| Previous Section | Index | Home Page |
Mr. Rowlands: And the servicing of manufacturing.
Mr. Wigley: My hon. Friend mentions the servicing of manufacturing. The producer services involve all services relating to the manufacturing sector. We are getting many of the manufacturing jobs, but when companies need the services that sustain manufacturing jobs, they go outside Wales, and often those services offer the best-paid jobs. Industry in Wales is paying for those jobs in England, and that is not helping our economy.
Reversing the low concentration of producer service industries in Wales is one of prerequisites to raising incomes and creating more jobs in Wales. That is important in terms of identifying employment growth sectors. The Minister may care to study a recent Cambridge Econometrics publication, which analysed growth potential by sector between 1994 and 2000. It is revealing. In manufacturing, the growth in output does not mean a growth in jobs. That is important for the WDA's and the Welsh Office's strategy. For example, in the electronic sector, Cambridge Econometrics projects a growth in output of 40 per cent. over that six-year period, but a decline in jobs of 2 per cent. It projected an output growth in instruments of 23 per cent., but a 3 per cent. decline in jobs and an output growth in pharmaceuticals of 22 per cent., but a decline in jobs of 6 per cent.
It is not enough to look only at such manufacturing sectors, albeit they are growth sectors. They may not be delivering the jobs that we need, and existing companies may not sustain current jobs. Part of the analysis that was undertaken by Cambridge Econometrics was to contrast that with the producer services that are relevant to those industries. Computer services have a projected output increase over the six years of 33 per cent. and a jobs increase of 15 per cent. Professional services will have an output increase of 23 per cent. and a jobs increase of 17 per cent. while other business services will increase output by 22 per cent. and jobs by 20 per cent. A priority for Wales must be to develop those producer services and not just the manufacturing sector.
I should like to repeat words attributed to Brian Morgan, chief economist at the Welsh Development Agency, in the summer 1996 issue of "Agenda". He said:
The problem is that the Industry Acts are mainly related to developing manufacturing jobs, but the distinction between manufacturing and services, as Mr. Morgan stated, is becoming more and more blurred. We need a change in the industrial incentive system to enable the Welsh Office, the WDA and other job creation agencies to help with financial and other infrastructure development incentives to secure the manufacturing services that Wales needs. There will probably be a need to change industry legislation. I hope that, before the election, or certainly after it, that change will be made.
I shall draw the House's attention to other aspects of the Welsh Office and WDA job development strategies. The first concerns targeting policy as laid down by the Welsh Office. It has published a map showing two target areas for securing new jobs and inward investment in Wales. One of them is the M4 corridor which runs through south Gwent and ends at Bridgend; the other is the A55 corridor, although that is a misnomer because it runs only from the border into parts of Flintshire and around Wrexham. Only 10 per cent. of the land area of Wales is within those two target areas, while 60 per cent. of the unemployed of Wales are outside them.
My hon. Friend the Member for Newport, West (Mr. Flynn) has just arrived in the Chamber, and I welcome him in view of the successful project that we have heard about today. There is now a need to direct more than 20 per cent. of the jobs coming to Wales to areas in the west such as Gwynedd and Dyfed or to the western parts of the old coalfield valleys if we are to overcome unemployment. Week after week, new projects come to the Newport area. I congratulate Newport--the best of luck to it--but we never hear about projects coming to the west. There has been a massive failure to attract inward investment projects to the old counties of Gwynedd and Dyfed.
In 1994-95, some 46 inward investment projects came to Wales. Only three came to Gwynedd, and one came to Dyfed, and the total number of new jobs for both counties was 55. That is inadequate, and there must be a change of emphasis. That is equally applicable to the old coal mining valleys such as the Rhondda valley, Cynon valley and Amman valley, which are missing out. Sometimes we are told by those who are involved in attracting jobs to Wales that the western parts are too far from the markets, but Ireland has succeeded in getting 56,000 new jobs in two years and it is further from the markets. It is a matter of determination, and of ensuring that jobs come to areas in which unemployed people live. Wales can learn some lessons from Ireland, and I hope that we will learn them.
There is a danger that finance by the WDA and the Welsh Office will go into those two small pockets and that adequate resources will not be available. Am I being too cynical when I say that those two pockets are conveniently placed to help not only the jobless in those areas but jobless people in Bristol in the south and in Liverpool in the north? It is easier for people in Liverpool to travel to the target area in north-east Wales than for unemployed people in Holyhead to get there and, equally, it is easier for people in Bristol than for the unemployed people of Ammanford to come to Newport. I hope that I am not being too cynical, but I wonder.
The WDA must start to redirect its efforts. I emphasise that inward investment should be only a part of the armoury of job creation and sustainable economic development in Wales. We must maximise the creation of indigenous companies. Much of that has occurred in my area where, according to a Bangor university study, the television and film industry has created 2,000 jobs over the past 10 years. More help is needed for those with ideas, such as people who want to start small companies but who cannot get capital. I had an example only last week in my surgery. A person with an invention, which was a good idea, had a fair amount of support and some
capital, but he needed another £50,000 risk capital and could not locate a source. We need to help small people as well as the big fish in the international seas.
Another example of which the Minister is aware is the coal mining project in Carmarthenshire where, for an additional £100,000, about 20 new jobs could be created. The Government are unable to deliver such a small sum to get a worthwhile project off the ground. Small companies must be helped to expand. I sometimes get the impression that the WDA is much more interested in attracting the big names and the big headlines that go with them than in helping some of the smaller companies in Wales. I hope that that will be redressed.
Companies in Wales will need to source more of their purchasing there so that there is a better spin-off in the local economy. That leads me to public sector investment. Wales needs to be fibre-optic cabled to bring jobs to the rural areas and to cut unnecessary travel costs. It needs new schools, community hospitals, leisure centres and railway infrastructure. The roads also need to be made safer and all that requires public sector investment. Such projects can create jobs and improve the quality of life. However, the Government do not seem to be capable of making that happen. Road improvement schemes and water and sewerage schemes are often undertaken in areas of high unemployment, but the people who undertake them bring their workers with them from areas of lower unemployment. That scandal needs to be addressed by the Government.
There were redundancies recently in my local brickworks in Caernarfon. The labour force was virtually halved because there was a massive stockpile of bricks. How can that happen when there is a crying need for more bungalows for elderly people and for more starter homes? Wales produces bricks, windows, slates, timber and cement, but 20,000 building workers are unemployed. Do we not have the wit to solve one problem through solving the other?
I must warn about the possibly devastating dangers that face the rural economy as a result of bovine spongiform encephalopathy if the culling programme continues to the extent that has been talked about. Thousands of jobs could be lost in rural Wales, and the Welsh Office must find a way to help small farmers in these difficult times. One way to do that is to have a beef promotion campaign, perhaps in association with the Meat and Livestock Commission. There must also be support for farmers who are not necessarily losing animals through culling, but for whom prices have dropped, causing cash flow problems.
There is a challenge to maximise full-time jobs in tourism, yet because of the nature of our industrial development Acts, when there is a service--such as a laundry service in my constituency--with the potential to offer a couple of dozen new jobs and to do work in our area rather than send it out, financial assistance is not available so that the service can expand and provide those jobs. We must break down the artificial barrier between manufacturing and service.
What else needs to be done to remove the unemployment cancer that has affected so many communities in Wales? Plaid Cymru believes in full employment. I hope that Labour Front Benchers will tell us that they also are committed to a full employment programme--I have been a little concerned about their seeming to have stepped back from that commitment
recently. We believe that it is possible to make massive inroads into the unemployment problems in Wales, and that it should be a social priority to do so.
Last year, we published a blueprint of a scheme called "One Hundred Thousand Answers", showing how 100,000 jobs could be created in Wales. We started from the assertion that work needs to be done in every community in Wales and that potential jobs are staring us in the face. There is a need to provide adequate community care, to improve the physical environment and to control pollution. There is a need for energy conservation schemes and to insulate homes, which would not only reduce energy consumption but reduce bills for pensioners and disabled people.
We need to improve our public transport and to reduce dependency on cars. There is a need for lengthsmen in our rural areas to keep the roads tidy, and a need to develop training and apprenticeships. We need more help in our schools, hospitals and doctors' surgeries, where staff are grossly overworked.
We need help for our police forces. People in every part of Wales say that they want to see police on the beat in villages and towns, but they are not available. Jobs need to be done in the paramedical services--in physiotherapy, speech therapy and occupational therapy. We need more community nurses, bath nurses and home helps.
Work is available all around us. The Minister is aware that people from the voluntary sector were at Westminster yesterday to lobby us. They told me how they could create jobs that would be of benefit to the people with whom they work.
"If Wales is to continue its recent growth performance, we need to ensure that the innovation process is extended to encompass the high value added service sectors such as computer-aided design and software engineering. The distinction between manufacturing and service sectors is becoming ever more blurred, with the industrial sector outsourcing all but its key functions and employing increasing amounts of services. In working towards an integrated manufacturing and service economy, it will remain important to encourage more original research and development expenditure from existing firms and to speed up the diffusion rates of new technologies."
That is an important statement, and, given its source, I hope that the Welsh Office will apply itself to seeing how such lessons can be learnt.
| Next Section
| Index | Home Page |