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12.46 pm

The Parliamentary Under-Secretary of State for Wales (Mr. Gwilym Jones): I am grateful to my hon. Friend the Member for Vale of Glamorgan (Mr. Sweeney) for giving us the opportunity to debate the economic and inward investment success story in Wales. It is a remarkable story, which many of our competitors envy, and it is a story that affects all of us in Wales. My hon. Friend details an impressive list of all that is going on in the Vale of Glamorgan. I know that that reflects his extensive activities as an assiduous constituency Member of Parliament. I believe that that is very much in the traditions of the late Sir Raymond Gower who, in many ways, was the predecessor of both my hon. Friend and myself.

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My hon. Friend excited me with what is happening with the waterfront development in Barry. I am sure that his practical involvement recently will have been significant in taking that project forward to its imminent completion. He rightly referred to the importance of Cardiff International airport to his constituency. My right hon. Friend the Chief Secretary to the Treasury was one of the Ministers who visited recently, and he went elsewhere in south Wales last week. I am sure that he was impressed by being able to see on the ground what good use we make of the money that we receive from the Treasury. That will better equip my Department for the next round of public expenditure negotiations.

My hon. Friend was concerned about improving the road from Cardiff to the airport. The road is the responsibility of the Vale of Glamorgan local authority as the highway authority. The original scheme involved on-line proposals to upgrade the A4050 and the A4226 between Culverhouse Cross and the airport at a cost of £23 million. However, there was fierce opposition to the plan, and there were congestion concerns, to the extent that an alternative, off-line route has been proposed at a cost of £58 million. My hon. Friend is a strong supporter of that proposal. As he said, we have provided transport grant settlement of £800,000 for the local authority for 1997-98, which will allow it to proceed with the preparation work for phase 1 and to investigate further the feasibility of phase 2.

I have to acknowledge my hon. Friend's persuasive powers. At a time of the greatest constraint on public expenditure, he was primarily responsible for persuading the Secretary of State and me to provide the £800,000 that will enable the local authority to go forward. No doubt next year he will seek to be even more persuasive in trying to elicit money from us, but I cannot anticipate. I note what he said about the need for the Dinas Powys bypass, but I cannot give any promises today.

My hon. Friend's constituency has shared in the exceptional success that we have enjoyed in attracting inward investment to Wales. Since 1983, almost 7,000 new jobs have been promised, with associated capital investment of almost £1.7 billion. Ford, Robert Bosch and British Airways have caught the eye because of their size and importance, but many other good projects have come to the Vale of Glamorgan through companies from the United States, Europe, the far east and elsewhere in the United Kingdom.

We have had a good run of industrial news for Wales in the past year or so. Sony, Ford, Newport Wafer-Fab, Toyota, British Aerospace and St. Merryn are only a few examples. LG was the most significant single announcement. It was the largest ever inward investment not just in Wales and the United Kingdom but in Europe. Those projects will take a further 10,000 people off the unemployment register. Moreover, that figure does not take account of the indirect jobs that will undoubtedly be generated.

What the Government have done to bring LG to the Cardiff-Newport area must be of the greatest importance to my hon. Friend, given the close proximity of his constituency. We shall build on those investments in the months and years to come and make sure that Wales continues to forge ahead in the important job of sustaining a vibrant and dynamic economy which is capable of taking on and beating the best in the world.

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It is incumbent upon us all to ensure that the whole of Wales enjoys the full benefits of inward investment. We want better distribution throughout Wales and we have given the Welsh Development Agency targets to achieve that. I am pleased that those targets have been achieved and, indeed, consistently exceeded over the past three years.

Major announcements in recent months present enormous opportunities. All of us involved in economic development must work together to make sure that we take full advantage of those opportunities for the people of Wales.

Wales is home to more than 300 overseas-owned manufacturing companies which employ more than 75,000 people. They are spread throughout Wales from Toyota in the north-east to Panasonic in the south-east, Euro DPC in the north-west and Calsonic in the south-west. Those investments have provided much-needed new jobs but the impact of inward investment is wide-reaching. The new jobs are vitally important to the families they support: none of us should underestimate that.

Equally important is the diversity that inward investors have brought to Wales. Where we were once heavily dependent on a narrow band of industries, we can now boast significant strengths in automotive components and aerospace--as my hon. Friend knows through their strong representation in his constituency--in consumer and office electronics, and a growing one in semiconductors. We are at the leading edge of technology in many of those sectors and more and more centres of excellence are being established in Wales. That diversity has given the economy of Wales robustness and dynamism. Wales can now withstand the inevitable peaks and troughs of the commercial world.

Falling unemployment in Wales has not happened by accident but by design. As my hon. Friend said, there has been another big and welcome fall in unemployment today. In January, unemployment in Wales fell by 2,700, leaving a rate of 7.1 per cent. Since October, 9,200 people in Wales have been taken out of unemployment.

Our excellent performance might well be compared with that of, say, Germany, because now no constituency in Wales has unemployment as high as the latest German figure of 12.2 per cent. I have the latest figures from the Library, which show that not only does every constituency in Wales compare favourably with Germany but only one out of the 38 constituencies in Wales has unemployment higher than the European average. I am pleased that the Vale of Glamorgan is below the Welsh average, and that my own constituency is the second lowest in the Welsh list.

I readily agree that unemployment remains too high, but we should take encouragement and heart from the progress that we have made, especially compared with others in Europe. In line with that was the banner headline on the front page of the national daily newspaper of Wales, the Western Mail, which proclaimed the likelihood of a further 1,000 jobs coming to the capital city of Wales, through a proposal for a call centre by CableTel, which is already well represented in south Wales. That is in line with other companies that have chosen to invest in Wales to establish call centres.

That fact offers a stark rejection of a less prominent article on page 5 of the same newspaper describing a survey which suggested that people find the Welsh accent

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unattractive and that even we in Wales do not care for it. I am sure that the survey must be too narrow to have any real validity, as I am sure that CableTel and others who have already established call centres in Wales, or are thinking of it, would not have done so without the fullest research, including evaluation of the worth of the Welsh accent in dealings over the telephone. Again, the possibility of 1,000 jobs from CableTel is welcome. My hon. Friend and I welcome the fact that more employment will be created for his constituents in the Vale of Glamorgan and I hope to discuss the proposals with Mr. Terry Ryan of CableTel.

Strong economic and fiscal measures have given this country stable and predictable inflation and interest rates, which have given companies the confidence to invest in Wales. We are getting new investors, as well as expansions by well established companies.

Mr. William Cash (Stafford): Has my hon. Friend noticed the extraordinary outburst of Mr. Niall FitzGerald, the chairman of Unilever, claiming that, if we do not join a single currency, that enormous multinational company, which employs 21,000 people in Britain, would think twice about its investment programme in the United Kingdom? Is that not an outrageous interference in the political process, and does not the situation in Wales show that Mr. FitzGerald is quite wrong about inward investment? Companies such as Nissan and Honda, and many others, have said that their decisions have nothing to do with the single currency. Would it not be as well for Mr. FitzGerald to leave politics to the politicians?

Mr. Jones: I am sure that there is great substance in my hon. Friend's point. In considering matters such as the single currency, which go wider than this debate, we need to take all factors into account rather than adopting the narrow approach that Unilever and others may have taken. Further and more mature consideration may lead them to a different conclusion.

The jobs created by inward investors and the new industries that they have brought are not the full story. Inward investors are keen to source locally and the Welsh Development Agency's "source Wales" programme has played a vital role in ensuring that we maximise the potential that exists. The agency worked closely with indigenous companies, many of which have taken the opportunity to expand and create jobs to satisfy the often substantial needs generated by the likes of Sony, Panasonic and Toyota.

While large inward investors catch the headlines, we have always taken--and always will take--an active role in encouraging home-grown companies to develop. The support that we can and do provide to inward investors is available to indigenous companies under the same terms. Indeed, over the past 10 years the support provided to indigenous companies has exceeded that given to inward investors but inward investors tend to have the headline grabbing projects. The combined effect of this industrial development is the strengthening of our whole economy.

New inward investors and local sourcing replace imports. That is good news for the United Kingdom as a whole. Just as important, inward investors use this country as a springboard into Europe. Many have achieved the Queen's award for export achievement, some more than once, and there are even examples of Japanese companies in Wales exporting back to Japan.

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As my hon. Friend and I know, the single market offers many opportunities for our home-grown companies as well as our inward investors. It is a market of almost 400 million consumers, many of whom are developing and many of whom aspire to those things that we in the west have taken for granted.

My hon. Friend is absolutely right to say that there are many good things happening in Wales, both in his constituency of the Vale of Glamorgan and up and down principality. Those will continue as long as we resist the dreadful, job-destroying twin threats--the social chapter and the minimum wage from Europe and the totally unnecessary bureaucracy of a Welsh Assembly--that would stifle further development in Wales.


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