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Mr. Martin Caton (Gower): Does my hon. Friend agree that partnership between the Welsh Development Agency and other agencies, such as central Government, is essential if we are effectively to create the jobs that we need, especially in the Swansea area? Does my hon. Friend agree also that the WDA let us down extremely badly recently when, having promised us money for the Technium project, the science park at Penllergaer, which is just outside my hon. Friend's constituency, the money was pulled away, along with European money that was already guaranteed? That money went back to south-east Wales. Does my hon. Friend agree that that was regional policy in reverse?

Mr. Anderson: Yes, precisely that. My hon. Friend has produced an extremely good case study. As he says, it is regional policy in reverse. Money was pledged for the science park at Penllergaer. The project involved using the expertise of the local university in a way that the hon. Member for Caernarfon was suggesting. At the 11th hour, however, the money was taken away by the WDA and assigned to the Cardiff area. It was an astonishing decision, and I hope that my hon. Friend will use it as a case study.

I am sure that my hon. Friend the Minister is aware of other examples in the Neath area of regional policy in reverse. Money goes to areas that are already relatively prosperous, its having been taken from areas that are not prosperous. That must be examined.

I adopt all that has been said about proportions. I understand very much what has been said about the deathbed repentance of the right hon. Member for Richmond, Yorks (Mr. Hague) a few months before the general election. The right hon. Gentleman saw the writing clearly on the wall. He said, "I have sinned. My policy has been wrong. Oh Lord, what I would like to do is as follows." That policy has been set down and I re-pose the question asked by the hon. Member for Caernarfon: will the Welsh Office pick up the challenge?

I am talking not of the theoretic undertakings of the previous Secretary of State but of a firm commitment that the investment targets for the WDA will be entirely recast with emphasis being given to the more deprived areas, such as areas west of the golden corridors of the A55 and M4. I want to see that broad commitment accepted in principle. Will my hon. Friend the Minister, in whom we have enormous confidence and think of as the advocate

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of the areas outside the more prosperous areas of Wales, give us an indication of the ways in which the Welsh Office intends to act? What instruments does it propose to use? I hope that my hon. Friend will underline that we have a new and reforming Government who are prepared to use all the available instruments for Wales as a whole.

10.34 am

Mr. Richard Livsey (Brecon and Radnorshire): I congratulate the hon. Member for Preseli Pembrokeshire (Ms Lawrence) on making an excellent maiden speech. I have a considerable Pembroke ancestry in my blood and I appreciated what she said.

I am delighted that the hon. Member for Caernarfon (Mr. Wigley) has initiated the debate. I congratulate the Minister, the hon. Member for Neath (Mr. Hain), on his appointment as Parliamentary Under-Secretary of State. In constituency terms, he is my next-door neighbour.

I shall endeavour to make a succinct speech in drawing attention to a number of areas of strategy that are important for the Welsh Development Agency and the Development Board for Rural Wales.

Various Secretaries of State have used the WDA as the engine of economic development in Wales. That is especially true of the tenure of Peter Walker, one of the better Conservative Secretaries of State, in the mid-1980s. The problem is that locational development has been unequal, with the result that there is a divide. There are many who say that there is little economic development in south Wales west of Bridgend, and there is some truth in that. There is a similar divide in north Wales along the A55.

We have a problem in the western valleys and we have enormous problems in south-west and north-west Wales. There are problems in rural areas. We are in danger, however, of forgetting mid-Wales, which is a huge chunk of the country. There is a great deal of discussion about what goes on in north Wales and south Wales, but the problems of mid-Wales are substantial. Those problems are undoubtedly the result of poor infrastructure. It is unpopular these days to talk about road developments and I would not advocate motorways running throughout Wales, but some improvements to the A470 and A483, especially in the Brecon and Radnor constituency, and in Powys in general, would improve north-south communications and assist economic development without wrecking the environment.

The difficulties facing the rural economy, with up to 25 per cent. of those involved depending on employment that is connected with agriculture, should not be underestimated. The problems of BSE and cuts in the green pound are taking farm incomes down to even lower levels.

We in mid-Wales are especially concerned about the Development Board for Rural Wales and the interface between the DBRW and the WDA in the location of investment. It is vital that the DBRW continues. There is a feeling in mid-Wales that perhaps its days are numbered. I ask the Minister to ensure that it continues. Indeed, it should be developed and given more powers. The problems facing agriculture should be addressed more clearly by the board. Legislation should be introduced to ensure that that happens.

The boundaries of the DBRW should be coterminous with the objective 5b area of the European Union in Wales. There may be a case for extending the board's boundaries.

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Many upland farms in Wales produce incomes of £10,000 a year or less. With the green pound devaluation and the halving of ewe premiums, incomes could fall to £5,000 per family. There is a great need to provide employment in rural areas to ensure that members of farming families have alternative employment and an alternative income. That means that economic development must be pushed through to many of the more remote rural areas to ensure that employment opportunities exist.

With the advent of a Welsh Assembly, which we all hope and trust will be set up, there is a great need to make up the democratic deficit. We certainly need a rural strategy that includes not only the WDA but the DBRW, the farming unions and the rural counties of Wales--and not only a policy, but a Welsh Office Minister, devoted entirely to the needs of rural areas. Then there could be a coherent strategy for employment and location.

The needs of rural Wales are great and I should like the Minister to assure us that the DBRW will continue to develop, that its budget will not be cut, as has happened over the past 12 months, and that it will be given a fair deal.

10.39 am

The Parliamentary Under-Secretary of State for Wales (Mr. Peter Hain): This has been what my hon. Friend the Member for Swansea, East (Mr. Anderson) appropriately described as a happily consensual debate. It is not hard to discover why, when we look at all the empty green Opposition Back Benches where Conservative Members would normally be sitting.

Mr. Nick Ainger (West Carmarthen and South Pembrokeshire): Where are they?

Mr. Hain: There are none left, because they were wiped out in Wales. That is why we can now, at last, tackle the real issues there, such as those raised by the hon. Member for Caernarfon (Mr. Wigley), whom I congratulate on securing the debate.

The hon. Gentleman raised several important issues that are right at the top of the Government's agenda for Wales. He also made some apt and sharp observations about the call centres and the need to ensure that a broad-band telecommunications network extends right across into north-west Wales. I shall write to him about that, and perhaps we can have a dialogue later.

I also congratulate my hon. Friend the Member for Preseli Pembrokeshire (Ms Lawrence) on an excellent maiden speech. In fact, I am somewhat jealous because I, as well as my hon. Friend the Member for Swansea, East, was her twin at the election--not that she needed our help, because she secured a bumper majority.

My hon. Friend spoke eloquently about her constituency, which is indeed beautiful. I have good reason to know that, having visited Skomer island with her on Sunday. However, as she eloquently explained, that beauty masks much unemployment and serious economic and structural problems, which the Government will seek to address, but which the Tory Government so shamefully neglected.

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To be successful, the Welsh Development Agency needs a clear framework of strategic guidance from the Government, incorporating specific targets on job creation--the levering in of private sector investment, the reclamation of derelict land and the generation of new business for Welsh firms.

The WDA's industrial location policy is based on the economic case for promoting inward investment in Wales--and it has been most successful. The new Labour Government are determined to build on that success.

However, it has been easier to attract inward investors to the south-east and the north-east of Wales. I agree with the hon. Member for Caernarfon about that, and we now need to redress the balance between east and west Wales, and between the south and the north. We are also determined, as the hon. Gentleman said, to locate investment up the valleys. I agree with him there, too.

We must be clear that getting investors into Wales, rather than specifying exactly where in Wales they should go, is the absolute priority. There is stiff competition from other regions of Britain and we simply must offer the best package possible. I do not think that there will be any disagreement about that. If that means having 6,000 LG jobs in Newport, or not having them at all, I am sure that we would all agree that the answer is self-evident. So, while I am second to nobody in my desire to spread prosperity westwards off the M4 and A55 corridors, I also ask for hard-headed realism from everybody in that respect.

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