 billion a year, which comes from the Exchequer to the Welsh economy.

Some people in Wales—certainly among the chattering classes—believe that there is an escape from all that reality in Europe. I do not want to discuss Europe in the way that it has been discussed in some interventions, except to say that those people seem to think that Europe can provide a substitute for the £5 billion, which the English are providing for the Welsh economy.

I predict that one of the first acts of the Welsh Assembly will be to acquire expensive premises in the rue de la Loi, not too far from the Charlemagne building—although its name may have been changed since asbestos was found in it. The hon. Member for Brecon and Radnorshire (Mr. Livsey) will know it well, because he spent some time in Brussels. Expensive premises, flying the red dragon banner, will be acquired. People will get on the Brussels cocktail circuit and acquire influence, and perhaps other things as well, in the process.

We have heard about the Institute of Economic Affairs and we have heard about Professor Kevin Morgan and such people. They are also financed by the English money that comes in. No doubt there will be an attempt to escape into Europe, but there is no escape in Europe from the position of the Welsh economy.

I return to the £5 billion deficit and take my cue from the references to the single currency. If the budget deficit was related to GDP—which is about £30 billion, or perhaps more in the past year—Wales could never qualify for the single currency. With a £5 billion deficit and a GDP of £30 billion, Wales has a budget deficit of more than 15 per cent., so it does not meet the criteria set out in the Maastricht treaty. Even if we round the figure down to 15 per cent., we have to remember that Greece has a deficit of 8 per cent. and cannot get into the single currency. On that score alone, there is no escape in Europe from the reality of Wales being part of the United Kingdom.

We have rightly talked a lot about objective 1 status. It is not easy to find out how much money comes to Wales from the various European funds. I have excluded from my estimates any payments under the common agricultural policy, because I cannot work that figure out. I have also excluded any notional expenditure that Wales makes into Europe, because Britain is a net contributor. Perhaps they balance each other out—I hope so.

I estimate that, over the past five years, Wales has received about £300 million a year from European Union structural funds—under objectives 2 and 5b—and Community funds such as RECHAR and various other odds and ends. That is a lot of money, but set against the £5 billion a year that comes from the British Union it is a mere drop in the ocean.

If the assorted ranks of Plaid Cymru had all been present for the debate, rather than just the reasonable hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd), they would no doubt have jumped up and shouted at me about the cohesion fund. The Republic of Ireland receives payments from the cohesion fund because its GDP is lower than that of the United Kingdom. As Wales is not treated as a separate nation state in the Council of Ministers, we do not receive such funds. However, let us add the cohesion funds, which would be about the same as Ireland receives—

Mr. Rowlands

They have been abolished.

Mr. Davies

I do not know whether they have been abolished—I think the Spaniards would have something to say about that—but I am talking about the past five years. Perhaps they will be abolished. If we had qualified for cohesion funds in the past five years, we would have received £150 million—this time I have rounded the figure up. However, we would have lost the £5 billion. We do not receive the cohesion funds because we are a member of the British Union, whose GDP is too high. Leaving that aside, let us add the £150 million of cohesion funds.

We have been told that the next six years will be bonanza years, because there will be objective 1 money. I hope so. I have heard the figure of £2 billion, but I do not know whether that will survive the meetings in Berlin this weekend—let us hope that it does. If my mathematics are not too bad, that comes to £330 million a year over the next six years. What would happen to objective 2 and 5b assistance if we received objective 1 money? I have no idea, but presumably it would be slightly less. If it were halved, and we received £2 billion-worth of objective 1 assistance plus a little objective 2 money, we would get £500 million over the next six years. [Interruption.] The hon. Member for Brecon and Radnorshire (Mr. Livsey) seems to be nodding. He understands these matters, because he goes to Brussels and talks to people.

Mr. Livsey

Occasionally.

Mr. Davies

Not too often, I hope.

Plaid Cymru wants to trade in the British Union and get the European Union—

Mr. Llwyd

Will the right hon. Gentleman give way?

Mr. Davies

I have at last managed to provoke the hon. Gentleman to intervene.

Mr. Llwyd

I have not intervened before, because quite frankly this is fag packet economics. I can think of several amounts that the right hon. Gentleman could take into account. For example, every large company operating in Wales pays tax outside Wales. That is a huge figure, and there are many such others. I should be delighted to argue these points with him at another time, but at the moment he is, with respect, talking fag packet, unrealistic rubbish.

Mr. Davies

I am glad that I managed to provoke the hon. Gentleman. I was hoping that the right hon. Member for Caernarfon (Mr. Wigley) would be here, because he would have got on his feet much sooner. Over the years, the nationalists have tried to knock these figures down—there have been various articles in the Western Mail and other worthy publications—but they have never managed to do so. It is quite simple: if Wales has the lowest income per head in the United Kingdom, obviously expenditure must be greater than the tax raised. The nationalists used to talk about defence expenditure, but they have gone off that now.

Mr. Llwyd

That is a good point.

Mr. Davies

Indeed. I am surprised that the hon. Gentleman did not mention defence expenditure.

That is the position we are in, and £500 million against £5 billion is a small sum.

I have always thought that Welsh day debates, the Welsh Office, which was established in 1964, and now the Welsh Assembly, were introduced to preserve Welsh identity. There is also the democratic element, and the notion that the Welsh Office can runs things better than the Department of Trade and Industry or the Home Office. However, underlying all that is the need for institutions in Wales to preserve national identity—I think that is the vogue word. They are required even more now because we live in a world of global capitalism and global economics, in which the driving force of economics breaks down loyalties in communities, between individuals and between nation states.

The Welsh Assembly will exist partly to preserve Wales's national identity. I hope that it does not become a national whingeing Assembly where we are always attacking the Treasury, the London Government and the British state, and where we whinge about what more we should get, such as increased powers of taxation when there is no tax base. I hope that it does not become a place where we talk about devolution being a process and not an event, and about wanting more powers.

If we go down that road, we shall not be able fully to utilise the Assembly as a bulwark of the Welsh national identity and to improve Welsh democracy and the Welsh economy. We will be able to do that only if we recognise the realities of Wales's parlous economic condition.

3.47 pm

Mr. Desmond Swayne (New Forest, West)

I apologised to Madam Speaker earlier, and I now apologise to the House, for not having been present at the opening of the debate. My plans were made before we adopted the extraordinary arrangements for Thursdays in this part-time Parliament. The Speaker is well aware of my views on that, and I have been ruled out of order more than once for having drawn attention to them, so I shall not go down that road again today.

Several Labour Members have referred to the parlous state of the Welsh economy—or at least to the relatively less-well-off state of its economy. I want to draw attention to the regional trends survey published by the Confederation of British Industry on 9 February, which states: General business optimism has declined more rapidly in Wales than anywhere else in the United Kingdom … Output has fallen markedly, with similar falls expected in the next four months, in addition to 1,000 further job cuts forecast between the final quarter of last year and the first quarter of 1999.

Mr. Win Griffiths

I appreciate that the hon. Gentleman's previous arrangements prevented him from being present for the opening speeches, but surely, at the very least, communications within his party should have enabled him to check with the shadow Minister with responsibility for constitutional affairs, because that report was mentioned at length in the opening speech from your side of the House. It is old news, and we have heard it before. It would have been much better for you to address your constituents elsewhere.

Mr. Deputy Speaker (Mr. Michael Lord)

Order. They are not my constituents and it is not my side of the House.

Mr. Swayne

The hon. Member for Bridgend (Mr. Griffiths)—from the party of spin—will know that these messages bear repetition. Indeed, the more they are repeated, the more likely it is that the message will be received and recorded.

There has been a significant rise in the rate of home repossessions because of unpaid mortgage repayments—an increase of 1,000 last year. In addition to the problems in the Welsh economy, there are problems for the agricultural sector. The problems of Welsh agriculture are not new. In recent years, as a result of those problems, my family withdrew from farming at Whitland on the border between Carmarthenshire and Pembrokeshire to farm in New South Wales. Although the problems have been compounding for years, it is now true that farmers in Wales have never been poorer, and they face new problems. We know that the arrangements under discussion for reform of the common agricultural policy will pose new challenges and problems to Welsh agriculture.

I wonder whether Ministers and hon. Members recognise the potential problems facing agriculture as a consequence of the increase in charges to be levied by the meat hygiene service, and the potential devastation that that may do to many livestock markets. There are huge challenges for agriculture and industry in Wales.

The right hon. Member for Llanelli (Mr. Davies) referred to the fiscal deficit; the huge challenge facing the Welsh economy in the coming years will compound that fiscal deficit. The single European currency was mentioned by the right hon. Gentleman. The problem that the Welsh economy will face is that it runs counter-cyclical to the average European economy. Its peaks and troughs are at a different time from the average European cycle.

The European central bank is insulated from any lobbying by the regions of Europe that will be adversely affected by its interest rate policy. Indeed, Governments that make representations will stand to be fined under the existing treaty structure. Counter-cyclical economies, such as that of Wales, will find that their fiscal deficits will be exaggerated. In times of inflation, the rate of inflation in Wales will be exaggerated, and at times of unemployment, its unemployment rate will be exaggerated by the interest rate policy pursued on behalf of the European norm.

It was instructive that the right hon. Member for Llanelli drew attention to fiscal deficits, which are seen as a way around the differential effects on regions which suffer disadvantages, as Wales would. There would be an expectation that the fiscal deficit would grow, and be required to grow, so that Wales could be compensated for the adverse interest rate policy by receiving a much larger fiscal inflow from the rest of the EU.

The problem is that the arrangements to do that are not in place in Europe, as they are in the United States. A state in the United States suffering adversely as a consequence of the policies of the Federal Reserve—for example, running a recession when the rest of the economy was in boom—would expect to receive a considerable increase in federal funding to ameliorate the effects. That is not in place in terms of any single currency that we might enter. Therefore, the full brunt of the adverse consequences of the interest rate policy will be felt in terms of unemployment in Wales.

That is a challenge with which the leadership in Wales and Welsh Members of Parliament must come to terms, and about which they must make representations to the Government. Given the Government's ability to take representations from this House, I suspect that the best way of getting through to Alastair Campbell might be to ring The Sun poll on the issue. They can do so by dialling 0660 100 721.

Mr. Win Griffiths

All the hon. Gentleman has said so far is purely speculative—it is right out of the Brothers Grimm. By quoting The Sun, he merely strengthens the view that he is producing one long fairy tale for Wales.

Mr. Swayne

I am surprised to hear The Sun treated with contempt by Labour Members, who have placed such faith in its strictures in the past. However, that advance from them is welcome. It is wise to speculate on these matters. There is that branch of Christian ethics which takes literally the Lord's command to consider only the troubles that are sufficient for each day, but it behoves us, as politicians, to consider the consequences of the policies announced this week.

The challenges posed by the state of the economy in Wales must be set against the expectations created by Labour during the general election campaign and the pledges that Labour made on a series of problems. On transport, it was expected that there would be a significant improvement in Wales. We must set the White Paper, "Driving Wales Forward" against the reality.

Yesterday, as I came to the House, a bus from Pontypridd was unloading lobbyists on behalf of British truckers, who were complaining about the fact that, in Wales, filling a 220-gallon heavy goods vehicle tank costs £200 more than on the continent of Europe. That disadvantage must be set against the high-sounding phrases from "Driving Wales Forward" which, in some respects, might drive Wales to a standstill.

I wish to refer to the A5; a road with which, as a former schoolmaster in north Shropshire, I am familiar. As a consequence of the White Paper, we have seen the abandonment of the Bethesda bypass, the Corwen bypass, Halfway bridge and Pont Padog.

Mr. Llwyd

I know that the hon. Gentleman is no expert on Welsh affairs, but Pont Padog is in my constituency and is being done now.

Mr. Swayne

I stand corrected. In south Wales, with respect to the A470—again, a road I know well, having contested Pontypridd in 1987—and the A479 at Talgarth, there has been a considerable scaling down of projects.

On education, there have been some modest increases in the amount of money available. However, while the headline figures sound higher, the actual amount that local education authorities will spend is more modest. That must be set against the vast increase in the bureaucratic intrusion in schools—a mistake started, and now thankfully admitted, by the Conservative party. However, that is compounded by the Government's arrangements.

I quote as an example literacy hour. Everyone approves of literacy hour. It is a good thing, but the way in which it has been imposed, and the strictures and requirements that arise from it, mean that it will inevitably affect other parts of the school day. It becomes less attractive when one learns that the visit by the parish priest or vicar to a school has been curtailed or excluded as a consequence of literacy hour.

Mr. Hain

Could the hon. Gentleman explain how he thinks the literacy hour is being applied in Wales?

Mr. Swayne

The literacy hour, imposed or required in schools, has in some cases—I am aware of one—led to the ending of the vicar's visit to a school.

Mr. Hain

If the hon. Gentleman knew anything about education in Wales, he would know that we have not imposed a literacy hour on schools in Wales.

Mr. Swayne

The effect of Government policy with respect to the literacy hour has led to those consequential changes. If that is an acceptable form of words to the Minister, I will be satisfied, but that must be seen against the failure, or—what is the word?—the sluggishness in delivering on class sizes.

Mr. Win Griffiths

While the hon. Gentleman was searching for the word, I thought that I might ask him to let us know whether that vicar was unable to go to a school in Wales, or in England.

Mr. Swayne

It is my son's school. He came home and told me that the vicar was excluded. I do not see that there is any difference in principle between a literacy hour in rural England and one in Wales, but, irrespective of that, what we have not seen is the reduction in class sizes that was promised.

I have always regarded the fixation with class sizes as misplaced on the ground that the relationship between class sizes and standards has always been somewhat tenuous. However, the problems will come home to roost when schools at the margin—small rural schools—find that, as a result of having to comply with the requirement to keep classes below 30, they have to acquire an extra member of staff, which will make those schools economically unviable. Pressure will then be mounted by education authorities to close the schools. I strongly suspect that parents who might have wanted class sizes below 30 and who have to make a choice between schools with classes in excess of 30 that were nevertheless local to them, and having no school at all, will choose the former rather than the latter.

Some 233 fundholding practices exist in Wales, accounting for almost 1,000 general practitioners. Those practices treat more than half the Welsh population—some 57 per cent. There is a marked lack of enthusiasm among GPs for the new collective arrangements. Of course, the governing party has made it clear that that was part of its programme and it has a mandate to do that, but it also has a mandate—it sold its policy on health with this commitment—to reduce waiting lists. There has not yet been the decline in waiting lists that we could have duly anticipated, given the hype that the governing party attached to it.

The 1.7 per cent. increase in the allocation for police forces for 1999–2000 should be set against the 2.5 per cent. increase in England. It ill behoves the Government to trumpet their success in law and order when police forces in Wales are now marginally smaller than they were when the Government came to power.

I have drawn attention to several problems or challenges, depending on the way in which one looks at it, particularly in respect of economics. Those challenges will require clear and decisive political leadership. What confidence can we have that that political leadership will be in place?

Wales is to be subjected to a new and novel form of government. I chose my words carefully—I said, "subjected". Only a majority of less than 1 per cent.—0.6 per cent.—of the electorate in Wales voted for the changes. Indeed, less than a quarter of the Welsh population voted for the arrangements that were set out in the White Paper.

As a consequence, the Government, in humility, announced that they would be sensitive in the arrangements that were put in place. That pledge was made by the Prime Minister on the day after the referendum and repeated in some respects by the then Secretary of State for Wales, the right hon. Member for Caerphilly (Mr. Davies). He said: the referendum results showed a marked difference in views between both north Wales and south Wales and between east Wales and west Wales … I am conscious that we need to do a lot more work to bring Wales together. We must address genuine concerns and I acknowledge the fact that we must listen and continue to listen".—[Official Report, Welsh Grand Committee, 18 November 1997; c. 12.] Some of us on the Conservative Benches have wondered throughout the process precisely what the sensitivity consists of. The arrangements that have been put in place strike me as somewhat insensitive.

The pledge in paragraph 3.33 of the White Paper—that Wales would remain an integral part of the United Kingdom—did not appear in the Government of Wales Bill, despite the fact that amendments were tabled so that it would. Now it is an Act, it contains no such provision, but what it does contain is the arrangement by which more power can be granted to the Assembly on the basis of statutory orders and a 90-minute debate in the House, with no provision by which powers can be restored and moved the other way. What we have is a ratchet effect by which the Assembly's powers might grow at the expense of the House. That does not strike me as representing the sensitivity that was required in respect of the referendum result.

We understand, and have understood for some months, that the Secretary of State for Wales is also to be the First Secretary of the Assembly—the emperor is also to be the consul. The character of that Assembly is still entirely opaque. The Government of Wales Act 1998 makes it clear that the Assembly might adopt a Cabinet system of government, but there is no requirement for it to do so, so Wales faces considerably uncertain times.

Given the demand for clear political leadership and vision, the most striking deficit in respect of the Welsh government arrangements is the voting system that has been put in place to supply Members of the Assembly. Voters will have two votes. The first will be cast in a first-past-the-post ballot, in the same way as votes are cast to elect Members of the House. In addition, voters will cast a second vote. The seats allocated on the basis of the second vote will be calculated by an extraordinary method.

For each electoral region, the number of votes cast for a particular party will be added up and divided by one more than the number of seats that that party has already won under the first-past-the-post arrangements in that electoral region. Explain that to the ordinary voter and try to persuade him of the connection between casting his vote and delivering a Member of Parliament from out of the sausage machine. I defy hon. Members to try fairly to explain such a system to ordinary voters. Confidence in the democratic system rests precisely on the ability to explain the operating electoral system.

Dr. Julian Lewis (New Forest, East)

If I understood my hon. Friend correctly, he was saying that the system will result also in two rather different types of Member of Parliament. Am I right in thinking that the effect of that will be that whereas some Members of Parliament will be accountable and responsible to their constituents, other Members of Parliament will lack that same type of link?

Mr. Swayne

My hon. Friend makes a very good point. It is unfortunate that Wales is to become something of a social experiment in those matters. We will have to wait to see how the system works. Currently, it is unclear.

The system is worse than I have described it, because of the way in which parties have gone about selecting their candidates for the second ballot. There is a perception—in these matters, perceptions are very important indeed—that there has been a stitch-up. The perception is compounded by the arrangements that the Labour party has made for the election of its own leadership candidate. It is a tribute to "people's democracies" that that election system should have been designed to deliver the desired result. The desired result was indeed delivered.

We shall have to await the outcome of the arrangements to discover whether they will provide the leadership and vision that is capable of delivering solutions to the problems that I mentioned earlier. I have grave doubts that they are so capable. I hope that I am wrong.

4.12 pm

Mr. Gareth Thomas (Clwyd, West)

The debate has focused, quite understandably, on issues of the Welsh economy. I shall take a different course, however, and deal briefly with two matters. The first is our priceless national asset in Wales—the Welsh language and its future role, particularly in the National Assembly for Wales. Secondly, I shall deal briefly with some aspects of the constitutional future, and the relationship between the National Assembly and this place.

I should like first to say a few words about the economy in Wales. I agree entirely with my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) that the Assembly's priority has to be jobs, jobs and jobs. I agree entirely also with the Secretary of State that we have to combat social exclusion in Wales and improve the performance of the Welsh economy. There is an expectation that the European Union structural funds that we hope will be coming to Wales will be of assistance to us. I also believe that the Secretary of State's position on additionality is entirely understandable and realistic. It would be wrong to put the cart before the horse, or for the Treasury to make any firm commitments on additionality.

The economy is a very real issue in my constituency. We have grave concerns also because of job losses in the adjoining constituency of Conwy. The Minister will be aware that, yesterday, job losses were announced at Hotpoint, Llandudno Junction. I hope that the Secretary of State—when I meet him next Tuesday, with a delegation from Conwy—will be prepared to discuss the issue, and how we might mitigate the effects of those job losses, which are a blow to the local economy.

Today is very near to St. David's day. It is always appropriate that we should have pride in the Welsh language. The Welsh language belongs to all the people of Wales, regardless of whether they speak Welsh. I welcome the fact that the language is not the political football that it might have been many years ago. I believe that the Welsh Language Board has in the main done good work. I believe also that, although the language should not be a political issue, politicians—particularly politicians elected to the Assembly—should be prepared to ask sometimes awkward questions about how money is spent on policies designed to support the Welsh language.

I should like more money to be spent on community-related activity to foster the Welsh language at the grass roots level. I represent a constituency in which the Welsh language is spoken widely, by ordinary people. There is genuine popular demand for services in the Welsh language.

I am aware of one recent case in my constituency in which a Welsh-speaking family—ordinary, working-class people—wanted to send their child to a Welsh-medium school. She is suffering from a very serious hearing impediment, which means that she has special needs and at school will require intensive speech therapy. However, she may not be able to receive speech therapy in the Welsh language. Although the matter is being pursued through the normal channels, it supports my view that, although much progress has been made in improving the status of the Welsh language, much has still to be done. I am of course aware that we have to tread sensitively and practically.

I should like to make two specific points on the language issue as it will affect the National Assembly for Wales. Given the fragmented nature of the Welsh political identity, it is a major political achievement that we stand at the threshold of huge political changes in Wales. There is an expectation that the Assembly will improve Wales's economic performance, although we do not know how realistic is that expectation. There is an expectation also that it will improve the profile of Welsh culture and of the Welsh language.

I should be grateful if the Minister could reassure me on two points. If those who are able and willing to speak Welsh publicly in Assembly sessions are to have confidence in doing so, a good quality translation facility should be available. Assembly Members also should have confidence in the accuracy of translations. It may surprise hon. Members to learn that I have recently fallen foul of that expectation.

As right hon. and hon. Members will know, at the beginning of this week, the Welsh Grand Committee met in Aberaeron. I delivered a speech in Welsh, but was much surprised and frustrated, not to say rather annoyed, to learn that the translation that was provided for Hansard—this is not a criticism of Hansard, incidentally—was very inaccurate in many respects. The matter is being pursued through the Chairman of the Welsh Grand Committee. However, we must have confidence that we shall have a good-quality translation, or the Welsh language will not be used as much as it should be.

The proceedings of the National Assembly will be reported. There is perhaps a misunderstanding that the verbatim report, at least the one in Welsh, will not be available for some days after a speech has been delivered. Hon. Members have been lobbied on the issue, and I should be grateful if the Minister could clarify the precise position. I realise that there is a difference between preparing the final bound text and a draft of speeches, but, if Members are to use the Welsh language publicly, they should not have to do so under such a hindrance.

Mr. Evans

Does the hon. Gentleman agree that, with the use of new technology, there is absolutely no reason why transcripts could not be put on the internet within a matter of hours, rather than Members having to wait days for printed texts?

Mr. Thomas

I agree entirely. As I said, I should like some clarification from Ministers on the issue.

It will be interesting to see how a Welsh debate, such as this one, will be conducted in 10 or 20 years. We are in a time of great constitutional change, and it is not clear where it is taking us. I am rather sceptical about the idea of a Europe of the regions. There is considerable loyalty to the idea of the British state, even among those who strongly support the need to preserve Welsh political and cultural identity through the Assembly.

As my right hon. Friend the Member for Llanelli (Mr. Davies) said, we have to accept the fact that there are big fiscal transfers from England to Wales. However, we are in a time of change. The penny has not quite dropped in this place about the procedural consequences of devolution. I am not entirely confident that the Government have got it right on the role of oral questions to the Secretary of State for Wales or the Select Committee on Welsh Affairs. I hope that the Committee will continue in more or less its present form, taking a cross-cutting brief examining all aspects of primary legislation and policy that affect Wales.

My hon. Friend the Member for West Carmarthen and South Pembrokeshire (Mr. Ainger) and I recently had the privilege of attending various meetings with colleagues from Scotland, Northern Ireland and the Federal Republic of Germany at the invitation of the German Government.

Mr. Rowlands

I have never thought that the Welsh Affairs Committee did enough on the block grant. Should not that be one of the centrepieces of its future work?

Mr. Thomas

I am grateful to my hon. Friend for that remark. I entirely agree that that would be a worthwhile area of study.

The Germans are very interested in what is going on in the United Kingdom. I was told by a member of the German Foreign Ministry that devolution to Scotland, Wales and Northern Ireland would make us a more normal country in European terms. That is a telling remark. Our regime is over-centralised. I welcome the trend towards devolution. I do not share the scepticism of those who maintain that there is no demand for devolution in the English regions. That will come. Although our system of quasi-federalism is asymmetrical and will cause problems, there is no reason why we cannot have a more rational constitution. We need some joined-up thinking on the constitution as well as on social policy.

One of the apocryphal incidents ascribed to Dewi Sant, or St. David, our patron saint, is the time when the ground rose up beneath his feet when he was delivering a sermon somewhere in mid-Wales. That is a striking symbol that makes us think of raising awareness, raising standards and raising horizons. The Assembly has a crucial role in raising standards across Wales. As a patriotic Welshman, I regret to say that we are too often seen as a mediocre country in many respects. We need a crusade to raise standards across the board—in education, local government and all walks of life, including industry.

4.23 pm

Mr. Alan W. Williams (East Carmarthen and Dinefwr)

It is a pleasure to follow my hon. Friend the Member for Clwyd, West (Mr. Thomas). I agree with virtually everything that he said.

I hope that this annual debate continues after the establishment of the Assembly, because it gives us a free agenda to speak on any aspect of Welsh affairs, including constituency issues. I learn a lot every year from the contributions of my hon. Friends and, occasionally, from Opposition Members.

I should like to focus most of my remarks on constituency issues. There has been a generally gloomy feeling to the debate, with everyone describing the problems across Wales and in their areas. I shall start with the gloomiest aspect, but I hope that there will be some optimism in the second part of my speech.

The most difficult aspect of the Welsh economy is the crisis in agriculture. I do not know where its origins lie but, in the past year, farmers' incomes have dropped by about 40 per cent., having already suffered a 40 per cent. drop the previous year. There is deep despondency about the future.

I keep reassuring farmers that things will get better and that next year cannot be as bad as last year. One of the problems was that prices in September and October fell catastrophically. The problems in Russia and south-east Asia and the high pound may have been contributory factors, but the catastrophic drop has not been properly explained. During the past year, interest rates have fallen from 7.5 to 5.5 per cent. I am confident that, over the next three or four years, they will drop to 5, 4 or 3 per cent., and below, as we prepare to join the European single currency. With that will come a fall in the value of the pound, which will help to restore competitiveness, putting up the price of imported goods, enhancing our exports and creating more demand for agricultural products.

The other element of despondency in agriculture relates to the negotiations in Brussels on reform of the common agricultural policy. I have felt for 20 years and more that the CAP drastically needs reform. It does not deliver what it was constructed for. It is a wasteful policy, because three quarters of the resources go to the richest 25 per cent. of farmers. Rather than supporting small, poor farmers, it gives million-pound subsidies to millionaire farmers—the barley barons and others. I hope that the discussions in Brussels result in a fairer and better-targeted CAP, moving away from production support towards the environment, thereby moving away from supporting rich farmers to supporting small farmers. There is deep anxiety throughout rural communities about the results of the negotiations, which we await over the next few days.

I am pleased with the progress being made on unemployment. I see the hon. Member for Brecon and Radnorshire (Mr. Livsey) in his place. I am aware of the severe blow in Ystradgynlais, where 700 jobs will go because of the Lucas closure. There are odd black spots, but unemployment in Britain has dropped by 40 per cent. in the past two years. In my constituency, there were 1,855 people out of work in December 1996 and 1,224 in December 1998. That is a one third reduction. We are making excellent progress on reducing unemployment. The useful research papers produced every month by the Library on unemployment in individual constituencies show that my constituency has the sixth lowest level of unemployment in south Wales and the lowest in south-west Wales. The figure is currently 4.3 per cent. I am reassured by the fact that it is half what it was 10 years ago, so we are making outstanding progress.

As my hon. Friend the Member for Islwyn (Mr. Touhig) said, thanks to the new deal, youth unemployment has halved and long-term unemployment has fallen by 57 per cent., so we are tackling unemployment head on.

The biggest problem in my area is low pay, something that is endemic in the Welsh economy, particularly in west Wales and Gwynedd, which have very low per capita incomes. The income per capita in Wales is 83 per cent. of that in Britain, but in west Wales and the valleys it is only 71 per cent. of that in Britain. That is partly due to low pay. The Government's legislation on the minimum wage, which will take effect in April, will provide a massive boost for my constituents as 15 per cent. of employees in Carmarthen, East and Dinefwr earn less than £3.50 an hour. The minimum wage of £3.60 an hour for people over 25 will directly benefit more than 3,000 people in my constituency—the poorest people in work. It will also provide a foundation for other wages. It is a wonderful, socially progressive measure providing for the redistribution of income and it will be a great monument to our Labour Government.

The other major topic of today's debate is objective 1 funding, which has been mentioned by many hon. Members. Objective 1 funding, if it is achieved, will provide a one-off opportunity, but for only six years. As my hon. Friend the Member for Cardiff, West (Mr. Morgan) said, it is sad that Wales is in a deep depression and that our income per capita is so low that we need to apply for objective 1 status. However, it will provide a once-in-a-generation opportunity to pull out of the bottom league, stop being the poorest region in Britain and start motoring ahead.

I should like to pay tribute to my right hon. Friend the Member for Caerphilly (Mr. Davies), the previous Secretary of State, and to the Under-Secretary, my hon. Friend the Member for Neath (Mr. Hain), who is not in his place. I should also mention my hon. Friend the Member for Bridgend (Mr. Griffiths). During the past 12 to 18 months, the Front-Bench team has done a great deal of hard work putting together the statistics and presenting the case, not ranting passionately like the right hon. Member for Caernarfon (Mr. Wigley), but in a cool, rational and diplomatic fashion, using the force of argument rather than the argument of force. We are grateful to the Front-Bench team for all its good work so far and we hope that, in March, we shall finally achieve objective 1 status.

I wish that there were more reports of the work of the task force under Hywel Ceri Jones, which was an imaginative and forward-looking idea. It involves about 160 working parties in different parts of Wales. Over the next 12 months to five years, they will have the enormous responsibility of drawing up hundreds of schemes involving the infrastructure, businesses and skills and training to equip us for long-term economic advancement.

Mr. Evans

Is the hon. Gentleman aware of the inconsistency of his argument? He began his speech by saying how wonderful Wales was doing and how great things were, but he then said that it needed objective 1 status as things were so bad. The hon. Gentleman cannot have it both ways. Is Wales doing well or is it not?

Mr. Williams

I am not surprised by the hon. Gentleman's intervention. It is an example of the superficiality of most of his remarks from the Opposition Front Bench. Let me explain my analysis. Eighteen years of Conservative Government left Wales in a desperate plight at the bottom of the regional league. My own area has only 71 per cent. of the income per capita of Britain. After 18 months under Labour, we have moved forward. As I said, unemployment has fallen by a third in my area and the new deal has given new hope for young people and the long-term unemployed. The minimum wage will also help, as will forthcoming measures involving child benefit, education and health. The picture is changing, but we cannot repair 18 years of damage in 18 months.

We need objective 1 support to regenerate the Welsh economy. I am very hopeful that we will achieve that. I mentioned some of the projects that we need. However, there appears to be a misconception, especially in rural areas, about objective 1 funding. In some farming communities, it is said that when Ireland achieved objective 1 status there were suddenly great times and that the money was there to be enjoyed—that it was money for nothing going directly into people's pockets. That is not the purpose of objective 1 funding. It is money not for today, but for long-term investment in the infrastructure to provide roads, industrial estates, water supplies, sewerage, gas and so on. It is to help businesses finance research and development and innovation.

Let me quote one example. The Science and Technology Committee has been looking at innovation in engineering and physical sciences—a sector in which Britain does not stand comparison with Germany, Japan and the United States. Newer ideas include science parks and technology transfer in an attempt to provide a middle tier between universities and industry. Objective 1 money could be used to further that. Wales has some notable academic institutions with excellent departments. We need to expand research and development and innovation. It is important also to provide skills training for those who are out of work or between jobs and further and higher education for young people. We need a multiplicity of courses to provide the skills for tomorrow's industries.

Mention has been made of matching plans and where they should come from. My feeling is that, if 75 per cent. of the money comes from Europe under objective 1, it is nothing to find the other 25 per cent. For instance, if I wanted to spend £20,000 on my house—not that I want an extension—and I was told that I could get £15,000 free of charge from the local authority, or wherever, and that I had to spend only £5,000 of my own money, I would soon find a way of raising £5,000. It does not make much difference whether the money comes from the Treasury, the Welsh Office or local authorities as it is all taxpayers' money and we are all taxpayers.

The Secretary of State will have to put the case to the Treasury. As my hon. Friend the Member for Clwyd, West (Mr. Thomas) said, we must not put the cart before the horse. First, we must get objective 1 status and then we must open negotiations with the Treasury on how it can help us—in addition to the Barnett formula—to raise those matching funds.

If the Treasury will not help, the Welsh Office block grant will be under pressure. We want money to improve the health service, education and other services. I am reluctant for the Welsh Office to be squeezed for the extra £100 million, or whatever the sum may be. I would rather that the funding came from local authorities. Our manifesto said that we would get rid of council tax capping and allow local government to set its own budget, restoring a freedom that exists in virtually every other part of the world.

Mr. Llwyd

I agree that an element of partnership is desirable, but let us be honest: local authorities are already under severe financial constraints and will not be in any position to contribute substantially, although they might make a nominal contribution. Even if all the council house receipts were available, that would not amount to very much.

Mr. Williams

I disagree fundamentally. It has taken 20 years to happen, but the ratio of local government expenditure that is raised locally is down to about 10 or 12 per cent. in Wales, with 90 per cent. coming from the Welsh Office in the standard spending assessment. That is unhealthy for local democracy. Rather than taxing and spending nationally, I would prefer local government to be allowed to spend what it deems appropriate on education, highways and all the other services. Certainly, the bulk should come from the Welsh Office, but there should be that freedom.

A poll carried out in Milton Keynes recently, and published in The Guardian last Tuesday, demonstrates the public acceptance of that view. We can learn certain lessons from England. The poll shows how people value their local authorities. The Government guideline was for a 5 per cent. increase in council tax, while the council in Milton Keynes wanted a 10 per cent. increase. The council balloted people on whether the increase should be 5, 10 or 15 per cent.

The results were very revealing. There was a higher turnout than in any council election: 45 per cent. as opposed to only 26 per cent. in the most recent council elections. Of those who voted, 23.6 per cent. voted for a 15 per cent. rise; 46 per cent. for 10 per cent.; and 30 per cent. for 5 per cent. That was in Tory middle England, as it were, although the council and the parliamentary seats are now Labour. Seventy per cent. wanted an increase of 10 per cent. or more, knowing that it would be spent on their local services. I think that people in Wales are very much of that frame of mind. If they see the benefit of services locally, they will vote to pay for them.

If any of the objective 1 money that we hope will be available within the next year or so were not used, we would lose a one-off opportunity and deny the advantage to our children and grandchildren. We must use it all, and if local authorities need to get involved in raising the matching funds, they should play their part.

4.44 pm

Ms Julie Morgan (Cardiff, North)

This is the last St. David's day debate before devolution and the Welsh general election. I hope that this annual debate will continue to take place so that Welsh Members who are not going to the Assembly will still have the opportunity to raise the wide-ranging issues that we have discussed today.

We do not yet know what impact constitutional reform will have on the Chamber. My hon. Friend the Member for Clwyd, West (Mr. Thomas) raised the issue of the future of Welsh questions. I know that the Procedure Committee has started to consider that. I cannot see how Welsh questions can continue in the same way if we are holding the Secretary of State accountable for the powers that remain to him. That is an unknown quantity, as is the future of the Welsh Affairs Committee, which I hope may be found a role in pre-legislative scrutiny, especially of the way in which Bills affect Wales.

We are moving into the unknown. That is an essential part of change and of the process of devolution. In addition to devolution and the setting up of the Assembly, reform of the House of Lords is bound to result in a second Chamber with more legitimacy, which in turn is bound to affect the workings of this Chamber. For the Welsh Members who will remain here, it is a time of change and uncertainty, but, for those of us who have been committed to and campaigned for devolution for many years, it is a time of great excitement. This is a day to celebrate what we have achieved.

Many people have said that we have unrealistic expectations of devolution, but I unashamedly have great expectations and look forward with tremendous excitement to the first meeting of the Assembly in Cardiff, with politicians from all over Wales coming together and starting to sort out the problems that the Government have already begun to address. I hope that we will be able to start building up forward-looking, strong, healthy communities, bringing power closer to the people and giving them a greater chance to sort out their own affairs, with women and men playing equal roles, which is an important issue for the Assembly.

Mr. Huw Edwards (Monmouth)

Is not it a great credit to our party that the twinning process that we introduced last year has produced such an outstanding range of women Labour candidates, who will be in the Assembly in a few months?

Ms Morgan

I could not agree more. The difference between the Assembly and the House of Commons is that there will be a much more representative group of people there than I see here today. I think that the style of conducting business there will be different, and more productive, because a much wider cross-section of the population will be involved. The beginning of the new democracy is an opportunity to look afresh at our constituencies, for example, and to see what we want to change and what the Assembly can do to help that change. The economic issues have been well covered today, so I shall concentrate on other issues.

The publication of the Stephen Lawrence report yesterday has made us all aware of the extent of racism in Britain. That applies equally in Wales. The objective statistics for Cardiff show that young black men are many more times likely to be unemployed than their white peers. South Wales police have announced sharp increases in the number of reported racial attacks, as has Cardiff and the vales race equality council, Race Equality First. When I was a councillor, I knew of Asian women who were afraid to leave their houses and walk on the streets of Cardiff because of the abuse they received from groups of youths.

I hope that the Assembly will be the inclusive body that people say it will. To me, inclusivity means including black people in decision making and in consultation. I am pleased and proud that the Labour party has a black woman candidate, Councillor Cherry Short, in the constituency of my hon. Friend the Member for Monmouth (Mr. Edwards), and we will win that seat on 6 May. It is a great credit that we have a black candidate for the National Assembly who will win her seat.

The Stephen Lawrence report recommended an immediate review of racism awareness training in the police force and other agencies. The setting up of the National Assembly is an opportunity to ensure that anti-racist strategies are in place from the beginning and that a programme is introduced so that all its employees have such training. I also believe that the members elected to the Assembly should have anti-racist training. I hope that those hon. Members who leave here for the Assembly will help to ensure that that happens.

Dr. Julian Lewis

I am a member of a religious minority, the Jewish community, which experienced before the war persecution and prejudice similar to what the coloured community experiences now. I have some slight reservations about going as far as the hon. Lady in her proposals for anti-racist training for all sorts of groups before it is established that there is a problem in those groups. Otherwise, there is a danger that one might create resentment and a problem, where no problem exists.

Ms Morgan

The evidence put before the House yesterday undoubtedly shows that there is a problem. Members of Parliament, as the law makers, should also have anti-racist training. When we first come to the House, we have no opportunity to access the type of training that is provided automatically in many jobs, including training in equal opportunities and disability awareness. We lose out because of that, and I hope that Members elected to the Welsh Assembly—a fresh start and a new opportunity—have the chance to experience such training.

The Equal Opportunities Commission and the Commission for Racial Equality will still be the responsibility of the Department for Education and Employment, although both have regional offices in Wales. It is essential that a strong link is made between those bodies and the Welsh Assembly, so that they can all promote equal opportunities.

I am a member of the Welsh Refugee Council and we have recently seen an unprecedented increase in the number of cases with which it deals. The numbers have increased from a handful in 1994 to almost 200. That is due partly to the Asylum and Immigration Act 1996 and also because south Wales contains established communities from countries such as Somalia, Sudan and Iraq. The new proposals in the Immigration and Asylum Bill are likely to increase the number of asylum seekers coming to Wales and it is essential that we have a cohesive and practical response. I hope that, in the Special Standing Committee, the Government will reconsider the cashless system that they propose for all asylum seekers. That system is already in place for asylum seekers who apply in-country; the experience of the Welsh Refugee Council is that it is stigmatising and creates major problems for daily living. The council is also concerned that asylum seekers should have a say in where they are placed in the country so that they have access to community support, health facilities, translation facilities and education in English as a second language. We need a comprehensive, on-going programme so that refugees who settle in Wales can become full and equal citizens.

The National Assembly should give everyone living in Wales the opportunity to become full and equal citizens. The essential test will be the difference that it makes to people living in difficult circumstances. The Assembly must make a difference to people such as the lone parents with small children struggling along on a council estate in one of the valleys or on the outskirts of Cardiff, where the local shop has closed because of competition from out-of-town supermarkets. We must try to make a difference to people such as that, and success or failure will be a test of the value of the Assembly.

An inclusive Assembly will also include the voluntary organisations that make such a tremendous contribution to the life of Wales. Countless people spend their time enriching their communities, for no payment. I want to mention organisations such as Mewn Cymru, which speaks for black women, and BAWSO, which has set up a refuge for black women.

As long as I have been involved in politics, organisations such as that have always been knocking on the door, trying to get in. The Assembly should start off with a place already available for such bodies. Any concordat or consultative process must take advantage of such groups, and the Assembly should include people from all the different minority groups and voluntary bodies. I have mentioned only a few of them, but there are many in Wales.

Mr. Lembit Öpik (Montgomeryshire)

Does the hon. Lady agree that the Assembly should not rely on those organisations to do its work? They are not a cheap alternative, and the Assembly cannot use them to escape its social responsibilities. Sometimes I feel that that is what the Government do.

Ms Morgan

There is no question of the organisations being used to do work that should be done by the Government, the Assembly or local authorities. The point of establishing strong links with the voluntary organisations is to take advantage of their knowledge and expertise. They are eager for that to happen, and their knowledge will enrich the Assembly's programmes and policies. As a result, we will have a rich and inclusive Assembly.

When we have this debate this time next year, the Assembly will be up and running, and I hope that it will have started to deal with all the matters that have been raised today. I believe that the Assembly represents a tremendous step forward, and I look forward to hearing, this time next year, about some of the things that are happening there.

4.58 pm

Mr. Martin Caton (Gower)

I want to concentrate on a particular matter that has arisen in my constituency, although it may have ramifications beyond the borders of Gower.

Earlier this week, Barclays bank got some positive publicity for funding research by the Groundwork Trust into the relationship between communities and their environment. That research was all good green stuff, and scored lots of brownie points for the bank's environmental credentials. However, a very different picture has emerged of the bank's attitude to a community determined to live in harmony with its natural environment, rather than to impose itself upon that environment.

About 10 days ago, a representative of the High Court's sheriff office visited the community, a settlement called Holtsfield, and told the residents that he wanted to check six of the wood-built chalets, in preparation for evictions any time in the next few months. The sheriff office was acting on warrants taken out by a property development company called Elitestone, which is bankrolled by the bank that likes to appear to care about communities and the environment.

This story is not even the traditional tale of capitalism putting profits before people. It started out as that, but there is no way that the 14-acre site can give Elitestone enough of a return to enable it to repay the £750,000 that it owes Barclays. As far as I can see, the evictions of six families will be driven by the malice and vindictiveness of the director of Elitestone. Barclays knows that—I have told the bank so myself—but it refuses to pull the rug from under him.

I should explain briefly the recent history of Holtsfield. It is a unique part of the heritage of Gower, a group of 27 chalets at the upper end of the Caswell valley on the edge of Bishop's Wood nature reserve. The chalets are situated in woodland around a central field. They are highly individual and picturesque, and they complement wonderfully their beautiful natural setting. One has a turf roof, and its electricity is supplied by a wind generator.

Originally built between the wars for holiday purposes, the chalets became homes for blitz refugees during the second world war. In subsequent years, they were increasingly occupied permanently. In 1990, in recognition of the quality of the settlement and its historic importance, Swansea city council designated it a conservation area. At present, 60 people live there, 24 of them children. Some of the adults have lived there for more than 40 years, and they include pensioners, the warden of the nature reserve, an architect, a merchant navy sailor, a nurse, a teacher, the manager of a care home, a photographer, a wood turner, an artist, a sculptor, a potter and a geologist.

Almost all the children have spent their whole lives there. They attend the local school, and the teachers say that they make a special and valuable contribution. This is no transient, hippy community, as the property company has tried to paint it. It is a group of people who have found a way of living that impacts as little as possible on an environment that they treasure and that they are determined to sustain.

Holtsfield is a real community. People there do not lock their doors when they go out—indeed, some of the chalets have no lock. People there look after one another. The community is not isolated from the wider community, and it makes a valuable contribution to the village in which it is set—Murton, which adjoins Bishopston. That contribution has been repaid by the support that the community has received from the residents of those and other surrounding villages since Holtsfield came under threat.

The threat began nearly 10 years ago when the freehold ownership of the field changed hands. Until then, the chalet dwellers owned their chalets, but were granted individual licences by the freeholders. In September 1989, the freehold was bought by Elitestone Ltd. with money borrowed from Barclays. Within months, the director of Elitestone had made clear his intentions to force the residents out of their homes, and to build a housing estate on the site.

For almost 10 years, some of the people of Holtsfield have lived under threat of losing their homes and the special way of life that they love. It was Elitestone's applications to build, first, 39 houses, and then 15, that led to Swansea—I was a member of the council at the time—designating Holtsfield a conservation area, thus refusing to allow any major new development.

Elitestone sought to challenge that decision by appealing to the Welsh Office, but when conservation status was supported by the Welsh Office, the company challenged the decision further by seeking judicial review right up to the Court of Appeal in London. Elitestone lost every time. The Welsh Office got it exactly right when it dismissed the appeal, stating: Holtsfield, in its distinctly Arcadian setting, forms an integral part of the countryside in contrast to the suburban character indicated on the illustrative drawing of the proposed development. As well as trying to change the site's planning status, Elitestone was also acting directly against the residents. The company claimed that chalet dwellers had no legal rights, and that their right to occupy their homes was granted by the renewal of licences at the freehold owner's complete discretion. A series of letters followed, demanding that residents move and surrender their chalets to Elitestone. Other letters demanded large sums of money. Residents, through their excellent solicitor, held that they had tenants' rights, and that the licences were, in fact, tenancies.

In April 1991, the residents received the first summonses for possession of the land and, for the next four years, legal wrangling, court cases and appeals overshadowed the lives of all the families at Holtsfield, ending with the devastating and absurd decision of the Court of Appeal, in July 1995, that their homes were temporary mobile structures. Many of those temporary mobile structures had been there for more than 50 years, and some people had lived in them for 40 years.

As a last resort, the residents applied, in desperation, for leave to appeal to the House of Lords and, at the same time, tried to meet and negotiate with the director of Elitestone. However, he was having none of it and, instead, applied for possession warrants for four of the chalets. On 19 October 1995, the county court bailiff arrived to serve the notices. He was met by the residents and more than 300 local supporters who came to show their solidarity—I was there that day. The bailiff was not, however, prevented from serving the notices.

At 7.30 am on 22 November 1995, the sheriff, his men and a private security firm appointed by Elitestone arrived on Holtsfield and, with excessive aggression and damage to property, proceeded with the evictions. The residents attached themselves to their homes with chains—indeed the local vicar did the same thing to show his outrage—but they offered no other resistance. I arrived just after the evictions were completed, but saw the damage and, what was worse, the distress, especially that caused to the children. That 7.30 am raid took place despite the High Court sheriffs promise that there would be no evictions until after the children had gone to school at 9 am.

The six families, waiting now for their evictions, know only too well what they have to expect and they dread it. However, they are not prepared to walk away from their homes and their way of living. Thankfully, in January 1996, the residents were granted leave to appeal to the House of Lords and the county court recorder refused to hear any further applications for eviction until the House of Lords decision was known. For a time, there was some respite. To highlight their plight, some of the residents marched all the 250 miles to London to arrive on 20 March 1997—the date of the House of Lords hearing.

On 1 May, they received their judgment and it was good news: full Rent Acts protection to the test-case residents, and acceptance that their chalets were proper homes and proper fixtures. That ruling was extended to cover most of the other chalets by a subsequent court ruling. However, not all the residents were protected because some had not lived on Holtsfield long enough; about eight chalets were not protected and Elitestone is now gunning for six of them.

Why is that, and why does Barclays bank still back the company? Any hope of development has gone out of the window; it is prevented by the conservation area status and the security of tenure of the majority of the chalets. Have the residents behaved badly or unreasonably? Far from it, they have offered to pay Elitestone a reasonable rent and have tried to negotiate with the company through their solicitor. It is Elitestone that refuses to talk. I can identify only revenge and mean-mindedness as the reasons for the attempt to make those families homeless.

Barclays should have pulled the plug on Elitestone a long time ago, on the basis of the bank's own environmental and ethical policies; it should pull the plug now on the basis of sound financial management. There is no profit to be made at Holtsfield, only the potential for a lot of heartache. Barclays holds a legal charge against Holtsfield. If the bank stops propping up Elitestone, it will become the landlord of that community, with the chance to put its fine words about communities and the environment into practice. Failing that, we must consider a solution that includes compulsory purchase, and I know that the local authority and a housing association are exploring that possibility with the residents. I hope that the Welsh Office and, subsequently, the Welsh Assembly will be as helpful as possible in terms of finance for that approach if that should be the outcome. I hope that everyone will recognise that what we have in Holtsfield is special and sensitive; it must not be replaced with some off-the-shelf social housing alternative.

The Government need to consider the issue of speculative land purchase where people's homes are involved. The people of Holtsfield have had the sword of Damocles hanging over their heads for almost 10 years; that should not be happening to them and it should never be allowed to happen to anybody else.

5.10 pm

Mr. Huw Edwards (Monmouth)

I apologise for not being present for the early part of the debate as I had a dental appointment. It is a privilege to contribute to the debate: the last to be held this century and the last under the present constitutional arrangements. There was no equivalent debate last year as we were considering the Government of Wales Bill, which will change fundamentally the context in which we debate many issues.

Yesterday and the day before, we passed the orders that transfer responsibilities from the Secretary of State to the National Assembly for Wales. It is significant to note not only what was transferred, but what was not. Main policy areas that will not be transferred to the National Assembly include macro-economic policy, social security, the justice system, prisons, the police and the fire services, the national lottery, labour market policy and defence. I think that there will always be a role for this debate, for the Welsh Grand Committee and for the Welsh Affairs Select Committee, in examining those policy areas that impact upon Wales but are not the responsibility of the National Assembly.

I mentioned defence, which has some significance in Wales and in my constituency. There is considerable concern at present about the future provision and development of ammunition in this country. The royal ordnance factory at Glascoed in my constituency manufactures ammunition and employs about 400 people. However, the factory and the future of those 400 workers are under threat due to the recent decision by the Ministry of Defence to purchase propellant from South Africa rather than from a royal ordnance factory in Scotland. I have a duty to represent those employees in this place and express my concerns about the actions of the Ministry of Defence in passing responsibility for producing propellant to another country. Although South Africa is a friendly country, there is a strong case, under a sustainable defence policy, for producing our own armaments in Britain rather than being overly dependent on imports.

The factory employees in Glascoed have worked extremely hard during recent conflicts. They produced the ammunition needed in the Iraq and the Falklands wars, and it would be a great tragedy if their jobs were jeopardised. I know that the Defence Select Committee is considering the matter, so I shall say no more at this stage. However, I think it is important to raise the subject.

Another issue of particular importance, not only to Wales but to my constituency, is farming. I am grateful that my right hon. Friend the Secretary of State recently visited my constituency and a local farm at LLanbadoc near Usk. The farmer, Nigel Bowyer, is a young man with a family. He says that he has been losing money on his farm for the past two years, partly because he is a lowland farmer.

To their credit, the Government have produced an emergency aid package for farming. However, it does not apply to lowland farmers to a great extent. We can be truly proud of recent developments in agriculture: the success in lifting the beef ban in Europe, the emergency aid package, the review of hill livestock compensatory allowance payments and the brutal honesty with which the Minister for Agriculture has recognised the problems in the industry and given a commitment to farmers to do all in his power to work on their behalf.

However, some problems remain. Recent Welsh Office figures show that there has been a 41 per cent. drop in farm incomes this year. There is concern about the Agenda 2000 programme and the need to protect the small family farms that are so characteristic of Wales. The beef ban in Europe has been lifted, but we have not resumed beef exports. Milk prices have fallen, and there is concern about the funding of the Food Standards Agency, which the Government are reviewing at present.

When my right hon. Friend came to my constituency with a senior officer from the Welsh Office agricultural division, we drew their attention to the complicated forms that many farmers must fill in these days. We also pointed out that, if farmers make inadvertent mistakes in completing those forms, they can be heavily penalised. Payments that should be made to them are often delayed for an unreasonably long time because they have made unintentional mistakes. Of course we accept the importance of achieving accuracy and avoiding fraud, but when those forms were compared to equivalent forms from Ireland, my right hon. Friend the Secretary of State and his officials acknowledged that the forms from Ireland had a more customer-friendly approach, so I ask Welsh Ministers to consider that issue.

Environmental payments have been a concern to hon. Members. We applaud the developments in tir gofal but significant additional resources could be invested in agri-environmental schemes.

The local authorities can play a greater role in agriculture. My authority in Monmouth is a major landowner and owns the local livestock markets, but it would be the first to admit that it has not regarded agriculture as part of its economic development strategy in the past. The emphasis has been on manufacturing. It is to the authority's credit that it is now considering the future of agriculture in Monmouth and examining economic development strategies that will work in the interests of what is the major industry in my constituency.

To its credit, Monmouthshire county council recently organised a seminar on organic farming. We were all surprised by the tremendous number of farmers who expressed an interest in attending and seeking advice on possible conversion to organic farming.

We shall have objective 1 status in Wales. Hopefully, objective 2 will also apply to eastern Wales, the area that I represent. I am grateful that the Welsh Development Agency, in incorporating the work of the Development Board for Rural Wales, will be considering infrastructure projects for agriculture.

Following the report of the Select Committee on Welsh Affairs, I have advocated the need for a large-scale freezing facility for Wales. There is not such a facility in the whole of the United Kingdom. Although that would be a commercial project, objective 1 or 2 funding could be used to develop that facility, which would be of use to farming communities, not only in Wales, but in the south-west of England.

One of the Government's most significant announcements in the past 18 months is the national strategy for carers, which was announced in the House two weeks ago by the Secretary of State for Health. My right hon. Friend the Secretary of State for Wales has assured me that his Department is currently consulting local authorities, voluntary organisations and the health service to develop the Welsh version of the national strategy for carers. I acknowledge that that will be the responsibility of the National Assembly for Wales when it is established in a few months.

Last year, I introduced a ten-minute Bill to give carers and the people for whom they care a statutory right to be assessed for respite care. Although my Bill does not appear to have been fully incorporated into the national carers strategy, I am grateful for the strategy's recognition of respite care.

I have been in contact with carers in my constituency who will be greatly heartened by the Prime Minister's foreword to the national carers strategy. He referred to the work that carers do as extraordinary not in ways which make headlines, but in ways which really matter". He said: Carers devote large parts of their own lives to the lives of others—not as part of a job, but voluntarily. And often in addition to working themselves. For the sick, the frail, the vulnerable and the elderly, carers provide help and support in ways which might otherwise not be available. Carers in my constituency will acknowledge the concern and support that my right hon. Friend has expressed for them.

I pay particular tribute to the Crossroads scheme in my constituency, in Chepstow and Caldicot and in Monmouth. I recently spoke at its annual general meeting and outlined the significance of dementia, which will be a growing problem in Wales. According to the Alzheimer's Disease Society, dementia is perhaps the major health and social care challenge of the next century". It will affect one in 20 people over the age of 65, and one person in five over the age of 80. Half the people in residential care who are over 80 have dementia. By 2040, when some of us, hopefully, will be in our 80s, if we survive that long, there will be 1.2 million people aged over 65 with dementia. Dementia currently affects more than 700,000 people in the United Kingdom, including 40,600 in Wales. According to the Office for National Statistics, it is estimated that in 1996 there were almost 7,000 people with dementia in the Gwent health authority area.

Many people with dementia are cared for in their own homes by their relatives. Two thirds of people with dementia continue to live in their own homes, including a substantial number who live alone. Many are cared for by family members, who in many cases are elderly themselves. That imposes a tremendous burden on those people.

It is to the Government's credit that the national carers strategy has been established. As a society, we must determine our social priorities. The needs of those suffering from dementia and other chronic conditions pose an immense challenge because our response is dependent on so much voluntary provision, especially the contribution of the vast army of informal carers, most of whom are women.

The challenge that faces us with dementia is not insurmountable. It can be met with the right commitment of statutory and voluntary services in the context of a Government policy that is creative and compassionate. Much of our approach to the care of the elderly has been constrained by negative stereotypes of elderly people being dependent. Professor Richard Titmuss, the outstanding professor of social policy in Britain, argued that far from being a burden, an aging population represents the triumph of a successful welfare state in reducing premature mortality and improving standards of health and social care.

Our aging population is a celebration, not a burden. I pay tribute to the Chepstow and Caldicot Crossroads, Crossroads schemes throughout Wales, the Carers National Association and all the voluntary organisations that work so hard on behalf of carers and the people whom they care for.

This is the last Welsh day debate before the tremendous constitutional change that we will witness in the next few months. I send my best wishes to all those who will be standing for election to the National Assembly. Opposition Members have spoken of two different types of Assembly Members. It is to the Government's credit that we have established a fair electoral system that will ensure fair representation.

I look forward to working with the Assembly Members. I know that in my constituency they will probably represent different parties, including the Opposition. I look forward to working with those people to ensure that the people of Wales will be better served by having a democratically established Welsh Assembly.

5.22 pm

Mr. John Smith (Vale of Glamorgan)

I apologise to the House for the fact that I was not able to be present for the whole debate. Unlike my hon. Friend the Member for Monmouth (Mr. Edwards), I have not been to the dentist, but, as a dutiful Welsh Member of Parliament, I have been serving on the Committee considering the Greater London Authority Bill. There are parallels between carrying out my duties and going to the dentist.

This is the first full Welsh affairs debate that we have been able to hold since the general election in 1997. We are approaching the second anniversary of the new Labour Government. I shall outline briefly the way in which the new Government have affected my constituency, the Vale of Glamorgan.

In many respects, the Vale of Glamorgan is a microcosm of Wales and of the United Kingdom.

Mr. Win Griffiths

There are no mountains.

Mr. Smith

There are hillocks, but not too many mountains. The Vale of Glamorgan is a beautiful constituency and an interesting one, made up of the traditional urban port town of Barry, which was built on coal at the turn of the century, at the core of the constituency; the agricultural area to the west, in Cowbridge and the seven villages, which is heavily dependent on the agricultural industry; and the suburbs of the east, Sully, Dinas Powys and Wenvoe, many parts of which are travel-to-work areas of Cardiff. Each of those areas is experiencing different problems.

Before the Government were elected, Mr. Lord, the biggest blight—

Mr. Griffiths

We are not in Committee.

Mr. Smith

I do apologise, Mr. Deputy Speaker. I have been in Committee all afternoon.

Before the general election, the Vale of Glamorgan experienced some of the worst problems in the country, and the worst of all was poverty. My constituency is generally considered to be one of the more affluent parts of Wales, but nothing could be further from the truth. It contains, or has contained, some of the poorest communities in Wales. In north-east Barry, for example, net disposable income per household, including all non-housing benefits, is less than £60 a week. That is less than the amount that some hon. Members would think nothing of spending on a meal, but it must pay for clothing, shelter, warmth and food for entire families. That is the legacy of nearly 20 years of Tory Government and misguided policy. It has ruptured our community, and has delivered poverty to our doorsteps—poverty that rests side by side with some of the most affluent villages in Wales.

In a radius of five miles, some people are living in poverty, while others have some of the highest incomes in Wales. The final judgment on whether our Government succeed or fail rests on whether we deal with that. I was delighted to hear my right hon. Friend the Secretary of State describe what we have already achieved in less than two years in regard to health and education, and, most important, the eradication of poverty. Our strategy is to help those who are able to work to escape their circumstances—to use work as a mechanism to empower those who can work, and to release resources for the support of those who cannot, including the carers to whom my hon. Friend the Member for Monmouth referred.

We must be able to redirect scarce resources, and I believe that, in the society in which we now live, we must do that in the way in which the Government have decided to do it: through work. I am delighted that, on 1 April, nearly 110,000 people in Wales will benefit directly from our minimum wage proposals—a higher proportion than in any other part of mainland Britain. The reason for that is sad. Under 18 years of Conservative rule, Wales, which had been one of the highest-wage economies in the United Kingdom, became one of the lowest-wage economies. That is why so many of our people will benefit from the minimum wage, which, combined with the working families tax credit, will enable many members of the community to which I referred at the outset to escape from poverty by means of work.

The task will be easier for my constituency, because, by and large, the work exists as long as it pays people to work. In far too many Welsh communities, the work does not exist. We need economic strategies to ensure that everyone in the country has an opportunity to seek employment. Even if the employment is badly paid and unskilled, at least people will have the dignity of being in work and receiving a minimum wage and tax credits allowing them a decent standard of living as we approach the millennium. That is the main issue on which this Government of ours will be judged, and I am delighted that we are moving in that direction.

We have delivered on our promises, especially our promise to establish a Welsh Assembly, which is one of the most important. There is not long to go before the Assembly starts its work and it could make a huge difference by providing the other side of the coin—economic success, which is what we need to eradicate poverty in Wales.

The record over the past 20 years has not been good and our primary industries, which were based on mineral extraction and metal manufacture, have been decimated. Whole tracts of those industries disappeared and their production, which was primarily for domestic consumption, has declined. However, there has been diversification in manufacturing industry—because of our efforts as a people, against the odds and despite the Conservative Government. We still do not have enough skills, and we are not at a high enough standard, but we are in a good position to able to build a prosperous future based on a diverse manufacturing industry. That bodes well for the Welsh Assembly, as long as we adopt a strategic approach to the exploitation of our country's assets to the benefit of all, not one sub-region as opposed to another.

We need to build on that, which is why I was disappointed that the Opposition spokesman, the hon. Member for Woodspring (Dr. Fox), condemned and talked down Welsh industry and Welsh manufacturing performance. That was particularly galling because he is not a Welsh Member, but represents a constituency that is in direct competition with Wales for jobs and investment.

Mr. Evans

The hon. Gentleman has told the House that he is a member of the Greater London Authority Bill Committee. Was he born in London?

Mr. Smith

Absolutely not, but I have not been talking down London or the Bill. I have been talking them up, at every opportunity. That is what I would expect from a responsible spokesperson for Her Majesty's Opposition speaking on Welsh affairs. Although the Opposition do not have a single seat in Wales, they have a right to speak in the debate, but, for goodness' sake, talk our country up, not down.

I refer to several local points. We have had tremendous success in education, transport and other matters, but we must ensure that the mechanisms are in place to make sure that the extra expenditure that we invest in those areas goes where it should. I say to my hon. Friend the Minister that the additional transport grant for rural bus services is superb, but there is evidence that bus companies receiving those grants are not providing the essential extra rural services for which they are being paid. That needs to be addressed. Shamrock Coaches, which provides services in the rural part of my constituency, has let passengers down and is being paid for it.

There has been tremendous investment in "education, education, education", but there is a backlog of repairs and maintenance because of the scandalous neglect of school buildings. We have extra money and I know that it is going into schools, but I ask my hon. Friend the Minister to consider the fact that some schools, such as Cowbridge comprehensive, are falling down. They present a physical danger to students. Are there contingency resources to deal with specific problems, when there is danger to children because of neglect over two decades?

The best way to empower people is through work, skills and knowledge. There have been reports that the number of mature students applying for places in higher education may be decreasing. Will the Minister tell us whether there has been a decline in the number of such students in Wales, and whether he is addressing that issue?

Thank you, Mr. Deputy Speaker, for bearing with me on this important occasion.

5.35 pm

Mr. Nigel Evans (Ribble Valley)

It is a wonder that the Standing Committee considering the Greater London Authority Bill felt able to do without the skills and expertise of the hon. Member for Vale of Glamorgan (Mr. Smith) for a short while so that he could come to the Chamber to make that wonderful contribution. I had better be careful, because irony does not come across in Hansard.

The next few months will be an exciting time in Wales. We will have the new Cardiff Arms Park in the millennium stadium—I am sure that it will be called the new Cardiff Arms Park in the tradition of new Labour. We look forward to the rugby world cup being held in Wales. We want the opportunity to show Wales off at its very best. I hope that the stadium will be ready in time—the Minister may tell us about that—because it would be dreadful if it was not.

I understand that one of the duties of the new Welsh Assembly will be to promote sport whenever and however it can. After the first two home internationals, one of its greatest challenges will be to do something to help the Welsh team to achieve the victories that they should be gaining. If it can do that, that would be one of its greatest successes.

Mr. Win Griffiths

What does the hon. Gentleman expect after 18 years of Tory Government?

Mr. Evans

We had more victories when the Conservatives were in power than we have had in the past couple of years. We do not take credit for those victories, and I am sure that the Labour Government will not take credit for the recent defeats.

The hon. Member for Vale of Glamorgan said that my hon. Friend the Member for Woodspring (Dr. Fox) should not have led for the Opposition in the debate because he was not born in Wales and is not a Welsh Member of Parliament.

Mr. John Smith

To put the record straight, that is not the point I was making. I did not question the right of the hon. Member for Woodspring (Dr. Fox) to make that contribution: I questioned the nature of his speech because he talked down Wales, which I felt was wrong.

Mr. Evans

I am sorry that my hon. Friend did not ask the hon. Gentleman to write his speech for him, so that his contribution would have been more positive. What he said was ridiculous. My hon. Friend is a Member of the United Kingdom Parliament and has the right to speak about Welsh affairs or about anything else to do with the United Kingdom as he feels appropriate, just as the hon. Gentleman has the right to speak on the Greater London Authority Bill to which he is making useful contributions based on his knowledge of London.

The Conservatives speak as the second party in Wales: at the last election, as we gained 100,000 more votes than the Liberal Democrats and twice as many as Plaid Cymru.

Mr. Llwyd

How many seats did the Tories gain?

Mr. Evans

Irrespective of that, we had more votes. It is a great shame that the hon. Gentleman is the only member of Plaid Cymru present. The nationalist party has four Members of Parliament. This is the only St. David's day debate we have had in two years, yet only one Plaid Cymru Member is present for the winding-up speeches, and only two have been present during the debate.

The leader of the Conservative party in Wales, Rod Richards, is relishing the opportunity to promote the cause of common-sense policies in the Welsh Assembly. At least we know that Rod Richards will be elected to the Welsh Assembly, whereas there is enormous doubt about whether the Secretary of State will win a seat. Many Labour Members secretly hope that the Secretary of State is not elected to the Welsh Assembly.

Mr. Llwyd

Two of my colleagues were busy elsewhere today, and it was unfair of the hon. Gentleman to make such cheap points. Secondly, Rod Richards would not understand a policy of principle if he fell over it.

Mr. Evans

That was a devastating intervention: I shall have to be careful in future, although I am sure that all the hon. Gentleman's colleagues were not at the dentist. This is the St. David's day debate and I should have thought that members of the so-called national party of Wales would make the effort to come here to contribute on behalf of Wales and their constituents.

We look forward to the Welsh Assembly elections on 6 May, but I am not sure that the Secretary of State is looking forward to them. He still has some fences to be fixed, and last Saturday's result was a denial of democracy for Wales. The Secretary of State has no credibility in Wales as a result of the rigged electoral college and the fixed trade union block votes. That was old Labour fixing at its worst—and a denial of one member, one vote in many of the unions—to deliver in Wales the Prime Minister's man, not the people's man.

Mr. Edwards

How is the leader of the Conservative party elected? How many Conservative party members voted in that election?

Mr. Evans

The leader of the Conservative party was endorsed by the entire membership of the party on one member, one vote. Is the hon. Gentleman saying that the Secretary of State will put himself before the entire membership in Wales for similar endorsement? He will not do that because he knows that the membership in Wales was 2:1 in favour of the hon. Member for Cardiff, West (Mr. Morgan). The members did not want the Secretary of State—they wanted the hon. Member for Cardiff, West, and the rigged voting denied them their choice.

Dr. Julian Lewis

Some time ago, the Labour party abandoned the block trade union vote for use at Labour conferences, and yet it has allowed it to continue for the choice of Labour leader in Wales. Why does Labour have a higher regard for democracy at the Labour party conference than in choosing the Labour leader in Wales?

Mr. Evans

It is not a matter of right or wrong—it is what system will deliver what the leadership wants. At party conferences, the Labour leadership takes away union power. When it chooses the leader of the Labour party in Wales, it uses the block vote to deny the membership of certain unions an opportunity to vote individually. They were consulted—sort of—but, in many cases, the result was ignored. In one union, the vote was split 60:40 in favour of the Secretary of State, but 100 per cent. of the union's vote went to the Secretary of State. That was a complete denial of democracy.

In today's edition of the Western Mail, an editorial—entitled "Way out of touch"—talks about the "arrogance and insensitivity" of the London Labour machine "reaching new heights". The report states that the hon. Member for Cardiff, West, having had the audacity to complain about some irregularities during the election, has been told to "stop whingeing".

When anybody talks about what is wrong, they are told that they are talking Britain, Wales or the Assembly down. When the hon. Member for Cardiff, West complains about irregularities, he is "talking the election down" or "talking the Labour party down". That is ridiculous. The report states that Labour has labelled the hon. Gentleman a "ballot whinger". He has every right to feel dismayed, not only about the result, but about the way in which the election was held.

I am delighted to see the hon. Member for Islwyn (Mr. Touhig) in his place. On the subject of democracy, he spoke about the Welsh referendum result and said that the jury was still out on the Welsh Assembly. He is right. With a turnout of 50.1 per cent.—49.7 per cent. voting no and 50.3 per cent. voting yes, so that only one in four of the Welsh electorate supported the proposals—of course the jury is still out. People will look carefully at how the Welsh Assembly develops over the next few years in deciding whether to give it their support. We will have the first test on 6 May—the turnout of the electorate.

Mr. Touhig

I note what the hon. Gentleman says. Yes, the jury is still out, but will he commit his party, as we commit ours, to making the Welsh Assembly a success, so that we will be able to say to the Welsh people, "It has been good and has been proved to be valuable for Wales"?

Mr. Evans

We are fielding candidates throughout Wales. We want to get as many candidates elected as possible. They will go to the Welsh Assembly not to grind it to a halt, but to ensure that the Assembly works in the best interests of the people of Wales. I guarantee that that is exactly what we here in Westminster want: we want the Assembly to be a success for the people of Wales, now that we know that it is going to be a reality.

Mr. Swayne

How does my hon. Friend react to the contrast between Labour Members, particularly the hon. Member for Cardiff, North (Ms Morgan), putting such great faith in, and setting such store by, the Assembly and building expectations—at one stage I thought it was expected to become the Assembly for the new Jerusalem—and the squalid fix in relation to the leadership election?

Mr. Evans

That is absolutely correct. Expectations of the Welsh Assembly have been raised to such great heights that it cannot hope to fulfil even 10 per cent. of what the Labour party has said it will be able to achieve. Contrast that with the way in which the elections were held, or the squalid way in which the referendum in Wales was held a week after the referendum in Scotland. [HON. MEMBERS: "Squalid?"] I will tell hon. Members why it was squalid.

We were told that the people of Wales would not be able to cope if the referendum were held on the same day as that in Scotland because they would get confused as to what was being offered, with a Parliament in Scotland and an Assembly in Wales. There could be no other reason why they were held on different days—other than to bounce the people of Wales into a yes vote following a victory in Scotland, which we always knew would be delivered.

The absurdity is that, on 6 May, people will vote in local elections in Scotland and Wales. In Wales, they will also vote for the Welsh Assembly—not only for constituency candidates, but for those on the regional list. If people in Wales can get their minds around the d'Hondt system and how the closed-list system will work, they could certainly have got their minds around having their referendum on the same day as the people of Scotland. Of course it was a gross insult to the people of Wales to pretend that they could not cope with that.

Mr. Öpik

The hon. Gentleman said that he felt that the Welsh Assembly would not deliver even 10 per cent. of the expectations that have been raised by the Government. Is it therefore fair to assume that he expects the Welsh Assembly to fail?

Mr. Evans

No. There is no expectation that the Welsh Assembly will fail because we will work to ensure that it is a success, but the jury is still out. The hearts and minds of the three out of four people in Wales who did not vote for the Welsh Assembly need to be won over. Had the hon. Gentleman been here for the four hours of the debate. he would have heard my hon. Friend the Member for Woodspring say that we would work to ensure that the Welsh Assembly, now that it is established, would be a success.

The problem is that we are not allowed to question devolution as a principle because that would be a great heresy. We hear the hon. Member for Vale of Glamorgan say that we are talking Wales, devolution and the Assembly down, but if, in the Chamber of the House of Commons at Westminster, we cannot talk about the problems that the Assembly might face where can we discuss them?

The hon. Member for Ogmore (Sir R. Powell) spoke about the one and a half hour debates we had yesterday and the day before in Committee, in which we debated very complex issues. It is a great shame that those debates, on essential issues, could not have been held on the Floor of the House. Indeed, it is a great shame that the St. David's day debate is being held—I cannot understand why—on 25 February, not on 1 March. The debate is being held not on a Monday, when all hon. Members would be at Westminster, but on a Thursday, at the tail end of what has become, these days, our part-time week.

Mr. Alan W. Williams

Speak for yourself.

Mr. Evans

Let us not go into that.

Democracy is denied when statutory instruments are scrutinised only in Committee, and only for an hour and a half.

In the past two days in Committee, we dealt with a number of anomalies. I asked the Secretary of State whether it was possible, for example, to lift the ban on beef on the bone in Wales, but not in England. The Secretary of State told me that, yes, that could happen. It is amazingly anomalous when people can cross the border—

Mr. Nick Ainger (West Carmarthen and South Pembrokeshire)

This is the same speech.

Mr. Evans

It is the same speech, but the important fact is that an anomaly is not being dealt with. It is amazing that people could buy beef on the bone in Wales and ship it back to England. That anomaly has to be dealt with, as the same one could arise in relation to genetically modified foods or prescription charges.

Yesterday, we were told that prescription charges could be lower on one side of the Severn bridge than the other. Differentials in taxation are important. My hon. Friend the Member for New Forest, West (Mr. Swayne) spoke about the lobby at Westminster, only yesterday, by hauliers from Pembrokeshire and other parts of the United Kingdom.

Mr. Ainger

They were from Pontypridd.

Mr. Evans

Yes, they were from Pontypridd. However, the more important point is that, because of taxation differentials, hauliers are filling up with cheaper fuel in Calais or in Belgium and coming to England for a couple of days. We will have to sort out any anomalies that could be caused by the establishment of the Welsh Assembly, but there is currently no structure in the Assembly for doing so.

Sir Raymond Powell

The hon. Gentleman mentioned my speech and statutory instruments. We should make it clear that any hon. Member serving on a Committee considering a statutory instrument who feels that, after an hour and a half, that scrutiny should continue, should ask for the sitting to be adjourned. We should have done that on Tuesday, after a full debate. I agree with the hon. Gentleman's comments—we should have had a fuller debate. However, hon. Members themselves should have asked for an adjournment. Perhaps it would have been wise also for the Chairman to advise hon. Members that they could do so.

Mr. Evans

The hon. Gentleman has been an hon. Member long enough to know exactly what would have happened. It is pointless trying now to address that specific issue. The point is that an hour and a half was allotted, and that is all that we would have got. It is a denial of democracy for there not to be proper scrutiny of statutory instruments—ever more of which are being passed by the House, and ever fewer of which are being debated on the Floor of the House. Nevertheless, I am glad that the hon. Gentleman accepts the principle of the matter. Perhaps it is a matter on which we can make progress, on a cross-party basis, so that we might make Parliament more effective.

My hon. Friend the Member for Woodspring dealt in his speech also with concordats and judicial review. Today, it was enlightening—perhaps the first chink in the blind—to learn that there might be judicial reviews of concordats. Yesterday, the Secretary of State told me—as the Secretary of State for Scotland told my hon. Friend the Member for West Dorset (Mr. Letwin)—that there would not be judicial reviews. Today, we heard that such a judicial inquiry might be successful. The problem is that the matter generally has not been properly thought through or tested.

During the passage of the Government of Wales Act 1998, the Opposition raised the issue of concordats. Time after time, the issue was dismissed or brushed aside. Ministers said, "Don't worry; things will be all right." Every aspect of the Government of Wales Bill was considered under the best case scenario. The worst case scenario was never taken up. When the Assembly becomes a reality later this year, there may be many worst case scenarios that we have not allowed for.

Mr. Win Griffiths

Maybe, maybe not.

Mr. Evans

The former Minister says, "Maybe not." Why were no precautions put into the legislation from the start to ensure that the system would be able to cope in the event of the worst case scenario coming about? Part of the problem is that everything was viewed through rose-tinted spectacles.

Reference has also been made to the fate of the Members of Parliament at Westminster after devolution becomes a reality. They cannot all sit on the Greater London Authority Bill Standing Committee. They will have to look for other things to do around the House. There has been much speculation about whether the St. David's day debate will continue and whether the Welsh Grand Committee or the Select Committee on Welsh Affairs will be wound up. I hope that they all continue. This is a United Kingdom Parliament. We must have the opportunity to discuss Welsh affairs as often as possible. I hope that there will be a consensus throughout the House on ensuring the continuance of those functions and on trying to make them more effective. The Assembly will look for advice, guidance and support from the Westminster Parliament from time to time. We should be able and available to give such advice.

Dr. Julian Lewis

In the Select Committee on Welsh Affairs, I asked the outgoing permanent secretary of the Welsh Office whether she believed that there would be a Secretary of State for Wales in the Cabinet in 10 years' time. She refused to answer in the affirmative.

Mr. Evans

That is one of the great unknowns. If the permanent secretary was not able to give such a guarantee, perhaps there is a secret agenda that goes beyond the Secretary of State's hope of becoming the First Secretary, to the winding up of the role of Secretary of State for Wales. I suspect that that would mean that there was no Welsh Office Question Time, no Welsh Grand Committee and no Select Committee on Welsh Affairs. I wonder what would happen to all the Welsh Members of Parliament here at Westminster. We have to address that.

Several hon. Members have mentioned rural affairs, which is a vital subject for Wales. Farming is one of the most important industries in Wales. The hon. Member for East Carmarthen and Dinefwr (Mr. Williams) said that the incomes of farmers had declined 40 per cent. this year, on top of a 40 per cent. decline last year. I was with him in Carmarthen when the farmers turned up for their rally. I remember the hot reception that he got. After another 40 per cent. decrease in their incomes this year, they have every right to shout. The Farmers Union of Wales is talking about the dire consequences of the current perilous state of farming and of some of the proposed changes to the common agricultural policy. If those changes hit farming in Wales yet again, the situation will be even worse than it already is, if that is possible.

I have had several representations since this debate was announced. One was from David Jones, the prospective candidate for Conwy, who asked for the decision to give the administration of Llandudno hospital to Gwynedd health trust to be reversed, leaving it instead under Conwy and Denbighshire trust. He has already handed in a petition with more than 300 signatures. Is the Minister prepared to make an announcement on that? Will he take heed of the 300 people who signed the petition?

The hon. Member for East Carmarthen and Dinefwr also spoke about local government capping. I found his remarks incredible. He said that the people of Wales were prepared to pay extra council tax. Of course, we are talking about a stealth tax. We have heard much about the fact that the Government have not increased direct taxes but, goodness me, they have certainly increased every other tax.

Council tax has suffered severe increases in the past two years. Last year's increases varied between 9.5 per cent. and 14 per cent. when inflation was running at between 2.5 per cent. and 3 per cent. People's wages were not increasing at the same rate, so where were they supposed to find the extra money? We have already heard that this year's increases will be between 8 per cent. and 12 per cent. It is an enormous hit—a stealth tax on people who were told that there would be no tax increases.

In addition, there is a problem with council fraud throughout Wales. In one Labour-controlled local council, more than half the local councillors are currently under investigation. What does the Minister propose to do to clean up local government in Wales?

The Government talk about education, education, education, but they introduced tuition fees of £1,000 and abolished student grants. I do not see how that will advance education. The director of the education department in Powys wrote to chairs of governors and head teachers in Powys. He said that the settlement appeared generous, but continued: You will note however, from my report that this is certainly not the case and it is clear that inflationary pressures, the need to fund additional pupils and the additional costs of the recently announced teachers' pay increase will, in reality, mean that the budget settlement is one of virtual standstill. I would much welcome the Minister's response to that statement as it was made not by a politician, but by the director of the education department at Powys.

Mr. Livsey

Will the hon. Gentleman give way?

Mr. Evans

I am sorry, but I am sure that the hon. Gentleman appreciates that we are approaching the end of the debate and I have to make progress.

I am sure that the Minister is as alarmed as I am to hear reports of another four cases of meningitis in Wales. What positive action is being taken with the Bro Taff health authority and the two charities in south Wales that are involved in disseminating information to provide extra resources and to ensure that parents are aware of the risks of meningitis? No one would wish panic to spread throughout Wales, but suitable action must be taken. I am sure that the Minister is aware that a new blood test can identify meningitis within 30 minutes. Is the Department monitoring that to see whether it could be utilised in Wales?

My conclusion from today's debate and what has been going on in Wales in the past 12 months is that agriculture is in crisis; people are waiting longer for health treatment; and there are fewer bobbies on the beat. When I asked the Secretary of States for Wales about that, he simply made a grammatical correction to my question. He could not care less that there were fewer policemen on the beat; he was only interested in making a debating point. Manufacturing jobs are in deep decline and confidence in orders from the United Kingdom and from abroad is depressed. The proposals for devolution have not been thought out. I believe that they could be a recipe for conflict and paralysis and that the anomalies that I have identified could make Wales a laughing stock.

Wales was promised that things could only get better. They have not; they have got worse for many people. Wales deserves better than the present Government, who are besotted by spin and style but have no substance whatever. The people are the victims. They are paying higher stealth taxes, higher council taxes and fees for students' education. They are suffering lost grants, worse pension fund rates and poorer services. We want fair play—chwarae teg—for Wales, and that is what the Conservative party will deliver to the Welsh people in the Welsh Assembly.

6.4 pm

The Parliamentary Under-Secretary of State for Wales (Mr. Peter Hain)

We take no lectures from the Conservatives about democracy. They trampled over the democratic wishes of the people of Wales for 18 long and bitter years. I know what the hon. Member for Ribble Valley (Mr. Evans) means about speaking with irony in the House when he says that Rod Richards talks common-sense policies: a contradiction in terms if ever there was one.

My right hon. Friend the Secretary of State offers his apologies, as he has had to leave the debate early for a long-standing speaking commitment at the coastal forum in Cardiff: an important conference to be addressed by the European Commissioner for Transport, Mr. Neil Kinnock.

I agree with my hon. Friend the Member for Cardiff, North (Ms Morgan) that this is a Welsh day debate in which we can celebrate the Labour Government's historic achievement of devolution for Wales. I assure my hon. Friends the Members for Merthyr Tydfil and Rhymney (Mr. Rowlands), for Islwyn (Mr. Touhig), for Ogmore (Sir R. Powell) and for Cardiff, North, and my right hon. Friend the Member for Llanelli (Mr. Davies), that there is absolutely no reason not to continue to have annual Welsh day debates.

I think that we will need these debates more than ever; but if the hon. Member for New Forest, West (Mr. Swayne) insists on speaking at them, there will be a problem, as he attacked us for imposing a literacy hour in Wales, which we have not done, and for dropping from our roads programme a road that is being built at this very time in north-west Wales, as the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) informed him.

In less than two years, there have been dramatic changes to the political landscape in Wales. By the summer, we will have a devolved National Assembly for Wales, speaking for Wales for the first time and giving the people of Wales a real voice. We will create a new democracy that is participatory, open and inclusive of all the groups in Wales that were denied a voice under 18 years of Tory rule. We will empower women's groups, voluntary groups, trade unions, business and many others.

I strongly agree with my hon. Friend the Member for Cardiff, North, who said that one of the most exciting things about the National Assembly for Wales is that, because of the lead that Labour has given, we will have for the first time equality for women in the government of Wales. That will be an historic achievement. The Labour Government, and not any other party, delivered that. I acknowledge a little bit of help from the Liberals and from Plaid Cymru in the referendum, and I defer to the hon. Member for Meirionnydd Nant Conwy, who has exhibited in this debate the non-ranting face of nationalism.

Our Labour Government is leading Wales to a confident future. I agree with my right hon. Friend the Member for Llanelli that we do not want to have a whingeing Assembly. With decisions being made in Wales, the option of blaming London for everything will disappear and we will resolve our own priorities.

The hon. Member for Woodspring (Dr. Fox) made a cogent and interesting speech, apart from his rather limp series of points about the economy. Let me remind him that there has been a 27 per cent. fall in unemployment in his constituency since the general election. The contrast between his speech and that of my hon. Friend the Member for Merthyr Tydfil and Rhymney was striking, because the latter made a powerful case for exactly the opposite economic strategy to that pursued under the Thatcherite Tories: one of active government. He included a timely plug for his forthcoming book. I can testify, having chaired a packed lecture by him in Neath, where he spoke for an hour and a half on the industrial history of Wales—the theme of his book—that it will be a riveting read.

In "Pathways to Prosperity", we set out a serious economic agenda for Wales. I strongly agree with my right hon. Friend the Member for Llanelli that there remain serious weaknesses in the Welsh economy that we have inherited, largely as a result of decades of Tory neglect. Manufacturing accounts for 28 per cent. of output in the Welsh economy and the Labour Government recognise its importance. We are working closely with manufacturers to tackle the problems created by a worldwide decline in output and the high pound, which again we inherited from the Conservative Government. I remind the Opposition that the pound is now roughly at the level that we inherited, having gone up to cure the consumption boom that the Tories created in the run up to the general election.

Mr. Oliver Letwin (West Dorset)

rose—

Mr. Hain

I am sorry, but I do not have time to take interventions. One of the central messages of "Pathways to Prosperity"—and it was graphically illustrated in the devastating and savage closure of Lucas in Ystradgynlais, in the constituency of the hon. Member for Brecon and Radnorshire (Mr. Livsey), although three quarters of the plant's workers came from my constituency—is that any notion that we could continue to flirt with the strategy of the previous Conservative Government, and seek to attract manufacturing jobs into Wales on the basis of low labour and other costs, has been swept aside. If anybody ever believed that we could attract jobs to Wales through low costs, that has been swept aside by Lucas's decision, at short notice, to switch production to Poland and Slovakia, where wages are a quarter of what they are even in the upper Swansea valley, where people were being paid £170 a week—a low wage by anybody's standards.

Wage costs are much lower in east European countries and we cannot compete on low cost alone. We have to turn the Welsh economy into a high-quality, high-skill, value-added economy that is at the leading edge of technological development and scientific innovation. I agree with the point made by my hon. Friend the Member for East Carmarthen and Dinefwr (Mr. Williams) about the application of objective 1 funds to his constituency and other valley and west Wales constituencies. If we can use that enormous investment to drive up the standards of infrastructure, skills, scientific development and engineering—the latter has been neglected for far too long—we will turn the Welsh economy into a world-class economy. The links that my hon. Friend mentioned between higher and further education and business are crucial to that task.

Over the past 20 months, we have developed a strategy of partnership with business in Wales. It is striking that when I talk to people from the business community, as I do in my capacity as industry Minister, they tell me how much they enjoy working with this Labour Government, because we listen and are approachable, in contrast with the Conservative Government whom the business community had to suffer, along with everyone else in Wales, for so long. That partnership extends beyond business to the trade unions, voluntary groups and, indeed, to everyone in Wales.

We have also had much success in bringing down unemployment, which has fallen by 15,000 since the general election. My hon. Friend the Member for Ogmore is right to say that we need to do more, and I assure him that we will look at the training scheme in his constituency which he said is so successful. Our new deal to bring thousands of young and long-term unemployed people off welfare and into work with high-class training or full-time study is an enormous success. I agree with my hon. Friend the Member for Vale of Glamorgan (Mr. Smith) that this Government should empower people who have been trapped in despair on the dole for so long. The success of the new deal is there to be seen. Some 13,000 people have come off the dole. We have created nearly 4,000 real jobs and some 3,000 employers have been involved. I wish to pay especial tribute to my parliamentary colleagues in Wales for the way in which they have supported the new deal, and I single out my hon. Friend the Member for Merthyr Tydfil and Rhymney, who has attended every event that I have been to on the new deal in his constituency.

We have put in place a new strategy for the valleys, and next week we will announce a new initiative to promote extra investment and to encourage companies to locate and expand in the excellent locations that exist in the valleys. In addition, I can tell the hon. Member for Meirionnydd Nant Conwy that we have a food strategy that adds value to Welsh agriculture: by merging the agency responsible for promoting Welsh food with the economic powerhouse that is the Welsh Development Agency, we have given it a central place in the WDA's economic strategy.

We are also tackling poverty by means of the national minimum wage. The Conservatives fought the legislation for that throughout its passage through Parliament, and sought to deny some of the lowest-paid and poorest citizens and workers in Wales their elementary rights and opportunities. I can tell Conservative Members that £3.60 an hour is a fantastic boost for many workers in my constituency, who have earned wages as derisory as £1.80 or £2 an hour.

Mr. Evans

The Deputy Prime Minister said that "any fool" knew that the minimum wage would involve a "shake-out" in labour. How many jobs does the Minister think that the introduction of the minimum wage will cause to be lost in Wales?

Mr. Hain

None.

Mr. Evans

Does the Minister disagree with the Deputy Prime Minister?

Mr. Hain

My right hon. Friend the Deputy Prime Minister did not say that. The fears that Conservative Members spread for week after week in the years running up to the general election—and subsequently during the passage through the House of the National Minimum Wage Act 1998—have been shown to be unfounded. The minimum wage will be introduced with the support of business, both large and small. It will also enjoy the support of the 100,000 workers in Wales who will benefit from it. Moreover, the introduction of the working families tax credit will benefit more than 70,000 working families. Some of the lowest paid and poorest people in Wales are benefiting from the activities of the Labour Government.

We are delivering objective 1 funding for Wales, including west Wales and the valleys. Plaid Cymru has constantly taunted and criticised Welsh Office Ministers for not being up to speed or ahead of the game in that regard. I realise that it is very tough to be in opposition when the Government are so popular and successful, but Plaid Cymru should acknowledge our success in respect of securing that funding.

Mr. Llwyd

I certainly did not taunt the Minister: I asked a few questions that I thought were reasonable. After the decision to award objective 1 funding is made public, we in turn will make public some documents that will prove what my right hon. Friend the Member for Caernarfon (Mr. Wigley) said earlier.

Mr. Hain

I do not accept that. The rant from the party's leader earlier showed that Plaid Cymru is still at it.

The hon. Member for Brecon and Radnorshire said that the Government should press very hard to obtain objective 2 funding also. We are working hard to that end. The Lucas plant in the hon. Gentleman's area is situated 200 yards from the objective 1 boundary, and there is no prospect of changing that boundary. However, there is a prospect that we can get investment up the Swansea valley, which will benefit the communities hit so hard and savagely by that plant's closure.

Mr. Rhodri Morgan

Can my hon. Friend cast any further light on the timing of a decision on matching funds for objective 1, which will solve the chicken-and-egg problem that I and many other hon. Members identified earlier?

Mr. Hain

My hon. Friend made some important and valid arguments about objective 1 funding and its matching equivalent. However, the problem is more complicated, and also involves the question of public expenditure survey funding. When we have secured a decision from the European Union about the exact amount that Wales will be able to draw down, the problem that my hon. Friend described will have to be addressed, and the important points that he has made will be borne in mind.

During the past 20 months, we have pursued policies that are distinctive, but not separatist. I agree with my hon. Friend the Member for Islwyn that we can be Welsh, but British too. Devolution is not about separatism, but about giving Wales a democratic voice for the first time, and about decentralising power.

Mr. Letwin

I had some difficulty in following the Minister's reply to the hon. Member for Cardiff, West (Mr. Morgan). Would I be correct to summarise him as having said, "We have no money, and we are not sure that we will be able to do what the hon. Gentleman asked?"

Mr. Hain

No, that intervention was too clever by half. The hon. Gentleman should have listened to what I said. He may study it in Hansard tomorrow, when, I am sure, it will make sense even to him.

We have pursued a distinctive policy on education, promoting partnership between further education and sixth forms to give pupils and others more choice. We have invested £50 million in school budgets this year, 95 per cent. of which has gone straight into school budgets. We shall invest another £70 million in school budgets in the next year.

I am disturbed by emerging reports that some local authorities plan not to put their full share of that £70 million into the education budget, or that they plan to retain a proportion centrally, which will leave schools with insufficient funds to meet pay and price increases, let alone the development of provision. At least five local authorities are apparently considering those options, and I am prepared to name them if we find that the funds do not go into school budgets. I have made clear our expectation that their share of the £70 million should go to education, with the vast bulk of it included in delegated schools budgets. We shall monitor budgets closely to ensure that that happens, and a report will be made to the National Assembly, which I should expect to take a close interest in any authority that does not give a high priority to schools and education in its budget decisions.

Mr. Livsey

Powys has no intention of not supporting fully the additional money, but the number of schools in rural constituencies means that there are a lot of head teachers. The settlement is understandably skewed, but that is not taken account of in the budget, which is why some authorities are finding it difficult to balance the books on their education budgets. That is not to say that they will not pay the money due to their education budgets.

Mr. Hain

The formula for the money's distribution has been agreed with the Welsh Local Government Association, of which Powys county council is a member. Consequences flow from that.

Another distinctive policy is our decision to put an extra £3 million into rural bus subsidies this year, with an extra £2 million for the coming year, either for urban services or for extra services in rural areas. That is having a major effect on provision for those who have no access to a car.

Mr. Edwards

The additional money for rural bus services has been very welcome in Monmouthshire, but may I refer my hon. Friend to Monday's debate about the problems of school transport and the way in which many local authorities have had to reduce free transport provision for certain children because of financial constraints? Can he assure me that he will review that policy?

Mr. Hain

My hon. Friend pinpoints an important problem that affects virtually all of us. The cuts imposed by the previous Conservative Government on local authority budgets hit school transport. Our provision of £70 million should allow local authorities at least to start reversing those cuts, if not restoring them.

My hon. Friend the Member for Gower (Mr. Caton) spoke movingly, and with socialist passion, about the predicament of his constituents in Holtsfield. If he makes a representation to the Welsh Office on their behalf, we shall consider it very carefully.

My hon. Friend the Member for Monmouth (Mr. Edwards) commented on the delay in payments to farmers. The Welsh Office recognises the problem, and we shall invest £16 million in computer systems over the next three years to ensure that payments are made speedily and on time. I agree that the forms that farmers must fill in are incredibly complicated, perhaps too much so. To the hon. Member for Ribble Valley I say, yes, the new national stadium or millennium stadium, the new Cardiff Arms Park, will be open on time and I am sure that Wales will win the rugby world cup in it.

I accept the remarks about good-quality translation made by my hon. Friend the Member for Clwyd, West (Mr. Thomas), and I recognise that it is of concern that the translation of his speech in the Welsh Grand Committee in Aberaeron was not of sufficient quality. The matter needs to be addressed by the House authorities, but no doubt one of the reasons for the problem is that we are in the early stages of the Welsh language being spoken in the Welsh Grand Committee. The delay originally envisaged in the translation and reproduction of speeches made in Welsh in the Assembly is far too long; my right hon. Friend the Secretary of State recognises that and he will make an announcement soon.

My hon. Friend the Member for Cardiff, North asked about the role of Welsh questions, the Select Committee on Welsh Affairs and Members of Parliament representing Wales in the House of Commons. Procedure in the House is a matter for the House and its authorities, but we accept the need for further debate in Parliament as devolution becomes reality, so that hon. Members can understand its implications and any limitations on the issues they can raise. We are discussing with my right hon. Friend the Leader of the House how best to approach such a debate, which would also have an impact on Scotland and Northern Ireland.

The Select Committee on Procedure is examining the consequences of devolution, and substantive changes are a matter for the House to decide. The Government's memorandum to the Committee suggests that any changes at Westminster should be allowed to evolve as experience of devolution develops. That includes the role of the Welsh Grand Committee, the Select Committee on Welsh Affairs and probably Question Time as well.

I agree strongly with the passionate points my hon. Friend made about the evil of racism, which was highlighted by the Lawrence report. That report dealt mainly with London, but it applies in Wales as well. Perhaps because we have only a small ethnic minority community, we in Wales are extremely complacent about the problem of racism. However, four years ago there was a racial killing in my constituency: Mohan Singh Kullar was killed in the middle of the caring cohesive community of Cimla. That just shows that the strategies about which my hon. Friend spoke and which the Government support must be implemented as a matter of urgency.

Dr. Julian Lewis

Will the Minister give way?

Mr. Hain

No—time is marching on and I want to conclude my remarks. In 70 days, we shall have the general election for Wales, and we in the Labour party will be working for victory. We have a radical manifesto; we have already delivered on a long list of promises and we shall make further pledges to the people of Wales. We shall guarantee free bus travel for pensioners—a promise that we shall keep. That will liberate some of our poorest pensioners, who do not have access to a car, from the misery of being trapped at home, unable to travel freely. They will be able to travel right across Wales, this year on half fares and, in the next two to three years, free.

We pledge that no one in Wales will wait more than six months for out-patient treatment, or for more than 18 months for in-patient treatment. We are creating thousands of extra education and training opportunities for young people in Wales, and we have pledged to create 36,000 additional places in further and higher education for students in Wales. We are providing more than £1 billion extra for the national health service in Wales, and an extra £850 million for education and training over the next three years under a Labour-controlled Assembly.

On 6 May, voting Labour will give Wales a real voice for the first time—a voice for jobs, a voice for education, a voice for health, a strong voice in Europe and an effective voice in London. For far too long under the Tories, Wales was forgotten, ignored and neglected. Now, under Labour, we can shape our own future and make our own history by standing up for Wales, for our families and for ourselves and voting for Labour to run our National Assembly, because Labour is the real party of Wales.

6.29 pm

Mr. David Jamieson (Lord Commissioner to the Treasury)

I beg to ask leave to withdraw the motion.

Motion, by leave, withdrawn.