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8.25 pm
Mr. Rod Richards (Clwyd, North-West): Judging by his speech, the hon. Member for Caerphilly (Mr. Davies) learnt his economics at TUC conference fringe meetings. He turned down my attempt to intervene on him when he raised the issue of a Welsh Assembly; I shall say to him now what I wanted to say earlier. He has written a letter putting the case--as he sees it--for a Welsh Assembly, which has been circulated by local authorities. I should like to know who paid for them to circulate it. Public funds may have been used to promote party propaganda.
Hon. Members on both sides of the House have rightly congratulated the WDA on the successes that it has achieved over many years, but others have been involved in those successes. Attention should be drawn to the considerable role played by the Department in the achievements of which we continually read. Nor, so far, have we heard about the economic context in which the WDA and the Welsh Office have been operating. Ultimately, whether people invest from outside--or reinvest from inside--depends on their confidence in the country's economy: for any investor, the bottom line is the return that he expects to receive.
The macro-economic context in which the WDA has achieved its successes is unparalleled in western Europe, certainly nowadays. We live in a time of historically low inflation and interest rates, and a stable and strong currency. One of the most important factors, which certainly did not exist 20 years ago, is our flexible work
force. Inward investors are always comparing the current flexibility with the position 15 or 20 years ago. At that time, Britain was known as the sick man of Europe because of its poor industrial relations, whereas today it is widely recognised as the enterprise centre of Europe.
Such confidence and stability as we now enjoy could be undermined by our European partners' policies, which they would have us implement, in particular the working time directive, which would damage jobs and prospects of inward investment, and a minimum wage. Again, for anyone selling the economy and the prospect of investing in this country, those policies would be to the detriment of future investment. Another reason--which people seldom recognise publicly--why people from abroad invest in Wales and Great Britain is that we are an English-speaking nation.
My right hon. Friend the Secretary of State mentioned changes in policy or in the modus operandi of the Welsh Development Agency. Many of us who represent seats in north Wales, mid-Wales or west Wales would welcome that greatly. He said that greater emphasis would now be placed on the parts of Wales with high unemployment, which, by and large, are perceived by many who live in those regions to have been disadvantaged, so his statement is timely.
Opposition Members will recognise that, these days, unemployment in their constituencies, which traditionally has been high, is very low compared with before. That reflects the success of the Government's macro-economic policy and of the WDA's policy.
I was interested to hear the hon. Member for Alyn and Deeside (Mr. Jones), a near neighbour of mine, mention unemployment in his constituency. Judging by the House of Commons Library publication on unemployment by constituency, unemployment in Alyn and Deeside stands at some 4.8 per cent., but the Welsh average is 7.4 per cent. I see many Opposition Members who I am sure are delighted at the much lower unemployment in their constituencies. For example, in Islwyn, the level is 5.4 per cent., in Delyn it is 5.6 per cent., in Pontypridd it is 5.6 per cent, in Bridgend it is 5.7 per cent. and in Wrexham it is 5.8 per cent. All those unemployment levels are much lower than they have been and reflect the Government's success.
At the top end of the scale of unemployment levels, which my right hon. Friend the Secretary of State addressed in his speech, we have Caernarfon at 11.1 per cent., Pembroke at 10.8 per cent.--
Madam Deputy Speaker (Dame Janet Fookes):
Order. Although this is a Second Reading debate and therefore, by definition, reasonably broad, the hon. Gentleman is stretching the case. May I ask him to return to the substance of the Bill?
Mr. Richards:
I was welcoming my right hon. Friend's remarks that the Welsh Development Agency will be addressing the regions with much higher unemployment, which are to the north and west of Wales. The unemployment level in regions where it has been traditionally high is far more acceptable--if unemployment is ever acceptable--than it might otherwise have been.
I should like my hon. Friend the Under-Secretary, when he replies to the debate, to address one or two questions, although he may not have the opportunity to comment on
them then; I hope, however, that he will find time to write to me about them. The first is on the distribution of the Welsh Development Agency budget. One of the concerns that we have in the north and rural parts of Wales involves forward commitments, within the properties budget, in different regions. It appears that the forward commitments, certainly in south Wales, are a high proportion of the budget allocated to that region, whereas the forward commitments elsewhere tend to be lower.
That creates a certain inflexibility in relation to future investment. What tends to happen is that, because of the high propensity towards forward commitments, moneys are moved from the regions that appear to have funds to spare and are transferred from one region to another. That means that in, for example, parts of north Wales, funds are not always available--this, I believe, is the position at present--to acquire land or to bring about the infrastructure changes that are necessary to attract investors, be they indigenous or from overseas. That critically affects forward planning in--in my case--north Wales, so the question to my hon. Friend the Minister is: what is the distribution of capital investment by geographic region and how does he expect that to be addressed?
The other point is the cost per job. Clearly, as I mentioned, investment is a matter of confidence in the economy, but confidence varies from region to region. I mentioned unemployment levels in parts of south Wales. Business and economic confidence in those parts would clearly be greater than, say, in Ynys Mon or in parts of Pembroke, where unemployment is high. Therefore, the case must be put--I believe that my right hon. Friend the Secretary of State addressed this in his speech--that the cost per job should be greater, or should be allowed to be greater, in regions where unemployment is very high.
We have all heard about the impact that 6,000 jobs from LG will have on Newport's economy, but the equivalent in a place such as Holyhead would be 50 jobs. There needs to be a greater allowance, to attract jobs to the parts of Wales that are perceived as economically unattractive. Therefore, it would greatly benefit us in north Wales to know precisely what the cost per job has been historically, and what my right hon. Friend the Secretary of State is prepared to allow the Welsh Development Agency to spend in future.
Mr. Alex Carlile (Montgomery):
I am sure that it will not have escaped your attention, Madam Deputy Speaker, that, as the debate was starting, there were two interventions from hon. Members representing constituencies in Cornwall--one of them my hon. Friend the Member for Truro (Mr. Taylor). Those interventions told their own story, that the Welsh Development Agency
I wish to pay tribute to the right hon. and learned Member for Aberavon (Mr. Morris). In the 14 years that I have represented Montgomeryshire, I have seen the fruit of the vision that he had when he created the Development Board for Rural Wales. When he created the DBRW, he had a clear and close understanding of rural, mid and west Wales. The board has worked extremely well. I am sure that he acknowledges that change is necessary as the years go by, and that the way in which the organisations function must change from time to time.
In my view, the linkage provided by Mr. Rowe-Beddoe during his chairmanship of both organisations has been valuable for two reasons. First, both the WDA and the DBRW went through short periods of which they cannot be proud, and there was good reason for ensuring that the management disciplines that were applied were extremely rigorous. Mr. Rowe-Beddoe applies rigorous management disciplines, and the performance of the senior executives in both organisations is evidence of that.
Secondly, the linkage has been useful because it has enabled the two organisations not merely to work closely together, but to learn more of each other's differing disciplines. However, it would be a disastrous mistake if any member of any political party or any Government were to take the view that there was now no need to distinguish between the way in which economic development should be managed in rural, mid and west Wales and the way in which it should be managed in the rest of Wales. The problems remain as different now as they were when the right hon. and learned Member for Aberavon set up the two organisations. They were set up quite deliberately, as he said in his speech, to represent separate requirements and needs.
The farming community upon which mid-Wales depends is different in every possible way from the former mining or steel communities of south and north Wales, not just in its job patterns, but in its structure. The continuing threat to what is still Wales's largest industry, agriculture, and the fortunately gradual, rather than sudden, decline in the number of jobs in that industry, require the continuing care of an organisation that is different from the WDA, an organisation that can take a more gradual approach.
If I wish to pay particular tribute to the work that has been done by the DBRW in the past two or three years, I can do so merely by pointing to the small new factories that are springing up, for example, just outside Welshpool, which has not had its full share of development. Also, more is happening west of the Newtown area which, at one time, had the concentration of development. I hope that the linkage between a better resourced WDA, as provided for by the Bill, and the DBRW will continue for a long time.
I wish to repeat a plea that I made recently in the Welsh Grand Committee, for a particular focus to be given in the future to the indigenous industries of Wales. It is wonderful for the Newport area to have the LG development, and any major incoming investment must be greeted with open arms. However, the DBRW has not always been the most popular organisation in mid-Wales, as it is said that sometimes, but not always, it gives the impression that it gives its all to outside investment coming in--particularly when a Japanese, German or Korean name is attached to it--but pays little attention to indigenous development.
That is not true, and it is not an accusation that I make. However, in my view, more can be done to develop indigenous industries within Wales. The Source Wales scheme is but an example of what can be done. But more can be achieved, particularly by focusing small-scale help on the development of new skills in Welsh factories--especially in the remoter parts of Wales.
In a recent Welsh Grand Committee debate, I made a particular plea for a part of the service industry in Newtown, in mid-Wales. The DBRW was, at the time, refusing to sell buildings to a successful business based in Newtown, called Charlie's Stores Ltd., which has grown from a street stall to a company with a turnover in excess of £10 million a year. The flexibility of Mr. Rowe-Beddoe was demonstrated to me today, when I received a letter from him informing me that an agreement had been reached to sell the premises to Charlie's Stores Ltd. Such a change in attitude towards indigenous industry will, I hope, be developed by the WDA and the DBRW.
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