With permission, Mr. Speaker, I would like to make a statement on the national minimum wage.

As the House will know, in June last year I asked the independent Low Pay Commission to produce a further report on the national minimum wage by July of this year. In particular, the commission was asked to consider whether there was a case for increasing the rate of the minimum wage. In considering any increase, it was required to take into account movements in earnings, the effect on employment, the impact on individual sectors, including small business, and the likely and future impact on the economy.

The commission announced at the end of January that this year it would produce its report in two parts. It had a clear message from employers that the length of notice given of any changes would be critical.

Today we are publishing volume one of the commission's third report. It looks solely at the main rate, and makes recommendations to have effect on 1 October this year and next. Copies will be placed in the Library of the House.

I thank the commission chairman, Professor George Bain, and its other members for the time, commitment and detailed consideration that they have given in preparing today's report. The strength of its recommendations comes from the detailed analysis, and also from the fact that it is a unanimous report, agreed by, for example, the deputy general secretary of the Transport and General Workers Union as well as the deputy director general of the Confederation of British Industry

The report concludes that the minimum wage has been a success, with nearly 1.5 million benefiting without any adverse impact on employment or the competitive position of British business. More than 70 per cent. of those benefiting are women. The commission concludes that, in narrowing the gender pay gap the minimum wage has had the most beneficial effect on women's pay since the introduction of the Equal Pay Act 1970 more than 30 years ago. It has also helped close the gap in regional pay differences. Since its introduction, the largest increases in average earnings have been in traditionally low-paying parts of the United Kingdom. While the national average increase in earnings for the first year of the minimum wage was 3 per cent., average earnings in the north-east rose by 5 per cent. In Wales, the average increase in earnings was over 4 per cent., and in Yorkshire and the Humber it was 3.5 per cent.

The minimum wage is about ensuring that people throughout the United Kingdom share in the country's economic prosperity. Twenty years ago, pensioners made up the largest section of those in poverty. Today it is those living in workless working-age households who are in poverty. Simply compensating people for their poverty through benefits is not good enough; the task must be to deal with the causes of poverty. The best form of welfare is work, and having a job. That is why it is crucial to make work pay, and the national minimum wage makes a vital contribution to the achievement of that objective.

Of course, there are those who opposed the very concept of a national minimum wage. They said that its introduction was the height of irresponsibility. Some said that it was a cretinous idea. Others said that it would deal a blow to low earners and would cost more than 1 million jobs.

The critics have been proved wrong, wrong and wrong. Employment has increased by nearly 450,000 since the introduction of the national minimum wage in April 1999 and by more than 1 million since we were elected with a clear pledge to introduce it. The number of jobs in the hotel and catering sector, which includes a high proportion of low-paid jobs, increased by 14,000 between March 1999 and September 2000.

In recommending a new rate, the commission had to satisfy itself about the likely impact of any increase. A rate that was not manageable would hurt the prospects of the very people whom it was meant to benefit. The commission is confident that there is scope for a significant increase in the rate of the minimum wage. The aim has been to make recommendations that are bold enough to make a real difference, but prudent enough not to have an adverse impact on employment or the economy. The commission's report is unanimous. It recommends that the adult rate, currently £3.70 an hour, should increase to £4.10 an hour on 1 October this year.

The Government accept that recommendation. It will mean that someone on the minimum wage and working a 40-hour week will see their earnings increase by £16 a week. It will mean a £10 a week increase for someone working 25 hours a week. Coupled with the working families tax credit, the Government are ensuring that work pays. The commission also recommends that the adult rate should increase in October next year to £4.20 an hour. In principle, the Government also accept that recommendation, subject to the economic conditions prevailing at the time.

The commission's report looks in detail at the impact of an increase to £4.10. It finds that the estimated wage bill impact will be modest—lower than the wage bill increase that resulted from the introduction of the minimum wage—and that the minimum wage had no discernible impact on the main measures of inflation. Analysis shows that the rise in the wage bill that would follow from the proposed increase to £4.10 adds 0.07 per cent. to inflation in the first year and 0.05 per cent. in the second.

The new rate for the minimum wage will apply across the board: to part-time and full-time workers, to agency staff and to those who work from home. I understand that there are some who would exclude businesses that employ fewer than 100 people from all legal requirements, apart from health and safety. That would mean nearly 8 million people being denied decent rights in the workplace. We reject such an approach. That is why the minimum wage will apply to all those in work, whatever the size of organisation that employs them.

The introduction of the national minimum wage has been one of the Government's great achievements. It has already had a real and much-needed impact on the lives of many hard-working people and their families, helping to raise the pay and standard of living of almost 1.5 million people.

The minimum wage combines economic efficiency and social justice. Increasing it to £4.10 an hour will take people further out of poverty pay. It is a significant increase that is affordable and will make a real difference to those who receive it. It brings reality to the phrase "dignity of work." I commend the increase to the House.

I am grateful to the Secretary of State for giving me some notice of his statement today.

Last October, the national minimum wage was uprated by 10p an hour. Before that, the Secretary of State made no oral statement to the House. Today, however, he has announced in the House that there will be a 40p uprating in the minimum wage. Is the difference in the announcement and the way in which it was made anything whatever to do with the fact that there will shortly be a general election?

When we take office after that general election, businesses will be planning that uprating and adjusting their payrolls accordingly. We shall therefore not oppose this uprating—[Interruption.] I want to make that clear at the outset. However, I do have various conditions and questions for the Secretary of State—[Interruption.]

Order. The right hon. Gentleman is entitled to a hearing. The Minister received a hearing; the right hon. Gentleman is entitled to one.

I am most grateful, Mr. Speaker.

Why has the Secretary of State been so anxious to make this announcement on the minimum wage while at the same time adding to the regulatory burdens on the very businesses that will be delivering the jobs in future? I remind him that, according to the British Chambers of Commerce, over the lifetime of this Parliament, that regulatory burden amounts to an extra £10 billion on British business. Would he like to confirm that, contrary to his earlier claims, that £10 billion figure does not include the financial costs of the minimum wage?

Is the Secretary of State aware that small business organisations are extremely alarmed at the damage caused by those regulations—which are added now to a substantial uprating later this year—particularly in vulnerable sectors such as village shops, sub-post offices and care homes?

I should like the Secretary of State to deal specifically with the point about the costs on private care homes. Is he aware that, this year, most care homes are receiving a funding increase from the Department of Social Security and from local authorities of between 1 and 2 per cent., whereas those same homes will now have an increase in their total costs of more than 7 per cent? For an average 20-bed care home, that will increase those costs by £2,600 annually. That is a Government responsibility. This is a Government problem that is being made worse by the Secretary of State's announcement. What offsetting arrangements is he making to get over and solve that crisis in care?

Will the Secretary of State also confirm that it is not within the Low Pay Commission's remit, but up to the Government, to assess the economic effects of increasing the national minimum wage in that manner? What could the damage be if this turns out to be at the top of the economic cycle? Will he confirm that unemployment decreased more slowly in the first three years of this Government than in the last three years of the previous Government? Will he therefore give his own assessment of the effect that the uprating will have on future employment growth, on which national prosperity and the prosperity of the low paid depend?

Will the Secretary of State comment on the report today by the organisation Incomes Data Services—which is authoritative in this sphere—which shows that pay settlements are running substantially ahead not only of inflation, but of last year's equivalent wage settlements? Those data were not available to the Low Pay Commission when it drew up its recommendation.

The Secretary of State gave a very low figure for the inflationary consequences of his announced uprating. Will he tell us whether that takes account of the preservation of differentials when the national minimum wage is increased by 11 per cent. and also of the earnings figure that has now been disclosed by IDS?

Finally, will the Secretary of State confirm that, in "Economic Trends", the Office for National Statistics records that under this Government, the tax burden on the poorest 20 per cent. of households has increased from 37 per cent. of gross income to 40 per cent.? So the sharpest rise in taxation under this Labour Government has been imposed on the poorest fifth of households. Will he confirm those Government figures? If the House takes seriously its duty to help the lowest paid, as it should, it will pay at least as much attention to that problem, and to the problem of future employment growth, as it does to this uprating of the national minimum wage.

Well, there we have it. I admit that I had some sympathy for the right hon. Member for Wells (Mr. Heathcoat—Amory) at the beginning of his response, because he had to accept that the Conservative party agree with the decision that the Government took, having opposed, day in and day out, the introduction of a national minimum wage.

The people of this country know the Conservative party's approach to the national minimum wage—it disagrees with it in principle, and it would allow it to wither on the vine. That is why the right hon. Gentleman said that the minimum wage would deal a body blow to low earners. That is his view of the national minimum wage, and he knows that it has not changed. The hon. Member for Rutland and Melton (Mr. Duncan) called it a "cretinous" policy. Well, he should know—but the reality is that 1.5 million people have benefited from its introduction. The right hon. Gentleman said little on the details of the proposals that we have announced this afternoon.

On the impact on small businesses and, in particular, on the private care sector, the Low Pay Commission has considered in detail the impact of the increase, sector by sector, and has decided that it would be prudent to adopt a significant increase to £4.10. That increase will make a real difference to those who receive it, but it will not have an adverse impact on either the economy or employment levels. That is the position. If the right hon. Gentleman looks at the areas where we have had the biggest increase in employment growth, he will see that they happen to be those that have traditionally been in the low-paid sector. That is the reality, as he will know.

Yet again, we have heard the cry about burdens on business. It is about time that the right hon. Gentleman made a distinction between red tape and bureaucratic burdens and decent, minimum standards. Today's announcement is about decent, minimum standards. The right hon. Gentleman will not challenge directly the basic standards that the Government are providing because he knows that they have broad and popular support. Instead, a code is used—the right to time off in emergencies involving children, the right to four weeks' paid holiday and the right to a national minimum wage is all red tape and bureaucracy. Well, it is not; it is what people should expect at the beginning of the 21st century. Under this Government, they will get those decent minimum standards; under the right hon. Gentleman, they would be taken away.

It is like having two Budgets in a week.

Is my right hon. Friend aware that no Labour Government with a majority in Parliament have ever introduced a minimum wage? The Attlee Government did not achieve it; neither did the Wilson nor the Callaghan Governments. That is why it is important that my right hon. Friend has made a statement today, even though the Tories do not want to hear the truth. Is he aware that this minimum wage is vital to people in areas where the bosses have got the whip hand and where the pits were shut and people were paint spraying at £2.10 an hour? I went through those Lobbies glad to vote for the minimum wage, muttering "£5" as I went through, and I look forward to the day when, in the next Government, my right hon. Friend will take the figure up to £5 an hour. Then he will get another plaudit from me.

We shall probably have to wait for the Low Pay Commission to report. However, I can tell my hon. Friend that we have decided to make the commission permanent—it had been reappointed on an annual basis. However, under this Government, the minimum wage is here to stay, which is why the Low Pay Commission is to be made a permanent body.

My hon. Friend is right to point out that the minimum wage is significant for individuals. I know from my own constituency of many hundreds of people who have benefited from the minimum wage. I remember vividly a security guard coming to my advice surgery. He pulled out his wage slips and he showed me that he was paid £1.80 an hour for working evenings and weekends. He said, "Now, because of what you have done, I am being paid £3.60 and hour", which was the rate at the time. He added, "This has simply made a difference to my life that I could not have believed before you introduced it." That is why the Labour party and this Government are committed to retaining the minimum wage and ensuring that it will not wither away.

May I welcome the announcement, particularly on behalf of my colleagues who represent constituencies in the south-west, the north-east and Wales, where wages are below the national average?

Although I was given 20 minutes to read the Government's 170-page report, I have several questions for the Secretary of State about it. First, table 4.2 suggests that one of the main beneficiaries of today's announcement will be the Chancellor of the Exchequer because there will be a substantial saving in benefit payments amounting to about £100 in million plus increased tax and national insurance contributions. As the reduced working families tax credit payment amounts, in effect, to a tax on business, what plans does the Chancellor have to feed back the money from the Treasury to business?

Secondly, what analysis has the Secretary of State conducted of the impact of the changes specifically on the competitiveness of manufacturing industry? Table A.3.1 in appendix 3 suggests that, at the present level of exchange rates, we now have the highest minimum wage of any country in Europe apart from Luxembourg. What assessment has he made of the impact of that on the unit costs of manufacturing and what proposals has he to enable British manufacturers, who have to compete for trade, to sustain the increase in costs?

Finally, although most groups in society will benefit from and appreciate the increase, some specialist groups have concerns. I am sure that the Secretary of State has read the Mencap report on people with learning difficulties. What thought has been given to the impact of the minimum wage on Mencap and associated groups and how does he propose to deal with their particular problems?

The Low Pay Commission is considering the hon. Gentleman's final point about therapeutic workers and that will form part of its recommendations in volume two of the report, which we expect to receive in a few months.

On the hon. Gentleman's question about the tax and benefits position, we should probably all wait until my right hon. Friend the Chancellor of the Exchequer makes his Budget statement on Wednesday. That may have an impact on these matters.

The hon. Gentleman also asked about the competitive position. The Low Pay Commission was particularly tasked with the responsibility of ensuring that any increase would be significant to individuals, but would not effect the competitive position of British business. That balanced approach is important, and I am confident, from the Government's analysis, that the commission's recommendation of an increase to £4.10 will not affect the competitive position of British manufacturing.

Does the Secretary of State agree that it is axiomatic in his statement that, if the Low Pay Commission gets it wrong, that could have an adverse effect on employment and the economy? Is not the simple fact that, if the minimum wage is set below market levels, it is otiose and, if it is set above market levels, it will simply result in job losses in the economy? Does the Secretary of State agree that either the minimum is not needed at all or that, if it is applied in this way, it will result in job losses?

The hon. Gentleman is repeating what he said in the House on 4 May 1997.

It was not on 4 May—that was a Sunday.

It was 14 May—the hon. Gentleman is right. We all remember that weekend very well.

When the Labour party took office, we announced the introduction of the national minimum wage in the Queen's Speech. The hon. Member for Banbury (Mr. Baldry) shows that Conservative party policy has not changed; the Conservatives still fundamentally disagree with a national minimum wage.

It is important to have a significant increase that helps individuals without producing the adverse consequences that the hon. Gentleman mentions. A minimum wage of £3.70 has made a difference to people who receive it, and an increase to £4.10 in October will be significant. That bold move can be afforded. It is manageable because of the economy and its strengths. I think that we have achieved the correct balance. We are not threatening the economy or jobs; rather, we are increasing the national minimum wage to a decent level.

Is my right hon. Friend aware that when I asked his counterpart in the previous Government what a constituent of mine was to do because his hourly pay as a security guard had been reduced to £2-plus and his average working week had been increased to 70 hours, he said that my constituent had the choice of resigning, even though the constituency had some of the worst unemployment in the country and the worst youth unemployment in England? Is my right hon. Friend also aware that, by capping the working week, providing minimum pay and cutting unemployment vastly—youth unemployment has fallen by two thirds in my constituency—the Government have transformed many of my constituents from virtual menial slaves to respected working people who contribute to society?

My right hon. Friend makes an important point. His illustration of the way in which his genuine question was dealt with by the Minister responsible at the time demonstrates a typical Tory reaction to a pressing issue. He is correct in outlining the benefits that his constituents and many millions of other hard-working people up and down the country have received. We were elected to govern for all our people, and that is exactly what we are doing, whether by introducing the national minimum wage, providing working-time paid holidays or ensuring that people can balance work and family life. Those important measures are also sympathetic to the needs of business. The increase in the national minimum wage reflects that approach.

Many of us are overjoyed by my right hon. Friend's statement because we have campaigned for the minimum wage to be uprated. Does he share my disappointment to hear the whingeing of Conservative Members? Given that Members of Parliament are on a salary of almost £50,000 a year, is it not miserly to begrudge an increase to those people whose salary will, even after today's announcement, be only about £8,500 a year? Although his statement is good news, will he also consider, before the rate is introduced in October, the youth rate of the national minimum wage so that there is not a greater discrepancy between them?

I share my hon. Friend's disappointment, but I am not surprised by the reaction of Conservative Members because we know their view about the national minimum wage. On the youth rate, I assure her that we have asked the Low Pay Commission to consider that in volume two of the report, which will be produced a little later this year.

Will the Secretary of State assure us that there will be appropriate changes to the level of tax credits to ensure that the increases in October will lead to a real increase in living standards, rather than simply being an accountancy exercise? Does he agree that in some seaside towns there is an anomaly because employees in cafes and restaurants receive substantial tips from the customer on top of the minimum wage, while employees in the shops next door simply receive the minimum wage? Can that be resolved? Although I appreciate that it will be difficult to do so, I hope that the Secretary of State accepts that it is a problem.

Tips do not count against the national minimum wage, and there may be a particular problem to which the hon. Gentleman is referring. I understand his concern about the possible impact of the minimum wage on seaside towns. The Low Pay Commission considered the hospitality, catering and hotel industries because, as we are all aware, they are traditionally low-paid sectors. We wanted to ensure that an increase to £4.10 an hour would not have an adverse effect on them, and the commission's analysis shows that it will not.

On the interface between the tax and benefits system, I repeat that it is worth waiting for the Chancellor's statement on Wednesday.

The national minimum wage will be one of the greatest monuments to this Government. I welcome the speed and boldness with which my right hon. Friend reported to the House this afternoon. He said that the impact of the minimum wage on inflation is less than 0.05 percent. Families in the pit villages that I represent and in the coalfields of Yorkshire more generally will feel that £16 is a massive increase in their weekly household income and will greatly welcome it.

The right hon. Member for Wells (Mr. Heathcoat-Amory) said that he would not oppose the measure. That form of words is more than a verbal circumlocution; it indicates a fundamental dividing line in the House. Does my right hon. Friend agree that the Tories have always resisted the national minimum wage and other measures to improve the living standards of working people?

It is a traditional role of the Conservative party to do precisely that, and my hon. Friend is absolutely right. Those who work 40 hours a week will see their earnings rise by £16 pounds a week and those who work 25 hours will receive an increase of £10. That will make a real difference to hard-working people and their families. It is interesting that the right hon. Member for Wells (Mr. Heathcoat-Amory) did not say that the Conservatives' policy of exempting employers of up to 100 people from bask employment legislation, except for health and safety provisions, would not apply in this case. A raft of employees would therefore be exempt from the national minimum wage. We shall certainly make sure that people throughout the country are acutely aware of that.

I thought that we were here to discuss the Government's policy. Will the Secretary of State therefore answer the question asked by my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) about whether those who run care homes will feel a particular impact following his announcement? Given that the number of care homes that are closing is causing alarming problems, especially for the health service and related areas, what will the Government do to help care homes?

The hon. Gentleman raises an important point. We must ensure that every sector involved is able to manage the increase, and the Low Pay Commission is confident that that is the case. The private care sector plays an important role in our society and it is valued. We would not introduce any measures that would threaten its future, and we are confident that the measures that I have announced today will not do so. The implication of what the hon. Gentleman said is that people working in the private care sector should not be paid the national minimum wage, and we disagree.

Is my right hon. Friend aware that one of the main reasons that the Government have remained popular is that Ministers are concerned about ordinary people, not least those who desperately require Parliament's protection—namely, low-paid workers? Is he surprised to learn that far from wanting an election, the Tories are absolutely terrified of having one?

My hon. Friend is absolutely right. We have taken people out of poverty pay through the national minimum wage, which was introduced in the face of total opposition from the Conservatives. Their words might have changed, but we know that their beliefs remain the same: they do not accept even the concept of a national minimum wage.

May I welcome today's announcement and congratulate the Government on sticking to their principles in this respect? I have a couple of questions, the first of which relates to the long-term future of the national minimum wage. Does the Secretary of State accept that subsidies to the low-paid will continue, for example, in the form of the working families tax credit, which can be seen in that light? In the long term, will he consider raising the national minimum wage to a level at which those subsidies do not kick in, and recycling the Treasury money, perhaps in the form of support for small businesses?

Secondly, will the right hon. Gentleman examine where real poverty in the workplace now occurs? Increasingly, it is the small self-employed tradesperson—the farmer, or the person who runs a small rural post office—who is affected. Such people cannot avail themselves of the national minimum wage but increasingly receive less than the national minimum wage. Will the Government consider whether that problem can be addressed through the tax system, so that poverty does not increase in one part of the economy while it is decreasing in another?

We must ensure that we have measures in place to make work pay, whether for the self-employed, farmers or workplace employees. The issue can be addressed in a variety of ways: one is through the tax regime; another is through the introduction of the national minimum wage. As for the working families tax credit, it is important that we have in place measures that complement the safety net of the national minimum wage; the working families tax credit achieves precisely that. We have to achieve a balance and set the national minimum wage at a level that takes people out of poverty pay but does not affect employment opportunities. Getting that balance right is the crucial test.

I hope that the hon. Gentleman will reflect on the fact that Wales is a part of the United Kingdom that has benefited most from the introduction of the national minimum wage in terms of both the number of people it covers and the increase in average earnings it produces. That increase in average earnings has been of real benefit to the country of Wales and, under the Labour Government, it is secure for the future.

Does my right hon. Friend know how many people in Wales will benefit from this excellent measure and what will be the full-time annual wage of someone receiving the national minimum wage in Wales? Today's announcement heralds an important social and economic advance, which Wales will be pleased to receive from the Government. Why are the Conservatives looking so miserable, sad and out of place? Will my right hon. Friend send for the House of Commons nurse to aid them?

One reason might be that there are no Conservative Members of Parliament to represent the 80,000 people in Wales who benefit from the national minimum wage and will benefit from the increase announced today.

The Secretary of State will know that I am never miserable and that I have always supported the principle of a national minimum wage—indeed, I operated a company in the United States that was subject to the national minimum wage. However, he will recall that in 1997 his own party predicted a national minimum wage of between £5 and £5.50 an hour, which is why the Conservative party said that the result would be high unemployment. Far from the Conservatives being "wrong, wrong, wrong", as he put it, the national minimum wage is just another Labour promise made in 1997 that was broken, broken, broken.

I think that the hon. Gentleman opposed the introduction of the national minimum wage. He will be aware that when we appointed the Low Pay Commission, we said that it was for it to decide the level at which the minimum wage should be introduced. The hon. Gentleman said that

"the minimum wage and other Bills going through Parliament will harm rather than enhance women's employment prospects."—[Official Report, 8 March 1999; Vol. 327, c. 67]

He has forgotten that there are more than 600,000 more women in work now than there were under the Conservative Government. There are more women in work, and they are better paid because 70 per cent. of them benefit from the national minimum wage.

My right hon. Friend rightly received wide-scale plaudits last Friday when he visited the north-west, announcing improvements in the science base. Today, he will receive more plaudits from other parts of the community.

When he next visits the north-west, may I invite him to see lone parents in my constituency who have benefited in their attempts to get into work and obtain real paid work that takes them off benefit as a result of the minimum wage policy? The policy has made a fundamental difference to those people and others. Will my right hon. Friend ensure that that message goes back to the Low Pay Commission? Will he tell it to keep up the good work, and will the Government continue to support the commission?

One reason that the Low Pay Commission is such a strong body is that it visits regions and talks to those who have benefited from the national minimum wage, as well as employers who are responsible for paying that wage. The members of the commission have a balanced and rounded approach to the recommendations that they make.

I have no doubt that my announcement will be good news for the tens of thousands in the north-west who will benefit from it. It is about ensuring that work pays and that there is real dignity for those in the workplace. The national minimum wage is an important element in securing those objectives.

What advice would the Secretary of State give to small business men and women who perhaps employ only one or two people and work many more hours than their employees? Given the right hon. Gentleman's announcement, their net take-home pay will be considerably less than that of the employee in receipt of the minimum wage. Will the Government make up their wages through the social security system? That cannot be done now because they are self-employed. If someone cannot see any light at the end of the tunnel in terms of his business—he may be a farmer, for example—should he sell up before the increase in the minimum wage comes into effect in October?

When the Low Pay Commission considered its recommendation, it looked at the impact that it would have on all sectors of the economy. I am confident that the recommendation that we have been prepared to agree will escape the difficulties to which the hon. Gentleman has referred. It is a balanced approach. It is prudent and bold in that there is a significant increase, but it is being introduced in a way that will not adversely affect the economy or employment generally.

My right hon. Friend's announcement will be extremely welcome in my constituency, where more than 2,000 people—most of them women—have already benefited from the national minimum wage.

There are always Scrooge employers who try to use every dodgy practice going to avoid paying a penny. Will my right hon. Friend assure me that his Department will mount an effective publicity campaign so that people know what they are entitled to? A clear message must be sent to miserly bosses that they need to pay what is due to people.

We need to ensure that there is effective enforcement, and we have committed a good deal of time and resources to that end. Enforcement will be one of the issues covered by the Low Pay Commission in the second volume of its report, which will be available in a few months' time. We lave put measures in place to ensure that people are aware of their entitlement. We have already run an advertising campaign; no doubt we will want to do so again, to publicise the fact that there is to be an increase to £4.10 in October. In the interim, individuals or employers who need guidance or have questions should contact our helpline number, which is 0845 6000 678.

The Secretary of State referred to benefits for women, especially in respect of the hotel and catering industry. Has he had time to read the latest Bank of England quarterly report, which indicates that the trend in the increase in employment is less towards full-time jobs and much more biased towards part-time jobs? Does he recognise that the increase in the national minimum wage will therefore involve less full-time employment and an increase in part-time employment? That is fine if that is what women want when their children are at school, but not if the women are the main breadwinners and bringing up young children.

As I said, the rates will be the same, whether employees are full-time or part-time. As a result of today's announcement, the national minimum wage will go up to £4.10 an hour from this October. It is important that people have a genuine choice; many of them choose to work part-time. I welcome the fact that, as a result of employment growth under this Government, people now have that option and can decide how to balance their lives. If people want to work reduced hours or go part-time, it is important that they should be entitled to do that, particularly if they have responsibilities for child care or looking after an ageing parent. In a genuinely flexible work force, employees can choose to work fewer hours, if that is what they want.

I thank my right hon. Friend for his statement. Will he confirm that there are no grounds at all for differential rates, whether by sector or geographic region? In particular, will he resist calls from Liberal Democrat Members for a lower rate in the south-west and Yorkshire and Humberside?

My hon. Friend is right to point out what the Liberal Democrats' policy was; I am not sure what it is nowadays. [HON. MEMBERS: "Neither are they."] That is probably right. When the national minimum wage was introduced, the Liberal Democrats wanted regional differences in the application of the rate, which would obviously have an adverse impact not just on Yorkshire and Humberside, but on the north-east, the north-west and Wales in particular Under this Government, the national minimum wage is exactly that: it is a national minimum, which does not vary according to sector or geographical location. Wherever someone works in the United Kingdom, in whatever sector, in whatever size of organisation, he or she will be able to get the benefit of the increase that we have announced today.

I accept that a powerful case has been made for the national minimum wage and that my fears about it have not been realised— [Interruption.] I do not find that embarrassing; my mother always said that it was quite a good idea, and I probably should have listened to her earlier.

Will the right hon. Gentleman assure the House that farmers who earn substantially less than the national minimum wage will shortly be on the receiving end of Government largesse? Further to the pertinent inquiry of my hon. Friend the Member for Cotswold (Mr. Clifton-Brown), will the right hon. Gentleman tell the House what specific discussions he is having, or intends to have, with the Federation of Small Businesses and the Forum of Private Business about the impact of the uprating on micro businesses?

The important point is that the Low Pay Commission has consulted and engaged with all organisations and has considered the impact of the national minimum wage. We, too, have looked at its impact, and are confident that some difficulties about which the hon. Gentleman is concerned will not arise. The report was published early in the cycle to ensure that small businesses have plenty of notice of the intention to introduce an increase in October this year. We are now giving them that notice. I have no doubt—and this point was reflected in the report—that, with that period of notice, the change will be manageable for micro businesses and other small businesses.

May I congratulate my right hon. Friend on his statement, particularly as it comes at the beginning of international women's week? Is he aware that, before the statutory minimum wage, countless women went out to work, often part-time, for what was derogatively called "pin money"? One effect of the statutory minimum wage has been to raise the status of part-time work—for example, in cleaning and private care homes, where formerly work was nothing more than exploitation.

My hon. Friend is right. Before we introduced the national minimum wage, there is no doubt that there was exploitation of workers, especially of women in the workplace. Through the introduction of the national minimum wage, we have made sure that work pays for those women, and that part-time workers have the same rights as full-time workers. They are no longer treated legally as second-class citizens. We will ensure that part-time work has status and dignity. Of course, the majority of people working part-time are women, so I am pleased that, as my hon. Friend pointed out, we made the announcement at the beginning of international women's week.

I know that the whole House will want to congratulate the mother of the hon. Member for Buckingham (Mr. Bercow) on her good sense. It is sad that she did not have more influence on him, so that we could have avoided a single sitting of 23 and a half hours in Standing Committee while he and his colleagues tried to talk down the national minimum wage.

I welcome my right hon. Friends confirmation, in answer to my hon. Friend the Member for Basildon (Angela Smith), that the youth rate will be considered before October. Did my right hon. Friend hear Mr. Chris Humphries of the British Chambers of Commerce this morning, when he said that his members, mostly small and medium-sized firms, did not oppose the national minimum wage? Does my right hon. Friend agree that if the membership of that organisation—firms with fewer than 100 employees—were exempted, that would mean the abolition of the minimum wage for a large number of vulnerable employees?

My hon. Friend is right to point out that if employers with fewer than 100 employees were granted an exemption from the national minimum wage, hundreds of thousands of people would lose the benefits of it. That is why we stated clearly that it should apply to all employers. I did listen to Chris Humphries this morning. I know that the British Chambers of Commerce endorses the principle of a national minimum wage, and I hope that now that he has had an opportunity to see the details of our proposals, he will welcome our approach to the matter.

On the specifics of the youth rate, my hon. Friend can be assured that the second volume of the Low Pay Commission report for this year will address it within the next two or three months. When the hon. Member for Rutland and Melton (Mr. Duncan) has read the Low Pay Commission report, he will see that it considered in detail the impact of differentials in relation to the recommendations that it made. In the light of that, the Low Pay Commission recommended a significant increase, which the Government have endorsed.

May I take the Secretary of State back to the issue of the youth rate? When he considers the next report, which will deal with the youth rate, will he also consider extending the national minimum wage to young people aged 16 to 18? As I am sure he is aware, there is a great deal of evidence to suggest that many 16-year-olds are grossly exploited because they are not covered by the national minimum wage, and some employers take great advantage of that. Will he consider, too, the problem of the increasing benefit trap in areas of high housing costs? When people get a job, the loss of benefit combined with very high rent costs unfortunately means that they are worse off. Finally, will he put another 90p on the national minimum wage?

The Low Pay Commission has been charged with the responsibility of examining the youth rate, but we have not restricted that to the existing youth rate; we have specifically asked the commission to examine the position of 16 and 17-year-olds, so they will be covered by the second volume of the report, which is due in a couple of months.

As for the impact of the national minimum wage on the benefits system, the Government keep it under review generally, because it is important that the existing barriers to work—my hon. Friend identified one of them—are removed, so that people are rewarded when they go out to work and recognise that there is a better future for them in work than on benefit. It is important that the barriers are removed wherever possible.

My right hon. Friend's announcement will be warmly welcomed by the people of Devon and Cornwall, where pay is traditionally very low. Thousands of families in the region have benefited from the national minimum wage, so is it not telling that not a single Conservative or Liberal Member from those counties is present to welcome the announcement? Furthermore, is it not time that we were given a fulsome apology by those who opposed the minimum wage? They claimed that it would boost unemployment, but there is record employment in Devon and Cornwall and throughout the country, and it is still rising.

I welcome the fact that we have been proved right on the introduction of the national minimum wage. As my hon. Friend said, it benefits the tens of thousands of people in Devon and Cornwall who have been taken out of poverty pay because of its introduction. Those people will benefit also from the significant increase that will be made in October, as I have announced. I share his disappointment that no Conservative or Liberal Democrat Members who represent constituencies in the south-west were present to hear the announcement.

In low-paid constituencies such as mine, the announcement of the £4.10 figure will be much welcomed, as will the assurance that the Low Pay Commission will continue its work, which demonstrates the Government's commitment to continuing the national minimum wage at the right level and to ensuring that it will be relevant in future years.

There is one further thing that we should do in relation to the minimum wage: we should recognise that many employees are worth a lot more than the minimum. We must urge employers who can afford to pay more not to rest on the floor of the minimum wage. When they can pay more and their workers deserve more, we should ensure that a fair wage is paid.

The minimum wage is a safety net below which no employer can legally go. Obviously, it is to be hoped that individuals who merit a higher wage will receive proper rewards, but I am pleased that thousands of hard-working people in Burnley will benefit from today's announcement. The minimum wage is about rewarding communities and individuals, and that is exactly what it does. As a result of the increase, 1.5 million people will be better off in October than they would otherwise have been.

Does my right hon. Friend agree that, despite the Opposition's forced weasel words of support, there can be no doubt that if a Conservative Government were elected, the national minimum wage would be allowed to wither on the vine? Does he also agree that the success with which the measure has been introduced and extended should give us greater confidence to proceed with further family friendly employment policies?

I agree with that final point. We must ensure a balance so that work and family life can be lived to the full. My hon. Friend was also right to point out the Opposition's view. It was the shadow Chancellor who announced what appeared to be a policy U-turn by saying that the Opposition would support the national minimum wage. He did so having had very little consultation with his Front-Bench colleagues.

How do you know?

Because they have told me. Later, on the "Today" programme, the right hon. Member for Kensington and Chelsea (Mr. Portillo) said: "You know, we're not great enthusiasts about the minimum wage." That is absolutely right.

indicated assent.

At least the right hon. Member for Bromley and Chislehurst (Mr. Forth) agrees with that. He is among the foremost of those who do not believe in the national minimum wage, bur the reality is that most Conservative Front-Bench Members who speak on trade and industry matters do not believe in it either.

Can my right hon. Friend confirm that north-east England will benefit most from the minimum wage? It is another great achievement for the Government, but, above all, it is a socialist achievement.

It is an achievement that manages to combine economic efficiency and social justice. I know that my hon. Friend will be pleased for the thousands of people in Blyth Valley who will benefit from the increase announced today. Indeed, hon. Members who represent constituencies in the north-east will take particular pleasure in the announcement. We know that for far too long, good, hard-working people in the region that we represent have simply not been rewarded for their endeavours. As a result of the national minimum wage, that is now happening, and they will benefit from the significant increase that is to be made in October of this year.

Does my right hon. Friend realise that fewer than a dozen Conservative Back Benchers are present to hear his statement? They have escaped an afternoon of humiliation here by going to their constituents to apologise for being wrong for the past 22 years. Members of the shadow Cabinet are reversing all the policies that do not match the Government's, while others, such as the right hon. Member for Henley (Mr. Heseltine), are busy working out which party to support in the general election.

Does my right hon. Friend agree—I am sure that he will—that the announcement is a great triumph for the Labour Government? It means that 3,000 of my constituents, who faced the daily insult of dirt pay for many years, will earn wages that will lift them out of the dependency culture and give them a reasonable reward for their labours.

There is no doubt that the national minimum wage has taken people out of poverty pay and that it rewards them for their endeavours. The significant increase that we have been able to announce today will make a real difference, not only to my hon. Friend's constituency but to the 1.5 million people and their families who rely on the national minimum wage. Today's announcement constitutes a genuine benefit for them; they know that it was introduced by a Labour Government and that it is safe under this Government. They also know that the Conservatives do not believe in a and would take it away at the first opportunity.

Many small employers in my constituency will welcome today's announcement because, for many years, they were seriously undercut by employers who offered £1 and £2 an hour.

Now that we have acted on pay, will my right hon. Friend consider the many people who are on temporary employment contracts? They continue to suffer because they have no security of tenure.

On my hon. Friend's final point, we are considering the fixed term directive and the steps that we need to take on that.

My hon. Friend made the important point that many small businesses encouraged the Government to introduce the national minimum wage because they were worried about the way in which other small businesses exploited their position and paid very low wages.

The Government have set up an enforcement line and many calls have come from employers, not employees, who have told the Inland Revenue and my Department about other employers who pay wages that are below the national minimum level. That demonstrates that business accepts the national minimum wale as an important provision. Indeed, it is widely accepted and welcomed, not only by those who receive the benefit of it but by decent, fair-minded people who know that a national minimum wage is about decency. At the beginning of the 21st century, the least that we can expect of a Government is the introduction of such a provision, We have done that, and we are proud of it.

On a point of order, Mr. Speaker. You will recall the anxiety that was expressed by hon. Members of all parties last week about the outbreak of foot and mouth disease, and especially hon. Members' wish to obtain as much information as possible from the Ministry of Agriculture, Fisheries and Food and other Departments. It is natural at such a time that our constituents may want to apply to us for information that they are experiencing difficulty in obtaining, or for clarification of that information. To be fair, the Minister of Agriculture responded to those anxieties by saying that he would establish information machinery for hon. Members.

I received two difficult constituency representations and rang the Minister's private office. I refer to you and your judgment on that matter, Mr. Speaker, because, to my surprise, the private office referred me to the hon. Member for Bolton, West (Ms Kelly), the Parliamentary Private Secretary, and her private office. I believe that that is unprecedented. I make no complaint about the courtesy with which my inquiry was handled, and I am sure that the person who spoke to me wanted to be as helpful as possible, but, given the seriousness of the matter, it is somewhat cock-eyed and inappropriate to handle it in that way.

Would it not be better for those who listen to these issues to take the matter back to the Ministry and set up proper machinery at an official level, so that hon. Members on both sides of the House can refer their cause to the Ministry and get the matter officially clarified?

Further to that point of order, Mr. Speaker. I did not know that my hon. Friend was going to raise the issue, but I would like to concur with what he said. A way must be found for Members of Parliament to put cases directly to Ministers. I rang the Minister's private office not long ago, and was also directed to the hon. Member for Bolton, West (Ms Kelly).

A farmer in my constituency has calving heifers on land about two miles away from his farm. He is unable to get to those animals and to be with them while they are calving. The Minister must come to the House and make a statement, so that hon. Members have the opportunity to raise such concerns as these.

The points of order raised by both hon. Members are matters for the Minister. I listened carefully to what the Minister had to say, and I got the feeling that he wanted to give as much information to the House as possible. I am sure that the concerns expressed by both hon. Members will be noted by the Minister and taken on board.

I shall not let this opportunity pass without paying tribute to a great Welshman who, sadly, was buried a week ago. Cledwyn Hughes was a great Welshman because of his passion for Wales: in that, few were his equal and none his master. His passion for devolution was deep, but he was also proud to be British and I know that, were he here, he would argue strongly for the continued partnership between London and Cardiff in the post-devolution world.

Cledwyn Hughes was also a great Welshman because he was a true internationalist. He stood opposed to fascism in the 1930s because he knew that events on the continent of Europe were not about far-away lands of which we knew little, but had a direct bearing on all of us on these islands, too. He was a man who had the vision to see the importance of Europe for Britain's future. At the Welsh Labour party conference last week, Neil Kinnock lamented Cledwyn's passing and expressed his regret that he had never been made Foreign Secretary. I, too, feel that history would have been very different—and that that difference would have been to the benefit of all of Britain—had that appointment been made.

The past few days have been trying times for many people in Wales. I know that the House will want to express its sympathy and understanding for the many involved in farming in Wales who face desperate worry and uncertainty as a result of the outbreak of foot and mouth disease. Those involved expect the Government, Parliament and the Assembly to act, and act collectively we have. We have acted speedily to do what we can to restrict the spread of this infection. We have acted to give local authorities the powers that they need to restrict public access to footpaths and bridleways. Again, I urge the public to stay off those paths, and warn anyone who breaks the law that they will face the prospect of heavy fines.

I am grateful to the Secretary of State for making the point about staying off footpaths. I am a keen walker, and was walking in Talyllyn in the constituency of the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) only two weeks ago. Does the Secretary of State agree that it is important to emphasise that people should not only stay off the footpaths that are clearly marked, but refrain from crossing fields and other areas that may not be clearly marked as out of bounds?

I take the hon. Gentleman's point, and I am glad that he was walking in Wales some weeks ago.

We have started to allow the movement of healthy animals for slaughter and subsequent sale. The House will know that we must proceed with caution, so movements have been relatively limited thus far, and that we have acted to secure agrimonetary compensation for farmers. We have done so through a strong partnership between Westminster, Cardiff, Edinburgh and Belfast. All the Ministers involved—my right hon. Friend the Minister of Agriculture, Carwyn Jones, Ross Finnie and Brid Rogers—deserve credit for their willingness to act swiftly and decisively.

The Secretary of State rightly refers to compensation and the European funding that is being accessed to help farmers. He will be very much aware that others directly associated with the agriculture industry such as slaughterhouses, hauliers and others will equally be hit and may be put out of business. Indeed, the tourist areas of Wales are being hit especially hard and bookings over Easter might be undermined by these developments. Is there any help at all that the Government foresee being available to those who are indirectly affected by this tragedy?

The right hon. Gentleman will know that in previous outbreaks of the disease farmers who lost their stock were directly compensated. There was a danger that their stock would infect other stock. Consequential compensation has not yet been considered, but I shall make sure that his points are put to my right hon. Friend the Minister of Agriculture.

At the weekend, I spoke to my brother-in-law, who is a farmer, and to other farmers about compensation. A number of people have been indirectly affected. Many of my constituents are small hoteliers. They have been drastically affected by the cancellation of the rugby match, which was entirely to do—[Interruption.] These are not small matters, as the cancellation meant losses of £5 million to the Welsh Rugby Union and considerably more to small hoteliers around Cardiff. If indirect compensation is considered, I hope that the Government will take account of matters such as the cancellation of major events, which have large knock-on effects for many small businesses.

I take my hon. Friend's point, but the compensation has so far been limited to those who are directly losing their stock, which would pose a danger to other stock. His points about Cardiff are well taken and I am sure that my colleagues in other Departments will take note of them. I do not underestimate the problems that have arisen because of the disease, which in some senses go far beyond the farms themselves, but compensation was not paid in respect of such matters in the past.

This morning, I heard that slaughterhouses are seeking to exploit the situation by reducing the price that they offer farmers. If that is happening, does the Secretary of State wholly deplore it, because farmers are in a desperate situation and they need to get their meat to slaughterhouses? Will the Government do everything they can to facilitate farmers getting their stock to slaughter where it is safe to do so, and, in the longer term, will he undertake to consider with his colleagues in the Ministry of Agriculture, Fisheries and Food reopening more small slaughterhouses so that animals do not have to be carted vast distances to slaughter?

The hon. Gentleman and Members from Welsh constituencies will be aware that a number of abattoirs have opened to receive such stock in north Wales, mid-Wales and south and west Wales. I take his point, which is valid and, if I may say so, very interventionist for a Conservative, but obviously we are all conscious of the problems that the disease has brought to our local communities—not simply those that are wholly rural, but mixed communities, to which I shall refer later.

I find it extraordinary that so many Conservative Members seem to think that there is something outrageous about the idea of strength going hand in hand with diversity. That is absolutely and completely what devolution is about: Welsh domestic approaches to Welsh domestic matters in a strong partnership with the United Kingdom Government.

There is a corollary to that. Serious politicians spend their energies tackling problems that they have an ability to influence, and that is the approach Taken by the Labour party in the National Assembly. The Welsh nationalists, Plaid Cymru, seem to have other ideas. They see the Assembly as little more than a platform for their own ideas. They have nothing of substance to offer by way of an alternative to the programme being implemented by my right hon. Friend the Member for Cardiff, West (Mr. Morgan) and his Administration, but that is for them to deal with in the Assembly.

The Conservatives, too, have their plans. No doubt they will make plenty of attacks on the Assembly Administration in this debate. They seem unable to face up to the fact that devolution is here and that it works. They will get over it sooner or later—probably later. Much later, I expect.

I thank the right hon. Gentleman for giving way with his usual courtesy. Does he accept that it is not only Conservatives who criticise the operations of the Welsh Assembly? His colleague, the First Secretary, staled in the Western Mail on 10 October 2000:

"The National Assembly is very unstable and far too prone to concentrating on procedural points of order, votes of no confidence and petty wrangling, instead of getting on with the job in hand—that of making decisions."

Does the Secretary of State agree with that?

As the hon. Gentleman knows, many Conservatives were involved in such activity. My right hon. Friend was referring to the need for stability in the National Assembly. The partnership in the Assembly between my party and the Liberal Democrats exists to ensure stability.

This Wales day debate will be of considerable interest to you, Madam Deputy Speaker, as a Welsh person. It marks another milestone in the history of the new, post-devolution Wales. It offers us, as Members of the House of Commons, a chance to look back at a full year of devolution. It gives all of us an opportunity to review the work of the UK Government, and to consider what might happen in the year ahead.

I am, of course, fully confident that the people of Wales, when they come to decide will endorse the Government's record. Some figures published in the past few weeks might help the House to understand why I am so confident about that outcome.

First, the new earnings survey published in December showed that the earnings of full-time employees in Wales rose by 4 per cent. between April 1999 and April 2000. That was the second highest figure for any part of the UK, and it compares with an increase of just 1 per cent. in London and 2.6 per cent. in the south-east. The reason for that increase is clear: the national minimum wage. To emphasise the point, the same survey showed that the earnings of adult women in Wales rose not by 4 per cent., but by 5 per cent. The minimum wage has helped more than 80,000 Welsh people, which represents almost one in 10 of Welsh employees. It is a pay rise from the Government for all those people in Wales. Only today, my right hon. Friend the Secretary of State for Trade and Industry announced a further increase in the minimum wage: another pay rise for many thousands of people in Wales. As I said to the Welsh Grand Committee recently, that Labour pay rise was for years resisted by the Conservative party.

I should also like to draw the House's attention to the policy of the Liberal Democrats. They thought that it was wrong that Welsh employees, especially Welsh women, had such pay increases thanks to the minimum wage. Their policy was—or is, unless it has changed—a regionally varied minimum wage, which would mean lower wages for Wales.

That is not the case. I have never supported a regional minimum wage. I believe that the minimum wage is being misused by powerful companies in, for example, the health care industry. They go down to the lowest common denominator and take on new employees at the lowest possible level, which did not happen before, when they were in the national health service, for instance.

I am grateful for that intervention, but I am not much clearer about the policy of the Liberal Democrats on the national minimum wage. At least the Conservative shadow spokesman for trade and industry said that, although his party had misgivings, it welcomed today's announcement. But there we are. We shall wait and see.

After the earnings figures published in December came the employment figures. I know that many people in Wales still face the threat of redundancy, and at least 300 of my constituents are threatened with the loss of their jobs with Corus.

On Friday, along with my right hon. Friend the Prime Minister and my right hon. Friend the Member for Cardiff, West, I met representatives of all the steel plants affected by the company's proposals. We listened not just to the expressions of justified anger and upset—how else would we expect workers at some of the most efficient steel plants in the world to react when faced with closure announcements?—but to people who were determined to do all that they could to keep as many jobs as possible at those plants.

Steel workers at Shotton are very grateful to my right hon. Friend and his Parliamentary Private Secretary for what they have tried to do to help them in the corridors of power, notwithstanding the 400 redundancies that we face at that plant.

Are the Government considering any measures to take into account the comparatively high wages that young redundant steel workers have been earning? Will it be possible to make up the difference when those workers have new jobs?

My right hon. Friend has worked hard on behalf of his constituents at Shotton. As he knows, the Government are considering a variety of packages. He will also know that, as we speak, the trade unions are working out alternatives to the Corns proposals. It would be wrong for me to go into detail until those alternatives had been put to the management.

The trade unions' pitch to Corns is firmly based on the commercial realities of the steel industry. We in the Government and the Assembly are pledged to do all that we can, within the tight constraints of the coal and steel community treaties and codes, to assist them. It is a tragedy that Corns has so far refused to engage constructively with either the unions or the Government, but I hope the whole House will join me in urging the chief executive, the chairman, Sir Brian Moffat, and his colleagues to listen to the unions' commercially based proposals.

My right hon. Friend may be aware that the chief executive and chairman gave evidence to the Select Committee on Welsh Affairs on Thursday. When my hon. Friend the Member for Gower (Mr. Caton) suggested to the chairman, Sir Brian Moffat, that the Bryngwyn plant was profitable, the chairman stated that he had no knowledge of its profitability. Does that not demonstrate the incompetence of senior management who are prepared to shut a plant regardless of whether it is profitable?

That is clearly of considerable concern; but what concerns all of us who represent steel constituencies in Wales such as Ebbw Vale. Shotton, Gorseinon and Llanwern is the fact that steel plants that are among the most efficient and productive in Europe, if not the most efficient, are to close or at least partially close. That strikes me as a national tragedy from a Welsh and indeed a British point of view.

I am sure most Members support all that my right hon. Friend has said. Does he agree that if Sir Brian Moffat proceeds with his proposals, does not listen to the unions and decimates the steel industry, the knighthood that he received for services to the industry should be withdrawn?

I am not in a position to comment on Sir Brian's honour. I am much more interested in what he is proposing to do to 3,000 people in Wales, their families and their communities. I hope he will listen very carefully to the alternatives that the unions and others will put to him in the next week or two.

Steel, however, is not the only industry in Wales. In recent weeks we have seen Ford's £240 million investment in the Bridgend engine works, which will create or secure 500 jobs in a leading-edge technology. Investment of £17 million is going to Mostyn docks in north Wales to secure 85 new jobs. There are 100 new jobs at IQE in Cardiff, announced in December, and 83 at Surface Technology Systems in Newport. Moreover, 1,700 jobs are to be created by BAE, and 1,000 are to be safeguarded at General Domestic Appliances. There are to be 400 jobs at Lloyds TSB, 400 at On:Line Finance and 230 at Paramount Food. There will be 264 new high-tech jobs at Wireless Systems International in my constituency, and 110 at Pure Wafer Ltd.

Manufacturing output and manufacturing investment are rising. There have been difficult times, but the climate, including the relative exchange rate between the pound and the euro, is improving. Manufacturing output is up 3.5 per cent. Exports are up 9 per cent. in the past year alone. Inward investment since 1997 is worth £2.2 billion.

Overall, the increase in jobs in Wales has outstripped any losses by 17,000 in the past year. That rate of growth is greater than that in the UK as a whole. It is greater even than that in London or the south-east of England, but jobs are not the last piece of good news for the Welsh economy. Last week, the Office for National Statistics published new data on regional GDP. I know that those data are often subject to change and reassessment, but it is only fair that I quote it, given that the hon. Member for Ceredigion (Mr. Thomas) has been so happy to use it in the past few weeks. He said:

"The latest regional estimates, published on 27 June by the Office for National Statistics…show a decline in GDP per head in Wales relative to that of the whole UK".—[Official Report, Westminster Hall, 29 November 2000, Vol. 357, c. 216WH.]

Perhaps he might wish to use any speech that he might make this afternoon to update the House. The latest figures, published on 27 February, show that Wales's relative share of GDP has risen from 80.2 per cent. of the UK average in 1998—itself a figure that was revised upwards—to 80.5 per cent. in 1999.

What matters to our constituents? Do more jobs matter to them? We are getting that. Does better pay matter to them? We are getting that. Does more prosperity matter to them? We are getting that. Do low interest rates matter to them? Interest rates are falling. Does low inflation matter to them, too? Inflation excluding mortgage rates is at its lowest since records began; including mortgage costs, it is enjoying its longest run at low levels for many decades.

I know that many in our rural communities feel that they are suffering from particular economic stress—something more than just the immediate effects of the foot and mouth outbreak. Labour Members are more than aware of that feeling. Mine is a mixed constituency: I represent farmers as well as steel workers in the House. Overall, the Labour party represents more rural and semi-rural constituencies in the House than all the other parties in Wales combined; indeed, it represents more such constituencies than all the other parties in the UK combined.

We—the UK Government and the National Assembly—are acting to assist rural communities, and not just through the £15 billion that is paid in subsidy to farming throughout the UK every year. The Assembly is acting in partnership with the Strategic Rail Authority to improve rural rail-bus links and to restore passenger services to the Vale of Glamorgan.

Before the Secretary of State moves off the economy, will he confirm that, when the Government came to power, Wales's GDP was 82.8 per cent. of the UK average and that what the Government have presided over—there has been a slight readjustment lately—is a decline in GDP of more than 2 per cent.?

The hon. Gentleman is not prepared to accept that Wales is getting better—in its economy, prosperity, jobs and in the relative way in which people live in Wales. That is typical of the Welsh nationalist party. All the time, it grumbles and whinges about what the economy is like when everyone knows, in his constituency, in my constituency—in the constituencies of all of us who represent Welsh seats—that things are getting an awful lot better.

rose—

I give way to someone who does not represent a Welsh constituency, but we will listen to what he says.

Unlike me, the Secretary of State was not, I believe, born in Wales. Will he, in his great concern for the farming community in Wales, dissociate himself from the remarks of the hon. Member for Newport, West (Mr. Flynn), who stated on "Farming Today" on 22 March:

"Of course there are farmers in serious difficulties, but I believe they have greatly exaggerated their case. And much of their case is based on distortions or plain untruths."

If that were not good enough, he was also quoted in Farmers Weekly on 4 February as saying:

"And the main reason why there's a large number of suicides among farmers is because they have shotguns handy."

Does the Secretary of State dissociate himself from those remarks?

First, I should like to say that I most certainly was born in Wales. I was born in the parish of Llanbradach, near Usk, which at the time, I suppose, was in Monmouthshire—although in out hearts that was a Welsh county. My hon. Friend the Member for Newport, West (Mr. Flynn) has just returned to the Chamber and can reply to the hon. Gentleman's comments after we inform him of them.

The Assembly's rural development plan has been accepted by the European Commission, so in future subsidy payments to agriculture will be modulated, with additional United Kingdom Exchequer funds to strengthen not only farming but rural communities more generally. It is of course fallacious to suggest that measures such as the children's tax credit or the minimum wage work only to the benefit of urban areas. As I have already said, most Members in Wales represent mixed constituencies. I know that those measures are as important in rural parts of Torfaen as they are elsewhere.

In last year's Welsh affairs debate, I was able to tell the House that the Government had agreed to establish in statute a Children's Commissioner for Wales.

Before my right hon. Friend leaves the subject of the serious crisis hitting so many parts of Wales, may I tell him something? No one would begrudge the full compensation that the farming community will receive for the nightmare that it is going through, but if we are in the business of compensating all the citizens of Wales who are suffering severe losses because of no fault of their own, should we not also be thinking of compensation for steel workers who may be losing their livelihoods, many of whom will probably never work again? I am told that, in redundancy payments and other compensation, they will be receiving about one fifth of what Dutch steel workers would receive. In this era of compensation, with all the incidental losses being suffered by people outside the farming industry, should we not be thinking of full compensation for steel workers?

My hon. Friend is right to compare what would happen to a steel worker's family with what would happen to a farmer's family when we hit times as bad as we are experiencing now. Some of his comments have probably dealt with the points made by the hon. Member for New Forest, East (Dr. Lewis).

As I said, the Government agreed to establish a children's commissioner. That announcement reflected the importance of this House and this Parliament in passing primary legislation for the people of Wales. Since our last Wales day debate, my office has overseen the parliamentary passage of new Welsh law not only on the children's commissioner, but on care standards more generally, on education, on training and on local government.

When we first dealt with the issue of the children's commissioner, we were limited to using the legislative vehicle then available—which has become the Care Standards Act 2000. That necessarily led to the creation of a commissioner with a limited role. However, I am pleased to say that, as we all know, our further measure was welcomed on both sides of the House and quickly passed into law. I am very grateful for the co-operation that was shown by all parties on the children's commissioner.

Today I am in an even happier position. On 1 March—less than one year after our announcement in last year's debate—the new commissioner took up his post. A Bill to widen the scope of his work to the full canvas of the Assembly's work is now being considered in another place, having completed its passage through this place in a matter of weeks, with, as I said, the co-operation of all parties. This year, Parliament has debated not only the Children's Commissioner for Wales Bill, but Welsh aspects of the modernisation of the national health service.

As hon. Members may recall, last year the present Conservative spokesman on Welsh Affairs, the hon. Member for North Dorset (Mr. Walter) told the House:

"Labour has also failed to ensure that Wales receives its funding from the European Union."

Moreover, despite the Prime Minister's promises, the hon. Gentleman added:

"Labour is refusing to give a commitment to secure the extra funding that Wales needs."—[Official Report, 2 March 2000; Vol. 345, c. 649.]

The hon. Gentleman was, of course, referring to the funding of the objective 1 programme. As the House knows, objective 1 is an opportunity for west Wales and the valleys to catch up some of the economic ground that they lost in the 18 years of the Conservative Government. It must therefore have been something of an embarrassment to the hon. Gentleman when, in last July's spending review, we did indeed fully fund the objective 1 programme.

I am sorry that the Secretary of State did not quite understand the point being made not only by me but by other hon. Members—those in other parties, as well as those in the Conservative party. We were talking not only about the European Union funding, but about the additional funding that was supposed to come from the United Kingdom Government. There was no additional funding from the Government; the only additional funding comes from the existing block grant to the Welsh Assembly.

The hon. Gentleman is mistaken; he knows that almost £500 million over the next three years will be additional to the Barnett block. If that is not additional, I do not know what is. He does not understand the funding arrangement. As he will be aware, both when the Conservative Government were in power and when I was a Northern Ireland Minister dealing with such matters, all the money involved in objective 1 structural funding—in Wales, Scotland, Northern Ireland or England—had to be found from the block itself.

The hon. Gentleman obviously does not understand, first, that the block has become much bigger in the past year—it is the biggest settlement ever paid to Wales by a United Kingdom Government—or, secondly, that between £400 million and £500 million will be paid over and above the Barnett formula in the next three years, so that we can draw down those funds. That represents an enormous development in the way in which public finances work. Any hon. Member—from whichever party—who suggests that that does not represent a major surplus for Wales does not understand the nature of that funding.

rose—

I hope that the right hon. Gentleman does not want to make the same point as the hon. Member for North Dorset, because he knows that it is wrong.

I understand the nature of the funding, and I welcome part of what the Secretary of State has just said. He has acknowledged that until now, not one brass farthing of European money over and above the Barnett block has come to Wales or any other part of the United Kingdom that is supposed to receive money from Europe. Will he acknowledge that, whereas we are supposed to receive £180 million a year for objective 1 from Europe, we do not, in fact, get that much in addition to the Barnett formula? We receive a sum above the Barnett level, but not the full £180 million—let alone the necessary match funding. That is why expenditure on education in Wales is being increased by a lower proportion than expenditure on education in England; the money has to be diverted to provide the match funding.

Obviously I have to disagree with the right hon. Gentleman. Here are the figures: the additional funding in 2001–02—the new financial year, which begins in a few weeks—will be £113 million; the year after, it will be £148 million; and the year after that, it will be £160 million. That amounts to £421 million in total over those three years. The point is that in the past, all the money had to be found from the block itself, but those sums are additional to the block. That is a major change in the way in which we deal with public finances. Does the right hon. Gentleman think that if the United Kingdom Government were not prepared to pay that money, the same amount would come from money raised in Wales alone? I very much doubt whether it would.

I suppose that we have heard the nearest that we shall ever get to an apology from the right hon. Member for Caernarfon (Mr. Wigley) for supporting a lie in the Welsh Assembly just over a year ago. It is just as well that that did not happen in the House. Will my right hon. Friend invite the right hon. Gentleman and his colleagues in Plaid Cymru to stop the continual whingeing that we have heard for so long, support the initiatives that objective 1 status can produce and start to help to improve the economy of Wales, instead of damaging it by continually discouraging people from proposing schemes?

My right hon. Friend is right. There was a lot of fuss and bother about whether we would get that money, but we did get it, and in a special way. However, all our energies in Wales were spent on arguing with each other about whether the money would come, rather than on preparing the schemes for the objective 1 areas, which are so important. We must not fall into that trap again. The money is there, the will is there, and it is now up to everyone in Wales—from north to south and from east to west—to encourage the partnerships and to ensure that we spend the money wisely.

As I said, it must have been something of an embarrassment to the hon. Member for North Dorset that the funding was found. He denies that he was embarrassed by his failure to understand the issues, but the money is there. His embarrassment could only have been compounded when Conservative central office denounced that decision, and the rest of the spending review, as a "public spending binge" and as a return to "tax and spend".

The briefing for Members of Parliament—it was for Conservative Members, I hasten to add, but I am pleased to say that a copy has also found its way to me—goes on to say that there is a £16 billion spending gap between what the Conservatives say is affordable and what Labour plans to spend. However, Wales will suffer badly if the Conservatives ever get their chance to close this "gap", because the 2000 spending review increased Welsh spending through the block faster than Government spending as a whole. The Welsh block will rise by about £2 billion over the next three years. That means more money for schools and more money for health. Welsh services dealt with outside the block, such as the police, have also done well, so there is also more money for policing in Wales.

How do the Tories propose to fill that gap? I know: they will cut, cut and cut. They will cut our schools budget, they will cut our health budget and they will cut our police budgets. In Wales, they will slash the very objective 1 budget that the hon. Member for North Dorset commended only a year ago. What else could we expect from a party that has swung so decisively against Europe?

Yesterday's speech by the right hon. Member for Richmond, Yorks (Mr. Hague) was condemned by the Financial Times today as

"as disingenuous as it is distasteful".

The reality, as the newspaper makes clear, is that the Tory anti-European bandwagon is now hurtling towards the precipice marked "Withdrawal". As the newspaper's leader column adds:

"Short of British withdrawal from the EU, the Tories are making promises that cannot be delivered."

Withdrawal from Europe would represent an economic and political disaster for the whole United Kingdom, and for Wales in particular; we would suffer most. Conservative prejudice and intolerance would leave thousands out of work, close off our export markets and destroy our agriculture.

Of course, the Tories' intolerance finds its echo in the words of Councillor Seimon Glyn. [Interruption.] I thought that Plaid Cymru Members would be upset by this; they do not like to hear about him. His view is that 80 per cent. of his fellow countrymen and countrywomen, such as me, speak a foreign language, and that incomers from Chester need to be "monitored and controlled". I notice that the hon. Member for Ynys Môn (Mr. Jones), the leader of the Welsh National party, is not here today to talk about these issues. The only difference is that while the Tories want to withdraw from Europe, the nationalists want to withdraw from Britain. Of course, many nationalists must want the Tories to be returned to power, because both parties have a common interest in undermining the devolution settlement.

I am rising to the right hon. Gentleman's bait on the question of what Seimon Glyn did or did not say. However, did the right hon. Gentleman read what the right hon. Member for Caerphilly (Mr. Davies) said in The Western Mail on Saturday, in which he acknowledged that there was a problem with support for the Welsh language? The silence from the Labour Government on that matter is deafening.

My right hon. Friend was speaking from Zagreb. I happened to be speaking in Swansea, where the Labour party conference was meeting, and the view from Swansea is very different from the view from Zagreb.

Is my right hon. Friend aware that in the 1980s, Cymdeithas yr laith Gymraeg used the well-known phrase, "Heb waith, dim iaith"? This Government have done more to create work in Welsh language areas and to preserve the language than any Plaid Cymru carping could do.

I agree with my hon. Friend; I know that she takes an interest in these issues.

The Secretary of State has misrepresented the Conservative party's policies in a way that is unworthy of him. Would he now care to comment on the Labour party's stewardship of the health service in Wales? Since the election, in-patient waiting lists have gone up by nearly 15 per cent., out-patient waiting lists have almost doubled and the number of those waiting for more than six months to see a consultant has gone up by 700 per cent. Will he comment on those figures?

I was wondering when the Conservative party was going to attack the National Assembly. I must tell the hon. Gentleman that the national health service in Wales will, I think, receive an extra £1.3 billion over the next three years. That is the biggest increase ever, and the service treats more people in Wales than ever before.

As for the speech by the leader of the hon. Gentleman's party over the weekend, Welsh people are disturbed by such comments. The devolution settlement, which we all believe is the way ahead, could be seriously undermined by such an attitude to the European Union. Objective 1 European structural funding is vital to ensure that our gross domestic product and economy improve. What would happen if we withdrew from the EU?

The Secretary of State knows that we are not going to do that.

Conservatives suggest the next best thing. They never have a warm word for what comes out of Europe. Their spokesmen, from party leader down, have nothing good to say about the EU, even though the lives of millions of people in Wales will be improved by EU structural funding.

Xenophobia about all things foreign, whether that is expressed towards a foreigner from the EU or a foreigner from England, undermines the devolution settlement and the basic tolerance of the Welsh people. Were the Conservatives to win the election—which they will not—I suspect that this would be the last Adjournment debate on Welsh affairs. It is their policy that all Members of Parliament should cease to be equal. According to the leader of the Conservative party, it is their priority to strip Welsh and Scottish Members of Parliament of their rights to vote on many matters that come before the House. For the first time, we would have different classes of Members of Parliament. The Conservatives are supposed to be the party of the Union, but on English laws they plan to have nothing but English votes.

We hear English nationalism from the Conservative party and Welsh nationalism from Plaid Cymru, but none of that coincides with what the Welsh people want. They want to be part of the United Kingdom, and they want their representatives to play a full role in the House of Commons. They do not want to be in a Wales that is split off and cut away from the rest of the UK.

Does the Secretary of State think it right that the decision on hunting with dogs in Scotland is being taken by the Scottish Parliament, but that Scottish MPs could come here and decide that issue on behalf of England and Wales?

It is right. As soon as we try to make Members of Parliament who represent different parts of the UK have different rights and different ways of operating, we undermine the basis of the House of Commons. The vast majority of hon. Members represent English constituencies. If they all voted together, they would easily outvote Members of Parliament who represent constituencies in Northern Ireland, Scotland and Wales. The House has never divided the way in which it works between different parts of the UK. If that were to happen, it would be a recipe for the break-up of the UK and the House of Commons. Even such an illustrious person as yourself, Madam Deputy Speaker, would find it difficult to rule whether this Adjournment debate was a Welsh or a UK matter.

Would turkeys vote for Christmas? Would the hon. Member for Ribble Valley (Mr. Evans) or the hon. Member for North Dorset vote to put themselves out of a job by backing such proposals? If the answer is yes, perhaps they should explain their participation in a debate on Welsh affairs, not to mention their participation in our proceedings on the Children's Commissioner for Wales Bill, when Members of Parliament who represented Scottish, Northern Irish and English constituencies—including even hon. Members from constituencies in Lancashire and Dorset—could come to the House of Commons, participate in the debate and vote on an exclusively Welsh Bill. As soon as we start dividing up matters for debate, that will be the beginning of the end of the United Kingdom. [Interruption.] The people of Wales created the Assembly by voting for it. Conservative Members should understand that a combination of their policy and that of the party that wants complete independence from the United Kingdom would undermine the devolution settlement and the unity of the nation.

The Secretary of State said that the people voted for the Assembly. Did not 75 per cent. of the Welsh people either abstain or vote against the Assembly?

I make two points to the hon. Gentleman. First, two Conservative Prime Ministers between 1979 and 1997 represented minority Governments. Secondly, the hon. Gentleman himself was elected with a majority of just over 200, and I suspect that more people voted against him than voted for him.

If the Conservatives' answer to my earlier question is no, we are clearly about to witness another of the policy U-turns that has disfigured their stumbling election campaign over the past few weeks. I await further discussion of that matter. Meanwhile, Labour Members intend to preserve the foundation of democratic rule—the notion that all Members of the House, be they ever so mighty or ever so low, be they Welsh, English or from Northern Ireland, have an equal vote.

The past year has been something of a roller-coaster ride for us all. Those who predicted the death of Welsh parliamentary politics because of the creation of the National Assembly must be feeling rather foolish today. As we have seen, our debates on Welsh matters are as lively as ever, whether they take place on the Floor of the House, in Standing Committee or in the Welsh Grand Committee, yet that has all happened at a time when Wales has had its own political voice in the form of the National Assembly. It is not wishful thinking on my part to state that devolution has strengthened the United Kingdom; it is everyday experience. If devolution is to grow and flourish, we must all work constructively with the new institution. Labour Members are fully committed to doing just that.

Our vision is of a strong and confident Wales within a strong and confident United Kingdom. We want a Wales where we enjoy high-quality, efficient public services that are accountable to the people of Wales, and where jobs, education and opportunity are available to all. We want a Wales where we are not afraid of our European partners or our European role, but willing and able to play our part at the very heart of European decision making, both through the United Kingdom and with our own voice where appropriate. Above all, our vision is of a tolerant and inclusive Wales that values all its peoples as its greatest assets. In the past year we have moved closer to all those goals, and in the year ahead I know that we can move closer still.