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Mr. Caton: While my hon. Friend is talking about moving investment westwards, will he join me in recognising the excellent work done by the WDA as the lead partner in developing the Felindre old steelworks site in my constituency, close to the boundary with his own? That must now be one of the premier inward investment sites in Britain, and probably in the whole of Europe.

Mr. Hain: I agree with my hon. Friend, and I assure him that the Government are doing all that we can to ensure that we get major investment in what he rightly calls a premier site.

Foreign direct investment has been, and continues to be, a vital source of new employment opportunities. For this year, the agency has the target of creating or safeguarding 12,500 jobs, almost two thirds of which--8,000 jobs--will come from inward investment. Half those new jobs will be outside the eastern M4 and A55 corridors.

The benefits are not limited to jobs. Overseas companies have brought new skills, new technologies and new products that have been of wider benefit to the Welsh economy. For example, home-grown firms have entered the supply chains of the overseas companies, thus creating and safeguarding further jobs. The new arrivals have also been able to learn from our businesses, so the benefits have flowed both ways.

We must look forward as well as back. The Welsh economy today faces challenges very different from those of 20 years ago.

Mr. Wigley: Before the Minister moves on to the general forward-looking bit of his speech, may I underline

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what I said earlier about the guidelines issued by the Welsh Office on 19 March, which said:

    "The targets set out below"--

that is, with regard to how many of the jobs should be outside the two pockets--

    "reflect this and the Agency is expected to recognise, within the UK and EC limits, the extra costs of locating in areas outside of the eastern M4 and A55 corridors."

That is deliberately specified, to try to attract companies that would otherwise want to go to those pockets--although, of course, as the Minister said, we would not want to lose them altogether. Presumably, that means giving some inducements to meet the extra costs. Can the Minister tell the House what the mechanism for doing that will be?

Mr. Hain: We have a delicate balance to strike here, and we intend to use all the levers available both to the WDA and to the new Government to ensure that we get extra investment in north-west Wales. If the hon. Gentleman does not mind, I would rather leave it at that at the moment.

It is also vital--

Mr. Martyn Jones (Clwyd, South): I am sorry to spoil my hon. Friend's flow, but I have here some figures from the Library, obtained by my hon. Friend the Member for Vale of Clwyd (Mr. Ruane), which suggest that employment and inward investment in north-west Wales are not quite as bad as they were portrayed earlier. There were 1,500 jobs in Anglesey and Gwynedd, and 4,700 in Wrexham and Flintshire.

The real problem area seems to lie in between, in Denbighshire and Conwy, where only 400 jobs were created last year. That is probably something to do with whether the local authorities are submitting projects to the WDA. Will my hon. Friend say something about those problems?

Mr. Hain: My hon. Friend makes a valid point. The duty Government Whip, my hon. Friend the Member for Cardiff, Central (Mr. Jones), muttered to me earlier from a sedentary position that there was high unemployment in Cardiff, too. Indeed, there is, but we do not want to get into a competitive auction. We must seek to do the best for all parts of Wales, and I think that there will be unity on that subject among Members here today.

The issue, however, is the imbalance of inward investment. The hon. Member for Caernarfon made a valid case.

Dr. John Marek (Wrexham): Can my hon. Friend consider the problems caused in north-east Wales. too? A Western Mail article by Darren Waters quotes the Secretary of State as commenting on the appointment of the new WDA chief executive, Mr. Willott, as follows:

Of course, that leaves out Cardiff, which is central to the concerns of the Government Whip, my hon. Friend the Member for Cardiff, Central, and leaves out north-east Wales, too.

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The Secretary of State also left out the area described by my hon. Friend the Member for Clwyd, South (Mr. Jones), the Vale of Clwyd and the areas in between.

The Minister would do a service for all of us in Wales if he gave a categorical--

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. The hon. Gentleman should know better. He is making a speech, rather than an intervention.

Dr. Marek: May I finish my sentence, Mr. Deputy Speaker?

Mr. Deputy Speaker: The hon. Gentleman may go no further.

Mr. Hain: My hon. Friend the Member for Wrexham (Dr. Marek) speaks eloquently for his constituency. It is a matter not of taking jobs away from north-east Wales, but of ensuring that the imbalance is corrected and that we have an investment strategy that supports all parts of Wales. More jobs will be created in north-east Wales.

I am pleased to make an announcement that will be of particular interest to my hon. Friend the Member for Alyn and Deeside (Mr. Jones). Comtek Electronics and Lasar Cutting Services are bringing new jobs to north-east Wales. Their projects will create almost 100 new jobs, involve the investment of more than £2.5 million extra finance, and will be welcome additions to the communities in north-east Wales.

Mr. Barry Jones (Alyn and Deeside): I welcome my hon. Friend to the Front Bench and congratulate him on that announcement and on the hard-headed, realistic way in which those jobs have been steered towards my constituency. They are much needed, because we have considerable long-term unemployment. We also have Deeside industrial park, which we need because we are still coping with the consequences of losing 8,000 steel jobs. I thank the Minister most sincerely.

Mr. Hain: I thank my hon. Friend. One of the reasons why such investment has come to north-east Wales is his diligence on behalf of his constituents.

It is vital that Welsh goods and services are competitive at home and abroad. With Wales exporting twice as much as it imports, it is truly part of the global economy, and we must pay particular attention to our key markets in Europe. Indeed, many United States, Japanese, European and now Korean companies chose to set up in Wales to service the European market. The Government's positive approach to Europe was triumphantly shown in the early hours of this morning by the outcome of the Amsterdam summit. That will provide existing and potential investors with further confidence that Wales is the right place from which to do business in Europe.

Inward investment is, therefore, an important component of the globalisation of the Welsh economy. However, we are pressing for a fairer distribution of inward investment throughout Wales, particularly in west and north-west Wales, but also in the south Wales valleys.

I underlined the importance that I attach to inward investment when I met Mr. Joseph Jun, the European President of LG, together with his colleagues, Mr. C. B. Kim and Mr. S. H. Kim, two days ago. I was impressed

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with their dynamism and they expressed confidence in the partnership approach that the new Labour Government and their agencies are providing. We agreed that we would like as many LG suppliers as possible to locate in Wales, up the valleys and northward and westward. That could bring a further 15,000 quality jobs. Of the 48 companies so far identified as suitable suppliers to LG, 19 are in south Wales, six are in west Wales and two in north Wales. There is potential for the whole of Wales, and we shall work hard to ensure that the Welsh Development Agency and the Welsh Office have the right strategy.

The Welsh Development Agency's strategic target for the number of jobs created or safeguarded outside the eastern M4 and A55 corridors was increased for 1997-98 from 20 to 50 per cent. of its overall target of 12,500 jobs. I strongly endorse that target.

The hon. Members for Meirionnydd Nant Conwy (Mr. Llwyd) and for Brecon and Radnorshire (Mr. Livsey) made powerful points about the state of the rural economy in Wales. The Government are conscious of that problem and I am sure that my right hon. Friend the Secretary of State would welcome discussions with hon. Members who represent rural areas in Wales to agree on a concerted approach. I agree with the hon. Member for Meirionnydd Nant Conwy about post offices, which play a vital role in rural communities.

Mr. Livsey: Will the Minister assure us that the Government's policy is the same as that stated by the present Secretary of State on 10 February? He said that he had no plans to abolish the Development Board for Rural Wales. Is that still the Government's policy?

Mr. Hain: We recognise that the Development Board for Rural Wales performs an important job, and we want to ensure that there remains a strong rural focus in economic and investment activity. We are reviewing all the quangos in Wales, as I am sure the hon. Gentleman would expect us to, given the loss of public confidence in quangos. The DBRW is obviously one of those that we are reviewing.

I expect the Development Board for Rural Wales to give priority to the west of its area. At least 55 per cent. of its programme expenditure will be concentrated in that area by 1999-2000 and we expect that at least 40 per cent. of the jobs to be created this year will be outside Powys, increasing to 40 per cent. by the millennium.

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