Welsh Day Debate

The Secretary of State for Wales (Mr. Peter Hain): I beg to move, That this House has considered the matter of Welsh Affairs.

As we take this opportunity to debate and celebrate all that is Welsh and our pride in Wales, perhaps there is a lesson to be learned from our national team’s sensational last-minute victory against Scotland the other Saturday-do not write off the red team until the final whistle. By the way, I am talking about rugby and politics, not football.

Of course, no one can deny that this year has been tough for us all-families, businesses, communities and Governments the world over. Yet, even in this difficult year, Wales has seen a number of firsts, such as our first Ashes test match and the first time that the UK Cabinet has ever met in Wales. We have showcased the very best of Wales as a great place to visit, to watch world-class sport and to do excellent business.

The people of Wales have also resolved that the rise of racist, fascist organisations must be stopped. These far-right groups first tried it on in Swansea, but then abandoned their vile demonstration plans in Newport and Wrexham in the face of decent, concerted community action. We must not be complacent, however; wherever the so-called Welsh Defence League and the British National party threaten our decent, tolerant communities in Wales, we must all stand together to resist them. I am pleased to confirm that the first ever conference of Unite Against Fascism (Wales) will take place in Cardiff in early March, and I would welcome support from any and all parties in Wales. Together, we must prevail over the poison of racism.

Our main task now is how we secure the recovery in Wales, and the fact that securing the recovery, rather than sliding back from recession into depression, is now on the agenda has not happened by chance. After the worst global recession for 80 years, other economies have experienced far higher levels of unemployment-Spain 19.5 per cent., France 10 per cent., Ireland 13.3 per cent., and America 9.7 per cent. The figure for Wales is 8.6 per cent.

Mark Pritchard (The Wrekin) (Con): The Deputy First Minister of Wales, Ieuan Wyn Jones, has said that there is “no room for complacency” on unemployment figures. The Secretary of State refers to other parts of the world, but is it not a fact that the unemployment rate in other parts of the United Kingdom is 7.9 per cent., which should be compared with the 8.6 per cent. rate in Wales that he has mentioned? Thus, the comparison also needs to be made with what is happening within the United Kingdom; we should not just make the comparison with other parts of the world.

Mr. Hain: I am very happy to make the comparison with other parts of the United Kingdom. As I shall describe later, if we were to examine Wales’s performance now compared with what happened during the recessions of the 1980s and 1990s under the previous Conservative Government, when the recessions were not nearly as bad as this recession either within the UK or across the globe, we would find that we have done far better on employment and unemployment.

Mark Pritchard rose-

Mr. Hain: I shall come to those points in due course.

Our Government and the Welsh Assembly Government have painstakingly secured a strong Welsh economic platform to build for the future. Until Spring 2008, Britain experienced an unprecedented period of continuous growth for more than 11 years under our Government, which saw the United Kingdom’s gross domestic product grow by more than 32 per cent. since we came to power in 1997. However, the global financial implosion that followed has hit that enormous achievement for six, and the Government have had to respond, not by downing tools as Conservatives did in the 1980s and 1990s to disastrous effect in Wales, but by active intervention to fill the gap left by the collapse in private sector activity and investment.

Fair-minded people now accept that our Government made the right choices. We saved the banking system, on which every business and household in this country depends-the Tories opposed that action, just as they opposed the fiscal stimulus package, which, among other things, has delivered a £1 billion future jobs fund. That has already created more than 9,900 job opportunities for young people across Wales, stopping them from being thrown on to the scrap heap as happened under the Tories in the 1980s and 1990s with most never to work again.

The stimulus package has also delivered the car scrappage scheme. More than 347,000 orders have been taken since the start of the scheme, 17,350 of those in Wales, thus protecting jobs and companies in the automotive sector. It has also delivered the business support schemes, such as the time to pay arrangements, under which more than 11,100 businesses have deferred nearly £155 million of business taxes in Wales alone. That comes as a result of the action that we have taken as a Government-it is all action opposed by the Conservatives.

Lembit Öpik (Montgomeryshire) (LD): May I put on record my gratitude to the Secretary of State and his fellow Ministers for the help that they have provided, first in securing Regal Fayre, which is a new company in the town of Montgomery, and secondly, in helping to save 180 jobs in the Shop Direct call centre in Newtown? It is my opinion that the Government’s assistance directly contributed in a positive way to saving those jobs, and I am grateful for the assistance that he has personally provided.

Mr. Hain: It is not often that we get thanked from across the Floor of the House, so I am grateful to the hon. Gentleman for those thanks. He has worked tirelessly on behalf of his constituents and has properly represented them to the Government, and we have been able to help in the way that he has described. I am very pleased for the local work force that that is the case.

We have given real support-real help for real people-requiring rises in public investment without which the Government deficit would be even higher. The irony of the Tories’ opposition to our recent public investment programmes is that the very Government deficit they complain about would have been even higher had we taken their approach, because there would have been more unemployment and greater borrowing to finance people who would have been on the dole instead of in work, earning incomes and paying their taxes.

Mr. Stephen Crabb (Preseli Pembrokeshire) (Con): The Secretary of State has tried to make some reassuring remarks about the size of our deficit. Our deficit is £178 billion-it is even bigger than Greece’s, yet I saw that the Prime Minister was trying to lecture the Government of Greece about fiscal responsibility. There is nothing reassuring and no reason to be complacent about the size of the UK’s deficit-it is a disaster for the country.

Mr. Hain: Nobody, let alone members of the Cabinet, such as myself, is being complacent. My point is that if we are that concerned-as we all, including the hon. Gentleman, ought to be-about the size of the deficit, why would we make it worse? That is what the Tory policies over the past year would have done and what Tory policies over the coming year would do. If a Government closed down many more businesses and gave many more people the sack-that is what the Tories would be doing-the deficit would grow higher. Everybody understands that; it is schoolboy and schoolgirl economics. That would be a consequence of Tory policies.

Mrs. Cheryl Gillan (Chesham and Amersham) (Con): While the right hon. Gentleman is painting such a rosy picture of Labour’s time in office, could he explain why 200,000 children in Wales still live in poverty-as measured before and after housing costs in the Department for Work and Pensions report, “Households Below Average Income 2007-08”? Can he also explain why Save the Children claimed last month that 96,000 children in Wales are living in severe poverty under his Government?

Mr. Hain: It was because we are concerned about the numbers on poverty that we set a target for abolishing child poverty just as soon as we can. What I cannot understand is how the hon. Lady’s policies for cutting child tax credits and child trust funds will help with the well-being of children in Wales. After a period of disastrous increases in pensioner poverty, child poverty and poverty across the board in Wales under the Conservative Government whom she supported, we have reduced the level of poverty for pensioners and children in Wales.

Mark Pritchard: On a point of order, Mr. Deputy Speaker. [Hon. Members: “A point of order?”] I know that this seems odd, because I do not raise many points of order. However, it is an important matter for the historical record when a Secretary of State of Her Majesty’s Government comes to the Dispatch Box and says something that is completely inaccurate. He claimed that a Conservative Government would-

Mr. Deputy Speaker (Sir Alan Haselhurst): Order.

Mark Pritchard: He claimed that they would abolish child-

Mr. Deputy Speaker: Order. What is a point of order is that when the occupant of the Chair rises any other hon. Member should resume their seat. Perhaps the hon. Gentleman is wise to be sparing in his points of order, if he thinks that that constituted one-it is more a matter for debate. He has said something on the record; he must be satisfied.

Mr. Hain: I am surprised that the hon. Gentleman rose, because it is a matter of record what the Tory party’s policies are on child trust funds, child tax credits and other such matters. The Tories were wrong on the recession, and they are wrong on the recovery. Their plans for early and savage public investment cuts would choke off the recovery. They have no plans for growth-they have only a plan for austerity.

Our Labour Government investment has ensured that, despite the worst global economic recession in more than 80 years, we have avoided the spectre of industrial decline, long-term unemployment and run-down public services-those are the kind of problems that Welsh people lived through to such terrible effect in the 1980s and 1990s.

Albert Owen (Ynys Môn) (Lab): This September, my wife and I will be celebrating our 27th anniversary. In the 1980s, we bought our first house and interest rates were 13 per cent. Mortgage rates varied in the ’80s and ’90s between 13 and 17 per cent., and house repossessions were at a record high. Is not the big distinction that the inflation rate is 3.5 per cent. now, not 13.5 per cent.? That lower rate not only helps couples to stay in their homes, but helps small businesses and the economy to recover.

Mr. Hain: First, may I congratulate my hon. Friend on an excellent 27 years of marriage? He is right to say that many people like him who bought their first house in the late 1980s were immediately plunged into negative equity as a result of the disastrous policies of the then Conservative Government. As I have said, our Labour Government investment has ensured that we have avoided the worst consequences of this recession and that employment levels and other indicators are better than they were in the 1980s and 1990s.

Our record speaks for itself-

Mrs. Gillan rose-

Mr. Hain: May I finish this point? Our record speaks for itself. There are still 95,000 more people in work in Wales than when Labour came into office in 1997. Long-term unemployment in Wales is more than 55 per cent lower than it was in 1997, despite the recession. It is almost 70 per cent lower than it was at the height of the last home-grown recession in the 1990s. Average house prices in Wales are more than 140 per cent. higher than they were when we came to power in 1997. Repossessions in Wales are 39 per cent lower than they were in 1991. The average household has nearly £5,000 more disposable income now than in 1997 and gross value added per head in Wales has risen by 49 per cent. since 1997. In the early 1990s recession, many more businesses failed in Wales, with the company liquidation rate two and half times higher than the current rate. On that high note, I give way to the hon. Member for Chesham and Amersham (Mrs. Gillan).

Mrs. Gillan: I am grateful to the Secretary of State for giving way, because it gives me the opportunity to congratulate the hon. Member for Ynys Môn (Albert Owen) and his wife on 27 years of happy marriage. Many congratulations to them. It is not good enough for the Secretary of State to say one thing in this place and another outside. Will he get his stories right? I believe that he said on BBC Wales online on 22 April last year that if efficiency savings had been made “earlier on at a time of rising spending…I think,” We “would have been in a better position to move forward.”

Which is it? Has his Administration messed up or does this wonderful picture that he is trying to paint for us now show what has happened? While I am on my feet, let me mention that he said in The Western Mail that characterising the situation as a case of “‘nice’ Labour reductions in public spending”

Versus

“‘nasty’ Tory cutbacks would be a mistake”.

That is a mistake that he is making now.

Mr. Hain: The planned Tory cutbacks would be nasty in their effect on Wales.

The difference between a Tory Government and this Labour Government is as I have just described: repossessions are relatively low; average house prices are higher; average household income has risen; unemployment is lower; and the rate of business failures is much lower than it was during the home-grown, Tory-induced recessions of the early 1990s and early 1980s, which were unlike the global recession from which we have suffered in recent times. That is the difference between a Tory Government and this Labour Government. A Tory Government leave people on their own, and a Labour Government are on those people’s side.

Mr. Philip Dunne (Ludlow) (Con): On the subject of business collapse, does the Secretary of State appreciate what has happened in the petrol filling station arena? More than 111 petrol filling stations have closed in the past five years as a direct result of what the Labour Administrations here and in the Assembly intend to introduce with the business rates revaluations. Increases without any transitional relief, such as that in England, are putting at risk the remaining 572 petrol stations in Wales, of which 206 are in rural areas. One of those is facing an increase in business rates of 725 per cent. How does he expect that business to survive that kind of increase?

Mr. Hain: I know that there is concern about business rates and the changes in Wales, but 60 per cent. of businesses benefit from those changes according to the Welsh Assembly Government. The reasons for petrol station closures are much broader than the hon. Gentleman suggests, and not least among them are the extremely cheap prices from supermarkets. To my regret-as a result of market forces, not of action by this Government-they are forcing too many local petrol stations to close.

Mr. Roger Williams (Brecon and Radnorshire) (LD): The Secretary of State claims credit for his Government for the fact that this recession is not as acute and difficult as the last one. Individuals have made a contribution, too, by working part time and by cutting their hours. There has been a huge amount of suffering as a result of the recession, but individuals have played their part in helping. I am sure that the Secretary of State wants to congratulate them on that.

Mr. Hain: I am grateful to the hon. Gentleman for giving me the opportunity to do so. I was openly arguing that the recession has been very tough for people; I said that right at the beginning. Individuals have made sacrifices such as working fewer hours and, as a result, having lower earnings, and that has helped us to get through this terrible recession, which has been a worldwide recession, in better shape than we would have been-this is my point-if we had followed the policies of the Conservative Opposition. Had they been in government, everybody in Wales would have been far worse off. That is indisputable.

Mark Pritchard: Will the Secretary of State give way?

Mr. Hain: I shall take one final point from the hon. Gentleman.

Mark Pritchard: I am grateful to the Secretary of State, who is being very generous in giving way. I think that I might be the only person in the House who has worked in a petrol filling station-Cymmer Afan petrol station in Cymmer, where I used to live in Wales. Cymmer Afan petrol station had been there for years and was run by a wonderful family, but it closed down just before Christmas. I am shocked by the Secretary of State-I know that he has been busy celebrating his 60th birthday this week, but he should not forget that unemployment is not low in Wales, but high at 8.6 per cent. Forgive me, but I believe that the Secretary of State’s complacency is breathtaking.

Mr. Hain: The hon. Gentleman will find in the official record, as everyone else in the House will have noticed, that I quoted that figure of 8.6 per cent. earlier in my speech. My point was not that it was not of concern-of course it is. I represent a Welsh constituency where people have lost their jobs. My point is that without Government action and that if we had followed the Conservative prescription, which he supports, of cutting public investment-

Mark Pritchard indicated dissent.

Mr. Hain: That is what the Conservatives have said. They have said that we spent too much money on business support, job support programmes and so on over the past year. If we had taken that course, those problems would have been far worse.

Dr. Kim Howells (Pontypridd) (Lab): I thank my right hon. Friend and hope that he can now get on with the substantive part of his speech. He will recall that in the 1980s, after the terrible onslaught on our basic industries, Wales reinvented itself. The industrial areas of Wales reinvented themselves, and we will do so again. Will he tell the House something about how the Government see the way forward for breaking with the enormous dependence on the public sector? If Wales does not reinvent itself as a home for entrepreneurs, for small businesses and for high-technology industries, we will miss out on the new generation of industries in the future.

Mr. Hain: I cannot agree more with my right hon. Friend. May I take this opportunity to pay tribute to him for his long service in the House and for his excellent record as a Labour Minister and to express my personal disappointment that he is standing down, although I understand his reasons for that? This will be his last Welsh affairs debate. I agree with him absolutely. A little while ago, I made a speech in the House in which I said that we had to strengthen our private sector and could not rely on the public sector to the extent that we had. However, that requires new investment to support the new industries and businesses of the future and to unleash the entrepreneurial spirit and innovation that we need, particularly in low-carbon industries and the digital economy. That requires Government support-it does not happen on its own. Individual entrepreneurs and small businesses need to grow with Government backing, not to have that support stripped away from under their feet so that they are unable to deliver what they are capable of.

Mrs. Gillan: Will the right hon. Gentleman give way?

Mr. Hain: I think I need to make a bit of progress.

Mrs. Gillan: One more time?

Mr. Hain: Okay.

Mrs. Gillan: I am grateful to the right hon. Gentleman for giving way, but I want to give him the opportunity to set the record straight. I believe that I heard him say earlier that fewer companies have gone to the wall in Labour’s recession. I understand that more companies have gone bust in Labour’s recession than in any other recession since records began. There were 26,978 corporate compulsory liquidations and company voluntary arrangements. That information comes from the Office for National Statistics time series and the Insolvency Service’s “Company liquidations in England and Wales 1960 to present”. Will he confirm that he did not make an error when he said that he felt that fewer companies had gone bust in this recession? I think that these statistics prove that he was wrong in this instance.

Mr. Hain: What I said-I shall read again to the hon. Lady from my speech-was that in the early 1990s recession, many more businesses failed in Wales, with the company liquidation rate two and half times higher than the current rate. That is my point-not that the current rate of liquidations is acceptable or that any business failure is acceptable. Things were relatively far worse in the 1980s and 1990s, and specifically in the 1990s in that respect.

Our action both in Westminster and in Wales has delivered real help to individuals, families and businesses across Wales, and we will continue to do that as the Welsh economy recovers. To cut off support now, as the Conservatives and right-wing commentators propose, would wreck the recovery. With oil prices rising, international volatility and the weak eurozone, and with countries such as Greece and Ireland facing serious crises, we must prevent this fragile recovery from sliding back into recession or, even worse, from causing a severe, prolonged depression.

Ann Clwyd (Cynon Valley) (Lab): I know that my right hon. Friend supports the idea, as does the Prime Minister, of a Robin Hood tax on global financial transactions that would spread both benefits and risks more fairly. Will my right hon. Friend elaborate on his support for that tax?

Mr. Hain: I am grateful to my right hon. Friend for that question. She is absolutely right to say that I have supported the Robin Hood tax, as most fair-minded people have. Indeed, the extent and breadth of support for it has been interesting. It is now backed by groups right across the board, from the Salvation Army to those such as Friends of the Earth, which we would have expected to support it. That is entirely consistent with the Prime Minister’s international leadership in seeking to get an international tax on financial transactions, not least to provide insurance support to prevent the banks from collapsing and having to rely on the public purse in the future. I am glad that my right hon. Friend gave me the opportunity to make those comments.

The Tories have lost all credibility on the economy. First, they promised austerity, until they realised that that did not play well with their focus groups. Then they said they would cut the deficit “further and faster”, but later realised that the sums did not add up. Now they have changed tack again and all they will say is that they will “make a start” on cutting spending. They are making it up as they go along, giving a nod to their baying right and then a reassuring wink to their worried left. They cannot be trusted and they would deliver a decade of austerity and low growth for Wales. They would cut support to the economy, which would lead to higher unemployment, bigger welfare bills and in turn to even higher borrowing and debt. They would bury hope with pessimism and would deliver a decade of austerity rather than the decade of growth that we plan.

In January, Britain emerged from the toughest recession since the 1930s. The growth figure, although modest, combined with the good news that unemployment in Wales fell for the first time since the recession began, means that we can be cautiously-I stress cautiously-optimistic. But things will not be easy; our priority now is to lock in the economic recovery. Access to finance from banks is still a major problem for too many businesses, especially small ones. I heard yesterday from representatives of small businesses in Cardigan whom the hon. Member for Ceredigion (Mark Williams) brought to see me with the hon. Member for Montgomeryshire (Lembit Öpik). Those businesses are having difficulties with the banks. Far too many businesses are unable to get loans from banks at rates that they can afford. The banks are charging small businesses ridiculously high rates of interest, as the hon. Member for Ceredigion explained to me.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) (PC): I appreciate the Secretary of State’s comments on this issue. We are all struggling with businesses that are unable to get reasonable credit, but was not the right time for the good Lord Myners to impose certain conditions in that regard when the deal was struck and the money was put into the banks?

Mr. Hain: We have been pressing the banks. We have done so since the beginning and during negotiations that led to the support, without which the whole banking system would have collapsed. We have stressed that the priority is for the banks to get the money out into the real economy. They have spent most of the time recapitalising themselves. As the hon. Gentleman has raised this point, let me report briefly on the past couple of economic summits that have been convened by the First Minister in Wales with my support and with the participation of a wide range of groups, including businesses and trade unions. One of the most telling points that everyone accepts, given the evidence that we have received, is that local bank managers no longer have-and have not had for the past 10 to 15 years-the autonomy to take certain decisions. That applies even though some of them have built up relationships with local businesses, know them and their directors and know the health of the economy. Instead of being able to sign off loans and continue credit arrangements, they have to pass decisions up the line to someone who sits at a computer, feeds material in and then says no.

Lembit Öpik: I know that it is not fashionable to do so, but I have to report two bits of good news. HSBC and the Royal Bank of Scotland have recently been quite helpful during detailed negotiations, but they are strapped by the recapitalisation demands on them. Nevertheless, does the Secretary of State agree that had the Conservatives been in government at the time and presided over the collapse of the banking system, there would have been no prospect whatever of economic recovery? It seems to me that that is what would have happened if they had carried out their promises at the time.

Mr. Hain: Again, the hon. Gentleman is absolutely right and speaks the truth. At that really difficult moment when the whole of the banking system could have collapsed, after which people would have lost their savings and much calamity would have resulted, if the disastrous policies that the Conservatives advocated had been followed, they would have made things much worse, whereas people accept that our policies have delivered results.

As I have said, it will not be easy to emerge from recession. We need to lock in the economic recovery, but finance from the banks is still a major problem. That is why we have committed another £500 million to the enterprise finance guarantee scheme, thereby enabling more businesses to access it. Currently, more than £33 million of loans have been offered to nearly 430 companies in Wales. Again, that support would be cut by the Conservatives.

Hywel Williams (Caernarfon) (PC): While the Secretary of State is in a happy and optimistic mood, will he tell us whether he is happy with the bonuses being paid by RBS? I think that the figure announced this morning was £1.3 billion. Is he sanguine about that?

Mr. Hain: I think that bankers have made themselves even more unpopular than politicians in recent times, and that is saying something. I do not like that level of bonuses. The chief executive of RBS has said that he is not taking a bonus. Obviously, the high bonuses for high earners have been restricted in all sorts of ways as a result of Government intervention, but the banks need to explain to the public, whose money has bailed them out, how they can possibly justify those very large bonuses. They need to give those explanations to the citizens of-in this case-Wales.

On the banks, how can anyone take the Tories seriously when they say that they will cut the deficit further and faster, now that they are planning practically to give away bank shares? Their deficit reduction plan is a total farce. As for shares in the banks, the public rightly demand that we should focus on getting back their money-the £70 billion that was handed to the banks by the Government. We were right to bail the banks out because we had to save the banking system so that the recession did not become a prolonged depression. However, it should be obvious to everybody that any responsible Government who are really committed to cutting the deficit and getting those billions of pounds of public money back must not discount those shares but sell them at a time and in a way that will maximise their value to the taxpayer. The Conservatives have merely offered the people of Wales and the United Kingdom an irresponsible and costly political gimmick. By contrast, we have supported businesses and our intervention has avoided unemployment rising as high as many predicted it would. Unemployment in Wales has fallen slightly in the past two months, but we cannot be complacent; unemployment may rise again and every job loss is devastating for those concerned.

We know that young people across Wales have been hit particularly hard by the recession but we will not condemn a generation to unemployment like that in the 1980s and 1990s. To prevent another generation from being lost to work we have extended the young person’s guarantee so that young people receive training and support after six, rather than 12, months, to ensure they have the necessary skills for permanent worthwhile employment. That said, youth unemployment in Wales is still a quarter lower than it was at the height of the early ’90s, and long-term youth unemployment is nearly two thirds lower.

Alongside those measures, we are looking to the future. We are not cutting back, but are investing to promote growth in the new industries of the digital, low-carbon economy that my right hon. Friend the Member for Pontypridd (Dr. Howells) mentioned earlier. We have used the strategic investment fund in Wales to invest in a £44 million high-performance computing institute-a world-class facility to build a world-class Wales. By giving companies in Wales improved access to the latest IT and training, we can ensure that Welsh businesses are able to compete on a global stage alongside other world-leading innovators.

Faster growth means more people going back to work, thus cutting the costs of unemployment and cutting the deficit. If we had walked by on the other side, believing that unemployment was a price worth paying, then the deficit would be even greater and unemployment rates even higher. That is the reality of a Tory recession. We saw it in the 1980s and ’90s: will they never learn?

I say it again: Welsh citizens need a Government who are on their side, not a Government who leave them on their own. That is why we celebrate-

Mr. Crabb: Will the Secretary of State give way?

Mr. Hain: I have given way a lot up to now, and I want to make some progress.

That is why we celebrate, not apologise for, this 10th anniversary of Labour passing the National Minimum Wage Act 1998. It remains one of this Government’s proudest achievements, having benefited millions of people. The latest increase in the national minimum wage has benefited over 50,000 workers in Wales alone.

When the hon. Member for Chesham and Amersham voted against the national minimum wage, as she did-

Mrs. Gillan indicated assent.

Mr. Hain: The hon. Lady nods her head in satisfaction. Then, wages of as little as £1.20 an hour were common and legal in our constituencies. That is just £1.38 an hour in today’s prices. So when she tries to say that she cares about families and people struggling to make ends meet, just imagine what it would be like to live on £1.38 an hour today, as might have been the case without the minimum wage.

Mrs. Gillan: The right hon. Gentleman knows that that sort of rhetoric is rather cheap, and that I do care about families and individuals. The minimum wage has certainly done a good job in places, but would not a minimum income have been better for families?

Mark Tami (Alyn and Deeside) (Lab): The hon. Lady did not argue for that.

Mr. Hain: She certainly did not argue for that. Is she now saying that she was wrong on the minimum wage, just as she has been, and in her current policies continues to be, so wrong on so many other things? The Leader of the Opposition said that the minimum wage “would send unemployment straight back up”, but Labour has delivered a rising minimum wage, and more people in work than ever before in Wales.

We also want to take Wales forward as part of a digital Britain. The Conservatives seem ready to cast aside any broadcaster that dares to compete with Rupert Murdoch. We say that sharing a fraction of the BBC’s licence fee-and it is only a tiny fraction- is necessary to help make sure that we get diversity of television news and strengthen local and national media outlets across Wales. [ Interruption. ] The hon. Member for Chesham and Amersham is muttering into her cups over there, but the Opposition are opposing our support for a new news outlet on Channel 3.

If the Conservatives get their way and refuse to back the pilots with the funding from the licence fee that we support, there is a real danger that Channel 3 will no longer have Welsh news, and that “Wales Tonight” and the other news programmes that it broadcasts will be lost. That funding is only a tiny fraction of the licence fee and, as I say, it is necessary to help make sure that we get diversity of television news and strengthen local and national media outlets across Wales. We want choice for the many and not, as the Opposition would prefer, profits for their rich friends.

Andrew Mackinlay (Thurrock) (Lab): I am very grateful to my right hon. Friend for giving way and I apologise for interrupting. I asked the nice man sitting on his left, who seems to have an advance copy of my right hon. Friend’s speech, whether he was going to deal with governance. I got the impression that he was not, and I did not want to be disappointed about not intervening to ask about it.

As an English Member of Parliament I am very interested in governance, and hope that my right hon. Friend will address this issue. Ministers with primarily English portfolios have taken arbitrary decisions without consulting their opposite numbers in Belfast, Edinburgh and Cardiff. As Secretary of State for Wales, will he jealously press the Justice Secretary, who is the custodian of these matters, to ensure that that does not happen?

By way of example, and in conclusion, I refer to the arbitrary decision of the Secretary of State for Health to abrogate and tear up the reciprocal health agreements between the Isle of Man, Guernsey and Jersey, without consulting the Health Ministers in Wales, Edinburgh or Northern Ireland.

Mr. Hain: My hon. Friend has got me on that one. I always admire his energy as a parliamentarian, but this Government have been an enthusiastic devolver of power. We have devolved more powers than any other Government in our history, and of course we respect the rights of Wales, Scotland and Northern, as we do those of the islands that he mentioned.

I cannot for the life of me understand why the hon. Member for Chesham and Amersham now opposes the 50p monthly levy on telephone line rentals to finance super-fast broadband everywhere in Wales. How can she justify all the “not spots” in Wales, and all the households and businesses there-such as those whose representatives the hon. Member for Ceredigion brought to see me yesterday-that are now unable to get broadband? How can she justify them falling even further behind while the rest of Britain forges ahead?

Adam Price (Carmarthen, East and Dinefwr) (PC): In response to the question about governance raised by the hon. Member for Thurrock (Andrew Mackinlay), the Secretary of State rightly said that he has been an enthusiastic proponent of devolution. Will he tell the House when he intends to reply to the letter written to him by his colleague the First Minister for Wales?

Mr. Hain: I have replied to that letter, and on Monday I put a copy of the First Minister’s letter and my reply in the Library of the House of Commons.

Lembit Öpik: On broadband, I am heartened by the Government’s apparent commitment to address “not spots”. Many of my constituents live in such areas, so will he say when they can expect to be connected to broadband? At present, they can do that by satellite, but there are some technical limitations to what they can get by that means, which is also tremendously expensive. They will be very encouraged if they can get an assurance that the Government are truly committed to funding the arrival of broadband, especially in small towns and villages such as Darowen and Staylittle.

Mr. Hain: Indeed we are committed to that. It is precisely to address the future needs of the Welsh economy that the Government want businesses and residents in the small towns of the kind that he and many of us represent to have access to fast, high-quality broadband. We have proposed the levy of 50p a month on telephone line rentals to fund that. I cannot give a time scale, but I am happy to write to the hon. Gentleman, especially if he lets my office know which specific areas he is talking about.

Mrs. Gillan: Many pensioners-perhaps especially those who live on their own-are not familiar with the iPhones and other mobile telephone technology that both the Secretary of State and indeed I have. Has he calculated how many of those pensioners will be paying this levy? How many business and call centres will pay it, and would it be better for them to relocate to other places?

Mr. Hain: What is the hon. Lady suggesting-that paying a UK-wide levy of only 50p extra a month should encourage residents and businesses to flee our shores wholesale? How would she address the issue? We get no policies from the Conservatives on these vital questions, whereas we have provided a practical and funded route to delivering universal broadband.

Mrs. Gillan: How many pensioners?

Mr. Hain: I can take my own mother as an example. She is a Welsh pensioner, and is quite happy to pay the rental. She is on broadband, and emails and texts almost obsessively. I suppose that she is an example of a modern pensioner in Wales, and I know that she is happy to be part of the broadband revolution that the Conservatives oppose.

Under Labour, the Welsh budget has more than doubled from under £7 billion in 1996-97 to nearly £16 billion in 2010-11-a bigger real terms rise than ever in Wales’s history. The Welsh Assembly Government have opened nine new hospitals, and of course introduced free prescriptions. That policy is now under threat from the Tories, but it particularly benefits those people on low incomes or with chronic illnesses who may not have previously been eligible for free prescriptions under the complicated and outdated exemption system.

The Welsh Assembly Government have introduced free primary school breakfasts for more than 900 schools across Wales-also a policy under threat from the Tories. Free bus travel for the over-60s and concessionary rates for people with disabilities have also been hugely successful, with more than 600,000 people benefiting from free travel. That is also under threat from the Tories. In Westminster, we are passing laws to promote equality, tackle discrimination, help vulnerable people with their energy bills, grant equal treatment for agency workers and enshrine in law for the very first time our commitment to abolish child poverty. Those policies were all resisted by the Tories. That is the role of an active Government who care, and that is a programme for a Labour Government who help the many, not a Tory party that wants to help out only a tiny few.

People in Wales increasingly realise, when they add it all up, that they cannot afford to lose this Labour Government. The Tories would be a change that we in Wales cannot afford. Instead of proposing tax breaks for millionaires, we are protecting the most vulnerable. On average in 2009-10, as a result of our tax and benefit changes, pensioner households will be £1,500 a year better off than they would have been if the pre-1997 system had continued. On average, the poorest third of pensioner households will be £2,100 a year, or £41 a week, better off than they were under the 1997 system-due to the Government’s tax and benefit changes.

Our winter fuel payment has risen from £10 under the Tories to £250 for the over-60s, rising to £400 for the over-80s. Again, they are policies offering vital support that could well be cut under the Tories’ austerity programme. Evasive and unfair: that is the Tory attitude to Wales. The shadow Chancellor, through his pay freeze, would on average cut the pay of every nurse and teacher in Wales by about £300 per year-all at a time when those at the top would receive the biggest tax breaks. Under the Tories’ initial proposal for the married couple’s allowance, for example, the highest earners would receive 13 times as much of the benefit as someone at the other end of the income scale. As soon as that proposal came under scrutiny, the Tories buckled, being unable to explain how a mother who was suddenly widowed would become poorer under their married tax allowance policy. They are trying to make policy with a nod and a wink.

We will reduce the public deficit fairly by halving it within four years. We have always said that we will ensure that those with the broadest shoulders bear their fair share of the burden. Those words have been borne out by actions, such as our new 50 per cent. top rate of tax, a pay freeze for top civil service earners and a one-off tax on bankers’ bonuses of £25,000 or more. All those measures have been opposed by the Tories. Instead, they are sticking to their plans to give the 3,000 very richest people an extra £200,000 each in inheritance tax cuts, while delivering savage public spending cuts and a pay freeze for public sector workers.

We have delivered on our spending review promise and increased Welsh funding by £500 million for 2010-11. That is new money, and it would not be going to Wales if the Tories had their way.

Mr. Crabb: The right hon. Gentleman sits in a Cabinet that approved a brutal cut of almost £1 billion to the higher education budget in England, meaning that many thousands of Welsh students who are hoping to study at English universities later this year will be told that they do not have a place. Indeed, they will probably go on the youth unemployment roll, so has does that benefit young people in Wales?

Mr. Hain: We have asked universities to make efficiency savings, and I do not think that “a brutal cut” is a phrase that any vice-chancellor recognises. Indeed, one Welsh vice-chancellor told me relatively recently that he thought that the measure could be easily absorbed without any of the consequences that the hon. Gentleman describes. Interestingly, the number of people applying to and getting into universities has been rising steadily, including over the past year.

We are in no doubt where the truth lies: the Tories would have an emergency Budget within weeks of entering power and leave Wales as the biggest casualty, with hard-working Welsh people fighting for their livelihoods. The Tories would make savage and swingeing cuts to the public services of Wales, creating a huge rise in unemployment and a collapse in businesses that supply the public sector.

So where else would those cuts fall? The Tories cannot deliver what they promise without slashing investment in Welsh schools and hospitals, Sure Start and large projects such as launch aid for the new Airbus planes at Deeside. Since 1997, and after years of decline in our public services, we have invested in our health service, schools, infrastructure and police force. People depend on those services being well funded and efficient, and in Wales there are almost 7,300 police officers-700 more than in March 1997.

Health spending in Wales has increased under Labour to more than £1,900 per person per year, and that is more than double the 1996-97 Tory figure. GP numbers have risen by 9 per cent. over the past decade, and nursing, midwifery and health visiting staff numbers rose by one fifth. They are all Labour policies that deliver real help to people in Wales. Wales faces a stark choice between securing the economic recovery or wrecking it; building a fair society where everyone prospers or a divided society that favours a few; and protecting front-line services or a programme of savage cuts. That is the choice that people will face in a few weeks’ time.

Our actions will not be painless, but nor will they be reckless. The recovery is coming now because of the action that this Government have taken. However, the recovery in Wales is still fragile, and Tory policies threaten it. Only Labour can secure the jobs and mortgages of people in Wales; the Tories would be a change that we in Wales cannot afford. The red team may be the underdogs, but the blue team are crumbling under pressure, and momentum is as important in rugby as it is in politics. We will keep going to the final whistle on polling day in order to save Wales from the disaster of a Tory Government.