House of Commons Hansard Debates for 25 Feb 1998 (pt 28)

Mr. Rowlands: My hon. Friend anticipates my final observations on the amendments, because I intend to address the argument concerning the industrial sector versus the service sector, as well as the indigenous versus inward investment argument, which has raged through some of the discussion that the clause has engendered outside the House of Commons.

I said earlier that the wording of the clause reflected changes in society that have already taken place. When preparing for the mighty efforts that we are going to make in respect of the new deal, I found that a portrait of the Merthyr Tydfil county borough now shows that the proportion of total employment supplied by the industrial manufacturing sector has fallen to 26 per cent.--that statistic coming from the heart of a great industrial manufacturing base. The service sector has been growing

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as a proportion of the total. My hon. Friend is right to draw attention to the changes, and to the fact that we must accommodate them.

We should not rest the regeneration of local economies primarily on the shifting sands of the service sector. The thing that makes our communities distinctive from service sector communities is our manufacturing role, tradition and skills. I challenge the assumption that one has not only to accept that the WDA should change its role, but to want it to change its role. I do not want it to change its role in one fundamental respect. I would like the WDA to continue to see itself fundamentally as an agency to regenerate the manufacturing sector. The agency can do that in two ways. It can support indigenous local industry--where that exists--and it can encourage major inward investment. I was interested to see the figures for new jobs created in Blaenau Gwent recently, where Tesco and Festival Shopping Ebbw Vale created 300 jobs each. That reflects the incredible changes that are taking place.

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In my area, Halla--despite its problems--is trying to regenerate and rebuild the manufacturing sector by inward investment, as are US CAN, Candy and the St. Merryn Meat company. These inward investments were achieved by a powerful partnership: the Secretary of State for Wales with a regional selective assistance budget and executive functions working with the WDA. While I do not oppose the fundamental role that the new economic powerhouse will have--especially in the development of indigenous industry--I am queasy about breaking up that powerful partnership.

My real worry about the WDA is not that it will not fulfil the tasks it has been given, but that the role it has played in inward investment--which has played a fundamental part in the regeneration of economies such as mine--will be damaged. I hope that my right hon. and hon. Friends can give me the reassurance I seek.

Mr. Wigley: The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) referred to the fact that he was in at the birth of the WDA. I almost claim the right to have been in at the conception because, in 1970, Professor Phil Williams and I were trying to draft a plan to create such an agency. I am aware that there were many before that who also had ideas.

The WDA was opposed by the then Conservative Opposition when it was created. The Conservatives have seen the light since then, and they understand that bodies such as the WDA can play, and have played, a significant part in development. The creation of the WDA was fought tooth and nail by the Conservatives, who opposed it on Second and Third Reading. The Conservatives learned from experience--as, no doubt, they will learn from a similar experience regarding the National Assembly for Wales in due course. It may take a little longer, given the present generation, but time will tell.

Mr. Robert Syms (Poole): Does the right hon. Gentleman agree that when there is strong debate in this place on issues such as the WDA, perhaps because there is opposition and people focus on the clauses, it produces good legislation which stands the test of time?

Mr. Wigley: In that case, the Conservatives should not have voted against Third Reading. However, I take the

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point. The WDA has played a significant role in Wales. I am not one of those who knock the WDA. There are shortcomings, and there is not a single body that has not make mistakes at some time. By and large, the overall benefits to Wales have been massive.

I shall now discuss amendment No. 374, in the names of the right hon. Member for Llanelli (Mr. Davies) and the hon. Member for Merthyr Tydfil and Rhymney, and amendments Nos. 523, 519 and 540, which we tabled. Although there is a need for a social dimension in the Bill, I understand the arguments made by the right hon. Member for Llanelli and the hon. Member for Merthyr Tydfil and Rhymney. I believe that the primary role of the Welsh Development Agency, in its new form as in its old, must be the economic regeneration of Wales. It must be about creating job opportunities throughout Wales.

Some aspects of the work of the Development Board for Rural Wales have had a social edge--we heard some examples earlier. I could quote examples such as the provision of television masts, with which the DBRW was able to help in the rural counties of mid-Wales, but for which there was no facility outside that area, so other areas could not benefit. Obviously, if the work of the DBRW is now to be included in the overall work of the new powerhouse agency, there needs to be some function to continue such provisions, in the areas where they are appropriate.

I agree with the right hon. Member for Llanelli that it is fundamental to get the economic emphasis right. What will happen if the focus of the Welsh Development Agency is shifted entirely to trying to respond to initiatives that are not strictly economic? Unless there is work for the communities living in the old towns and villages of the slate-quarrying areas of my county of Gwynedd, as in the old coal mining areas of the valleys of Glamorgan and Gwent and in east Dyfed, we shall have depopulation, an aging population and all the social and economic problems that flow from that. Therefore, the organisation must do a positive job in providing the economic base that sustains social and cultural life and the other aspects of life in those areas.

This has been a useful debate, in which valuable arguments have been made from the Conservative Front Bench. I am glad that among Conservative Members there appears to be a change of emphasis and approach to this issue. Perhaps the Leader of the Opposition is giving a lead in rethinking his policy on devolution. If so, I welcome it.

I hope that when the Under-Secretary of State for Wales, the hon. Member for Neath (Mr. Hain), replies to the debate, he will put to rest the issue of thebalance between the agency's social and economic responsibilities. I hope he will tell us that the Welsh Development Agency will have primarily an economic role, and that the social role will facilitate the economic role but not take over from it. It is a question of getting the balance right.

I shall now speak to the amendments standing in my name and those of my hon. Friends. Amendment No. 523 inserts, instead of the words "or any", the words "and every". That may seem a very simple amendment. It refers to the need for economic regeneration to occur in all parts of Wales, not just in the pockets of Wales that have benefited so much recently. I shall not bore the

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Committee by repeating our arguments about unbalanced development in Wales. I summarise by saying that, until fairly recently, during the period of Conservative government, the Welsh Office had a strategy that accepted that 80 per cent. of new jobs coming to Wales by way of inward investment went to two small pockets--one around the M4 corridor in south-east Wales and one around the Wrexham-Deeside area in north-east Wales.

I grant that, in March 1997, a month before the general election was called, the Conservative Government had a change of mind--a deathbed conversion--and changed that distribution to 50:50. I believe that the incoming Government have changed the distribution a little more, but the pockets of severe unemployment in Wales are to a large extent outside those two catchment areas.