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10.14 am

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy): I congratulate the hon. Member for Preseli Pembrokeshire (Ms Lawrence) honestly and sincerely on her maiden speech, which was thoughtful and thought provoking. I am confident that she will prove an excellent Member of Parliament and that the people of Preseli Pembrokeshire will be represented very well.

I also congratulate my hon. Friend the Member for Caernarfon (Mr. Wigley) on securing time for this debate on a matter that is important for the whole of Wales. In the time available, I shall concentrate on the rural parts of Wales. My hon. Friend has assiduously tackled deficiencies in the Welsh Development Agency over the years. He has offered constructive criticism, rather than simply banging away without offering any helpful suggestions. I am sure that the recent change in direction by the agency and the Welsh Office is due in no small measure to my hon. Friend's efforts.

The Welsh Development Agency's success in attracting high-profile new investment, such as LG in Newport, is most welcome. However, the problems of rural areas present a far more difficult scenario. In effect, a single huge job creator in a populous area will sweep away an enormous percentage of the unemployment figures at a stroke. However, the economy in the other 80 per cent. of Wales will remain utterly reliant on the small and medium-sized sector businesses, without which the economy would collapse. It follows, therefore, that it is far more difficult to attract the medium-sized sector to the pockets of unemployment that are prevalent in many parts of rural Wales.

The situation has been exacerbated of late by the scaledown of labour in the agricultural industry. A particularly worrying aspect is the rate of long-term youth

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unemployed, which is as high as 33 per cent. in some parts of rural Wales. Addressing that problem must be a priority if we are to build a healthy and viable society in Wales.

It is correct to say that the Welsh economy generally is depressed, with gross domestic product per head at about 83 per cent. of the United Kingdom average, as the hon. Member for Preseli Pembrokeshire said. Low wages are a feature in many industries. Tourism, which is one of the main employers in Wales, remains largely seasonal despite the efforts of many in the industry to encourage expansion into the so-called "shoulder areas" of the year. Wales must also deal with an inferior transport network--indeed, it is hardly a network at all.

Rural Wales is characterised by a population comprising a high proportion of elderly people with a lower proportion of under-45s. Population growth in rural Wales is due largely to the in-migration of mainly elderly people and, as a consequence, service delivery is more costly per head. In addition, the settlement pattern of rural Wales is under threat. Characteristically, Wales has always had a network of small market towns which frequently serve a catchment area of many miles. In the past five years, we have seen a huge growth in the number of large stores--such as supermarkets and hypermarkets--in those towns. They are seeing off the smaller retailers, one by one.

I was among those who called consistently for policy planning guidance notes 6 and 13 to be introduced in Wales without delay. The Welsh Office, under the tenureship of the former Secretary of State, the right hon. Member for Wokingham (Mr. Redwood), sat on the documents for 12 months after they were introduced in England by the Department of the Environment. During that time, large retail outlets sprang up like mushrooms over huge swathes of rural Wales. We must now come to terms with the consequences of those events.

In seeking to address the particular problems associated with the economic and socio-economic planning for Wales, the Welsh Office should develop a rural strategy, which was so eloquently propounded by my hon. Friend and by the hon. Member for Preseli Pembrokeshire. I consider that we have lessons to learn from the English model, a rural affairs commission similar to that model might be part of the answer. The fact is that the problems of rural Wales are broad based. They never present one single answer, but beg several. A body that brings together all the problem areas and addresses them would be most welcome.

What I have just said will inevitably be taken as a criticism of the Development Board for Rural Wales, but, in truth, the board has performed fairly well within what many of us consider to be a far too limited remit. I recognise that the board has considerable expertise in encouraging growth in the rural economy, but its powers and obligations should be extended. There is no justification for cutting its budget, even if that means thousands of new jobs for the Newport area. I call on the Government to reinstate the board's budget and to extend its remit so that it is better able to fulfil its statutory purpose and obligation to assist in improving

The recent market town initiative is most welcome, but I ask the Minister to look again at what the board can offer existing businesses to help them expand. That must be the

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key to any strategy. I believe that that offers far more potential even than attracting further inward investment. A thorough appraisal of ways in which to invigorate rural Wales and redress its further decline is long overdue.

We need improved public transport, and initiatives such as post buses are most welcome. Our rural post offices and shops are a vital resource. Although some recent rate relief was introduced, further initiatives must be sought. Capital grants must be introduced to assist businesses in rural areas. Support for all rural businesses, be they general stores, garages, public houses or whatever, should be considered, because they are key resources. Any business failure in those sectors inevitably has a serious knock-on effect throughout rural areas.

My hon. Friend the Member for Caernarfon referred to information technology and the need to cable up Wales. That is of paramount importance if Wales is to have a truly prosperous future. I believe that time is of the essence, as Wales has great potential for attracting telematic-based firms in rural areas.

One of the particular problems in rural Wales is the need to link up indigenous businesses. Due to the far sightedness of several individuals in my constituency there is a contract shop for connecting businesses. In the past, businesses typically had to import raw materials from the west midlands, but they now find that those same materials are available at a competitive rate within the constituency. Such an initiative is extremely important. I also echo what my hon. Friend said about the transport of goods and people.

We need to think carefully about encouraging real diversification in agriculture. If that means a relaxation of planning procedure, so be it. The national park within which I live must be a living, breathing and expanding area where the communities can live and prosper. We need to redouble our efforts to assist our market towns. Environmental improvements such as those undertaken by the WDA at Llanrwst and currently at Dolgellau are fine as far as they go, but we need to make it more attractive to people to start up in business. We need to remind people that rural Wales has some world market leaders within it. If they can succeed, a new business will also succeed. A far more radical and all-embracing policy is required so that all the key players in rural regeneration are singing from the same hymn sheet.

We have a wonderful quality of life in rural Wales. People must recognise our determination to ensure that businesses prosper. At the moment, I fear that that message is not getting through. I also fear that a drastic rethink is necessary to make Wales, in particular its rural areas, a haven for business start-ups and expansion.

I trust that when the Welsh Assembly is set up it will concentrate on the dire need to refocus and simplify the various efforts to achieve rural regeneration. I believe that the Assembly would be an excellent forum for that and a catalyst for true forward thinking about what is good for Wales.

10.24 am

Mr. Donald Anderson (Swansea, East): What a happily consensual debate this has been. It is one in which people who represent different parts of Wales have sought to consider constructively its problems and propose solutions.

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I congratulate the hon. Member for Caernarfon (Mr. Wigley) on his timely choice for debate because, at the start of a new Parliament, I believe that we are pushing at an open door. I know that when the Under-Secretary of State for Wales, my hon. Friend the Member for Neath (Mr. Hain), replies, he will fully understand the problems and will seek to address them constructively.

I also want to commend warmly the maiden speech of my hon. Friend the Member for Preseli Pembrokeshire (Ms Lawrence), which was a model of its kind. During the election campaign, I had the privilege of being twinned with Preseli, and my wife and I spent a happy two weeks there at the start of the campaign. I can certainly underscore what my hon. Friend said about the deprivation in her constituency. At one stage, I thought that there was a new candidate standing for election because of the number of boards displaying the name Halifax. That is some indication of the pressures that that constituency has faced due to a combination of factors associated with the oil industry, defence cuts, BSE and other problems that my hon. Friend described so graphically. I know that she will be a worthy successor not only to the hon. Member for Ceredigion (Mr. Dafis), who used to represent the northern part of her constituency, and my hon. Friend the Member for West Carmarthen and South Pembrokeshire (Mr. Ainger), who used to represent the major part of it.

The broad theme of all the contributions has been the same--yes, the Welsh Development Agency has had some successes, but there have also been some major failures. That cannot be laid at its door, because as its name implies, it is an agent and there is a principal behind it--the Welsh Office. By its policies, the Welsh Office has allowed the divide between the more prosperous and less prosperous areas of Wales to increase. In part, that is due to its failure to use the instruments that are available to it, but, worse than that, it has increased the locational advantages of south-east and north-east Wales. Effectively, its policy has been one of failure by omission to use certain instruments to attract developments to those areas that need it. Worse than that, by its policies it has increased the disadvantages of certain areas--disadvantages that have already been described.

I do not intend to ask the Under-Secretary to visit the areas in question because he knows them well. We were delighted by his appointment because he will be a powerful advocate within the Welsh Office for the type of policies that we have mentioned. My hon. Friend need only look at the relevant statistics gathered by the Welsh Office concerning population movement and other demographic factors such as the aging population, the number of young people who leave Wales and the decline in the population in certain areas. They speak for themselves.

The statistics on poverty show how earnings have declined. In my part of south-west Wales, for example, earnings used to be well above the Welsh average because of highly paid steel jobs at Port Talbot, but we are now well below it. That has been a feature of the economic development in south-west and north-west Wales. Other statistics, which relate to economic activity and the comparative financial advantages of certain areas, also speak for themselves. Under the Redwood era, as the hon. Member for Caernarfon has said, the figures were astonishing. Over three years, I think, the Cardiff Bay

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development corporation was given by way of grant in aid more than twice the budget that the Welsh Development Agency had for the rest of Wales.

Recently, for example, my city of Swansea was trying to attract a well-known consumer business to the city. Swansea was told, "Yes, we may be interested in coming, but you--the city and council--must match the subsidised price of, and other incentives at, Cardiff bay." The city does not have the resources to do that. Playing on the locational advantages of south-east Wales is causing enormous problems.

There is always a temptation in these debates to be parochial and to get a quick headline in the local newspaper. We must recognise, however, that Cardiff is the flagship. It is the capital of Wales and should be treated accordingly. We must recognise the locational advantages--

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