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4.30 pm
Not only does the schedule mention activities that are carried on without a view to profit, but it refers to
Perhaps the WDA's budget will be doubled, and that is fine, but I question the effect of what is proposed. Despite the criticisms of some of my hon. Friends, the WDA has been a successful interventionist body and has helped to create real wealth in Wales. We need more of that, but perfectly enlightened social activities are to be mixed in, and that is dangerous. I hope that the Minister will deal with those issues, which I hope will not be a by-product of the DBRW and WDA merger. That is not necessary, and the matter could have been ring-fenced in the legislation. I hope that the Minister will explain that matter, which is important for our constituents.
Mr. Evans:
I should like to speak to our amendment No. 493 in this group, and I welcome the opportunity to focus on the extension of the Welsh Development Agency's functions, the possible impact on Wales and the potential for the greater devolution of the social role. I enjoyed the speech by the right hon. Member for Llanelli (Mr. Davies). He said that he thought that the WDA would be an economic and social powerhouse. For a second, I thought he said that it would be an economic and socialist powerhouse. However, I understand that we are all new Labour now, so that could not possibly be the case.
The WDA, which was set up in 1976 by a previous Labour Government, is one of the great success stories of Wales. In a recent debate, the Attorney-General said that he had had the privilege of setting up three bodies in Wales that had survived 18 years of Tory rule. He said that they had survived because the Conservative party could not think of anything better. That was a tribute to
the Attorney-General, although it came from himself. It seems that the new Labour Government can think of something better.
The WDA has been built on by successive Secretaries of State for Wales, but there is a fear that the proposed changes may endanger its success. Its remit has been prescribed and the Development Board for Rural Wales has taken over a similar, but more targeted role for areas such as Ceredigion, Meirionnydd, parts of Powys and swathes of rural Wales. That will end with the fusion of the Land Authority for Wales into one super-quango.
We should not underestimate the real success story of the Welsh Development Agency. I think that the right hon. Member for Llanelli fears that the proposed changes will jeopardise the wealth creation focus of the WDA, which, in the 1980s, played such an important role in helping to restructure the traditional industries of coal, slate and steel in parts of Wales, especially steel in Llanwern and Port Talbot.
The Welsh Development Agency also met the task of land reclamation with gusto. I am sure that it would have tackled the task with even more gusto if it had had a larger budget. The WDA also worked on town developments, which were praised by the right hon. Member for Llanelli.
The Welsh Development Agency has helped to transform Wales, which has loosened its grip on its industrial past to become the enterprise centre of Europe. We fear that that role may be jeopardised by changes that will occur under the assembly.
I congratulate the chairman and the entire team of the Welsh Development Agency on its success. We can tell how good the agency has been by the fact that it is being copied not only in other parts of Europe, but across England. The new challenge will be posed by regional development agencies in England--which will receive the help and advice of secondees from the WDA, which is another enormous compliment to their skill.
Another fear is that the Welsh assembly and its 60 politicians may become overly intrusive in the agency's daily affairs. I seek assurances from the Secretary of State--
The Secretary of State for Wales (Mr. Ron Davies)
indicated dissent.
Mr. Evans:
I see him shaking his head. I am partly reassured by that, but perhaps, later in the debate, we shall receive a bit more--verbal--reassurance that that will not be the case. I am sure that he has taken heed of the fears expressed by the Confederation of British Industry about the lack of a clear demarcation between the assembly's strategic role and the performance of the WDA's daily functions.
This group of amendments seems to propose assigning many extra tasks to the Welsh Development Agency. Some hon. Members have been critical of the agency, saying that it did not pay due regard to areas outside the M4 and A55 corridors, which have acted as investment magnets. However, if we get the changes to the agency wrong and those areas no longer attract the same investment levels--for example, 20 per cent. of all inward investment into Britain has been in Wales--and if those changes divert the agency from its core responsibility, damage will be done not only to the areas along the M4 and the A55, but to other areas that had planned on
gaining some of the extra social development funding. Those areas will be badly let down, particularly if new investment does not materialise.
If we get the changes wrong, the social deprivation that will be caused in parts of Wales--north, south, east and west--will be absolutely enormous, and the tin can that the right hon. Member for Llanelli mentioned in his speech will most certainly find its way to the agency, to the Welsh assembly and to local authorities. We must fully consider the exact consequences of what we are asking of the WDA.
The steer that was given to the WDA--asking it to concentrate on areas away from the M4 and the A55--was absolutely right. The 1996-97 figures show that of £2.2 billion of indigenous and inward investment and 18,400 new and safeguarded jobs, 6,200 of those jobs were safeguarded or created outside the eastern M4 and the A55 corridors. That is absolutely right, and it is exactly what we wanted. The same is true of the Development Board for Rural Wales. We wanted to ensure that more of its money and job creation activities went to a wider area within rural Wales, and that was starting to happen.
New regional development agencies are being created. Despite the concordats that we have heard so much about, we are still unsure about what will happen to Wales's success story when Wales has to compete with those RDAs and with Scotland. Who will be the umpire?
Other problems that will confront not only Wales, but other parts of the United Kingdom are the minimum wage, Europe and farming. Farming is a particular problem for rural Wales, and the WDA will have to pick up the pieces of the crisis that has hit Welsh farming. However, it is not only farmers who are being hit, but the small rural businesses such as tractor suppliers, builders and many others which have grown up around farming. They will now have to look to the WDA. Many small towns and villages will also have to ask the WDA for extra assistance. The greatest social development assistance that can be given to any community is to ensure that there is proper, sustainable work. Without that, there will be severe problems.
Businesses have been hit by five interest rate rises since 1 May. They are probably already working on tight margins and have now seen their borrowings increase and their charges go up. Those which were already marginal may have gone bankrupt.
We have to re-examine the whole subject of Europe if there is to be any re-evaluation, as we understand there is, of the way in which regional aid will be doled out strictly according to the unemployment figures. In many parts of Wales, the unemployment figures are looking good, but we are still told that the gross domestic product of communities in Wales is low compared to many other areas, especially areas in Europe.
We could find ourselves in the absurd situation of seeing areas such as Catalonia attract regional aid that would be taken from areas such as Wales. That would mean a £1 billion hole which the WDA would be asked to fill. We seek some assurances from the Secretary of State in that regard, although I expect that he is battling hard to ensure that any changes in Europe will not disadvantage the parts of Wales that have benefited greatly from regional aid.
I am sure that there is a reason for the way in which social development assistance was targeted on certain rural areas, and a reason why the work was not given to the WDA. If the three bodies to which I have referred are to be merged, we must ensure that social development assistance continues to be given to the parts of rural Wales that need it. The right hon. Member for Llanelli suggested that one way in which to do that would be to include in the Bill more specific references to social development areas. Another way might be to involve local authorities.
As the Minister knows, I was a county councillor in West Glamorgan for six years, and one of my joys during that time was to sit on one of the grant committees. The right hon. Member for Llanelli wondered how many voluntary bodies there are in Wales--I can tell him that there are a great many. They used to ask our committee for support month after month, and we used to dole out money for various bodies. Mention was made of the young farmers, but we gave money to the cubs, boys bands and others. All organisations have a voluntary body to assist them, especially those involving young, disadvantaged and disabled people. We used to go through our budget, which was small in relation to our other budgets, doling out what money we had to assist those good causes.
"the activities of any government department or any local or other public authority".
The whole range of government, including quangos, public authorities, non-governmental bodies, voluntary bodies and those that do not make profits are included. Everything is to be thrown at the WDA. Local authorities will be able to ask the WDA for money. Even Departments will be able to do that. The idea is bizarre. Will the Treasury ask for some of its money back? All those bodies will be like bees at the honeypot of the Welsh Development Agency, poor thing. Apparently it will be entirely different from what it was before.
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