Welsh Affairs

Business of the House – in the House of Commons at 1:09 pm on 26th February 2009.

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[Relevant Documents: The First Report from the Welsh Affairs Committee, on Cross-border provision of public services for Wales: Further and higher education, HC 57, and the Second Report from the Committee, Globalisation and its impact on Wales, HC 184 .]

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Photo of Paul Murphy Paul Murphy The Secretary of State for Wales 1:51 pm, 26th February 2009

I beg to move,

That this House
has considered the matter of Welsh Affairs.

Before starting today's debate, I would like to extend, through Mrs. Gillan, the thoughts, prayers and sympathies of everyone in Wales, of all political persuasions—I am thinking particularly of Welsh Members of Parliament—to Mr. Cameron and his family at this difficult time for them.

You are a serious Welsh lady, Madam Deputy Speaker. Like you, I am glad to be present at this annual Welsh day debate. It is sometimes called the "St. David's day debate", but as hon. Members know the feast day of that saint is Sunday. Today is, in fact, the feast day of St. Isabel of France—rather appropriately, bearing in mind what might happen on the rugby field in Paris tomorrow. I am sure that we all send our best wishes to the Welsh rugby team for tomorrow.

Each year we take this unique opportunity to debate all that is Welsh. However, this year there is little doubt that our minds have to be focused on the significant economic challenges that all of us collectively face. Wales, along with every country in the world, cannot insulate itself from the worldwide economic problems. No one could have predicted the sheer scale and speed of recent events. This is no ordinary crisis, and it is clearly not the result of the usual cycle of domestic inflationary pressures. It is the first financial crisis of the global age.

What has changed since the United Kingdom recessions of the '80s and '90s is that it used to be thought that spreading financial risk globally would insure against it. Instead, however, the risk has impacted globally. My right hon. Friend the Chancellor of the Exchequer's statement earlier today has great relevance to that point.

Since the '80s and '90s, there is no doubt that the Welsh economy has been dramatically transformed. As I look back at last year's debate—as we get older, I suppose that we tend to look back—I remember that I spoke about Wales's record employment, the importance of the knowledge economy and the fact that the Wales of the future will be a small but clever country. The present economic crisis is hitting us hard, but we are starting from stronger foundations than ever before. The financial crisis has caused a world recession, with consequences that are hurting individuals, families and firms right across Wales. Government action on regional, national and international—and, indeed, local—levels is required to intervene and support our economy by helping people and businesses.

Our decisive action in October, to invest £37 billion to strengthen our banks and stop them collapsing, was vital for our economy—not for the sake of the banks, but, as my right hon. Friend the Chancellor said earlier, for the people and businesses in Wales and around Britain that rely on them. In January, we announced further measures designed to reinforce stability, to increase confidence and capacity in order to get credit flowing again. The pre-Budget report in November additionally provided a £20 billion injection for the economy, including targeted support for small businesses, a temporary reduction in VAT and support for homeowners facing difficulties. We calculate that approximately £1 billion has come to Wales because of that fiscal stimulus.

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Photo of Lembit Öpik Lembit Öpik Liberal Democrat, Montgomeryshire

The Secretary of State knows that I am sympathetic to and fairly supportive of the measures that the Government are taking to try to lessen the impact of the economic downturn. Nevertheless, is he aware that many small businesses—certainly in Montgomeryshire—are experiencing serious problems because, notwithstanding the Government's investment, the banks are still reducing their overdraft facilities? That means that otherwise viable businesses have to lay off workers and may have to close as a result of the banks' reticence about maintaining lending at pre-recession levels.

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Photo of Paul Murphy Paul Murphy The Secretary of State for Wales

I am aware of that. A week or two ago, the hon. Gentleman and I met to discuss those issues with business people from Montgomeryshire. Unquestionably, banks are not doing what they should do—that is, lend to businesses. I am thinking particularly, of course, of viable businesses. We can understand a bank being reluctant to help out a business that is far too risky and has no future, but stories reaching me from all parts of Wales show that some banks are not lending as they ought to. There is a significant issue of delivery following announcements from the Government here and in Cardiff. I shall return to it in a few moments.

Figures show that the VAT reduction has already helped to bring inflation and prices down, putting more money into the pockets of Welsh families—about £275 a year for the average family—and assisting businesses. Our legislative programme for the fourth Session demonstrates our determination to equip people and businesses to deal with the economic challenges too. Taken together, the initiatives and the legislative programme represent decisive action. As the Prime Minister has said, we simply cannot walk by on the other side when decent, hard-working people are facing tough times. That is why it is important that today real help should go to our businesses, our trainers and those who face the possible repossession of their homes.

It is so important to stress that we in Wales have a unique opportunity. The Welsh Assembly Government are taking action—more than £1 billion is coming from Cardiff and going into businesses and helping families. That action and the measures that this Government have brought forward show that the way to tackle the problems is through the devolved Administration and the Government working together.

That has been seen in the all-Wales economic summits, which I attend with Rhodri Morgan and Ieuan Wyn Jones and which are leading the way in dealing with the global problems affecting Wales's economy. My hon. Friend the Under-Secretary of State and I have visited businesses right across Wales to listen to accounts of the impact that the recession is having. In addition, I sit on the National Economic Council, which means that I can put the Welsh view there and go back to Wales to discuss the important issues with colleagues.

The measures in the pre-Budget report, such as business rate exemptions on vacant business properties and additional time for firms facing cash-flow problems to pay their tax bills, came from the meeting of the first all-Wales economic summit in Cardiff some months ago. The request was made at the summit and the Governments in London and Cardiff acted. Some 2,600 businesses in Wales have been given extra time to pay tax; that amounts to about £38 million of deferred payments in Wales alone. In addition, we have taken a series of actions to unblock bank lending to small and medium-sized enterprises—the point that Lembit Öpik made—although I believe that more is still to be done on that. Nevertheless, figures show the effect that the global economic slowdown is having on our labour market. Every time a worker loses their job, it is a personal tragedy, and we are doing all that we can to support people through these tough times.

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Photo of Peter Hain Peter Hain Labour, Neath

Will my right hon. Friend speak with those who are responsible for setting the precept for the South Wales police force? The chief constable gave MPs and AMs a briefing on this matter, which I attended. She has asked—reasonably in my view—for a 10-year 10 per cent. increase. That would amount in total to about £13 a year on bills. The difference between what has been allocated and what she is asking for is about 2p a day. I think that my constituents are willing to pay that to keep more police officers on the beat and to see more neighbourhood policing. Why should the precept for South Wales police continue to lag behind by about £50 compared with North Wales and £30 compared with Gwent and Dyfed-Powys? I would be grateful if he used his good offices to influence a resolution of the problem.

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Photo of Paul Murphy Paul Murphy The Secretary of State for Wales

Like my right hon. Friend, I have spoken to the chief constable on this subject. She came to London a few weeks ago to discuss that and other matters, and he and I were present at that meeting, here in the House of Commons. Next week, when I meet the Home Secretary, I will raise these issues again. There is a strong case for South Wales police, because it is not only the biggest police force in Wales, but covers our capital city, where major events take place.

The Government have invested £1.3 billion in Jobcentre Plus. Those investments are working alongside the policies that the Assembly is advancing—ReAct and ProAct. The ProAct scheme, in particular, has been of great interest, not just in Wales but beyond. That programme has started very speedily and is backed by European funds. Take-up is now starting—in the past few days, at least two companies have been given a ProAct grant, and 15 others are in the process of having their applications considered. It is a uniquely Welsh programme that is very useful in ensuring that people are retained in their industries during the slowdown so that, when the changes eventually come, their industry is not badly affected and will continue, perhaps even stronger than before.

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Photo of Cheryl Gillan Cheryl Gillan Shadow Secretary of State for Wales

I am interested to know how ProAct is working. The "Real help now" document produced by the Welsh Assembly says that the scheme was funded by the Assembly. Can the Secretary of State confirm that the money is coming from the Assembly, not through European funding? More importantly, I gather that it is a pilot scheme from January to March and that it was supposed to focus initially on the automotive industry. I would be interested to hear about the quantitative outcome—what it has done for that industry and how many jobs has it saved. If there are good lessons to be learned from Wales, they must be passed on to the rest of the country.

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Photo of Paul Murphy Paul Murphy The Secretary of State for Wales

The hon. Lady is right to ask those questions. I hope that I will be able to give her a bit more detail in the course of the next week or so. As I said, two companies, one in Welshpool and one in Llantrisant, are receiving help, and 15 are under consideration. She is right to focus on the automotive industry, which is quite big in my own constituency, where workers have been put on to a three-day week because orders are not coming in—people are not buying cars, and if they are not buying cars they are not buying brakes. Ultimately, therefore, we need to ensure that manufacturing continues for when the good time comes.

On the financing of the scheme—

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Photo of Paul Murphy Paul Murphy The Secretary of State for Wales

Just one second—I am still answering the hon. Lady.

The bulk of the financing comes from the European social fund as a direct consequence of what was initially objective 1 funding, but other money—for example, the money put into apprenticeships—comes from Welsh Assembly funds. The scheme could be replicated elsewhere. I know that the Prime Minister is very interested in it and has given the details to the Secretary of State for Business, Enterprise and Regulatory Reform.

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Photo of Roger Williams Roger Williams Opposition Whip (Commons), Shadow Secretary of State for Wales, Shadow Minister (Environment, Food and Rural Affairs)

I thank the Secretary of State for giving way and apologise for intervening at an inopportune moment.

I understand, in a way, why we have to keep production going in the automotive industry, but surely the key is to get customers to buy the cars? At the moment, we are keeping production going and just building up stocks of unsold cars that are overhanging the market, but what we need are customers with confidence. Getting the banks to lend to individuals as well as businesses is key to that, is it not?

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Photo of Paul Murphy Paul Murphy The Secretary of State for Wales

It certainly is. I am buying a car myself this Sunday.

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Photo of Stephen Crabb Stephen Crabb Opposition Whip (Commons)

Someone is doing all right, then.

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Photo of Paul Murphy Paul Murphy The Secretary of State for Wales

I have had to go to the banks as well.

Mr. Williams makes an important point. There is an argument, for example, that we should be involving finance companies that deal with the car industry. That is superficially attractive, but we must bear in mind that that most cars nowadays—86 per cent., I think—are not made in Britain. In a sense, we are financing other countries by doing that, although that is perhaps an over-simplification. It is not an easy issue. However, his general point—that we must somehow encourage people to buy cars—is valid.

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Photo of Lembit Öpik Lembit Öpik Liberal Democrat, Montgomeryshire

The Secretary of State is aware that Flowform in Welshpool has shut rather suddenly and Stadco in Llanfyllin is planning to lay off 106 workers, in both cases as a direct result of the companies to which they supply car parts reducing their business. What can the Government do to support those jobs, or does the right hon. Gentleman think that we will just have to find re-employment in other sectors for the individuals who are losing their jobs?

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Photo of Paul Murphy Paul Murphy The Secretary of State for Wales

The Government can help in a variety of ways not only companies, but the people who need retraining in the course of the job itself or, if the business unfortunately goes under, training for other jobs. There is a variety of schemes. If the hon. Gentleman looks at "Real help now", he will see at least 30-odd schemes that can help people in different ways. Ultimately, of course, some companies will not survive, but that might well happen in other times too. The question then is whether there are alternatives for people.

I know that it is not particularly easy in rural Wales because of the nature of the communities there, but it is important always to ensure that, whatever happens, we help the person by retraining and re-skilling or by finding them another job. That is why I touched on the extra money that the Department for Work and Pensions is putting into Jobcentre Plus. There are still roughly 20,000 vacancies in Wales. Of course, they do not always fit in terms of geography and type of job when a company goes under, but it is worth remembering that there are jobs out there that we need to tap into.

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Photo of Stephen Crabb Stephen Crabb Opposition Whip (Commons)

The Secretary of State is arguing that there is a unique partnership at work between central Government and the Welsh Assembly Government to protect Wales as best we can from the global economic crisis. Does he share my concern that all the statistics and data coming out of Wales at the moment show that job losses, company failures and the downturn are just as bad in Wales as right across the UK? If so, what does he think is the value of all the extra schemes that he has spent his time talking about?

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Photo of Paul Murphy Paul Murphy The Secretary of State for Wales

If things are worse in Wales than elsewhere, it is much more important to have more schemes to help people, not least schemes such as ProAct. That scheme is uniquely Welsh, partly because the money that has come into it from European objective 1 and convergence funding came uniquely to Wales as a consequence of the British Government negotiating that deal, and partly because that deal is delivered to the people of Wales through the Welsh Assembly. That would not have happened elsewhere.

There is a strong case for people in Wales looking to their directly elected representatives in Cardiff, as well as here, to help out. We are able to have our summits and to listen to people in a way that perhaps could not happen in a country of 50 million people, but can happen in a country of 3 million, and that gives us the opportunity to have that free flow of information between us. There is also the possibility of having very localised summits—almost every local authority in Wales is thinking about an economic summit of its own, and some have already held them. In Newport, in my own authority in Torfaen, in Flintshire and in Anglesey, the local community is looking at how it can help itself in different ways. Local authorities can help considerably to alleviate difficulties in the local area.

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Photo of Philip Dunne Philip Dunne Opposition Whip (Commons)

The Secretary of State has been regaling the Chamber with tales of the work that the Government are doing to try to help preserve jobs in private sector entities, but would he reassure the House that he has put in the maximum effort for Government-owned agencies? I am thinking of the Nuclear Decommissioning Authority, which has been determined to press ahead with the closure of the Wylfa nuclear plant, despite the vigorous efforts of the local MP, Albert Owen, who is in his place. He has tried to intervene with the Secretary of State to keep that power plant going to preserve jobs in the area.

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Photo of Paul Murphy Paul Murphy The Secretary of State for Wales

I understand that there has been an announcement today on the extension of Wylfa, but I have worked closely with my hon. Friend Mr. Dunne makes a valid point. We have to keep on talking vigorously to all the agencies that are in a position to engage and deal with employment in Wales and he can rest assured that we are doing precisely that.

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Photo of David Davies David Davies Conservative, Monmouth

I am very grateful to the Secretary of State for giving way; he is being generous. Could he reassure people in my constituency who have heard a rumour, which I hope is completely incorrect, that the original Severn bridge is suffering from a certain amount of degradation and that there might be plans to close it? Could he assure the House that that is not the case at all, and that the community of Chepstow is safe and will always be able to travel to Bristol across that bridge?

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Photo of Paul Murphy Paul Murphy The Secretary of State for Wales

I cannot give a reassurance about rumours, but I will certainly take the issue up with my right hon. Friend the Secretary of State for Transport and find out whether there is any truth in the rumours that are obviously going around the town of Chepstow. That is the first I have heard of the matter, but I will certainly take it up.

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Photo of Adam Price Adam Price Spokesperson (Communities and Local Government; Culture, Media and Sport; Defence; Transport)

The generosity of the Secretary of State knows no bounds. I think that almost everyone has intervened now.

The Secretary of State mentioned the importance of the economic summit. I was wondering what plans there are for members of the board of United Kingdom Financial Investments, which holds the Government's stake in the partly nationalised banks, to come to Wales to hear the experiences of businesses there. There are examples in my constituency—I am sure that this is true for other hon. Members—of businesses that have been badly treated by banks in which the Government have a stake. Could representatives of UKFI come to hear first hand the experiences of businesses in Wales?

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Photo of Paul Murphy Paul Murphy The Secretary of State for Wales

That is a good idea, and I will certainly follow it through. The Deputy First Minister of Wales, with whom the hon. Gentleman has some connection, was talking to me only last week about getting the heads of the banks in Wales to come together to talk about banking practices and other issues raised by hon. Members, and I shall take that point up.

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Photo of Cheryl Gillan Cheryl Gillan Shadow Secretary of State for Wales

Could I press the Secretary of State to give us more details on the announcement on Wylfa? I have seen an announcement, but I thought that it related to two sites in Cumbria with RWE, and that it merely referred to Wylfa. I am not sure whether the extension to 2014 is wishful thinking or whether it has been confirmed today, and I would be grateful if he elucidated.

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Photo of Paul Murphy Paul Murphy The Secretary of State for Wales

The Under-Secretary of State for Wales, my hon. Friend Mr. David will give more detail to the House when he makes his winding-up speech. I do not want to give information that is inaccurate in any sense, so I shall make sure that my hon. Friend deals with Wylfa in that speech.

I have two other things to mention as far as the economy is concerned. The first is the announcement by RWE npower of plans to treble the size of its carbon capture pilot project at Aberthaw from 1 MW to 3 MW. Subject to planning permission, the construction of the £8.4 million project will begin later this year, with plans for the pilot to be fully operational by 2010. That is good news for us in Wales. It is the first pilot plant in the United Kingdom to capture carbon dioxide directly from a commercially operating power station. It will also provide a boost to the local economy and, given that the economy of our country is historically based on coal, it is excellent news for us.

The other issue I wanted to mention, given that my hon. Friend Dr. Francis is in his place, is the important work that his Committee did on globalisation. Everybody should read the report in question, and I would like to draw one part of it to the attention of the House:

"In the course of this inquiry, we have collected numerous examples of innovative practice in Wales, spanning the full range of economic sectors. These examples demonstrate that, despite the present difficulties, Wales does have the essential ingredients necessary to face the challenges of globalisation."

That message from my hon. Friend's Committee is a good one.

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Photo of Albert Owen Albert Owen Labour, Ynys Môn

On the economy, I am sure that my right hon. Friend will join me in welcoming today's announcement by PV France to locate a bakery in Anglesey, creating 105 jobs. That was done working in partnership with the local authority and the Welsh Assembly Government's single investment grant. Although the Secretary of State is right to concentrate on the economic downturn that is affecting the real economy in Wales and elsewhere in the United Kingdom, and the support mechanism, there still are some good news stories, and those 105 jobs in my constituency are to be welcomed, particularly given our aims towards the Irish market.

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Photo of Paul Murphy Paul Murphy The Secretary of State for Wales

That is excellent news for my hon. Friend's constituency and his constituents, and I congratulate him. It is good to hear about such events.

I turn to another important issue that the Select Committee on Welsh Affairs is dealing with, which is the Welsh language legislative competence order. I have presented the proposed Welsh language order to Parliament for pre-legislative scrutiny, and I hope that hon. Members will urge their constituents to have their say on the proposals. I want to see the biggest public debate on the Welsh language of recent years, and to hear from all sectors of society in Wales—the public sector, business, the voluntary sector and the general public—to ensure that the draft order meets the needs of the people of Wales.

When the order was published some weeks ago, some people thought that I was somewhat lukewarm on the issue of the Welsh language LCO. Indeed, this was referred to in Mr. Vaughan Roderick's blog—which is of course written in Welsh, but has been translated for me because we have a very good Welsh language scheme in the Wales Office—in which he says:

"Paul Murphy's press release on the Welsh language LCO was rather lukewarm. He said more consultation was needed and that the order could change. To use his words, 'it is not set in stone.'"

Apparently, some Labour Assembly Members were amazed by the release, but it is not the Secretary of State that is to blame:

"Don Touhig is the problem. One said, 'Don is Paul's best friend, and they spend a lot of their spare time in each other's company, and with their families, and they go on holiday together like brothers.'"

So what I have to say on the Welsh language order is all the fault of my right hon. Friend Mr. Touhig.

In reality, we have come a great distance in the past 20 or 30 years on the Welsh language in Wales. When I was a lad, no one was taught Welsh in Gwent—it was not on the curriculum. In my constituency today, I have three Welsh-medium schools: one secondary and two primary. Every child in Wales, and in my constituency, is taught Welsh. The best way to develop an interest in the Welsh language is for people to learn it, and for them to be taught it—that is the challenge. The best way forward, as with everything else in this regard, is to move forward by consensus. There should be a consensus among the people of Wales that we have a sensible way forward, and we should give the Welsh language an opportunity to flourish, which of course it should.

By asking people in Wales their views on the Welsh language order, we are giving them the opportunity to express their views on a detailed document, on which this House will eventually have to decide to vote. It will do two things. It will give the opportunity to all people—particularly those affected by the order—to make their views known, and it will also mean that we can explain to people and reassure them about what is not in the Welsh language order. Some of the mixed correspondence that we are all getting does not reflect what is likely to be in the order. It is a draft order, which means that the Welsh Affairs Committee, chaired by my hon. Friend the Member for Aberavon, will have a proper opportunity to examine it. In doing so, it will talk to people in Wales who are involved in the matter. The Assembly itself will be able to do exactly the same thing. I have sent letters today to public bodies and others in Wales, and I will share any results of the consultation with the House and with our colleagues in the Assembly, so that we can come to a proper decision.

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Photo of Cheryl Gillan Cheryl Gillan Shadow Secretary of State for Wales

The notes that the Secretary of State has sent out accompanying the draft order set out possible effects on institutions that go beyond the Welsh borders. For example, the BBC is specifically mentioned as falling under the Communications Act 2003, and of course any Government Departments delivering services in Wales would be included in the requirements, because they would exceed the £200,000 limit. Will he consider extending the consultation to his colleagues in other Departments and to organisations such as the BBC? It seems to me that there could be an effect on both sides of the Welsh-English border and further afield in the UK.

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Photo of Paul Murphy Paul Murphy The Secretary of State for Wales

Government Departments do of course have the opportunity to comment upon legislation. The BBC will submit a view through BBC Wales, and if it wants to comment on effects on business or broadcasting across the border, there will certainly be an opportunity. Ultimately, the consultation is about listening to people and ensuring that when we eventually introduce the order it is watertight, means what it says and is the result of the most widespread public debate possible in Wales. That is very important.

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P

I do not see why the welsh language has to be forced down the throats of people living in Wales. It has no significance at all, only a small percentage of the population speak it. We are in Europe,Spend the Education budget on teaching children the language of our tradings partners not on some medieval...

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Photo of David Davies David Davies Conservative, Monmouth

Is not the real problem that no matter what goes into the final order, the Welsh Assembly will end up with the power to make legislation on the Welsh language, and there will be no input from Members of this House?

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Photo of Paul Murphy Paul Murphy The Secretary of State for Wales

The order will define the parameters of what the Welsh Assembly is able to legislate on. It will state—giving considerable detail, unlike a lot of legislation—precisely what such future legislation can deal with. The establishment of a Welsh language commissioner is one example, and it is generally supported. I suspect that we will get the most letters on the issues that affect business. However, as I said earlier, the idea that a small corner shop or a small business will be affected is wrong. Certain matters might need closer and tighter definition so that we do not capture people who are not intended to be covered by the order.

A lot of the bodies mentioned in the LCO already have sophisticated Welsh language schemes, so it will almost rubber-stamp what they already do. Nevertheless, if there are genuine concerns about aspects of the order, whether from business or the public, there will be an opportunity for people to make their views known. I very much welcome that.

Importantly, individual Members of Parliament and of the Assembly can also hold their own consultative processes. For example, I see from yesterday's Daily Post that Lesley Griffiths, the Assembly Member for Wrexham, has invited people to have their say on the Welsh language and write to her in her role as a member of the Legislation Committee. That is the right thing to do, and people throughout Wales will have the opportunity to discuss the legislation.

The partnership that I mentioned earlier is very important for the people of Wales. Interestingly, the British-Irish Council met last Thursday and Friday in Cardiff, and we were able to share best practice in all parts of the UK and Ireland. For example, the Assembly Government pioneered the creation of a Children's Commissioner and free bus travel for the over-60s, to which I am now happily entitled. We have copied those things in England. Wales has learned from the experience of England how to reduce waiting times for hospital treatment, among other things.

Ultimately, we serve the same people. Today, our annual opportunity to discuss Welsh matters enables us to ensure that, together, we serve the people whom we represent, whether we sit on a local authority, in the Assembly or in this House. We can ensure that the people of Wales are more prosperous as a result of the joint policies of both our Parliaments.

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Photo of Cheryl Gillan Cheryl Gillan Shadow Secretary of State for Wales 2:25 pm, 26th February 2009

First, I thank the Secretary of State for his kind words to David and Samantha Cameron and their family on the death of their son, Ivan. We all share his thoughts, and David will be able to see that the Secretary of State speaks on behalf of Wales in passing on those best wishes to him on this sad occasion.

I apologise to the Under-Secretary of State for Wales; sadly, I will not be here for his winding-up speech and his exchange with my hon. Friend Mr. Jones. I mean no discourtesy; my timetable has become a little hectic today, and I will be on my way to Wales when he addresses the House.

I should like to continue in the spirit in which the Secretary of State opened this St. David's day debate. Since we last celebrated St. David's day, some things have not changed in Wales. First, the brave men and women of our armed services are still defending our interests abroad. My hon. Friend Mr. Howarth will be visiting the Welsh Guards based in his constituency, who I understand will shortly depart for Afghanistan. I am sure that, on St. David's day, all our thoughts are with them and their families. All our thanks go to the Welsh men and women who are serving our country so bravely abroad in our armed services.

I am delighted that we have something else that has not changed—a rugby team on the rise, with the prospect of a second consecutive grand slam. I am delighted that Albert Owen has new baking facilities in his constituency and brand new jobs. I hope that they are not making French bread—as the Secretary of State said, I hope that they are making Welsh cakes instead. We have had another set of elections since the last St. David's day, and I am pleased to say that yet more people in Wales chose to vote Conservative as they sought change through the ballot box.

The Secretary of State is right, however, to say that what has changed dramatically is the economic outlook. We have not compared notes, but I think that he will find that my speech takes the same shape as his, with remarks on the economy in Wales followed by remarks about the Welsh language order. Some 28,000 more people have lost their jobs, and we now have more than 100,000 people out of work. Many thousands of 16 to 24-year-olds are not in work, education or training, which is exceedingly worrying. A significant number of businesses both large and small have closed, and sadly house repossessions are rising. Although that is clearly not confined to Wales, or even to the United Kingdom, the effect on Wales, as the poorest region of the UK, is especially great.

The first priority must be to help families and businesses in the short term. We would like taxes to be cut for savers and pensioners, a bold and straightforward national loan guarantee scheme to get credit flowing, a reduction in employment costs for small businesses, tax breaks for new jobs and a six-month delay in VAT bills to help small businesses with their cash flow. We believe that such practical measures could help our beleaguered economy.

The "Real help now" list, which the Secretary of State produced with the Assembly Government, sets out various measures and schemes that the Government have established. Of course, the Secretary of State also referred to his summits. However, the documents and the meetings, although they are well intentioned and establish a plan, do not appear to save many jobs or halt business closures at the moment. Today, the Government are putting many more billions of pounds into our banking system, and that is hard news for businesses that are closing and those whose jobs are threatened in Wales.

As has been said time and again, a credit crunch can be truly tackled only by addressing the problems of credit and getting money flowing to the business front, instead of the current sclerotic position, whereby nothing moves to help businesses. A bold loan guarantee scheme, such as that suggested by my right hon. Friend Mr. Cameron, would be welcomed throughout the country. While we tinker at the edge of the problems with so many of the schemes in "Real help now", large sums go into the banking system, and the bankers appear to sit back in relative comfort, without apologising for their part in our economy's downfall.

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Photo of David Davies David Davies Conservative, Monmouth

Will my hon. Friend recommend an early-day motion, which I tabled and many Labour Members have supported? It suggests that the directors of banks that have received large amounts of public money should publish their expenses in the same way as Members of Parliament, given that they now live off public money.

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Photo of Cheryl Gillan Cheryl Gillan Shadow Secretary of State for Wales

My hon. Friend is well known for his innovative early-day motions and other matters, but individual Members are responsible for appending their names to early-day motions. I would not presume to tell others what to do, but, if the mood takes them, I suggest that they look closely at that early-day motion because it probably has some merit.

I would be interested to know—I am pleased that the Secretary of State said that he would get back to me—how many businesses the proposals have helped; how many extra jobs they have created in each of the past three months in which they have been operating; how many people have been diverted from the unemployment register into work; and how many jobs have been saved. I hope that hon. Members will forgive me if I am cynical, but I believe that, at this stage, few have been saved. Unless we quantify those items of help, we will not understand how we can start to bolster and improve our economy, save the jobs that we can and create a climate for future employment.

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Photo of Peter Hain Peter Hain Labour, Neath

The hon. Lady mentioned Conservative policy on banking. Has she read the letters page in today's Financial Times? Tom Brown, senior credit executive at Norddeutsche Landesbank, finds it especially disconcerting that the shadow Chancellor is revealed as a man who does not have

"the haziest grasp on the cause of the crisis" or how banks work. If the hon. Lady is taking advice from the shadow Chancellor, surely those comments are devastating.

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Photo of Cheryl Gillan Cheryl Gillan Shadow Secretary of State for Wales

The right hon. Gentleman obviously has more time on his hands than I have. What with preparing for the debate, for a television programme on which we will both appear later today and my private Member's Bill on autism, I have not had time to scan the papers. However, I am sure that the right hon. Gentleman remembers the remarks that some foreign politicians made about Labour Front Benchers, which I am too much of a lady to repeat.

After prioritising help and removing the blocks on lending, I am sure that the Secretary of State agrees that we have a duty to look long term to ensure that Wales can emerge from the recession with the tools to flourish and prosper. To do that, we must make some major fundamental strategic plans rather than going for quick fixes or cheap headlines.

Wales has fantastic natural assets and an enthusiastic and committed work force, as we all know. We must make the most of our assets and transform Wales into a country to which people can flock once again to do business and take their well-earned holidays. I want to consider some matters to which we need to give genuine attention to give Wales that competitive edge.

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Photo of Cheryl Gillan Cheryl Gillan Shadow Secretary of State for Wales

I will, although I hope that the hon. Gentleman will make a contribution later. He usually intervenes and leaves.

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Photo of Lembit Öpik Lembit Öpik Liberal Democrat, Montgomeryshire

I am grateful for the hon. Lady's generosity and I shall try not to storm out in a fit of pique.

Does the hon. Lady agree that the fees that the receivers and administrators charge when a company closes are stupendous? They can be up to £760 an hour for an individual member of a company's work force. Does she agree that one of the problems that arise when a company shuts is that a significant proportion of the assets, which the staff would reasonably like to go towards their pensions and paying their debts, go to the receivers?

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Photo of Cheryl Gillan Cheryl Gillan Shadow Secretary of State for Wales

The hon. Gentleman does not need my endorsement of his opinion on accountants' fees for dealing with bankruptcies or receiverships—he has made the point himself. He will know, however, that there is an awful lot of such business, so those firms will be making good profits.

I want to deal with those things that will give Wales a competitive edge when the country emerges from recession, as it will. As the Secretary of State knows, we should have such a debate between Westminster and Cardiff bay, because it is essential for the health and welfare of the Welsh economy that we co-operate at both ends of the legislative spectrum, as it were. We need to prepare Wales for the upturn.

Let me deal first with transport. If Wales is to attract further investment, whether domestic or overseas, businesses must not feel isolated from other parts of Wales and the UK or from Europe or beyond. The journey from north to south Wales is still a great undertaking. The journey from Bangor to Cardiff by rail still takes more than four hours, which is almost an hour longer than it takes from Bangor to London. Although we should acknowledge the obvious geographical constraints, we must have long-term plans to increase accessibility to and from Wales and within Wales.

With increased line speed, the rail freight network along the M4 corridor could carry more volume if more goods came in through Welsh ports. The ports deserve support. I am particularly concerned—perhaps the Minister could deal with this when he winds up—not only by the Government's decision to recalculate, and thus effectively to raise, port taxes, but that this should be done retrospectively. That will place an added burden on a crucial part of the Welsh economy. Our road, rail, maritime and air links must all be maintained and enhanced to provide those valuable links to the worldwide market.

As geography makes travel within Wales more arduous, it is vital that modern technology and infrastructure should help to compensate. Broadband coverage and speed need some attention, as I am sure the Secretary of State knows. At present we do not have 100 per cent. coverage, and the prominent "not spots" in mid-Wales effectively isolate those rural communities, in terms of modern business potential. The Government recently said that they wanted every home to have access to broadband at 2 megabytes a second at least by 2012. However, with average connection speeds of 2.9 megabytes a second in parts of Wales already and with technology being developed with much greater speeds in mind, we need to set our sights higher to give us the competitive edge. That will be crucial in Wales if we are to attract inward investment and stimulate business development in areas such as rural mid-Wales. I understand that the Secretary of State has responsibility for digital inclusion, so I hope that he will be able to give Wales the edge in speed and infrastructure that would help us to secure our future businesses and give us those first-class electronic links.

Energy is another thing that we must consider. I welcome the Aberthaw announcement today. The strategy is critical in terms of both security and its impact on the local economy and the environment. The power station at Milford Haven is welcome. I have sung the praises of the liquefied natural gas pipeline linking Milford Haven on many occasions. That pipeline was delivered on time and on budget, and I am still so proud of it as a piece of British engineering, because it will contribute hugely to our energy security.

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Photo of John Smith John Smith Labour, Vale of Glamorgan

Will the hon. Lady take this opportunity to endorse the view expressed by the Leader of the Opposition the week before last that we should have an open mind on the prospect of a Severn tidal barrage?

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Photo of Cheryl Gillan Cheryl Gillan Shadow Secretary of State for Wales

I will come to that in just a second. Before I do so, let me say that we need an energy strategy that reflects Wales's potential, that will include looking at the short list of options for the Severn barrage that have been announced. Any barrage, as we all know, will have positive and negative effects in respect of energy production and environmental impact. We need a rapid evaluation process, because there is no doubt about the potential. We have been talking about the barrage for an awfully long time without finding out exactly what should be done to capture renewables through the resources provided by the River Severn.

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Photo of Roger Williams Roger Williams Opposition Whip (Commons), Shadow Secretary of State for Wales, Shadow Minister (Environment, Food and Rural Affairs)

The LNG pipeline might have been an engineering success but it has caused considerable environmental damage. Does she agree that when licences are awarded for large infrastructure projects, the environmental consequences should be much more at the forefront of the concerns of Government agencies?

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Photo of Cheryl Gillan Cheryl Gillan Shadow Secretary of State for Wales

No, I do not agree. I have flown along the pipeline and have met and talked to the chief engineer. I was exceedingly impressed by the amount of repair work and by the care that was taken with the environment. There were some absolutely stunning pieces of engineering in and around rivers and other areas of sensitivity. Some heavy negotiations had to be undertaken with a large number of landowners before the pipeline could extend across its chosen route. I think that the hon. Gentleman will acknowledge that anyone going anywhere near the pipeline cannot see it in many places. I therefore do not agree with the hon. Gentleman to that extent, but I have to say that no project should go ahead without an attempt to minimise its environmental impacts in every possible way. If Wales is to remain competitive, we must have a strategic energy policy.

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Photo of Stephen Crabb Stephen Crabb Opposition Whip (Commons)

My hon. Friend responded very well to the point made by Mr. Williams. She is exactly right that, yes, there was disruption when such a large and significant piece of engineering was put in place, but the quality of the reinstatement has been absolutely fantastic. I speak with experience, because the pipeline passes just beneath my back garden.

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Photo of Adam Price Adam Price Spokesperson (Communities and Local Government; Culture, Media and Sport; Defence; Transport)

The pipeline also goes through my constituency, so I know that it has caused a scar across the length and breadth of Wales. There was a lack of democratic accountability for it, and some of the hon. Lady's English colleagues were instrumental in trying to oppose the plan. Is not the crucial point that although it may have improved energy security in the UK, most of the gas is not even available to customers in Wales? Should not energy decisions in Wales be made for the benefit of Wales, which was not the case with the LNG pipeline?

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J

The pipeline refered to is not an LNG pipeline, it is a natural gas pipeline. LNG is short for Liquified Natural Gas, it is stored at the two import terminals in Milford Haven and regassified to be transfered into the national gas grid system.

Submitted by Jonathan Collier Read 1 more annotation

Photo of Cheryl Gillan Cheryl Gillan Shadow Secretary of State for Wales

I am sorry but the hon. Gentleman reveals his isolationist credentials. I cannot agree with him at all. First, pipelines work both ways. Secondly, Wales is part of the United Kingdom, and if we pursue the hon. Gentleman's insular "little Wales" attitude in today's world, we will simply isolate the country from the rest of the world.

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A

I have to agree with Cheryl Gillan on this particular point.

Submitted by Andrew Lye

Photo of David Davies David Davies Conservative, Monmouth

I am grateful to my hon. Friend, who is making a very important point. Does she agree that if we followed the logic of Adam Price, we would have no pipelines anywhere in the world to supply oil or gas across different nations?

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Photo of Cheryl Gillan Cheryl Gillan Shadow Secretary of State for Wales

I would have to differ from my hon. Friend in that I do not think that the hon. Gentleman was exhibiting any logic—logic of any worthwhile status anyway!

The Secretary of State knows that I think we need to secure future nuclear generation at Wylfa. It is not only a vital element of the UK's energy production, but is of huge importance to the economy and jobs in north Wales. I shall be interested to hear what the Minister says about this debate in his concluding speech.

Tourism is another element that we need to consider. In recent years, there has been a huge shift towards employment in tourism. It makes up 3.3 per cent. of the economic value added in Wales. The industry employs, directly or indirectly, nearly 80,000 people, and £1 in every £10 spent in the transport and retail sectors in Wales is spent by visitors. It is a key area, but our share of both UK and international tourism fell in 2007, which cost the Welsh economy an estimated £267 million.

With environmental awareness and pressure on family budgets increasing, there is a clear opportunity for our Welsh tourist industry. This year is the 60th anniversary of the legislation that enabled the creation of our parks. Why travel abroad when our fantastic natural assets—our coastline, forests, lakes, mountains, terrific national parks and our warm welcome—could attract visitors who will be persuaded to return year after year, even as the financial situation improves? We really need to capitalise on those assets; we require a robust tourism marketing strategy to attract visitors now and maintain their numbers in future.

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Photo of Albert Owen Albert Owen Labour, Ynys Môn

I hope to catch Mr. Deputy Speaker's eye and speak on the Wylfa issue a little later, but on tourism, given the economic crisis and the weakness of the pound, is there not an opportunity to encourage people from European countries, particularly the Republic of Ireland, to come to Wales over Easter? The hon. Lady talks about a robust policy; should not Visit Wales capitalise on that, and show what good value for money the United Kingdom and Wales are at this time?

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Photo of Cheryl Gillan Cheryl Gillan Shadow Secretary of State for Wales

The hon. Gentleman and I could appear in a commercial for Wales on that front. We should be taking that message across Europe. What with the Ryder cup, the Olympics coming to the United Kingdom, and our rugby team, it is important that we sell Wales everywhere. We do not want the benefits to be felt only in and around the millennium stadium, the venues involved in the Ashes, or the golf course for the Ryder cup. We want the benefits to spread throughout Wales, but unless we have a comprehensive strategy, that will not happen. People will come to Wales, spend in a little, closed area, and then disappear again. We need a comprehensive strategy. A Welsh Tourism Alliance report last year recommended that liaison between the tourism industry and the Welsh Assembly Government be dramatically improved. It is only through co-ordinated action that we can ensure that adequate support is given to that vital industry at this vital time.

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Photo of Daniel Kawczynski Daniel Kawczynski Conservative, Shrewsbury and Atcham

My hon. Friend will know that the vast bulk of tourism to mid-Wales goes through Shrewsbury. On the A5-A49 roundabout, which is called Dobbies' island, huge delays are caused by caravans going to Wales on bank holidays and at peak times in the summer. I hope that when we are in government, before too long, she will work with me to ensure that there is investment in that roundabout to improve the flow of traffic to Wales.

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Those of us who live in the constituency, unlike the MP, are well aware of the recent improvements including traffic lights on all the access roads.

Submitted by MARTIN JONES Read 1 more annotation

Photo of Cheryl Gillan Cheryl Gillan Shadow Secretary of State for Wales

My hon. Friend makes a good point on behalf of his constituency but I give him an assurance that, while I hold this post, whether in government or opposition, I will always work in the interests of Wales. That is at the forefront of my mind.

To prepare for an economic recovery, we must address the matter of higher education in Wales. First, it seems incomprehensible that, at a time when thousands of people are retraining, or trying to prepare themselves to enter a difficult jobs market for the first time, there are plans to slash the further education budgets in Wales by £3 million. I ask the Under-Secretary to refer to the issue in his wind-up. Again, it is a devolved matter, but in view of the economic circumstances, I think that we in this House can show concern.

As we all know, Welsh universities are some of the best in the world, and are an essential tool in building up Wales for the future. In recent years, however, the funding gap has become a great problem—there is a £61 million funding gap between English and Welsh universities—and there is now significant pressure on facilities. As the universities try to compensate with increased numbers, there is the possibility as the student-teacher ratio becomes increasingly less favourable of diminishing educational standards. I am therefore concerned about the issue.

Secondly, I am concerned about the portability of qualifications, an issue on which the Welsh Affairs Committee has just reported. It is absolutely vital that any qualifications gained in Wales, particularly vocational qualifications obtained in-house, are transferable and recognised outside Wales, as any failure in that regard will severely damage the prospects of attracting international businesses, which will want to recruit staff who can use their qualifications in other parts of the United Kingdom and internationally in Europe.

Thirdly, we need to ensure that we have the necessary skills base in Wales to attract business, particularly in the light of the growth of the high-tech industries and the decline of the manufacturing sector. If we are to do that, it is essential for us to take account of the needs of industry by forging much closer links with business leaders in all sectors across Wales.

In areas such as aerospace we are a world leader in our skill and technology base, but we cannot take those areas for granted. GE Healthcare is a world leader, but we have lost invaluable skilled jobs from its factory in Wales. We need to ensure that we create the right conditions for key industries to thrive. I want to see evidence of clear strategies to attract and maintain the businesses of the future: scientific and industrial strategies, almost like the old foresight strategy of a few years ago, which the Minister may remember. That includes securing the delivery of the St. Athan project, which has been along a very bumpy road.

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Photo of Cheryl Gillan Cheryl Gillan Shadow Secretary of State for Wales

If the hon. Gentleman will forgive me, I should like to make a little progress. I am sure that he will make his own speech, and will press the case for a project that he has championed relentlessly. I should like to hear from the Minister what progress is being made on it.

While preparing people and the business environment for the recovery, we must also ensure that we do not erect barriers—tariff or non-tariff—to new ventures.

It is essential that we examine the recently published Welsh language legislative competence order, to which the Secretary of State referred, and which is a matter of concern to some businesses in Wales. Conservatives have a proud record on the Welsh language, and are committed to its growth. Every piece of legislation that has strengthened the language has been Conservative-led, including Lord Roberts's excellent Welsh Language Act 1993. Many businesses are already making enormous strides to provide information in Welsh, and we must encourage those efforts through a culture of shared responsibility rather than heavy-handed bureaucracy. We must ensure that the devil is not in the detail of the LCO, which should be examined closely both across the House and, as the Secretary of State reaffirmed, more widely.

Some may question our call—I think it is a joint call—for closer scrutiny of the order, but we must ensure that there are no unnecessary burdens on business, and that the good will towards the language is maintained at this time of enormous economic difficulty. We must put the interests of the people and businesses in Wales—especially in these tough economic times—at the heart of any decisions on linguistic policy.

I am also concerned about the way in which the LCO will be scrutinised. I hope that the Secretary of State will devote some of his time to examining the way in which the scrutiny process will develop. There is some concern about the possibility that the House and the Welsh Affairs Committee will start to scrutinise the order while recommendations for change are being made in the Assembly. I hope to have a meeting with the Secretary of State to discuss whether, instead of conducting our investigations in parallel, we could conduct them sequentially, so that we can be sure that the document being examined by the Select Committee here is the one recommended by the Welsh Assembly Government.

Transport, education, energy, electronic communications, tourism and, perhaps most of all, not creating unnecessary barriers or burdens for business should help to position Wales for the upturn. We share a common aim in wanting to help families and businesses in Wales to come through the current financial difficulties. I hope that the Secretary of State will work closely with the Welsh Assembly Government and with his colleagues to ensure that Wales is in the best possible position to take advantage of the upturn when it comes. We need forward thinking and strategic planning. I think that by looking at our longer-term goals as well as dealing with our short-term problems we can ensure that Wales comes through these difficult times with the means to succeed in the future.

I want to end on a positive note for St. David's day. I think we in Wales will have our "we can do" moment: I believe that our businesses and people can work hard, and that we can create the right climate for inward investment—and I look forward to having the opportunity, on another occasion, of being able to read out all the job gains and inward investment coming into Wales, rather than having to spend time concentrating on the job losses and the businesses that have gone.

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Several hon. Members:

rose

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Photo of Michael Lord Michael Lord Second Deputy Chairman of Ways and Means

Order. Before I call the next Member to speak, may I remind the House that Mr. Speaker has placed a 12-minute limit on Back-Bench speeches, and that that starts now?

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Photo of Hywel Francis Hywel Francis Chair, Welsh Affairs Committee 2:55 pm, 26th February 2009

I wish to make a contribution to this debate from two perspectives: that of an individual Member—for Aberavon—and that of Chair of the Welsh Affairs Committee. The perspectives and priorities are much the same—they follow those outlined by my right hon. Friend the Secretary of State for Wales—and they are clearly about the economy, both local and global; nothing is more important to the people of Wales.

In my constituency, manufacturing—in particular, steel—is the dominant sector. In my roles as a member of the all-party steel and cast metal group, and secretary of the steel union community parliamentary group, I have had regular meetings with Ministers, unions and Corus, as well as my local authority. I have been impressed by the fact that there is a universal desire to retain both the steel industry and, equally importantly, the skills within that industry. I particularly congratulate the Welsh Assembly Government and the Secretary of State for Wales on the work that they have done through the Welsh economic summits, and, more widely, the steps that they have taken to establish the ProAct and ReAct initiatives. I am also looking forward to the local economic summit that will be launched in Neath-Port Talbot very soon, and I know that similar initiatives are taking place across Wales, which is most welcome; my hon. Friend Albert Owen is taking a leading role in his local economic summit.

In the course of evaluating the impact of the economic downturn on my constituency, I have visited several small businesses. I recently met the management and work force at two important small companies: Excel and Rhino Engineering. They are both cutting-edge manufacturing companies which are appreciative of the information and guidance being provided by the Government, and particularly the circular letter that the Secretary of State for Wales recently sent to Members, copies of which have been passed on to many businesses in my constituency. The two companies have also benefited from significant contracts for the 2012 Olympics and Paralympics to be held in London.

Looking cautiously to the future, I have been struck by Tata's continued expressions of support for local communities in my constituency and the backing that it has given to the Corus steel plant, as well as by the fact that it is seriously examining the possibility of developing the new Margam drift mine—a project that, as one would expect, has strong support from the National Union of Mineworkers and other local unions.

Again looking to the future, it is encouraging to see that employers' organisations such a the EEF and UK Steel and unions such as Community are looking beyond the current difficult circumstances, talking up the need for greening the economy, what they call a nuclear renaissance and its links to steel, and ultra-low carbon steel-making, turning theory into what they call practical reality.

Turning to the work of the Welsh Affairs Committee, which I have the privilege of chairing, I should at the outset pay tribute to all its members and staff for their sterling work over the past year. Its work load has virtually doubled in the recent period, and I am pleased to announce today that over the past year we have succeeded in getting significant improvement in staff support to take account of this increased work load.

Our annual report, which will be published tomorrow, outlines the growth and range of our activities. The Committee's profile has also been raised both here in Westminster and in Wales, and on balance, we should welcome that. One kindly journalist compared my Committee to that benign institution the Commonwealth games. One Assembly Member generously suggested that we should serve on only one Select, or any, Committee—on just our own Committee—a suggestion that I found helpful.

One hon. Member, a great supporter of our Committee and one-time member of it—Mr. Llwyd, to whom I sent a message earlier today; I understand that he is on his way to Cardiff—gave some advice on how I should run my Committee. He suggested that I should crack the whip. I am grateful for his advice, but that is not my style and I do not think it the style of any Chairman of a Select Committee. We work by consensus and consent—a more inclusive approach. Ours is not the style or the language of the slave-driver.

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Photo of Albert Owen Albert Owen Labour, Ynys Môn

Was my hon. Friend as disappointed as I was, as a member of that Committee, to read those comments from the leader of Plaid Cymru in a national newspaper? If somebody has suggestions or ideas for a Select Committee, writing to the Chairman is the normal convention.

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Photo of Hywel Francis Hywel Francis Chair, Welsh Affairs Committee

I am sure that the hon. Gentleman will read the account of what my hon. Friend has just said. We have had an interesting discussion about the matter, and I reported that to my Committee.

Although in some quarters we may be approaching the notoriety of the committee of public safety in revolutionary France, I am more of a Gramsci than a Robespierre, although I think that Robespierre had his merits.

The work of the Committee in the past year has focused, as it will in the coming period, directly or indirectly on the economy in recognising the need for an outward-looking, global Wales, rather than a fortress Wales.

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Photo of Julie Morgan Julie Morgan Labour, Cardiff North

My hon. Friend says that his Committee has generally been concentrating on the economy. May I say how pleased I am that he is undertaking an investigation into the Legal Services Commission's plan to cut jobs in Wales, which will of course affect the economy because of the number of jobs that would be lost?

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Photo of Hywel Francis Hywel Francis Chair, Welsh Affairs Committee

I thank my hon. Friend for that intervention and congratulate her on the sterling work that she has undertaken on this matter.

As my right hon. Friend the Secretary of State mentioned, we have undertaken a globalisation inquiry and a cross-border inquiry. Both these reports highlight heavily the importance for the long-term economic future of Wales of the need to establish higher-level skills, as Mrs. Gillan rightly said. In our globalisation report, we recognise the central importance of universities and colleges in building the knowledge economy, and the need for that to be done at local, national and international levels. We were particularly impressed with the role that universities are already playing in this field in Wales by contributing to their local economies. Much could be learned in some respects from more advanced developments, such as the Mondragon co-operative university, in the Basque country; Xiamen university, which I am delighted is twinned with Cardiff university; and other, similar initiatives.

In our recently published report on cross-border public services in relation to further and higher education, we highlighted the vital issues, which have already been mentioned, of the funding gap, the research profile and UK science policy.

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Photo of Daniel Kawczynski Daniel Kawczynski Conservative, Shrewsbury and Atcham

I am grateful that the hon. Gentleman is talking about the cross-border issue. He probably knows that the Royal Shrewsbury hospital loses £2 million a year as a result of the different tariffs that it is paid by the Welsh Assembly. I hope that his Committee has looked at how English hospitals are losing out.

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Photo of Hywel Francis Hywel Francis Chair, Welsh Affairs Committee

We have made some observations on that matter. We have not done anything about roundabouts in Shrewsbury, but I am sure that we will come to that issue as well.

The message of the two reports was very clear. With all due respect to the importance of widening access—I spent a quarter of a century in universities trying to achieve that—the whole question of student finance pales into insignificance when we are dealing with the core question of the funding of universities for proper teaching and research. Unless that question is addressed, we will not be able to build the knowledge economy of the future and thus safeguard quality jobs for all our communities.

We made several key recommendations, especially on science policy and research, which can be influenced by the Welsh-UK Government partnership. I hope that we will be able to emphasise that in the future. I am delighted that my right hon. Friend the Secretary of State for Innovation, Universities and Skills has recently visited Cardiff university, and he has agreed to come to my constituency in the autumn to visit Glamorgan university's hydrogen centre and Swansea university's Technium centre and the new science campus, which will be based largely in my constituency.

On the theme of the knowledge economy and creating new, sustainable jobs for the future, my Committee has begun its inquiry on digital inclusion, and we will visit Bangor university to see how higher education is addressing the social and economic challenges facing us. We may also need to consider seriously the role of broadcasting within that inquiry, given the impact of digitisation on the Welsh economy and the democratic deficit. Lord Carter's interim report, "Digital Britain", which was published in January, is a matter of concern for us all, not least because as a reserved matter broadcasting is a concern for my Committee.

Finally, I shall turn to my Committee's new responsibility to undertake pre-legislative scrutiny of LCOs emanating from the Welsh Assembly Government. After 18 months of hard work and much learning by everyone, we have established a pattern of work that is now functioning reasonably well. We have excellent working relationships with Welsh Assembly Government Ministers, Assembly Committees and the Wales Office—I see a wry smile on the faces of the two Ministers on the Front Bench.

We are about to undertake work on two important LCOs, and I am somewhat dismayed that so far no mention has been made of an important LCO on carers. It is to the credit of the Welsh Assembly Government and the Assembly Member for Llanelli, Helen Mary Jones, who initiated this particular LCO, that this is coming before us. We should recognise and respect the right of the Welsh Assembly Government to prioritise its policies and propose legislation. This particular LCO—I declare an interest as a vice-president of Carers UK and the sponsor of the Carers (Equal Opportunities) Act 2004—will affect nearly 1 million people in Wales, so it is a matter of some consequence.

I have said publicly, and will repeat, that we will undertake our work thoroughly and, in the words of Erskine May, "in an expeditious manner" and in partnership with our colleagues in the Assembly. I have already had meetings with Dr. Dai Lloyd, the Assembly Member whose committee deals with the carers' LCO, and with Mr. Mark Isherwood, the Assembly Member whose committee deals with the Welsh language LCO. At 5 o'clock this afternoon, I will have a meeting with the Culture Minister, Mr. Alun Ffred Jones, and in a few weeks I shall meet Meri Hughes, the chair of the Welsh Language Board. I am delighted to announce that, on the same day, she will also be prepared to meet all Welsh MPs here in the House.

As an indication—

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Photo of Michael Lord Michael Lord Second Deputy Chairman of Ways and Means

Order. The hon. Gentleman has had his due time.

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Photo of Mark Williams Mark Williams Shadow Minister (Innovation, Universities and Skills), Shadow Minister (Wales) 3:10 pm, 26th February 2009

Thank you, Mr. Deputy Speaker. May I begin by associating Liberal Democrat Members with the profound comments that we heard from the Secretary of State and the shadow Secretary of State on the loss of Ivan Cameron? All of us, and especially those of us who are parents, will appreciate that there is nothing more sorrowful than the loss of a child in such sad circumstances. Our condolences go to the Leader of the Opposition and his family.

It is a privilege to follow Dr. Francis. I say this as an opposition MP, but he is an excellent Chairman of our Select Committee and his pursuit of a consensual style is to be admired. I shall add to what he and the Secretary of State have said about the ingredients for the future and especially the importance of higher education and the skills agenda. We need to develop the Welsh skills base, so that businesses both large and small are supported. In particular, I shall speak from a rural perspective about small businesses.

As we have heard, the report on the cross-border provision of higher education identified some of the positive steps that have been taken. However, it also alerted us to some of the great issues of concern, the clearest and starkest of which is the funding gap of some £61 million. The House does not need to be reminded that Wales has some of the finest academic institutions in the world, but if the present level of funding is not maintained or increased, there is a great danger that we will fall behind in an increasingly challenging global market. That would make it more difficult for Welsh institutions to compete for research funding which, considering our relative size, is already disproportionately low. A lack of research funding will inevitably make it more challenging for Welsh universities to keep top academics, and the knock-on effect will be that it will be harder to attract new students.

Moreover, we have to compete internationally as well as in the UK context. The Committee took evidence from Professor Merfyn Jones of Bangor university, who pointed out that international students contribute well over £100 million annually to the Welsh economy through the payment of fees and through spending their money locally. Concerns have been raised with me, most recently by the vice-chancellor of Aberystwyth university, about the mismatch between the length of visas and the duration of some of the courses that overseas students wish to undertake.

I do not mean to patronise the Welsh Assembly Government in any way, but our report found that, in developing the work force development fund, they could learn some lessons from Train to Gain. It was felt that Train to Gain was far better at promoting itself than the work force development fund. We took evidence from Summit Skills, the sector skills council for the building services and engineering sector, and were told that many employers simply did not know that the work force development plan existed—the Welsh Assembly Government had not advertised it at all.

The Leitch review has demonstrated the importance to the future skills base of reskilling and upskilling. Learning is a lifelong process now, and not something that happens only between the ages of four and 16. In that context, I know that the Welsh Assembly Government will assert—I mean no criticism, as we have heard the same assertions from the Secretary of State—that £68 million has been spent on the ReAct and ProAct schemes. That is welcome but, like Mrs. Gillan, I find it hard to reconcile that with the 7 per cent. cuts that have been made in further education in Wales. As one of my colleagues in the National Assembly, Jenny Randerson, remarked, we should no doubt praise the admirable further education college in the north-east that is now in receipt of £60 million a year, as that is more than the Assembly budget for further education across the entirety of Wales.

The skills agenda was rightly highlighted when we found ourselves in somewhat uncertain economic climes, but it is now all the more important that we focus and refocus on it. We considered that in our report on globalisation. When the representatives of Higher Education Wales gave evidence to the Select Committee, they stated that higher education contributed £1.6 billion to the Welsh economy, which demonstrates just how important it is. As others have said, we are now moving on from developing the interface between traditional academia in our universities and opportunities in the commercial world. Examples of that are the relationship between Aberystwyth university and Bangor university, the growing associations between the other higher education institutions in Wales, and the merger of the Institute of Grassland and Environmental Research and Aberystwyth university to form the Institute of Biological, Environmental and Rural Sciences. The Under-Secretary of State was there last week and heard about the development of biofuels, the academic scientific research into that development and the need and enthusiasm at IBERS to develop commercial partnerships to take these projects further.

Of course, that is all underpinned by the state of the national economy. My party certainly supported the recapitalisation of the banks last October. We share across the House the concern that, since October, £5 billion less has been lent to enterprises across the country. My hon. Friend Dr. Cable has made our approach quite clear: we favour the acquisition of ordinary shares so that the Government can have a steer on lending and remuneration. The offensive news that we have heard last night about the £650,000 pension awarded to Fred the Shred, as I think he is called—[Hon. Members: "Outrageous!"] It is outrageous. It does not resonate strongly with what we have heard about the roles of the banks in relation to small businesses and with the difficulties that rural businesses have experienced.

In my constituency, small businesses account for two thirds of the work force. Indeed, 54.2 per cent. of people in Ceredigion are employed by micro-businesses—businesses with nine employees or fewer. That is the highest percentage in Wales. When we consider rural businesses, we must make the point that the collapse of small and micro-businesses has a direct effect on the broader rural economy. When young families are forced to move away, that has an effect on the pupil numbers in the village schools and on the ability of public services to continue. That can make the difference to a community's survival.

I remain very concerned, as we all do, I am sure, about the attitude of the banks. Let me use an illustration that I have been aware of for the past couple of weeks. Two constituents of mine—I will not mention their business—came to Finance Wales in good faith two or three years ago, and achieved funding for their enterprise. Difficulties followed, the cost of bank loans has risen and they are now in talks with one of our high street banks to renegotiate the loan. The banks displayed stridency and determination in not budging from a repayment figure of £233 a month, whereas my constituents could raise only £200. That £33 is the difference between the threat of bailiffs hanging over them and their future viability as a business, which would be assured if the bailiffs went away.

One constituent of mine in the north of Ceredigion has the misfortune of having a range of empty business premises. Although the rate relief has been welcome—we heard about that earlier—for small business people with empty business premises, my constituent will not be helped by the scheme and faces an annual rates bill on empty properties of some £30,000, which directly affects his capacity to function in other areas. That is the reality of the operation of the banks on the ground.

I have read the Wales Office website in some detail, and have read about some of the schemes available. It states some of the criteria and whether they are applicable to England, Wales or the UK, and gives telephone number contact details. However, there is still a problem in getting that message through to some of our small business people. Two weeks ago, I went to a small business breakfast in Aberystwyth armed with the website page and went through it with those people. Much of it was fresh news to them, so I do not think the message is getting through to those businesses about the extent of the available help, which they desperately need.

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Photo of Daniel Kawczynski Daniel Kawczynski Conservative, Shrewsbury and Atcham

Does the hon. Gentleman agree that it is vital for local authorities to do more to give contracts to local firms? I am encouraging Shropshire county council to increase the amount of business it gives to local Shrewsbury firms and I am sure the hon. Gentleman is doing the same in his area.

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Photo of Mark Williams Mark Williams Shadow Minister (Innovation, Universities and Skills), Shadow Minister (Wales)

I thank the hon. Gentleman for that intervention. That action is certainly being taken by my local authority and by Cardiff. The Assembly Government summits have looked at procurement, which is important.

The closure of the tax office in Aberystwyth has been frustrating in the extreme, not least given the economic climate in which we are operating. It is frustrating given that on the basis of a saving of £83,000, the Aberystwyth tax office is to go, despite the fact that Her Majesty's Revenue and Customs spent £50 million on consultants last year. The Financial Secretary asserted to me that the closure

"will not have an adverse effect on the services to small businesses."

My goodness, if ever there was a need for services to small businesses, it is now. He said:

"Most of HMRC's businesses can operate without the need for a local presence."

I know that is the experience of other Members across mid and west Wales. The Financial Secretary asserted that

"the Department's customers are increasingly using the internet as a preferred way of doing business and obtaining information. Where face to face services are provided these will be maintained at a level geared to meet local demand."

According to the soon to be former HMRC employees in my constituency, that means pointing clients to a telephone linked to a call centre elsewhere.

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Photo of Roger Williams Roger Williams Opposition Whip (Commons), Shadow Secretary of State for Wales, Shadow Minister (Environment, Food and Rural Affairs)

My hon. Friend is right to emphasise the loss of tax office services to small businesses. In these difficult economic conditions, a number of my constituents find themselves subject to tax inspections. They do not have the time for such inspections—they want to run their businesses. Surely, this is the time to lay off such things and allow businesses to ensure that they are still around when the upturn comes?

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Photo of Mark Williams Mark Williams Shadow Minister (Innovation, Universities and Skills), Shadow Minister (Wales)

I take my hon. Friend's point, but the sad reality for inspections across mid-Wales and the extremities of Powys—so I am told by HMRC—is that the spectre will arise of a roving squad of two people serving the needs of Montgomeryshire, Brecon and Radnor and Ceredigion. Only two people will respond to the problems that arise.

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Photo of Lembit Öpik Lembit Öpik Liberal Democrat, Montgomeryshire

My hon. Friend is a feisty campaigner in defence of rural HMRC offices. Does he agree that one of the factors excluded from the closure calculations is the potential reduction in the tax take? The more remote the offices in any practical sense, the less connected some people will feel to their responsibility to pay tax. The closures could actually cost more than they save.

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Photo of Mark Williams Mark Williams Shadow Minister (Innovation, Universities and Skills), Shadow Minister (Wales)

I certainly agree and I thank my hon. Friend for that contribution. We are still trying to get the elusive figures in that regard.

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Photo of Stephen Crabb Stephen Crabb Opposition Whip (Commons)

Is not the irony that in recent years HMRC has deliberately devoted more resources to targeting big business customers of its services and has de-prioritised small businesses? Large banks are not making any money, and HMRC needs to raise money efficiently from the small business sector, so the plan to decimate the network of tax offices in rural west, north and mid-Wales is counter-productive.

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Photo of Mark Williams Mark Williams Shadow Minister (Innovation, Universities and Skills), Shadow Minister (Wales)

I thank the hon. Gentleman for that intervention and pay tribute to his work trying to defend the office in Haverfordwest. He makes a valid point. I am amazed at the lack of thought behind the closures, not least in the present climate. All our calls for a moratorium on the closures have been ignored by the Government.

Mrs. Gillan mentioned broadband. Of course, the answer to HMRC's problem is now broadband, but she mentioned the problems of "not spots". Again, I pay tribute to the National Assembly for its work. There are six pilot schemes across Wales, one of which is Cilcennin in my constituency, which will now get some assistance after a long campaign for broadband, but we have a long way to go. All that, in my consituents' context, is taking place in an area that is deemed to need convergence funding for good reason: it is an area of significant social and economic deprivation, as recognised by the National Assembly's communities first programme.

Let me touch on another rural business—the family farm—and the anxiety that is being expressed, certainly among the farmers in my constituency, about the introduction of the compulsory electronic identification of sheep. Again, I will pay tribute where tribute is due: the Government have had some success in delaying the introduction of that scheme. None the less, EID is looming fast, and there is real anxiety in the countryside. It has been estimated—it is a low estimate—that 18 per cent. of farm income will be lost to the introduction of EID. I remind the House that farm incomes stood at £3,000 in less favoured areas—indeed, in most of Wales—in 2006-07. That was 63 per cent. down on the previous year, while income on lowland farms was down by 24 per cent. at £8,500.

I am sure that other colleagues have written to the European Commissioner who is responsible for EID. I was extremely disappointed by her response, which seems to go along the lines not of justifying the system, but of saying that we must proceed just because some countries have started their introduction of the scheme, despite the proven facts that, geographically and climatically, the problems that we have in Wales make the system completely inappropriate. It seems extraordinary that the Commission is not prepared to alter the policy. It may have looked good on paper and ticked various boxes in Brussels, but it has been shown to face significant problems on the ground that will, at best, render it useless and, at worst, seriously undermine the continued viability of small family farms.

The Government have lobbied on the issue. I pay tribute to Elin Jones—we share a constituency—for working hard on the issue in the National Assembly, but I urge the Government to continue to push for a derogation and a non-compulsory model. I initiated a Westminster Hall debate on the subject, when there was remarkable unanimity between representatives of my party and other hon. Members. The hon. Members for Ynys Môn (Albert Owen), for Preseli Pembrokeshire (Mr. Crabb), for Meirionnydd Nant Conwy (Mr. Llwyd) and for Clwyd, West (Mr. Jones) were all there. We all argued the same way and sang very much the same tune, yet the scheme is proceeding.

Of course, the background for today—the sad reality—is the continued funding crisis, whether from banks to small businesses or family farms, or now because of the spectre of a £500 million cut in the National Assembly's budget, made worse by the Barnett formula in all its manifestations. I reflect again on my constituency and I look at the tight local government funding settlement in a county where 40 per cent. of the work force are employed in the public sector. Some people have asserted that those public sector jobs would buffer us from the challenges of the recession, but as I look at NHS schemes, I am less certain that they will proceed. As we mark St. David's day, I look even at a great, iconic institution, the National Library of Wales, which has had a marvellous success with the open-doors policy that has attracted tourists and academics alike to Aberystwyth and the county of Ceredigion. Because of cuts in its funding, the doors of that august institution will be locked on Saturdays. The Minister has visited the National Library of Wales and has seen some of the excellent work that is being undertaken there, and he will be aware of that dispute.

HMRC could now alter its interpretation of the rules for claiming back VAT, which will cost the National Assembly £500,000. Adam Price has been involved in that issue as well. Cuts in our budget are in prospect, and that will, no doubt, have implications for service delivery.

Members may be pleased to hear that I am now turning to my final point; they can rest assured that my hon. Friend Mr. Williams will be back on the Front Bench, rather than being a boisterous Back Bencher. On what is nearly its 10th anniversary, I should like to say a little about devolution.

After nearly 10 years of the Assembly, this debate is as good a time as any to be positive about the contribution made by devolution—although I hesitate as I look towards the hon. Member for Preseli Pembrokeshire. Some of us have been frustrated by the operation of the Government of Wales Act 1998. Hywel Williams, who is not here this afternoon, talked about the 27 hoops and hurdles that have to be gone through and jumped over before measures can see the light of day in Cardiff. However, legislative competence orders represent progress. Some of us devolutionists passionately believe that anything that can lead to the legitimate transfer of power from this place back to Cardiff should be welcomed. I look forward to the referendum, when the time is right, and I for one am glad that Sir Emyr Jones Parry will not be heading off to Bosnia but concentrating on the work at hand back in Wales. We wait to see what the all-Wales convention will produce when it reports at the end of this year.

While we have the system, we need to make it work. We have talked about the Welsh language legislative competence order. There are those here who stridently oppose the order—although, since David T.C. Davies left his place, there have not been as many as there were. I agree with what Front Benchers said about the need for the widest debate, and we have moved on from any assertion that this place should have a monopoly on the debate through the Select Committee. Of course we need the widest discussion, but my party cannot accept that it is not the place of Assembly Members to make the ultimate decision on the mechanics of the measure that they wish to put before us. We are clear on that. The role of the Select Committee is clear. There is a debate to be had about the effects of the LCO on small businesses, and there will be comment from this place. However, the ultimate legitimacy rests elsewhere and the ultimate decision should be made in Cardiff.

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Photo of Peter Hain Peter Hain Labour, Neath 3:32 pm, 26th February 2009

I apologise to the House, as I will have to leave almost straight after I sit down; I have to go to Cardiff to join battle with the shadow Welsh Secretary on "Question Time" tonight. I am sorry that I will not be here for the winding-up speeches.

I was grateful that my right hon. Friend the Secretary of State responded positively to my request that he look into the South Wales police funding crisis. I suggest, however, that the problem lies more at the Welsh than the Westminster end in respect of the meeting that he might be attending. I hope that those who made the decision will reverse it in Wales.

Another policy area for which decision making remains at Westminster is broadcasting. The House should give proper attention to the impact on audiences in Wales of the decisions on the future of public service broadcasting that Ministers must take in the coming months. There is room for considerable concern, and I am grateful that, as my hon. Friend Dr. Francis reported, the Welsh Affairs Committee will look into the matter.

ITV said publicly that the cost of its public service obligations will exceed the benefits of being a public service broadcaster earlier in Wales than in Scotland or Northern Ireland—in other words, the situation is more serious in Wales. In January this year, ITV Wales reduced its news output to four hours a week, and its general programming for Wales to a mere 90 minutes a week. Only a few years ago, its general programming amounted to nearly seven hours a week. There is no certainty that even that 90 minutes—that hour and a half—will last more than a year or two; we could go from seven hours a week to nothing in a few years.

I also understand that BBC Wales is having to find savings of £3 million a year for the next five years. That is bound to restrict the ambition and range of what it makes for Welsh viewers and includes, of course, the ending of BBC2W. Taken together, this represents a shocking reduction in service for Welsh viewers. The Assembly's broadcasting advisory group calculates that between 2006 and 2013 the annual value of English language programmes made for Wales will have reduced by more than £20 million. There is a great danger that this will become permanent. That prospect raises economic and cultural issues for us in Wales, as well as questions about the role of television in our democracy.

There are some welcome conclusions in Ofcom's final report on its public service broadcasting review, as there are in Lord Carter's interim report, "Digital Britain". I particularly welcome the support for the continuation of S4C, the recognition that we must retain a strong and viable competitor for the BBC in Welsh news, and Lord Carter's suggestion that we should plan for a digital universal service commitment by 2012. I know that my right hon. Friend the Secretary of State, who also has a brief for digital inclusion, is considering that issue. However, neither Ofcom nor Lord Carter seems to have given sufficient weight to the issue of general programming made for audiences in the nations. Indeed, Lord Carter's report does not address the issue at all, concentrating solely on the provision of news and production quotas for the UK networks. Ofcom recounts the proposals made by various bodies in the nations, including the Welsh Assembly Government and its broadcasting advisory group, but makes no firm recommendation.

Since 1982, an honourable provision has been made for the Welsh-speaking audience through S4C, which has provided a wide range of programmes, and successive Governments have given this greater care and attention. We must now show equal care and attention for programme services for the majority non-Welsh-speaking audience in Wales. Most Welsh viewers—indeed, 80 per cent.—speak English rather than Welsh.

Unless something is done, the BBC could soon be the only provider of general programmes in English for Wales; and even that is on a downward curve. Assuming the survival of Welsh news on ITV, in future English language programmes made specifically for the audience in Wales will be totally dominated by news and sport, leaving only 10 per cent. of the output for drama, music, arts, factual, and light entertainment programmes. By comparison, S4C's service devotes about 40 per cent. of its output to news, current affairs and sport, and 60 per cent.—10 times the amount of English language provision on the BBC and elsewhere—to other programmes. It is important that we share the view conveyed to Ofcom by the Welsh Assembly Government that

"this is not a defensible proposition for a developed national community that brings to the table the sort of cultural legacy that Wales commands".

One of the successes of devolution is that it has given a greater focus to cultural policy. The fact that our actors and singers, poets and artists are getting unprecedented attention is of huge value to Wales as a whole. We have all cheered at the success of "Dr. Who" and "Torchwood", Michael Sheen and, of course, Duffy, who received those marvellous Brit awards last week. In television, we must not allow the soil in which many of these creative talents are grown to be carted away and dumped. "Coronation Street" is important to us all, but especially to the people of the north of England; the same can be said of "EastEnders" for the people of London. They are both a permanent presence in people's lives. Yet I gather that last year there were only four hours of television drama in English made specifically for the audience in Wales by BBC Wales—including, of course, the excellent "Coal House". Drama has long disappeared entirely from ITV Wales's service. The same sad picture could be painted in comedy and light entertainment.

As regards funding, there are options—I hope that my right hon. Friend the Secretary of State and my hon. Friend the Under-Secretary will look into this—that might solve the problem without further impinging on the public purse: for example, use of the proceeds from the sale of spectrum following the switch-off of analogue transmission, or use of the part of the licence fee that is dedicated to the digital switchover campaign, which will end in Wales at the end of this year.

The audience in Wales deserves better than this very sharp decline in general English-language programming provision, and I hope that whatever decisions are made in the current months, the restoration and development of a fully adequate English language programme service for Wales will get a high priority. I fully support the move towards the development of high-speed broadband services, but the fact is that traditional television will be a major factor in people's lives for some years to come, and probably for ever in many respects. People in Wales deserve a full reflection of their lives on television in English as well as in Welsh.

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Photo of Stephen Crabb Stephen Crabb Opposition Whip (Commons) 3:40 pm, 26th February 2009

It is a pleasure to participate once again in the annual, not-quite-St. David's day debate on Welsh affairs, and it is a privilege to follow the former Secretary of State for Wales, Mr. Hain, who was economical with the time allocated, and made an extremely important point about the importance of home-grown, Welsh-produced television for an English language audience in Wales.

The backdrop to the debate is, as right hon. and hon. Members have already said, the deteriorating economic picture facing Wales, the UK and the entire world. I was still a member of the Select Committee on Welsh Affairs when it began scoping out its inquiry into the globalisation report, which is one of the background documents to the debate. The economic scenario that we were considering two years ago seems very different to the one we are facing now. Looking back, it is interesting to note that what many of us regarded then as underlying strengths of the economy now look illusory, built as they were on piles of unsafe, risky debt.

The report also highlights the fact that what hon. Members from all parties recognise as underlying continuing weaknesses in the Welsh economy now look even more troubling and disturbing. I am thinking of the growing pool of people not in education, employment or training, the persistent problem of worklessness and a rate of people claiming incapacity benefit in Wales that is higher than the national average. Some deep-seated economic issues have to be tackled, and the current economic downturn makes that more difficult.

It was interesting and useful to hear the Secretary of State outline all the measures that the Government and the Welsh Assembly Government are taking to assist Welsh businesses, but I reiterate the point that I made earlier. The data that we are seeing from Wales so far do not suggest that the Welsh economy is any more resilient to the downturn than other parts of the UK. I am thinking, for example, of the recent RBS purchasing managers index report, which is a monthly monitor of the state of business activity in Wales. The most recent report shows the eighth consecutive month of a significant contraction of private sector business activity in Wales, which is very concerning.

At the end of January, the First Minister of Wales, Rhodri Morgan, said that he had "no idea" when the recession would end. That is probably a more realistic assessment than the one underpinning the pre-Budget report in December, which forecast the UK effectively bouncing out of recession six months from now. No one would regard that as a realistic economic forecast now. The truth is that we do not know when the recession will end, and it could be a long haul indeed for the Welsh economy and Welsh businesses. We all hope that better times lie ahead, however, and fundamental to that, and to reorienting and rebalancing the Welsh and UK economy, is focusing as never before on world-class skills and education. That issue has been flagged up already, and it was good to see that skills featured strongly in the Welsh Affairs Committee's report on globalisation.

In the time that I have, I would like to make a few brief points, the first of which concerns further education. That was already highlighted by the powerful speech of Mark Williams, who spoke about some of the pressures facing the further education sector in Wales. The umbrella body for further education colleges in Wales, fforwm, predicts that about 450 jobs will have to be lost from further education colleges in Wales in the next 12 months as a result of the cut of about £3 million that is being made to further education this year. At a time when we need to focus even harder on the skills agenda to help the Welsh work force adjust to the challenges of the recession, the further education budget is actually being cut. My local college, Pembrokeshire college, is consistently the most successful beacon award winner in the UK, having notched up seven beacon awards in the past six years as recognition of its innovative and effective approaches to further education. In the next 12 months, there will be a 1 per cent. reduction in its budget at a time when it should be expanding the courses that it offers and the skills training that it delivers to the people of west Wales. That picture in my constituency is replicated right across Wales, with further education colleges having to make cuts at a time when they should be thinking about how they can expand services to help their local areas.

Another issue flagged up in the report on globalisation was the importance of Welsh exports. There has been something of a success story in recent years. In his evidence to the Committee, a Trade Minister said that the Welsh economy had been a particular beneficiary of globalisation, with the value of Welsh exports growing by half between 1998 and 2005, almost twice the rate of the UK as a whole. He cited specialised electronics, technology, aerospace and the service sector as areas in which Wales had a comparative advantage relative to other parts of the UK.

We celebrate the growth in exports from Wales, but if we dig a bit deeper into the figures and drill down into what is driving that growth, the picture does not look quite so rosy. According to the most recently released statistics, in the previous 12 months the value of Welsh exports had grown by £1.3 billion on the year before, up from £9 billion to almost £10.5 billion. That looks great on the surface, but when we drill down into those figures we see that that growth in value was driven to a significant extent by inflation of the oil price, as Wales is a significant exporter of refined petroleum products from the two major refineries in west Wales. When we strip out the effect of $150 barrels of oil and the increase in the price of refined products, we see that there are challenges to be addressed in increasing export volumes from various industrial sectors in Wales. Perhaps the picture is not quite as positive as we are led to believe.

The Committee noted in its report that it was disappointed by the achievements so far of International Business Wales, the arm of the Welsh Assembly Government that is seeking to boost trade, particularly with China, secure inward investment and expand exports. Much more work needs to be done at UK and Welsh level on considering how to encourage Welsh businesses to take advantage of parts of the world that are still experiencing economic growth, such as India, China and south-east Asia. That is a major challenge.

A point that was not highlighted in the Committee's report, but that is relevant to the discussion of the economy and globalisation, is foreign language skills. There has been a disastrous decline in the number of Welsh young people coming out of school with any meaningful qualification in a modern foreign language. Back in 2002, the Assembly Education Minister, Jane Davidson, said at the launch of the Assembly Government's national modern foreign languages strategy:

"Learning a language can empower individuals, promote cultural understanding and diversity and above all enable us to remain competitive in a global marketplace... can we honestly expect to become really effective traders or world citizens if we always simply expect others to accommodate our limitations? The answer must surely be no."

That is great rhetoric, with Assembly Members talking up the importance of modern foreign languages, but what has been the effect of the policies of the past five years? There has been a decline every year in the number of young people of 15 starting GCSE courses in French, Italian or Spanish, and an even sharper decline in the number of those gaining grade C or above in their GCSE two years later. There has been a UK-wide decline as well, but the figures for Welsh young people show that as a proportion significantly fewer pupils are coming out of Welsh schools with qualifications in those languages.

Does that matter? I believe that it does. There was a view kicking around some years ago that given globalisation, and with English being the language of Microsoft, perhaps it was not so important any more for people to be multilingual, and that the English language would suffice for doing business. That view has been proved false. Companies value people with language dexterity, and it is important for trading and business relationships to have people who can go into other cultural and national contexts and speak other languages. Welsh young people who do not have such qualifications and are presented with opportunities such as the ERASMUS programme—the EU-funded exchange programme that enables students to spend a year or a term of their university course in a European university—will find that such options are not open to them because they do not have A-levels or good GCSEs in modern foreign languages.

Those are the points that I believe are relevant to today's discussion.

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Photo of John Smith John Smith Labour, Vale of Glamorgan 3:50 pm, 26th February 2009

I am grateful for the opportunity to speak in the annual Welsh affairs debate. We do not have many opportunities in the House nowadays to discuss Welsh issues exclusively, so the debate is welcome.

As previous speakers have said, our debate today takes place against the backdrop of a serious global economic crisis—possibly the worst international financial crisis in the past 100 years. I would therefore like, in the short time available to me, to refer to three projects in my constituency, but not parochially, because they all have valuable strategic Welsh importance. I want to use today's opportunity to draw the House's attention to several issues surrounding the projects.

The Conservative spokesperson has already mentioned the first project. It will come as no surprise to hon. Members when I refer to the defence technical academy in St. Athan in my constituency. It is progressing well. It was recently announced that Sodexho is to be the equity partner, replacing Land Securities Trillium, which had to withdraw because—let us make no bones about it—of the financial crisis. However, in many respects, Sodexho is a better fit. Unlike its predecessors, its core activity is facilities management, and it has been involved in the scheme from day one. It was always involved, but it has just become a 50:50 equity partner.

The Minister for the Armed Forces made a statement in the House, saying that the negotiations were progressing well and were on track. A clear timetable is developing. A detailed planning application for the scheme will be submitted in May this year and construction will commence around August next year. That timetable is important, because we have lost time in the past two years, mainly because the project is so large and complex. It is the biggest single Ministry of Defence investment and its importance for Wales cannot be overestimated.

The project will provide 5,000 direct jobs and train annually 25,000 service personnel from all three services. It will provide a defence training strategy in some of the most sought-after skills in the world—technical, engineering and information technology skills. I have always argued that the real value to Wales as a whole—not only to my constituency—is not the 5,000 jobs or the £12 billion private finance initiative investment over 25 to 30 years, or even the revenue, which runs to tens of millions of pounds, that will go directly to the local economy, but the transformation of Wales's reputation to that of a country that is a centre of technical and skills excellence. Our reputation for being dominated—still—by metal manufacture and mineral extraction can be transformed into a reputation for high value-added technology. That is the benefit: a change of reputation and an ability to attract inward investment.

I am delighted that a Command Paper was put before the House on Tuesday, offering a contingent liability of £40 million to prepare the plans for this year and the design to get on with the construction next year.

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a

This is the worst thing that could happen to Wales - no body wants a school of the americas thrust on them.
There is not going to be thousands of news jobs just menial jobs like cleaning up.
Why are we privatisng profits and nationalising debt?
This is throwing the tax payers money away on ascheme that is doomed to fail.
http://www.antimetrix.org/

Submitted by anne greagsby

Photo of David Jones David Jones Shadow Minister (Wales)

As the hon. Gentleman will know, we on the Conservative Benches also strongly support the St. Athan project. Does he agree that one of the key benefits of St. Athan will be to improve the perception of the military as a career for young people, with the high-quality jobs that if offers, and in particular as a career for Welsh young people? Does he agree that, today more than ever, going into the military is a good, attractive career for young Welsh people?

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Photo of John Smith John Smith Labour, Vale of Glamorgan

I agree with every word that the hon. Gentleman just said. Indeed, he should forgive me if I have not referred to that point, because the overriding benefit of the project will be to improve training in the military. Perhaps I should remind the House that, unlike now, every technical qualification that will be achieved at the new academy will be a civilian-recognised qualification. We will be producing engineers for the future, including civilian engineers, so I accept the hon. Gentleman's remarks. We also had all-party support, which in my view is one of the reasons why we won the bid in the first place.

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Photo of Lembit Öpik Lembit Öpik Liberal Democrat, Montgomeryshire

I applaud the cross-party work that the hon. Gentleman has done to secure those jobs. Does he agree that one of the opportunities for Wales will be not to repeat the errors at Deepcut Army barracks—I understand that they are being shut down, with some of the work perhaps coming to Wales—where Cheryl James, the daughter of one my constituents, was, I believe, murdered?

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Photo of John Smith John Smith Labour, Vale of Glamorgan

Of course I agree with that.

St. Athan has been a huge success story for Wales and for Welsh politics. We won the bid because we were united across the parties and because—let us be clear about this—ours was the best bid. However, I must sound a rather disconcerting note this afternoon. The Command Paper was presented to the House on Tuesday, but—I have given notice of this to the hon. Gentleman involved—it was blocked. An obscure procedural motion was used on Tuesday on a point of order to block the contingent liability of £40 million. The process cannot be stopped, but the effect of what was done on Tuesday could be to delay a recession-busting project that is vital for our country.

I am sure that every Welsh Member of this House will condemn Mark Pritchard. I understand why he objects to the scheme: because he lost the bid. I understand his protesting, but what is reckless and unacceptable is his bid to block the progress of the scheme. It is important that we move ahead with the planning in May. I call on all hon. Members to condemn his action. I am afraid that I must say to Conservative Members in particular: for goodness' sake, bring some influence to bear on him, because he is delaying a vital project.

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Photo of Stephen Crabb Stephen Crabb Opposition Whip (Commons)

I understand the hon. Gentleman's passion and commitment to the St. Athan project. We would all recognise and applaud that. However, it is deeply unfair of him to talk in such terms about my hon. Friend Mark Pritchard, who is not here and who does not have an opportunity to defend himself.

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Photo of John Smith John Smith Labour, Vale of Glamorgan

I gave notice—I have been in the House long enough to realise that I should do that. What I am doing today I do with a heavy heart. I have never done it before, but the project is too vital to play silly political games with it. The future of Wales is at risk.

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Photo of Daniel Kawczynski Daniel Kawczynski Conservative, Shrewsbury and Atcham

As the neighbour of my hon. Friend Mark Pritchard, may I say that he is an assiduous constituency MP and works extremely hard? As Opposition MPs, it is the responsibility of us all to scrutinise Government decisions.

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Photo of John Smith John Smith Labour, Vale of Glamorgan

We have an overriding responsibility to behave responsibly. I will leave it at that, because I gain no personal benefit from making such comments, but it is important that I should make them today.

The second, related issue that I wish to raise is about an important piece of transport infrastructure: the M4 link road to Cardiff international airport—that is, to Wales's international airport. That has a bearing on the technical academy, because although we will not lose the academy if we do not get the timing for that road right, we might lose some of the benefits that could come to Wales. The onus is on us to maximise all the benefits from the investment, to ensure that Welsh people and Welsh businesses benefit first from the huge opportunity that is coming our way. We must get the transport links. Businesses in Pembrokeshire and west Wales will benefit, as will businesses in Monmouth and mid-Wales. We must get the transport infrastructure right and the M4 airport link road is a crucial factor in it, because it will serve the defence technical academy, and it will serve Barry—the second largest town in Wales—as well as providing a link to the airport.

A decision is imminent. We have had the public consultation and the Welsh Assembly Government's Deputy First Minister will take a decision shortly. The biggest decision to date has been about which route to choose. It is controversial—it will affect local people, so there is a lot of local concern about the impact on people's quality of life—but the decision on the route of the direct link to the airport is crucial. I call on the Minister to use all his influence with the Welsh Assembly Government to ensure that the decision is taken, and taken quickly.

I am deeply concerned that there may be prevarication and second thoughts about the strategic importance of this road; we should be in no doubt that this link road is crucial. We will never have a country seriously recognised throughout the world unless we have a serious international airport that provides comprehensive scheduled flights across the world. Air travel is still the cutting edge of business communication, even in comparison with broadband—I accept everything said about it earlier—and Wales must have a proper international airport. What we have now is a holiday charter airport; it is growing and doing well, but as the aviation White Paper said, it has a long way to go. This road is an absolutely necessary condition for the growth and expansion of Cardiff international airport. It may not be a sufficient factor, but as I say, it is absolutely necessary.

I flag up that issue because I hope that we will not make the mistakes of the past by thinking that some funding for a few extra routes or a few extra slots to European cities will provide us with the strategic advances that we need for the airport's future. The entire business community supports the road: the CBI in Wales, the Federation of Small Businesses, the Cardiff business club. Indeed, there is not a business in Wales that fails to recognise the importance of strategic access to the airport. It is supported by the planning authorities and it has been supported by every management of every company that has owned the airport over the past three decades.

It is a crucial issue—one of the most important road transport issues in Wales. We are really at the cusp, right on the edge, of making a decision on a matter that will drive the Wales international airport forward. The decision must be taken quickly and the right decision must be taken—that is, identifying what route to take, not having second thoughts about whether we need such access to the airport.

Finally, a third project based in my constituency is also of international importance. It has already been mentioned in earlier debates. I refer to the Severn tidal barrage. I am delighted that the Government have gone out to public consultation on the four shortlisted possibilities. I favour, as I have for the past 20 or 30 years, a large barrage from Lavernock Point to Brean Down. The scheme will provide 5 per cent. of the UK's energy needs for the next 100 years, and it could provide the entire—I repeat, entire—energy needs for Wales for the next 120 years. The source is clean and renewable, and once the structure is there, it is cheap. We have a natural asset on our coast—at 42 ft, the highest rise and fall of tide in the world—so we can use our human ingenuity to harness the power of that tide. That will not only provide us with a cheap and environmentally friendly source of energy for our country, but contribute to the overriding threat to the world of climate change. Of course we have to consider carefully the environmental implications of such a project, and we have to carry out the feasibility study, but our overriding concern must surely be ensuring a source of energy for Wales for the future.

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a

Welcome John Smith to the age of stupid!
A new road to the airport is the last thing we need in
the Vale of Glamorgan and there is strong opposition to it from FOE, Greenpeace and the Green Party with local people
http://www.bigfootcreative.co.uk/nevar/news/news.html
http://vimeo.com/ageofstupid

Submitted by anne greagsby Read 1 more annotation

Photo of Adam Price Adam Price Spokesperson (Communities and Local Government; Culture, Media and Sport; Defence; Transport) 4:05 pm, 26th February 2009

It is a pleasure to follow John Smith, who is clearly proving an effective advocate for his part of Wales. I would like to focus on the economic crisis, which was at the heart of many of the speeches that we have heard. I particularly want to consider the role of banking and the effect of the crisis on Wales. In some ways, because we do not have an indigenous banking sector to speak of, we have been shielded from the direct effects, but of course we are dealing with the indirect repercussions of the banking crisis.

As I see it, we face three categories of problems, the first of which is access to affordable mortgages. It particularly affects first-time buyers, who are benefiting from a fall in prices but are not able to get a mortgage because banks and building societies now often ask for loan-to-value ratio of 75 per cent. A 25 or 30 per cent. deposit is nigh-on impossible for first-time buyers. The second category of problem is the lack of normal credit facilities for small and medium-sized businesses; we have heard about that from a number of hon. Members. The third category is more long term. I foresee a possible long-term negative effect on public confidence in saving per se. That will affect pensions—returns on equity investment are being hit—and financial inclusion. People look at what is happening in the banking system and are clearly suffering anxiety about the safety of their savings and investments. They are also experiencing a tightening of credit as a result of the crisis.

Those trends are particularly acute in the UK because of the absence of local and publicly owned savings banks, which are a typical element of the banking system in many European countries. The UK has a highly concentrated banking sector, in which there are a small number of very large institutions—institutions that, as we have seen, have unfortunately engaged in highly risky and slightly exotic investment activities over the past few years.

The banking sector is also concentrated geographically, in the sense that it is essentially focused on London and, to a lesser extent, Scotland. There has been a withdrawal of regional banking facilities, so the traditional role of the banking manager—even the business banking manager—who had a personal relationship with their customers has disappeared to some extent. The linkage between banks and the communities and businesses that they serve has become weaker in recent years.

The crisis gives us an opportunity to shift the balance again. There is a need to have local and, I would say, publicly owned banking institutions as part of the mix. In particular, there is a need for banks that focus more narrowly on traditional banking and do not get involved in some of the investment banking activities that were an important contributor to the current crisis. In Wales, which lacks a local banking institution, there is an opportunity to create indigenous financial institutions. The Welsh Assembly Government, through their activity with the economic summit, are looking at increasing their ability to impact positively on the economy in Wales. Having an indigenous banking institution that is directly owned by the public sector, or over which the public sector has some leverage, is an important component of a medium-term economic strategy in Wales. As Geraint Talfan Davies wrote recently in the Western Mail, in some ways—almost perversely—this is quite a good time to consider launching a new banking institution. A bank that does not have toxic assets on its balance sheet because it is a new institution could be a favourable proposition.

There are models out there. The Sparkassen, for instance, are local savings banks in Germany, rooted in local communities. Some services are provided by the Landesbanken, which operate as an umbrella institution owned at Land level by the regional governments. They have been very successful: about half the retail sector in Germany involves the Sparkassen. They have been unaffected by the financial crisis. Indeed, many have increased their lending because they are seen as a safe bet—a credit-worthy, trusted institution.

Many European countries have a mixed economy in banking. In Germany, the private sector represents only 12 per cent. of the overall banking sector. Even Switzerland, which is famous for private institutions which may or may not be involved in nefarious tax-evading activities, has cantonal banks which are owned by local government, and which deal with 30 per cent. of the banking business of ordinary individuals. That model offers us a way forward in Wales.

According to a recent Financial Times survey, 81 per cent. of people in the United Kingdom support the idea of the locally owned, publicly owned savings bank as an alternative to what has been on offer. We used to have that in the UK, of course: we had the Post Office Savings Bank, which became National Savings, and we still have the remnants in National Savings and Investment. We also had Girobank, the "people's bank", which was launched in the late 1960s and was very successful. It was the first bank in the world to launch telephone banking, and was also instrumental in launching the Link ATM network. Unfortunately it was privatised, perhaps because it was too successful.

There is still a residual element of the municipal bank movement. There are six municipal banks left in Scotland, and Birmingham city council—Birmingham was the site of the first municipal bank—says that it is considering creating a new one by means of a private Bill with which the House would deal later in the year. Ceredigion is considering the possibility of creating Wales's first- ever municipal bank in order to provide credit for local businesses.

Local authorities have the ability to offer mortgages. Birmingham city council is considering providing a top-up scheme in partnership with building societies. If the building societies were willing to lend the first 75 per cent. to first-time buyers, the council would provide perhaps 15 per cent. to make the purchase affordable. The Welsh Local Government Association is conducting research, as are the Welsh Assembly Government, to establish whether an umbrella product could be created through local authorities, possibly in conjunction with a new institution. I hope that it will be possible for the Westminster and Welsh Assembly Governments to act in partnership, but clearly the Treasury would have some decisions to make.

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Photo of Albert Owen Albert Owen Labour, Ynys Môn

The hon. Gentleman is right to refer to localism. A network that already exists in Wales, based on the Irish model, is the credit union network. Credit unions offer personal finance opportunities, and because of the safety mechanism that they represent, they are growing during the recession. Does the hon. Gentleman welcome that, and does he believe that the Welsh Assembly Government and others should do more to promote credit unions?

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Photo of Adam Price Adam Price Spokesperson (Communities and Local Government; Culture, Media and Sport; Defence; Transport)

I absolutely agree. Credit unions could be part of this new mixed economy in banking and financial services. I mentioned Germany; the third element in the German tripartite banking system is the co-operative movement—the Volksbanken—which is its equivalent of the credit unions. We need to build up the credit unions, and they might form partnerships with municipal banks. Municipal banks can legally take deposits, but they cannot offer loans. If membership of a credit union were linked in with holding a retail deposit in a municipal bank, one could have a complete array of financial services, and with local authority mortgages as well. These are exciting possibilities, and it would be relatively simple for the new savings banks to link up with the plumbing of the wider banking industry through the SWIFT system. They could provide other financial products from other institutions. This could be done on a low-cost basis and relatively quickly.

As hon. Members will know from their own experiences, there is a gap in terms of business banking. Finance Wales provided just 110 loans in 2008. There is an issue to do with European law, in that it has to offer those loans at between 4 and 10 per cent. above the European reference rate, so they can be relatively expensive. Finance Wales is, essentially, a quasi-investment bank or kind of venture capital organisation, in that it looks at a small number of high-growth-potential firms, which leaves a gap in the market in terms of ordinary business banking for the vast majority of enterprises. Birmingham and Essex in England are looking at using local authorities' ability to offer loans on an unregulated basis. Birmingham is talking of offering £200 million in loans to local businesses. That could address some of the problems in the short term, but we need to create something similar to the Landesbanken—locally owned savings banks in conjunction with local authorities, and then an umbrella national institution that aggregates that and is able to provide a higher level of loans, pooling risk and providing expertise.

We could also pool some of the reserves held in the public sector, both in the Welsh Assembly Government and local authorities. Instead of putting that in Icelandic banks, and suffering as a result, why not keep it and invest it in a Welsh-owned institution that could then offer loans to Welsh businesses and that could also take deposits from retail customers? Too often in the past, what has happened is that retail deposits given by Welsh customers have not been reinvested in the Welsh economy, but have been used by financial institutions based elsewhere, and we have seen very little benefit.

Finally, if we did create this new architecture of Welsh financial institutions, it would greatly help if the Welsh Assembly had borrowing powers. I understand that the Labour party in Scotland has now made a submission to the Calman commission making the case for borrowing powers for the Scottish Government, and the Northern Ireland Executive already has them. It would be positive if the Labour party in Wales were also to back having borrowing powers, perhaps in its submission to the Holtham commission, because that could underpin any new financial institution we were able to create.

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Photo of Don Touhig Don Touhig Chair, Members' Allowances Committee 4:18 pm, 26th February 2009

No one could have predicted that a problem that began with banks in America would lead to people throughout this country sitting at their kitchen tables worrying about their finances. Although the economic downturn we face is correctly described as global, its impact is local in the sense that every family in Wales has been affected.

It is right of our Government to act now to boost the economy. Whatever the doom and gloom merchants say, that means borrowing more in the short term to help keep the economy moving and to help businesses and families during these tough times. Some have argued that we should not borrow to boost the economy. They would leave it to the market, but that would mean us abandoning families and businesses in Britain who are facing difficult times—families who struggle with the loss of a job or to pay a mortgage, and the small business man or woman who has put everything into setting up the business. To stand back and do nothing to help them would have terrible consequences.

We have to learn the lessons of the past. Laissez-faire policies are not the answer, as we saw in the two recessions in the '80s and '90s. Those recessions tore into the very fabric of society, causing massive damage. In my constituency, young people leaving education had no job to go to. People who had worked all their lives in the same industry were condemned to the scrap heap, and pensioners were expected to live on £69 a week. In the south Wales valleys, the experience that some called Thatcherism we called despair.

If anything, the credit crunch has made us all realise how interdependent we all are. The very last thing that we in Wales need now is to turn in on ourselves in a narrow, nationalist sense and embrace the separatist agenda. However, I note that these days "new Plaid" has very little to say about independence, and it certainly does not mention the arc of prosperity to which it once said we should belong. Frankly, when someone is worrying about how they are going to put food on the table and whether they are going to meet this month's mortgage payment or even keep their job, the last thing they want from their political leaders is a sterile constitutional debate. I therefore hope that we can have some respite from more bids for powers for the Welsh Assembly. Now that the eminent diplomat charged with running the convention on whether or not Wales should have a referendum on more powers is busy in the Balkans, perhaps those who want to balkanise Britain will now leave it alone for a while.

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Photo of Adam Price Adam Price Spokesperson (Communities and Local Government; Culture, Media and Sport; Defence; Transport)

I should be interested to hear the right hon. Gentleman's response to my practical and relevant suggestion that additional borrowing powers for the Welsh Assembly Government would, in fact, help us to combat the economic crisis that we face.

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Photo of Don Touhig Don Touhig Chair, Members' Allowances Committee

I was very happy to give way to the architect of "new Plaid", and I think that he had some positive and important things to say. I am sure that they will be listened to by Ministers, because these problems will not be solved unless we all work together. I recognise that that is an important point to make.

One of the vital strengths of the Welsh economy is the readiness of our companies, both large and small, to use flexibility and to make and take opportunities for enterprise and innovation. Although we have made great strides in encouraging people to establish businesses in Wales—Wales is still a great place to invest and to grow a business—there is much to do. We have to believe that we are going to come through this economic downturn. That belief is important to our future.

Our economy will grow and our standards of living will improve, but we must be cautious about putting up what some may say could be barriers to investment. Here, of course, I am referring to the proposed Welsh language legislative competence order, which will be considered by this House in the coming months. My right hon. Friend the Secretary of State referred to a BBC reporter's blog; it is good to see that the licence payer's money is being used to help BBC journalists in Cardiff to promote their own political prejudices. We all know the BBC and its prejudices.

That LCO could be the biggest shot in the arm for the Welsh language in modern times, so I welcome the announcements by the Secretary of State for Wales and the First Minister, who have promised the widest possible consultation. Certainly, for my part, I am content that the Welsh Assembly should have the responsibility for dealing with matters relating to the language, but such a power, should it be given, must be exercised in the interests of all Welsh men and women—the 20 per cent. who are bilingual and the 80 per cent. who are not. In the coming months, I intend to ask a number of questions about the LCO, because it is not simply about the Welsh language; it will have an impact on our economy. Macro-economic policy is not devolved, and we have a proper duty and a right in this place to ask questions.

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Photo of David Jones David Jones Shadow Minister (Wales)

The right hon. Gentleman is making an important point about the Welsh language LCO. Does he agree with me that it is a proper function of the Select Committee not only to scrutinise the bid itself, but to scrutinise, by taking appropriate evidence, the measures that might be brought forward under the terms of the LCO, if it is passed?

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Photo of Don Touhig Don Touhig Chair, Members' Allowances Committee

The hon. Gentleman makes an important point, and I shall answer it in a moment.

It is not good enough in this instance for us to be told that the Assembly will decide the measures—how it will use the new powers—if the LCO is passed. We cannot take a "suck it and see" approach. We need to know now and in some detail the implications of the measures for jobs, the economy and the voluntary sector in Wales.

I have many friends whose first language is Welsh, and I celebrated with some of them at a 40th wedding anniversary party last week. They do not want to become part of some linguistic crachach, in which jobs are reserved for the 20 per cent. of our countrymen and women who are bilingual and denied to the 80 per cent. who are not. Let us have the consultation and the debate we need—let the people of Wales speak. I encourage every business, voluntary group and individual to write to their MP and AM, the Welsh Secretary and the First Minister and ask questions—starting with questions about what the LCO will mean for them, their company or the charity they work for.

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Photo of Madeleine Moon Madeleine Moon Labour, Bridgend

Does my right hon. Friend agree that it would be helpful to have a clear understanding of how much we spend every year on implementing existing legislation on the Welsh language, so that we know how much it costs the Welsh Assembly, the voluntary sector and the business sector? Then we could estimate the future spend as well.

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Photo of Don Touhig Don Touhig Chair, Members' Allowances Committee

That could be a question for scrutiny by the Welsh Affairs Committee. I am sure that hon. Members on both sides of the House will receive letters from their constituents about that matter.

With the country facing serious economic challenges, along with the rest of the world, it would be a serious step indeed to impose even more regulation on companies in Wales. I have one final word on this matter. Over the years, we have had very successful Welsh language policies. My right hon. Friend the Secretary of State referred to the Wales Office's language policy; I was the Minister who oversaw the introduction of that very successful policy. Such policies have been adopted by companies and the voluntary sector—I emphasis the word "voluntary". I hope that during consideration of the LCO, the idea of making any language scheme voluntary will be considered and ultimately adopted. I think that that would be supported across Wales.

For all the challenges that the present economic downturn brings, we must never lose sight of the fact that Wales is part of a global economy that will double in size over the next 20 years. The ideas expressed in the debate so far will contribute to the debate on how we approach that growth. There will be great opportunities in the future, but we must be ready to grab them. Our underlying purpose should be to make Wales a global leader in all those industries and services where our skills, our creativity, our enterprise and particularly our flexibility is known and is world-class.

The Work Foundation has published a report called "Manufacturing and the Knowledge Economy". It argues that the old way of separating manufacturing and services does not reflect the interconnected, interdependent nature of modern manufacturing, and I agree. Companies such as Rolls-Royce make more money from service contracts, sales of licences and hours of flight time on their engines than from manufacturing the engines in the first place. Car makers run finance houses offering loans to people who want to buy cars, and pharmaceutical companies offer health care services as well as selling drugs.

The great challenges that we will face in the coming years are not Welsh but global, and we have to be able to compete. Our real competitive advantage will be our knowledge base and capacity for innovation. In simple terms, we have to be smarter, quicker and more adaptable than our competitors. The world is undergoing a new industrial revolution—the knowledge revolution—fuelled by the pace of technological change, and Wales must be at the forefront. The only way in which countries such as Wales will be able to compete is to retrain and upskill our work force to face the challenges of the future. We have to stay ahead, with new and innovative ideas, which we can fully exploit only if we have the skills to do so. Put simply, we have to stake a claim to be the linchpin of the new knowledge economy.

With those challenges come great opportunities, and Wales could and should be at the forefront of making the most of them. I have always believed in our great strength as a society and in our capacity to respond rapidly to changing circumstances. However, we are facing challenges that may be greater than any that we have faced before, and we cannot be found wanting. There is too much at stake.

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Photo of Lembit Öpik Lembit Öpik Liberal Democrat, Montgomeryshire 4:30 pm, 26th February 2009

It is clear that, as in previous recessions, manufacturing in Wales has suffered more than any other industry. We all know that, according to a CBI survey, demand for manufactured goods in Britain is at its worst for 17 years but, like Mr. Touhig, I believe that the recession offers us an opportunity. He accurately encapsulated the importance of having the right attitude to the challenges that we face.

In my constituency of Montgomeryshire, as in all Welsh constituencies, small, medium and large businesses face real hardship. Recently, I have made sure that, as far as possible, I am aware of the difficulties that businesses on the high street and in the local manufacturing base face. I have met many representatives from companies that are experiencing difficulty, including Woolworths, which of course tragically closed not long ago, and Stadco, which is threatening to cut more than 100 jobs in Llanfyllin.

In addition, I have met representatives from Floform in Welshpool, which closed dramatically and suddenly a week ago, and I have met Gareth Pugh, whose construction business in Abermule seems to be going well despite his problems getting loans from the banks. I have also met people from Total Network Solutions and dozens of other companies.

I have also listened to the voices in Westminster clamouring for long-term solutions to the crisis. In particular, I have listened long and hard to my hon. Friend Dr. Cable, our esteemed economics spokesperson. I think that I can say without fear of contradiction that, at the moment, he is effectively the Chancellor of Britain.

The definition of the problem is pretty straightforward. I think that we in mid-Wales have been in recession for about three years now: without a new direction for our Wales economy, I believe that the problems that we face will only spiral. Salaries in Montgomeryshire and in Brecon and Radnorshire are down in real terms, according to objective data. We also know that unemployment in Wales alone has risen by 28 per cent. in the past year. This month, it affects 7 per cent. of the Welsh population. There has also been a 69 per cent. increase in jobseeker's allowance claimants in Montgomeryshire in the past year.

Even the farming industry has suffered in the past few years. It has been blighted by bluetongue and bovine TB, and there is also the continuing dispute about how farmers are able to control foxes. The inability to control that pest in the most efficient way has an economic cost for farmers in my constituency. Therefore, I hope that the Minister will assure the House that he will do everything he can to prevent the introduction of electronic identification tags for sheep in Wales, which would merely place even greater pressure on our already overstretched farmers and rural economy.

Like many other constituencies in Wales, mine has seen businesses close. Powys had the highest VAT deregistration rate in Wales in 2007, with 54 businesses closing and huge job cuts as a result. Manufacturing firms have been predominantly affected by the shrinking of consumer demand. I have mentioned a number of those companies already, but this week I learned that Control Techniques, a very successful international electrical firm in Newtown, is facing another 30 redundancies in the very near future.

As a result, it seems to me that both the Welsh Assembly and the Government here must produce a specific plan of action, because the rescue packages that have been announced so far are not making a discernible difference in Montgomeryshire. I certainly do not deny that the Government are operating in good faith, and I support many of the proposals that they have made, but we need the action being taken to achieve results before many more jobs are lost.

In that sense, I want to thank the Minister for agreeing to come to a meeting that I hope to arrange in the very near future. He will be able to hear directly about the problems that local small and medium-sized businesses in Montgomeryshire are facing. He has been generous in making that commitment of his time, and I assure him that he will have a constructive and insightful session. I believe that it will probably give him a good insight into the typical problems facing small and medium-sized businesses across rural Wales as a whole.

The core issue, it seems to me, relates to the banks. They should not be reining in overdrafts and increasing interest rates on overdrafts for their existing customers, as they have. I am sorry to report to the Minister that much of the good work that is being put in place by the Government is being undermined by the banks, which are paying lip service to their partnership with the Government but, in any practical sense, are reining in the level of debt that their existing customers can secure.

The Secretary of State already knows that in my constituency successful businesses have been forced to accept massive reductions in their overdraft facilities. I accept the conflicting demands on banks to shore up capital as well as to increase lending to small businesses, but they are in full knowledge of the support that the Government are giving them, yet they refuse to extend a hand to those businesses that are struggling to get by without their help. The message is simply not getting through.

I find individual bank managers very co-operative, and have had many useful meetings with the major banks, but I am very close to naming those banks in my constituency that do not co-operate with the needs of business people. I hope that the Minister can pass that message through the Treasury to the banks, which are effectively in national control. They are morally obliged to co-operate to ensure that we do not lose more jobs needlessly in Montgomeryshire and across Wales as a whole.

I would also suggest that we need a rather clearer economic narrative for Wales, and that has been touched on by other speakers, as well as an overarching strategy to pull us out of the recession. I am sure that a number of hon. Members would also agree that with the downturn mid-Wales has the potential to be the environmental capital of Britain, as we have seen through the Centre for Alternative Technology and the fact that we export many ideas to other parts of Britain and Europe. The other side of that should be to create specific eco-companies that lead the way with green technology development as well as exporting those ideas elsewhere. If we look at Wales as an eco-nation, we can ride the wave of a growth industry at a time when we need to clarify our political narrative.

Let me make two more short points. In mid-Wales, we are fast becoming not only the eco-capital of Britain but the wind turbine capital of Britain. There are mixed reactions to turbines, but in my view those turbines and the strategy of enforcing the installation of hundreds of new turbines in the form of wind farms in Montgomeryshire is misguided. They do not produce baseload because they are not a reliable form of energy. Although I would not be against them if they provided a substantial contribution to British energy requirements, my worry is that we would need 2,000 turbines to replace a single conventional power station. When the larger proposals come forward, as they will inevitably find their way to Westminster rather than Cardiff due to the exigencies of the legislation, I hope that local opinions and the cost-benefit analysis will be taken objectively into account. Although it looks like the Government are doing something when the turbines go up, they are not necessarily making as good an environmental policy decision as it might at first sight appear.

My other point is one of praise, and concerns flooding in Montgomeryshire. The Severn flood plan occupies an extensive proportion of the land area of my constituency and we have been blighted with some serious flooding issues over the past few years. I have been working with the Environment Agency to see whether we can modify some of the policies that are imposed. A number of my constituents are concerned that they will end up as the victims of enforced flooding in order to protect other towns and settlements downstream. I am happy to report that as a result of conversations with the Environment Agency and Ministers, the Environment Agency has modified its policies, specifically policy 6, in order to take local concerns and feedback into consideration in its decision-making activities. That is a success story and it shows that if one works strategically with the Environment Agency and similar bodies, one can make a local difference by altering national policies for the greater good. I thank Wales Office Ministers for their co-operation in achieving an all-round good result.

I should like real progress, with a partnership approach in terms of both economics and the environmental considerations that particularly affect Montgomeryshire. With the right infrastructure developments, both in connecting the rest of Britain to Wales through improved rail, road and air links, as well as a continued commitment to improving the canal and waterway system throughout Wales, we could see Welsh tourism flourish under the credit crunch, when more and more people will choose to holiday in the UK.

I close with two requests. The first is that if the Government are genuinely to feed a large amount of money into trying to restart the economy, they could do a lot worse than invest in reconnecting Montgomery canal to the rest of the network. It is a multi-million pound scheme of construction work that would provide much-needed employment in the sectors that are suffering most.

My second and final request is that the Minister heeds the advice of others who have spoken today to take a strategic approach to developing a hub and spokes air service across Wales. I declare an interest as a pilot in a fledgling air taxi company, which formerly transported Mr. Hain—without accident. I offer my humble services to fly the Minister about if he wants but, more importantly, to ensure that Cardiff international airport is connected to Welshpool international airport—if I can describe it thus—for the greater good of connecting Wales by air, not, we hope, just for economic benefit but for cultural benefit too.

I look forward to seeing the Minister in my constituency and I shall make sure that his visit is satisfactory and worth while, both for him and for the businesspeople whom he will meet.

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Photo of Julie Morgan Julie Morgan Labour, Cardiff North 4:41 pm, 26th February 2009

It is great that we are holding this debate, celebrating St. David's day three days early. When I was preparing for the debate, I learned that St. David is sometimes called the patron saint of vegetarians, which was news to me. He was a committed ascetic and beer was banned in his monasteries.

I wondered how those interesting points related to modern-day Wales. The Secretary of State mentioned the historic task of the Welsh rugby team tomorrow evening in France. If the team is successful, I do not know what St. David would think about the celebrations, but I certainly think that we all wish the team every success tomorrow evening in France.

We are going through a difficult time economically in Wales and throughout the UK. As has already been said, it is important to tackle the economic difficulties at all levels—internationally, nationally, in Wales and locally. I am pleased that the Prime Minister is going to the United States next week to speak to both Houses of Congress, to hear at first hand the details of President Obama's plans and to see how we can work together internationally to tackle the crisis.

There are long-term and short-term things we can do to help the economy in Wales. Transport links should be improved, and I am pleased that the Government are planning such improvements, in particular the rail links to Heathrow and the electrification of the railway line from London to Wales. On Tuesday, I was pleased to meet Lord Adonis in the all-party group chaired by my hon. Friend Mrs. James. Other Members in the Chamber this afternoon attended the meeting, too. Lord Adonis accepts the point that if south and west Wales is to attract business and develop its economy, it is essential that direct links to Heathrow are developed. Ideally, that would involve trains from south Wales running directly to Heathrow, via a loop from the main line to Paddington. A connection near Heathrow is being considered, with a shuttle service to the airport, but a direct service from south Wales to Heathrow would be infinitely preferable. I also support improvement to Cardiff airport in Rhoose.

Many right hon. and hon. Members have signed my early-day motion, which urges the International Baccalaureate Organisation to stay at its base in Cardiff and now has 125 signatures. I thank those Members for their support. Sadly, at the organisation's board meeting two weeks ago, it confirmed its plan to move its European base to Amsterdam. It described Cardiff as remote and criticised the transport links. I condemn its decision, which does not recognise the work of its 330 staff, who have made it such a success. It now intends to expand, doubling the number of students, to create three international hubs, with Amsterdam as the European one.

Plans to improve links to Heathrow might have played a role if their implementation had been much more imminent, but the organisation's mind was set on no longer having its headquarters in Cardiff and Wales. That highlights the importance of transport links, particularly those to Heathrow. The electrification of the main line from London to Heathrow must not stop at Bristol. The Severn tunnel must not be used as an excuse not to continue the electrification into Wales. We must do all that we can to influence the Government to ensure that that happens.

To help in the present situation, we must also push forward the capital building programme, something that the Government are already trying to do. I am very pleased that we in Cardiff, North have been given the go-ahead for the £70 million Whitchurch hospital development, which will provide acute and out-patient facilities. I hope that that will start this year, as it will be a big boost to the building industry, as well as an improvement to mental health services. It will replace the old asylum-style Whitchurch hospital, which is preserved by Cadw and has a certain charm but is certainly totally unsuitable for the treatment of mental health patients in the 21st century.

The plan to build a new hospital has caused anxiety among some mental health patients in Cardiff, because the day facility—Tegfan—will be knocked down as part of the process. However, we hope that another place has been identified in the hospital's grounds, where a small capital building programme will produce another day centre. If all that starts this year, it will be very positive and help both the mental health facilities and all the builders, plasterers, carpenters, brickies and everyone who will get the work if those capital building programmes go ahead.

I am very pleased that the go-ahead has been given for the Cardiff, North medical centre. It is a much smaller project, but it will also stimulate the building industry in my constituency and provide good, up-to-date facilities for the people of Pontprennau, Thornhill, Llanishen and all the people of Cardiff, North. The original building was lost to a devastating fire.

I welcome the extra millions of pounds committed by the Government, as my hon. Friend John Smith said, to the defence training academy at St. Athan in the Vale of Glamorgan, which is accessible to people coming from my constituency and all the surrounding constituencies in south Wales. Again, the capital building programme will provide a great impetus to all the building trades, as well providing long-term employment. Introducing such capital spending is one of the key ways to keep employment and boost the building trade. Transport and a capital building programme are two of the things that we should be working on.

I pay tribute to the Education and Skills Ministers in the Assembly—Jane Hutt and John Griffiths—for their extreme swiftness in developing the ProAct programme. It is an ideal programme, under which people will not fester at home when they are unable to work. They will be able to go out and get skills that will enable them to improve their job chances or to continue in their jobs with increased skills. That is exactly the sort of programme that we want. We have discussed today how many people it has reached, and obviously we do not yet know how many firms and individuals have benefited from it. However, I understand that 150 firms asked for information, and no doubt many of those requests will develop into actual help.

It is important that the Government look again at the planned reductions in the number of civil servants. There have been plans to downsize the civil service to make efficiency savings, and if there are jobs that are not productive and efficiencies can be made, we should make them. However, it is worrying that the cuts will be made when there is growing unemployment in areas where civil servants are working. Furthermore, there is a real problem at the Department for Work and Pensions, given that more people need help. It makes no sense to reduce the number of civil servants and offices at the Department, given that there will be huge demand for its services. The Cabinet Office Minister at the Committee meeting that I attended this morning acknowledged that we should look at that issue—perhaps the DWP will need more, rather than fewer, civil servants, given that we want to give individual help to people so that they can get jobs.

Finally, I want to make a point about the Severn tidal barrage. I am glad that we have reached the stage of considering the short-listed schemes. We have to weigh the huge advantages of the energy that the barrage can produce against the environmental consequences and come to a decision about which will give the greater boost to the environment. Sometimes when we hear about the environmental disadvantages, we do not weigh them against the huge environmental advantages. Obviously, I want to see what the impact study comes up with, but I come from the position that the barrage would be a great step forward to harness all the power of the Severn estuary. I accept that it will be a tragedy if the Severn bore goes and I know that there are environmentally damaging features, but let us weigh those against the huge increase in energy provision.

In conclusion, I should say that St. David's most famous affirmation was that we should do the little things; I did know that he had said that. We need to do the little things at local government and community level and build up to the international level. In that way, we will be able to tackle the difficult economic situation together.

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Photo of Dai Davies Dai Davies Independent, Blaenau Gwent 4:52 pm, 26th February 2009

People in my constituency have campaigned against the funding formula for local government for more than 10 years. I was recently at yet another presentation by Lord Barnett, who accepted yet again that there is a need to consider a needs-based formula. My constituency's uplift for this year of 1.5 per cent. will result in the loss of front-line services and a staff reduction. In my opinion, that is unacceptable. I urge the Government to bring forward a review of the Barnett formula at the earliest opportunity. The Assembly is looking into the issue, but the time being wasted is costing our constituencies very much.

The worry is that the £500 million cut for next year will be even worse for us; that cut in services will go very deep. I also ask the Government to review the rates on empty property. If local government bodies own industrial parks, they have to pay hundreds of thousands of pounds in empty property tax. The principle behind the tax—to get people to use properties quickly—was good. However, given the economic crisis that we are in at the moment, that is not a reality.

I am sorry to say that the problem with the banks is not new; it has been going on in my constituency for a considerable time. I raised the issue in 2006 in the House, soon after I first entered it. The problem is that average wages in my constituency are around the £17,000 mark, but house prices there average £100,000. Banks were giving 100 per cent. mortgages, the debt bubble just grew and grew and nothing was done to reduce it until the global crisis.

Credit card interest is a huge problem. The interest rates are absolutely enormous and cost our constituents huge amounts of money on the basis of what they borrow. Taking the point made by Mr. Williams, we need to do all that we can to put money into people's pockets, as well as looking at loans to businesses. I support loans to businesses, but without people buying, those businesses will still suffer—they will just borrow more and more.

We have heard a lot about the global economy. This country of ours—Wales, I mean—has exported for hundreds of years. It has led the way in exporting. Going back to the civil war in America, we exported cannon balls. We have exported everything, from coal to steel to—as now—modern technology. The problem is that those at the top over the past 10 years have got richer and richer while those at the bottom have suffered because of it. There will always be enough in this world for everybody's needs, but there will never be enough for someone's greed, and the greed of those individuals has destroyed the financial services. The financial control of these companies belongs to the many, not the few. We need to bring bank controls back to local economies and local areas—through credit unions, for example.

On regeneration, one of the projects that is vital not only to my constituency but to that of the Secretary of State and to constituencies along the Heads of the Valleys road is the dualling of that road. It is a massive project that will take a long time, but delaying it is causing huge problems to businesses in our areas. It is also a huge opportunity for construction and people's jobs. I urge the Secretary of State to do all that he can to bring that project forward.

We have heard about rail services. The launch of the rail link in my constituency last February—a year ago now—has been so successful that the passenger numbers projected for the fourth year are travelling on it already. That is a fantastic demonstration of what rail can do for us. I urge the Secretary of State and the Government to look at where we can extend rail services. That is a massive opportunity. We had services across all our valley communities, and we need them back.

The shadow Secretary of State touched on tourism, but she did not mention history. The history of the south Wales valley built the world. The industrial revolution spread from Cardiff to Merthyr to Torfaen to Blaenau Gwent. There is a massive opportunity to tell our story, especially to the Americans. We virtually built America—let us bring them back to spend their money in our constituencies! To do that, however, we need integrated transport. Bus services and rail services need to work together. They are not doing that at the moment: they are increasing in one area and reducing in another. We have seen regional buses taken off and bus services cut. That is not good news for us.

The Welfare Reform Bill is going through Parliament. Last week, I mentioned that in my constituency we have 3,000 people looking for work and 6,000 people on incapacity benefit—a total of 9,000 people and an average of 200 to 250 jobs. That does not fit. However, the training opportunities are huge, and that is a real goal. Within that, we must get joined-up services. Julie Morgan mentioned jobseekers and jobcentres. Jobcentres need to work with other organisations as well. When individuals enter them, they are dealt with just in that one place. There is lots of help out there, but we need joined-up thinking, not working in isolation.

Funding for further education has been raised on several occasions. I urge the Secretary of State—I know that this is a subject very close to his heart—to speak to the people at the sharp end. When we as politicians speak to the people who run these facilities and educational establishments, they tend to tell us what we want to hear. Staff and students in the three establishments that cover my constituency, tell me that they are in trouble. They will not be able to provide the services that they do already, and certainly not the services that we need for training opportunities.

I want to touch on two other subjects. The first is the steel industry, which is close to the hearts of many hon. Members. There are continuing problems in that industry. The main plant shut down in my constituency in 2002. Across the country at that time, we lost 10,000 jobs, and we are now seeing another 2,500 go. We must do everything we can to give the steel industry a level playing field. I have urged the Leader of the House to initiate a debate on the future of the steel industry, and I hope that that will happen in the near future. One of the areas for which we can use the industry is training. It has one of the best training records anywhere and I urge the Government to look at that when we look at the apprenticeships Bill. The opportunity in Wales to use the industry to train is massive.

Lastly, I have another big concern. I know that many Members have been in contact with the police authorities and the police themselves about threatened and perceived cuts to police funding. We hear from this House that money is being spent and that more police are on the streets, but in my constituency we have seen some police stations shut down and some have cut their hours, and there are fewer police on the streets. We need to get the record straight, whichever side is right or wrong. We need to come together and sort it out. In a time of downturn, we will see more people on the streets. We may well see more crime because of it, with people forced into situations such as house repossessions. It is not going to be easy, but we need to work together to ensure that our communities are safe and ready when the global downturn turns around, so that we are there to respond to it.

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Photo of Paul Flynn Paul Flynn Labour, Newport West 5:00 pm, 26th February 2009

The problems of the credit crunch in my constituency mainly affect the manufacturing sector. At one point, 50 per cent. of Newport's work force were involved in manufacturing, and about half of that figure are involved now. We have had serious problems, such as redundancies and short-time working in Novelis, Quinns radiators in Llanwern and Panasonic. These are terrible blows to the many thousands of workers concerned and their families. The only good thing to have come out of this recession is that there have not been any closures. No one has closed down a plant, or a section of plant, and then demolished the plant itself. Sadly, that happened in Llanwern in the last recession, where they started to knock down the coke ovens in the very week that the price of coke rocketed throughout the world, and we ended up importing coke from China.

There is optimism that the manufacturing industry will be ready to take off when we come out of the other side of recession. There are some good news stories. A month ago, a plant opened on the docks in Newport, at Sims, which is the biggest of its type in the world, and it is next to two other plants that are the biggest of their type in the world. The Sims plant deals with redundant electronic equipment under the waste electrical and electronic equipment directive, and it is a remarkable piece of machinery. Old computers, vacuum cleaners, calculators and so on are wheeled in one side, and at the other end they come out as four different types of plastic, metals and precious metals such as silver. It is a wonderful piece of equipment that is unique to the world, and the biggest in the world. Next to it, on the same docks, is the biggest piece of end-of-life car recycling equipment in the world, and next to that is the biggest refrigeration recycling plant in the world, which is also the most efficient at extracting gas. There are therefore some good news stories to tell.

Much that is good is happening in Wales this year. It is the 10th anniversary of having our own Government on the soil of our country for the first time in centuries, and we should acknowledge what a success that has been, particularly the One Wales agreement, through which two parties are working together to give us stable government in Wales that can plan for the future. I am looking forward to that anniversary being suitably marked. Unfortunately, it is up against— [ Laughter. ] I hear laughter from one of the obstacles that I was going to mention. The two main obstacles to the Assembly and drag anchors on it have been neurotically power-retentive Welsh Members of this House who weep when they see power flowing down the M4 to Cardiff, and the inertia of civil servants who do not like change and are not attuned to taking on purely Welsh initiatives, particularly those that come from the Labour party. It is significant that about half a dozen of the civil servants at the Welsh Assembly earn more money than the First Minister himself.

I have been asked to be brief, but I have great concerns about the Welsh language legislative competence order. I think that it will make little difference to the Welsh language. In 1961, Saunders Lewis made a great speech, entitled "Tynged yr Iaith", that shook the Welsh-speaking nation—saying that the Welsh language would be dead by the year 2000. It should have died out centuries ago, given that it is spoken by fewer than 1 million people and is up against a great world language, but it has prospered magnificently. A list has been mentioned of prominent people from Wales who have won competitions on UK television for choirs, performers, singers or musicians. Many of them are the products of Welsh language education, because of its emphasis not just on the Welsh language but on music and acting skills. It is a great success story, and we have been successful in many other ways as well.

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Photo of Don Touhig Don Touhig Chair, Members' Allowances Committee

Does my hon. Friend recognise that when we were councillors together, we made great strides in putting investment into Welsh medium education in Gwent, which has benefited greatly? That was done by Labour councillors.

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Photo of Paul Flynn Paul Flynn Labour, Newport West

My right hon. Friend tempts me: I came into politics as the secretary of an organisation to set up Welsh language schools in Gwent in 1969, when my late daughter came home from school and announced that she had learned her first ever Welsh song. I asked, "How does it go?" She said, "It goes like this: 'The land of my fathers is dear to me'." "Hen Wlad Fy Nhadau" was being taught in English in Newport at that time. We have made huge strides, and I think that there are now six or seven schools that teach in the Welsh language. The Conservatives are right to take pride in the Education Reform Act 1988, which means that conversational Welsh can be spoken in English medium schools. Certainly the Labour party, Gwent county council and other Welsh councils have a lot to be proud of.

My final point about the LCO is that I am concerned about what we are creating. The Welsh Affairs Committee is doing a prodigious amount of work on it, on top of all the other work that it has been doing successfully for years, but it is not the right body to be, as it has been described, a "revising chamber" for the Welsh Assembly. If such a thing is desirable, as it may well be, we should have an organisation that reflects the democratic votes of the people of Wales, which the Committee does not. More than a quarter of its members are Conservatives, and one of them does not represent a single Welsh vote. There are 25 Welsh Labour Members who do not have a voice on it at all.

There are two organisations that represent all Welsh MPs. One is the Welsh Grand Committee, which I am afraid was set up as a sop for devolution many years ago and is mired in failure and futility. It is not thought of as a serious body at all. However, there is another body that should be re-exhumed: the Welsh parliamentary party. It was set up in 1888, and for the period between 1892 and 1906 held the balance of power in the Chamber. It could have taken over and acted in the same way as the Irish parliamentary party did at the time.

The Welsh parliamentary party has gone through long periods of hibernation and been revived each time. The most recent revival was by a Conservative Secretary of State when the Conservatives wanted the Welsh Grand Committee to go to Wales. The Welsh parliamentary party put a condition on that, saying that the use of the Welsh language should be allowed, and that a monolingual Chamber here should not import monolingualism into Wales. That was the last time that the party met. The current situation is similar to the one in the 1930s, when Members of all parties decided that the challenge was so serious that it needed the input of all Welsh MPs, regardless of party affiliation. I believe that we should revive the Welsh parliamentary party, because it would be the ideal vehicle to deal with LCOs in a far more acceptable way. We cannot just have the Welsh Affairs Committee taking on that extra burden and becoming a revising chamber by default. We should decide what is the ideal way of doing things, and the best way is to have a body to revise LCOs that is open to every Welsh MP.

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Photo of Daniel Kawczynski Daniel Kawczynski Conservative, Shrewsbury and Atcham 5:09 pm, 26th February 2009

I am the only English Member of Parliament to speak in the debate and I look forward to presenting a perspective on cross-border issues that affect my constituency of Shrewsbury as a result of devolution in Wales.

It is appropriate to hold a debate on Wales—it gives Welsh Members of Parliament a tremendous opportunity to talk about the Principality. However, I greatly regret that the Government have not fulfilled their commitment and kept their promises that we would have debates in the Chamber on the English regions, and that there would be a Question Time about the English regions. My region—the west midlands—has more people than Wales and contributes more to the gross domestic product of the country as a whole than Wales, yet we have no Question Time and no opportunity to discuss the issues that affect us.

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Photo of Don Touhig Don Touhig Chair, Members' Allowances Committee

In view of the hon. Gentleman's comments, I hope that the Conservative party will submit names for the regional Select Committees that the Government are trying to set up.

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Photo of Daniel Kawczynski Daniel Kawczynski Conservative, Shrewsbury and Atcham

I believe that we have. It is important that the Government introduce English regional debates.

I believe that the seats in the United Kingdom—

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Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. The debate is about Welsh Affairs. However strongly the hon. Gentleman feels about issues that relate to other parts of the UK, I am sure that his remarks from now on will be about Welsh Affairs.

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Photo of Daniel Kawczynski Daniel Kawczynski Conservative, Shrewsbury and Atcham

Very much so, Madam Deputy Speaker. I was about to mention Montgomeryshire, which is the seat next to mine. Lembit Öpik, who has already spoken and is an assiduous Member of Parliament, represents 57,000 constituents, whereas, just across the border, I represent 74,000 constituents. That is a staggering extra 17,000 constituents with whom I must deal in comparison with the Welsh Member of Parliament just across the border. That is important, because we all want to do everything possible to support our constituents, table Westminster Hall debates for them and ask questions on their behalf. When Members of Parliament have the same budget, but 17,000 more constituents, that is a problem which we must tackle.

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Photo of Lembit Öpik Lembit Öpik Liberal Democrat, Montgomeryshire

The hon. Gentleman gets the figures right, but he must also recognise that the geographical area that he covers is much smaller than mine. Montgomeryshire covers 765 square miles. If the constituencies get too big, they become unmanageable for geographical reasons. He has his cross to bear and I have mine.

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Photo of Daniel Kawczynski Daniel Kawczynski Conservative, Shrewsbury and Atcham

The hon. Gentleman is luckier than most because he flies around in his little plane. He has taken me up in his plane across our two constituencies, so I am sure that he can get around Montgomeryshire in his plane more easily than I can get around Shrewsbury and Atcham in my motor car.

I want to consider proportional representation in Wales. I am joint chairman, with Mr. Donohoe, of the all-party group on the promotion of first past the post. We recently went to the Scottish Parliament to take evidence from Members of the Scottish Parliament about the problems that they have encountered with proportional representation. I perceive proportional representation in the Welsh Assembly as a threat ultimately to our electoral system in England. I believe that there should be one electoral system for the whole United Kingdom. At the end of the day, we are one country, and there should not be PR in Wales. Being elected under first past the post to represent a constituency makes one accountable to the people in that constituency. All parliamentarians here have a tremendous bond with their constituents. They know that we are accountable to them, that we live in the constituencies that we represent and that we are directly elected by them. In my view, PR is a travesty, which increases the distance between politicians and those who elect them.

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Mr Kawczynski is right that there should be one electoral system for the whole of the UK and that the accountability of MPs to their constituents is important. Unfortunately, the First Past The Post system that he supports makes most MPs unaccountable to their constituents in any meaningful sense because they have safe constituencies. The Single Transferable Vote system would make all MPs and AMs really accountable to their constituents and would be the best system for all UK elections.

Submitted by Anthony Tuffin Read 1 more annotation

Photo of Roger Williams Roger Williams Opposition Whip (Commons), Shadow Secretary of State for Wales, Shadow Minister (Environment, Food and Rural Affairs)

Has the hon. Gentleman checked that point of view with the leader of the Conservatives in the Welsh Assembly, who was elected under the proportional system?

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Photo of Daniel Kawczynski Daniel Kawczynski Conservative, Shrewsbury and Atcham

As the hon. Gentleman knows, my main duty is to England and I speak on behalf of my constituents.

The Welsh Assembly creates huge difficulties for English border towns. As I said earlier, the Royal Shrewsbury hospital loses £2 million a year as a result of the different mechanism whereby the Welsh Assembly pays for treatment across the border. When I made that point to the Chairman of the Welsh Affairs Committee, he gave a derisory reply. We have patients coming from Wales to the Royal Shrewsbury hospital who get life-saving medication to which my constituents in Shrewsbury are not entitled. I have to fight tooth and nail to secure life-saving treatments for my constituents that people from Wales get automatically in our hospital. That causes huge frustration and anger and divides our two communities.

Another problem is bovine tuberculosis. We in England had to kill 40,000 cows last year as a result of bovine TB. I am grateful that the Welsh Assembly is looking into that terrible problem and that it is holding trial culls of badgers in Wales. It is just a shame that there is not more co-operation between our Parliament here in London and the Welsh Assembly over the issue, which transcends our borders. There should be far more assimilation and co-operation in dealing with such major issues.

The hon. Member for Montgomeryshire also mentioned flooding. He thanked the Minister for his intervention, which he said would prevent part of his constituency from being flooded. However, flooding causes tremendous misery on our side of the border. Shrewsbury floods repeatedly, as do all the other towns on the River Severn, through Herefordshire, Gloucestershire and Worcestershire, causing hundreds of millions of pounds of damage in lost business. The way to resolve the problem is not to have little barriers in each town, but to have a wet washland scheme at the source of the River Severn, across the border in Wales, which would flood a large piece of agricultural land, which would become a marsh in the summer, encouraging wildlife, and a lake in winter. However, the hon. Gentleman said that thanks to the Minister's intervention that proposal has been blocked. I shall be telling my constituents in Shrewsbury about that and trying to find out more about how the Minister intervened to prevent mere scrubland or agricultural land from being flooded in a rural part of mid-Wales. The Minister is happy to do that, despite all the suffering from flooding in Shrewsbury and all the other towns down the River Severn. That is simply unacceptable.

On a positive note, I should like to put in a plug for the Wrexham-to-Marylebone rail service, which goes through Shrewsbury. Welsh and English MPs are working together to secure that link, which is vital for business and tourism. However, Virgin Trains and Arriva are doing everything possible with the Office of Rail Regulation to try to scupper that service. I very much hope that the Minister will do everything possible to safeguard that important service, which operates from Wrexham to London.

I have great concerns about the grants that the Welsh Assembly gives to businesses, which are much greater than those that we can afford in England. Those grants are uncompetitive and unfair. They lead to many Shropshire firms going just across the border to set up business and thus causing—[Hon. Members: "Hear, hear."] Hon. Members are cheering, but those moves are leading to significant job losses in Shropshire.

Finally, a lot of Welsh children come across the border to go to schools in my constituency. Many rural primary schools are under threat from closure because we receive only £3,300 per annum for every child and we are ranked 147th out of the 149 local education authorities in England, which is leading to huge pressure on our schools. I hope that the Minister will bear that in mind as well.

I am trying to say this respectfully, as the only English MP in a Welsh debate, but what I am trying to get across is this: I love Wales. We went on holiday to Wales last year, to Mwnt bay, which is absolutely beautiful. My family and I even spent an afternoon on the beach in Mwnt with my hon. Friend Mr. Crabb and his family. During my holiday I also met Mark Williams in Aberystwyth, in his constituency. We all love Wales and we all want to see it prosper.

I am just trying to convey some of the problems and frustrations I have as a Member of Parliament representing a border town that is losing out in certain ways as a result of increasing changes between the Welsh Assembly and our own Parliament. I very much hope that we can all work across the border because, at the end of the day, we are one country and we should be working together to improve the lives of our constituents in both countries.

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Photo of Albert Owen Albert Owen Labour, Ynys Môn 5:19 pm, 26th February 2009

It really is a pleasure to follow an English MP in this debate on Welsh day. I am very pleased to be able to speak on Welsh affairs. There are, as Daniel Kawczynski mentioned, some cross-border issues, and there are occasions when I need to speak on English affairs. It worries me that the Conservatives have proposals for English-only votes on English-only matters. That would deny me as a Welsh MP the opportunity to represent the interests of my constituents when they go across the border for essential services.

I believe in an integral United Kingdom and in the freedom of movement of people across the borders for services and goods. I have to say that I had thought that it was only the nationalists who believed in this type of segregation; yet the hon. Member for Shrewsbury and Atcham indicated that he wanted to lift up Offa's dyke to prevent Welsh people coming across the border and businesses coming from Shrewsbury into Wales. Well, we Welsh Members in this Parliament want an equal voice on matters affecting the whole of the United Kingdom. I am here today to represent the views of my constituents on some local matters, but also on those of national interest across the UK.

In a few days' time, I hope to promote Anglesey, the mother of Wales, in the mother of Parliaments with an Anglesey day. I know that the Wales Office is co-operating on that matter so that all can benefit from the culture and heritage of Anglesey and from the economic advantages when people come into my constituency. It is about promoting my constituency.

I want to refer in greater detail to a couple of important Welsh affairs issues, into which there have been inquiries. We have heard today about the important role—I disagree with my hon. Friend Paul Flynn on this matter—of the Welsh Affairs Select Committee. I think it does a good job of scrutinising Welsh legislation coming from the Assembly in the form of legislative competence orders. We take this matter seriously and we liaise with other MPs, so if they wish to raise any strong issues on behalf of their constituents, they will be fed into that mechanism.

I want to concentrate on two particular inquiries and the difference they have made to the north-west Wales region and my constituency of Ynys Môn. The first was into prisons in Wales. We worked on the important issue of prisoners having to move far away from their homes to serve their sentences—sometimes into south Wales from north Wales, but also into parts of England. That makes it very difficult for their families to visit them. The Select Committee identified the need for a prison in Wales and we lobbied particularly for a prison in north Wales.

A few weeks ago, the Justice Secretary announced a preferred site for that prison in north-west Wales, and I am very pleased about that, as I lobbied hard for it. As a result of the recommendations of the Welsh Affairs Committee, that preferred site in Ferodo in north-west Wales will create hundreds of jobs in the area. The desolate site of the Ferodo factory, which has a nightmare industrial relations history, will now provide well-paid and secure jobs. That is good evidence of the Welsh Affairs Committee raising an issue and making recommendations, resulting in benefit to the people of north-west Wales and the people whom I represent. It is evidence of the UK Government delivering for the people of my area.

Energy in Wales, which is relevant to everyone in the UK, was the subject of the other inquiry that I wish to deal with. We had a follow-up inquiry into clean coal and other technologies as well. One of the main findings that would benefit my constituency—a cross-party recommendation, made by parties including the Liberal Democrats and Plaid Cymru—was that if new nuclear development went ahead, and the United Kingdom Government supported it, existing sites in Wales would benefit from that. That was a clear, cross-party view at the time. The recommendations said that the extension of Wylfa power station needed to be considered. I can inform the House—I am sure that the Under-Secretary of State for Wales, Mr. David will confirm this when he winds up—that there is movement on that issue. There is a full study looking into a possible extension, which would ensure two or three years' more generation at the Wylfa site. That would provide extra jobs, skills and opportunities to young people over that period.

I want to inform and update Members on an issue that Mr. Dunne raised earlier, when he was present. He is a supporter of Anglesey Aluminium, because Bridgnorth Aluminium in his constituency is one of the main customers of Anglesey Aluminium. I declare an interest as chair of the all-party aluminium industry group. The hon. Gentleman and I are working together to keep that smelter open. There is a big issue about the power contract, which is due for renewal in September. That is threatening some 600 to 700 jobs in my constituency.

All the political avenues are being explored, as I have explained in parliamentary questions, and indeed in the Welsh Grand Committee—another issue on which I disagree with the hon. Member for Newport, West. I think that it is an important forum for raising issues. He does not agree, and neither do the press, but it is an opportunity for me to raise issues on behalf of my constituency. I welcome the fact that the Secretary of State is encouraging us to hold more of those Grand Committees. They are important. I do not have a blog; some people spend a lot of time on social websites, but I like to speak in this House, on behalf of my constituency, on important matters on as many opportunities as I can get.

The issue of Anglesey Aluminium is complex, because Rio Tinto, the parent company, is shedding 14,000 jobs worldwide. It is also reducing the production of aluminium across the world, so this is a precarious moment for the aluminium industry and for the renewal of the contract. I assure the House that everybody is working together on the issue. The Welsh Assembly Government are working on a new biomass plant, after the closure of Wylfa. The Wales Office is acting as a host, and as a facilitator between the Welsh Assembly Government, the Department of Energy and Climate Change and the Department for Business, Enterprise and Regulatory Reform, to get the best political outcome. At the end of the day, it will be a commercial decision, but I hope that there are more favourable conditions, so that we can save those jobs.

I want to talk more about nuclear power, green and low-carbon energies, and the opportunity for Wales to be a leader and a pioneer in the low-carbon economy. The Climate Change Act 2008, the Energy Act 2008 and planning provisions provide an excellent framework for the development of renewable energy. The Energy Act also provides us with renewables obligations, so that there can be progress on an industrial scale. That will help to ensure that there is benefit. We must have nuclear as part of a rich mix if we want a safe, continued electricity supply for industry and our homes. I think that we are moving towards consensus on that. I read this week in The Independent that four leading environmentalists have said that they are pro-nuclear. One of them was a senior director of Greenpeace, who now sees the value of nuclear power. He calculates that the perceived risks associated with nuclear power are less than those posed by climate change and global warming. If we are to continue to build a prosperous, low-carbon economy, we need nuclear power. The UK Government, along with the Nuclear Decommissioning Authority, have listed a number of preferred sites for the first wave of new nuclear build. I am pleased to say that Wylfa is part of that first phase.

A new nuclear power station in my area could create as many as 9,000 construction jobs, as well as the generating jobs that will follow. Those are highly-skilled, well-paid jobs that would benefit my constituents. There is only one brake on consensus. I read with dismay this week a letter in The Western Mail that was written jointly by the chair and the environmental spokesperson of Plaid Cymru. The letter said that if Plaid Cymru was ever in power and had to make a decision on new nuclear on Anglesey, it would vote against it.

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Photo of David Jones David Jones Shadow Minister (Wales)

I am interested in that last point. Does the hon. Gentleman know what the leader of Plaid Cymru in the Assembly would have to say about the matter?

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Photo of Albert Owen Albert Owen Labour, Ynys Môn

That is an interesting question, and that is what dismays me. The environmental spokesperson and the chair of Plaid Cymru, speaking about all these national issues on television, said that they would not back a nuclear power station in my constituency. In 2007, the Assembly Member for my constituency stood on a platform and said that he was fully in favour of nuclear power. I find it inconceivable that the leader of a serious political party can say that he is fully in favour of nuclear power while the chairman and the environmental spokesperson say that they are against it. Far from being enlightened about the position of the chairman and spokesman, the electorate of Ynys Môn are confused by the mixed message, at a time when jobs are at a premium.

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Photo of Albert Owen Albert Owen Labour, Ynys Môn

I will, but I want my speech to be brief.

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Photo of Adam Price Adam Price Spokesperson (Communities and Local Government; Culture, Media and Sport; Defence; Transport)

What is the position of the Labour Minister for Environment, Sustainability and Housing in the Welsh Assembly Government? What, indeed, is the position of the Welsh Assembly Government, who have said that they are against nuclear power? If the issue of nuclear power were devolved to the Welsh Assembly Government, the majority of Labour Members there would vote against it as well.

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Photo of Albert Owen Albert Owen Labour, Ynys Môn

The hon. Gentleman is trying to confuse the issue even further. I have lobbied the Minister of State, Department of Energy and Climate Change, my hon. and learned Friend Mr. O'Brien, in the House. I have lobbied on a platform with the leader of Plaid Cymru, saying that we need these jobs in the area. I have been consistent on the matter. The Prime Minister has visited my constituency, and he supports the development. The Labour party is delivering a preferred site that includes Wylfa.

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Photo of Albert Owen Albert Owen Labour, Ynys Môn

I will not give way again. I am very short of time, and I want my hon. Friend Nia Griffith to have an opportunity to speak.

The mixed message must end. Plaid Cymru must end this division. It is putting jobs at risk. The Labour party is delivering on nuclear power in my constituency; the chair of Plaid Cymru would oppose it, and if Plaid Cymru were in power we would not have these opportunities.

I want to send the clear message that Anglesey is open for business when it comes to a low-carbon economy. Nuclear power can be a catalyst to attract others. We have windmills in my constituency which were early prototypes and have subsequently been developed further, and I also support marine turbine energy, which can provide a skills base. At the core, however, is nuclear power.

We are at a very important stage: Anglesey is now a preferred site. I want to see this happen, and the people whom I represent want to see it happen. They know that the Labour party in this place supports it, that the power is retained here, and that we will ensure that it happens.

I am standing here and fighting for what my constituents want: new nuclear build in Wales. I am proud to do that, because I believe that it is important. We should be pioneers of a new age of electricity generation. Anglesey was a pioneer of education, and I want it to be the pioneer of clean energy for the future.

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Photo of Nia Griffith Nia Griffith Labour, Llanelli 5:33 pm, 26th February 2009

At this time, we are all rightly concerned about the economy. Every job loss is a devastating blow for the worker affected and his or her family. I know that there has been a tremendous amount of activity both at Cabinet level and among ordinary Members such as me, in groups such as the all-party parliamentary group for the steel and metal related industry. We have been lobbying the Secretary of State for Business, Enterprise and Regulatory Reform, who has agreed to attend a steel summit to meet the appropriate representatives of the manufacturing industry, and I know that many similar initiatives have been undertaken involving such industries as motor manufacturing. However, it is important that we do not fuel scaremongering rumours and talk the economy down. That will only sap confidence and stifle efforts to get the economy moving again.

I share the concern expressed by hon. Members about the somewhat erratic and obstructive behaviour of some banks, including sudden changes in the terms and conditions of their lending. Some successful businesses in my constituency have been badly treated in that way, and only following my intervention have things got moving. That should not have been necessary. I hope that my right hon. Friend the Secretary of State will convey that message to the National Economic Council.

An extremely important element of the Labour Government's strategy to help people through the economic downturn is the determination to carry on with public investment for the future. My own county, Carmarthenshire, has an impressive school building programme, but EU convergence funding is giving cause for real concern. Carmarthenshire has a number of projects that it is ready to proceed with, but it is experiencing difficulty in drawing down EU convergence funding via the Assembly. I have secured the agreement of the Deputy Minister for Regeneration in the Assembly to visit my constituency and meet council officers, but I would be grateful if my right hon. Friend the Secretary of State did all that he could to persuade Assembly Ministers to prioritise the release of convergence funding to projects that are ready to roll. I also ask him to impress upon Assembly Ministers the logic of extending the western valleys initiative to include not only Cross Hands, but the whole of the Gwendraeth valley, the most western of the south-west Wales coal mining valleys.

I turn now to a very sensitive matter: foreign workers. It is important that when we consider such matters, we attack structures and not people—that we look at structures, and if necessary criticise them and seek to change them, rather than resort to racist attitudes and comments. We are all too aware that there are organisations out there whose agenda is to breed fear and hatred and to create scapegoats, and who seem to have money to spend on glossy and very deceptive leaflets. We need to take a clear stand against such organisations and their attitudes.

I know from speaking to people in my constituency that they are not racist. They recognise the enormous contribution to Welsh society that people born abroad have made, particularly in our health service. They are, however, understandably alarmed when they hear rumours that contractors working on big infrastructure projects, such as the gas pipeline or the construction of the power station in Pembrokeshire, are taking on foreign workers—sometimes in large numbers, according to the rumours. I would be very grateful if my right hon. Friend looked into this matter and found out why foreign workers are being taken on, supposedly in preference to Welsh workers. If this is happening, we must ask why. If it is happening because employers think they can get away with shoddier terms and conditions—lower pay and fewer rights—that needs to be sorted out.

There was tremendous support among Labour Members for the Temporary and Agency Workers (Equal Treatment) Bill, and work has subsequently been done at both EU and national levels to improve terms and conditions for such workers, but we need to know exactly why these foreign firms appear to be giving preference to foreign workers. Using them on the cheap is not fair to our workers, who are being undercut, and it is not fair to foreign workers, who are being exploited. If foreign workers are being taken on instead of Welsh workers because our workers do not have the appropriate skills, we need to identify exactly what those skills are and make sure that we provide opportunities for our people to acquire them. We also need to think ahead about what skills will be necessary in future, particularly as we develop public infrastructure projects—and, it is to be hoped, when private sector opportunities open up as the economy picks up. We need to make sure, too, that we are equipping our young people to take up such opportunities.

Lastly, may I ask my right hon. Friend to wear two hats at once: that of Secretary of State for Wales and that of Minister for digital inclusion? I should like to bring to his attention the excellent work of an organisation called UCanDoIT. At present, Trina Davison, a constituent of mine, is the only person working across the whole of south and west Wales who is providing the valuable service that UCanDoIT offers. What Trina does is work with housebound people in their homes to sort out computer equipment for them and link them up to the internet. In some cases, she is working with partially sighted people, and she teaches them to use special technology that reads things out to them and gives them access to computers, e-mail and the internet. I would be grateful if my right hon. Friend met me to discuss what more can be done to extend this excellent work in Wales and give more people the opportunity to get online. For people who are housebound, internet access is particularly important, both for potential employment opportunities and for social contact, which can greatly enhance well-being.

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Photo of David Jones David Jones Shadow Minister (Wales) 5:38 pm, 26th February 2009

As is the case with most St. David's day debates, this one has been thoughtful and generally good-natured, reflecting the good humour that is characteristic of our nation. I am indebted to the Secretary of State for the important information that today is, in fact, not St. David's day but the feast day of St. Isabel of France. Like him, I hope that that does not bode ill for tomorrow evening, although I am sure that it does not. Even in our part of Wales, where we prefer the spherical ball to the oval type, we are following the fortunes of the Wales team with great interest; indeed, a constituent of mine said only the other day that what he was particularly pleased about was that the only Englishman who is likely to get his hands on the Six Nations trophy is the engraver.

The debate has, predictably, been dominated by concerns about the economy. Dr. Francis, the Chairman of the Welsh Affairs Committee, spoke about his own constituency, but he also discussed the important work that his Committee is doing not only on the process and scrutiny of legislative competence orders but on the impact that present economic conditions are having on the Welsh economy. I must rise to the hon. Gentleman's defence and say that he is an excellent Chairman: he chairs the Committee with great sensitivity and great wisdom. He does not need to be told to crack the whip. He knows how, from time to time, to tighten the screw, but he does not need to crack the whip.

We then passed on to Mark Williams, who also spoke about the impact of the current economic downturn. He spoke about the higher education sector, which is of course important, in his constituency and about the need for reskilling and upskilling. Importantly, he also mentioned the farming industry and the adverse impact that electronic identification of sheep will have on the Welsh agriculture sector if it is allowed to go ahead. My constituency is in many ways similar to his, and I can tell the House that many farmers there are very concerned about whether, if that system is introduced, it will be worth while continuing farming.

The impact on the auction industry would also be substantial. I have spoken, for example, to the directors of Ruthin Farmers Auction Company, which regularly sells some 5,000 head of sheep in a session. They say that it will be quite impossible to read the ID tags of each individual sheep as it goes through. I therefore echo the hon. Gentleman's words and urge the Minister to do whatever he can to persuade DEFRA to obtain a derogation from this wrong-headed European legislation.

We had a very short and focused contribution from Mr. Hain, who probably even now is sharing a railway carriage with my hon. Friend Mrs. Gillan—I think that they are going to the same destination this evening. He spoke about a very important subject: Welsh broadcasting and English language broadcasting in Wales. There is no doubt that that sector is under severe threat. I commend to the Government what he had to say about the difficulties that the Welsh broadcasting industry is facing and suggest that they take his remarks on board.

My hon. Friend Mr. Crabb spoke about the deteriorating economic picture in his constituency. He spoke about the need for additional investment in further education and expressed his concern about the budgetary cuts imposed on the sector by the Assembly Government. He also made a important point about the importance of language skills. In Wales, we tend to obsess about the Welsh language, and it is important, but so are international languages. In an increasingly globalised world, foreign language skills are absolutely necessary and my hon. Friend was entirely right to make that point.

We then heard from John Smith, who spoke up, as he has on so many occasions, for the St. Athan project, which is supported in all parts of the House. I reiterate the point that I made when I intervened on him: one of the most important aspects of St. Athan is that it provides highly skilled military jobs for young people and, specifically, that it offers those opportunities to young people from Wales. Wales has a fine military tradition—everybody in the House knows that—and St. Athan will be a huge asset to young people who wish to serve their country.

The hon. Gentleman also spoke about the M4 link road, and other Members, including Julie Morgan, spoke about the importance of transport. Transport is vital, as is the improvement of transport links. One concern—I have expressed it previously, as have other Members—is the potential impact of the local transport legislation that gives the Welsh Assembly the power to impose trunk road charges in Wales. I strongly suggest that at a time such as this the last thing that Welsh road users need is an additional tax on driving along roads in their own country. Although the Assembly has those powers, I strongly counsel it not to use them.

We had an interesting contribution from Adam Price, who analysed the banking crisis and spoke about the prospect of a more local form of banking that is more publicly accountable. I know that the hon. Gentleman is a student of history, so I am sure that he will recall the efforts of Richard Williams of Llandudno at the end of the 1960s, who formed a company called Prif Trysorfa Cymru, or the Chief Welsh Treasury. That attracted some concern from the Board of Trade, so he renamed it the Welsh Black Sheep bank and issued £1 and 10 shilling notes. I am not sure whether the hon. Gentleman would want to resurrect that bank, but it is an interesting prospect.

Talking of black sheep, we then had a contribution from Mr. Touhig. I do not intend any personal criticism of him; I am merely echoing the words of Paul Flynn. The right hon. Gentleman made his usual robust points in his usual robust style. He expressed concerns that many Opposition Members have about the potential for the balkanisation of Britain if devolution is not handled sensitively. He made the important point that the Welsh language LCO must be carefully scrutinised. My party yields to no one in our support for the Welsh language, but we do not want to see it become a tool for division. Therefore it is vital that that LCO is scrutinised with great thoroughness.

Lembit Öpik spoke of the downturn in the economy and the effect on his constituency, which is primarily rural. He also expressed his concerns about electronic identification of sheep and the closure of businesses in his constituency, which he says has been in recession for some three years. He also spoke in favour of green technology, but against wind turbines.

We then heard from the hon. Member for Cardiff, North, who also touched on economic issues and spoke about the need to improve transport links. She also spoke approvingly about St. Athan, and of the interesting ProAct programme, which I would like to hear more about, as it appears to be very innovative. At the moment, its achievements are small, but from tiny acorns do mighty oak trees grow. The hon. Lady said that the Severn tidal barrage project could have huge environmental benefits, but could also have huge environmental disbenefits. Careful scrutiny of the project will be needed to balance those competing concerns.

We had a powerful contribution from Mr. Davies, who spoke of the need for a review of the Barnett formula and expressed his concern about the potential for a £500 million budget cut for the Welsh Assembly. He spoke also of irresponsible banking practices and touched on the failure of regulation, which was also mentioned yesterday by the chairman of the Financial Services Authority in his evidence to the Treasury Committee. There certainly has been a failure of regulation, and I hope that the Government will address that.

We had an upbeat contribution from the hon. Member for Newport, West. He said that his constituency is suffering from the downturn but that there have been no closures yet, and there are some bright spots. He talked about new recycling plants in his constituency, which are an extension of the green technology that may power the upturn when it comes.

We had a contribution from my hon. Friend Daniel Kawczynski, in which he reminded us—usefully—that Wales is actually attached to England. He said that events on one side of the border have repercussions on the other, and he was right to highlight the effects that the policies of the Welsh Assembly are having on hospitals in his constituency. The Welsh Affairs Committee has touched on such matters, and it is clear that we have not got the settlement right. That is something that we have to address.

We then heard from Albert Owen, who spoke about his support for Wylfa and for Anglesey Aluminium. Both are important employers in his constituency and both are in danger from the downturn. Finally, we heard from Nia Griffith, who expressed her concerns about the difficulty of drawing down funds for public building projects.

The debate was dominated by economic concerns, and there is clearly an extraordinary amount of anxiety in the House about the downturn's effect on individual constituencies and on Wales as a whole. I believe that Wales has the potential to pull through those difficulties, but doing so will not be easy. I am sure that every Member of the House will work assiduously in the 12 months between now and the next time that we convene for this debate to ensure that the impact on our country is minimised.

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Photo of Wayne David Wayne David The Parliamentary Under-Secretary of State for Wales 5:51 pm, 26th February 2009

It gives me great pleasure to respond to this St. David's day debate. As far as I am aware, he was not an ancestor mine, but he could be an antecedent of many of the hon. Members who have participated today. He lived a frugal life, and my hon. Friend Julie Morgan reminded us that his only drink was water. He believed in brevity: he was a man of few words, like my right hon. Friend Mr. Hain, who gave a commendably brief speech this afternoon. He also focused on the little things in life, about which my right hon. Friend the Prime Minister reminded us in the note on this debate that he sent to all Welsh Members.

I was pleased that nearly all those who contributed to the debate focused on the people whom they represent in their constituencies rather than on somewhat remote theories and activities. Most people in Wales are worried about the economy, and that was brought home to us in the passionate contributions from my right hon. Friend Mr. Touhig and various other hon. Members, including my hon. Friend Nia Griffith.

These are undoubtedly difficult times, but I want to stress that the Government are being very proactive. That is the important thing: we are doing everything that is humanly possible to demonstrate that we are on the side of ordinary people. For example, my right hon. Friend the Secretary of State and I have been travelling around Wales over the past few weeks, meeting the owners of small businesses in particular, and hearing at first hand about the difficulties that they face. We have listened to their views and ensured that they are articulated here in London, the centre of UK Government.

The Wales Office has published the document "Real help now", and it has proved to be very useful. Mark Williams said that it has been extremely well received, but it is important to stress that that is not the end of the matter. The document will be constantly updated and made even more accessible to people throughout the length and breadth of Wales.

The document clearly demonstrates how central Government here in London and the Welsh Assembly are working in partnership for the benefit of the people of Wales. I shall not go through all the schemes enumerated in it, but several hon. Members mentioned the ProAct programme, which is already delivering material benefits for people in Wales.

Times are difficult, but it is important to stress that positive developments are also occurring in Wales, and we heard some references to them this afternoon. For instance, my hon. Friend John Smith referred to the defence technical academy, and mention was also made of the gas-fired power station in Pembrokeshire.

My hon. Friend the Member for Llanelli said that she had heard rumours that large numbers of people from abroad might apply for jobs on infrastructure projects in her constituency. I assure her that we will do our utmost to make sure that the majority of those employed come from the local labour market, as it is very important that local people benefit from those investments.

Similarly, the go-ahead has been given for a new prison at Caernarfon, as my hon. Friend Albert Owen noted.

A number of Members, including the hon. Members for Chesham and Amersham (Mrs. Gillan) and for Blaenau Gwent (Mr. Davies) referred to the positive developments with tourism in Wales. It is undoubtedly a very important area that we should exploit to the utmost given the value of the currency.

Concern was expressed about a new nuclear power station to succeed Wylfa. The Wales Office is 100 per cent. behind a new nuclear power station in Ynys Môn—let there be no question about that. Members asked whether Wylfa will continue beyond March 2010. There is a possibility of that, but we will have to see exactly what the Nuclear Decommissioning Authority has to say.

Another clear theme is the need not only to deal with the situation in which we find ourselves but to prepare and plan strategically for the future. The upturn will come, and I am confident that it will be a dynamic upturn. We have to invest in education and training, as Mr. Crabb said. My hon. Friend Dr. Francis and the hon. Member for Blaenau Gwent mentioned that, too. There can be no shortcuts. It is vital that we invest in education and training—there is no doubt about that.

Equally, we have to invest in digitalisation. My right hon. Friend the Secretary of State, who is responsible for digital inclusion, is 100 per cent. behind ensuring that we have a comprehensive strategy to ensure that everyone benefits from the new technological revolution that is gathering momentum all the time.

Adam Price had some impressive and innovative ideas about the new banking system that needs to emerge. His ideas will be well worth debating in future.

A number of Members mentioned the need for a strategic investment in transport infrastructure. Again, the hon. Member for Chesham and Amersham referred to that, as did the hon. Member for Blaenau Gwent when he spoke about the Heads of the Valleys road. Lembit Öpik referred to it, too, and I wholly agree with his comments. However, I am not so sure that I will take him up on his offer to join him on an aeroplane.

The debate was also significant because we heard some trenchant and controversial remarks from my hon. Friend Paul Flynn. However, I believe that the Government of Wales Act 1998 has been very successful. Yes, it could be streamlined and improved, but basically it is working very well. One reason it is working well is the good work being undertaken by the Welsh Affairs Committee. To have good legislation, it is vital to have effective pre-legislative scrutiny. I believe that that is what the Welsh Affairs Committee provides. I say that because I shall be giving evidence to the Committee on Monday on the important issue of carers and I hope that its members will not be too hard on me.

Obviously, another important issue that will come before the Welsh Affairs Committee is the Welsh language LCO. As a number of Members have said, it is important that in seeking to develop and promote the Welsh language we should seek consensus in Wales. We should take all the people of Wales with us, non-Welsh speakers as well as Welsh speakers. It is important to recognise that the advances with the Welsh language have been made because there has been not just an acceptance of it but positive support for it. That must be taken forward and that is the way to build the Welsh language for the future.

I welcome the remarks from the English hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) because it is vital that we recognise that Wales is not separate from England and that the cross-border links between our two countries are important. The Welsh Affairs Committee, again, has highlighted the importance of that relationship at all times. However, I did take some exception to the implication in his remarks about the future of Welsh representation. He pointed out how many electors he represents and how many the hon. Member for Montgomeryshire represents. My concern is that some people in the Conservative party might therefore conclude that we need fewer Welsh MPs, and it would be a huge mistake to go down that road— [ Interruption. ] Given the mutterings that we are hearing, I think that we are beginning to see the true face of the Conservative party again. This debate shows, above all else, that Welsh MPs have a vital role to play in the future development of Wales, and long may we have positive debates such as the one we have had this afternoon.

Question put and agreed to.

Resolved,

That this House has considered the matter of Welsh Affairs.

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