| Previous Section | Index | Home Page |
12.3 pm
Mr. Rhodri Morgan (Cardiff, West): I join in congratulating the hon. Member for Caernarfon (Mr. Wigley) on securing this debate on unemployment and low pay in Wales. I couple that with congratulations to Welsh Office Ministers, local authorities, Newport borough council and all the other agencies, bodies, individuals and consultants who have been involved in helping to land the LG project for Wales, as was announced in the early hours of this morning. It is a superb project--possibly the largest inward investment project in Wales for 20 years, and perhaps the most important since the BSC Llanwern steelworks 40 years ago in the same town of Newport.
It is unusual, although not unique, for such a mega-investment project to be announced right at the end of a Parliament. It shows that LG is investing in Wales regardless of the outcome of the next election. Obviously, the bulk of the public expenditure needed to bring the project to fruition will be required after the election. All the jobs that will arise from the project will arise after the election, too. I say to Welsh Office Ministers who are present, all others and any Korean listeners that Labour's Welsh Front-Bench team gives an absolute commitment to bring that mega-project to fruition should the responsibility fall to us after the election.
We shall all have to get used to words such as "chaebo"--the Korean word for large industrial conglomerates, of which LG is one. Indeed, we shall have to get used to the name LG, since the company has changed its name from Lucky Goldstar in the past 12 months. In Wales, LG used to mean one thing: the initials of this country's only Welsh Prime Minister. Those initials now have a new meaning for all in Wales, and one which is very welcome because of the subject of this debate. Never has such a mega-investment been more urgently needed by Wales or, perhaps, any other part of the United Kingdom. The deterioration in the Welsh economy has been caused largely by the absence of such mega-projects over the past 20 years.
The Government's Invest in Britain Bureau conveniently produced a list of mega-projects in a press release issued yesterday by the President of the Board of Trade. I was very pleased to read the list because it was
identical to a list that I gave in a previous debate. That is not a boast; one does not need to be a rocket scientist to work out which projects are needed. The list is highly relevant to this debate. I absolutely agree with the press release when it says:
Sir Wyn Roberts (Conwy):
I should like to make two points. First, the hon. Gentleman said that Lloyd George was the only Welsh Prime Minister. There was also, of course, James Callaghan. Secondly, the Toyota engine plant is in Deeside. I apologise for not being present for the whole of the debate, but I heard it from afar. My problem was that I could not lose a couple of minutes of the speech of the hon. Member for Caernarfon (Mr. Wigley).
Mr. Morgan:
I am grateful for the right hon. Gentleman's attempted correction. His arrival in the debate on unemployment and low pay is better late than never on a day when I half expected all three Conservative Back Benchers to be present to help to welcome the good news for Wales today. I am grateful that the right hon. Gentleman has entered the Chamber halfway through the debate. He was right in one sense: James Callaghan represented a Welsh seat--indeed, the one that adjoined mine--for 40-odd years, but we tend to think of Lloyd George as having a special place because, although I believe that he was born in Manchester, he was brought up in Wales. He was Welsh in a very specific way that I am sure Lord Callaghan, who is now a distinguished Member of the other place, would not claim.
As yesterday's DTI press release said, investment in such a large project can almost on its own lift the relative position of a region such as Wales in the league table. Failure to attract any of the projects listed by the DTI, until this morning's news from Seoul, has caused the relative deterioration in Wales's position in the United Kingdom league table. That deterioration is starkly illustrated in the 1996 edition of "Regional Trends", published a fortnight ago. As the hon. Member for Caernarfon has already given figures similar to those that I intended to cite, I shall not repeat them. "Regional Trends" gives us the figures for Wales up to 1 April 1995 in most cases, and shows how extraordinarily badly Wales has been doing over the past 15 years.
According to Government figures for gross domestic product or household income per head, in 1980-81 Wales came ninth out of the nine English regions plus Wales, Scotland and Northern Ireland. We are now at the bottom of the league table--12th out of 12. That is a sad state of affairs and I am grateful to the hon. Member for Caernarfon for this debate, which helps us to focus on the
difference that the LG project will help to make to Wales's position in the league table. Table 8.1 of "Regional Trends" shows that in 1994-95 not only was Wales bottom of the table on household income per head, but the gap between it and the next lowest region--northern England--was enormous. In northern England, average gross household income was £345 per week while in Wales it was £282.70.
Wales's deterioration compared with Northern Ireland is also extraordinary. In 1980-81, Wales in ninth position had an average gross weekly income of £138.60 and Northern Ireland was almost £20 worse off at £119.20 a week. By 1994-95, Wales, now in 12th position, had an average gross weekly income of £282.70 while Northern Ireland had an average gross weekly income of £40 more than Wales at £326.30 per household. It is serious enough to drop from ninth to 12th place, but even more serious to be hopelessly behind in 12th place. That is what is so depressing about the picture for Wales.
There seems to have been not merely a relative deterioration but an absolute deterioration. For instance, in 1992 average weekly expenditure per person reached £101.60. Two years later, it had dropped to £96.40. The same is true of income per head. That absolute deterioration then feeds through to other parts of the economy. If a family has a low weekly income, its general expenditure will not create extra jobs in the service sector. It will not create a demand for new shops and other specialist services because it simply does not have the money to lash out on all manner of services. So low wages create a poor provision of wages in multiplier service industries and, as a result, there tends to be a low demand for labour, which then depresses incomes. That vicious cycle has impacted on Wales since 1992.
The importance of this morning's news is that it gives the Welsh economy an opportunity to improve its position and surpass some of the other regions which tend to depend, as Wales does, on manufacturing industry. It will increase demand for labour and therefore increase relative wage levels. It was ironic to hear on the 8 o'clock BBC television news this morning, announcing the LG project, that one of the reasons why the Koreans were investing in Wales was that they had a strong manufacturing economy and strong trade unions. Strong trade unions were forcing up wages, so they were coming to Britain. That is good news for Britain, but it is ironic when we compare the history of Great Britain and Korea over the past 30 or 40 years.
"Companies such as Siemens, Fujitsu, Toyota, NEC, Samsung, Honda Chunghwa and Nissan make a vital difference to the local economy wherever they choose to set up operations."
We should remember that Siemens and Fujitsu are going to the north-east of England, Toyota has already gone to the east midlands, NEC has gone to Scotland, Samsung to the north-east of England, Honda to the south-west of England, Chunghwa to Scotland, and Nissan to the north-east of England, but none has gone to Wales. The absence of such mega-projects is probably the reason why unemployment and low pay are such problems for Wales. Thank goodness, at long last, for the first time in 20 years, a mega-project has come to Wales--the first since the Ford engine plant went to Bridgend in 1976.
| Next Section
| Index | Home Page |