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The Chairman: Order. I remind the Committee that this is not the only debate about the Welsh Development Agency. There are several groups of amendments that relate to it.
Mr. Rhodri Morgan (Cardiff, West): Taken as a whole, the amendments in this group relate to the question of how social, as well as economic, the Welsh Development Agency cum economic powerhouse should be, after the merger with the Land Authority for Wales and the Development Board for Rural Wales.
I shall not reminisce about the period in the mid-1970s, almost a quarter of a century ago, when the three agencies were set up under the previous Labour Government, because obviously I was not there, unlike my right hon. Friend the Member for Llanelli (Mr. Davies) and my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), but I recall the period. The curious fact about our debate today about a three-way merger and the terms on which it should take place is that that was also true at the setting up of the WDA.
The WDA was a merger of the derelict land unit, the Welsh Industrial Estates Corporation, which built the factories, and the Development Corporation for Wales, which was the punter-hunter for the body that marketed Wales in England and the rest of the world. It tried to draw companies in to occupy the factories that would be built by the Welsh Industrial Estates Corporation, sometimes on cleared land that used to be covered in slag heaps from the coal mines.
In that three-way merger, probably the same consideration of priorities took place that we are undertaking in debating the amendments. We should not expect the functions of a body on day one of a merger to remain the same over the next quarter of a century. Clearly, the priorities will change. When the original merger took place, one of the main priorities back then would have been to clear the slag heaps. It was not all that long after the Aberfan disaster, and people were still conscious of it from eight years previously.
People saw that as a high priority for two reasons: first, it released land; and, secondly, it improved the environment and made the environment in the valleys of north-east Wales and especially in industrial south Wales more attractive to industrialists. Accordingly, factories were built on the cleared land, and the parts that could not be made flat enough on which to build factories were landscaped.
Rather than discussing how social the Welsh Development Agency cum economic powerhouse should be, at that time we would have been discussing how environmental it should be, and to what extent it should be allowed to dilute--
Mr. Denzil Davies:
That is made perfectly clear in the Welsh Development Agency Act 1975. One of the four purposes set out in the Act is
There was great criticism of the environmental aspects of the early WDA. [Interruption.] My right hon. Friend the Member for Llanelli denies that, but I can tell him that it is true. I wrote an article on the subject. My right hon. Friend is not the whole of the human race and he may not remember that, so he should not rush to denials too quickly. He may not remember my article in the Western Mail, but that is his problem, not mine.
The issue is the same: is the focus of an economic development agency diluted when functions are added to it? Is it better for the agency to concentrate solely on economic agencies, and for other agencies to specialise in other functions? Are merged functions a good idea, because they would help along the general process of improving the wealth and prosperity of the Welsh nation? Should that be done by several agencies, or by a merger of three agencies, as we did when we set up the WDA in the mid-1970s and as we are doing now?
The issue is complicated by the fact that one of the predecessor agencies had a social function. For the DBRW, the main problem was not unemployment, but depopulation. Unemployment was quite low, but the young people would not stay because they had none of the facilities of town life. The DBRW thought that, with more social development, people would not mind staying in the area. People did not want to stay on the farms and little villages.
Mr. Lembit Öpik (Montgomeryshire):
Does the hon. Gentleman agree that exactly the same problem persists, particularly in areas such as mid-Wales, and that that is one of the most powerful arguments for the proposals in hand?
Mr. Morgan:
I think that the hon. Gentleman is confirming what I thought about the basis of "social". If the word is put into the Bill, will there be a dilution throughout Wales in both rural and urban areas? That point was made by my right hon. Friend the Member for Llanelli. Such a dilution would put pressure on the social side of the budget. If the word is not inserted--I think that that is what the Tory amendment seeks to achieve, although I did not hear the hon. Member for Ribble Valley (Mr. Evans) arguing this--and social development does not feature at all, it cannot be applied in mid-Wales, let alone urban Wales. It seems that that is the meaning of the Tory amendment. The hon. Gentleman may not wish to advance that argument but it seems that that is the meaning of the amendment.
Mr. Evans:
I am not sure whether the hon. Gentleman was listening carefully enough. The right hon. Member for Llanelli (Mr. Davies) suggested that we could either
Mr. Morgan:
The hon. Gentleman is saying that he was speaking in defence of the amendment tabled by my right hon. Friend the Member for Llanelli. I was saying that the hon. Gentleman was not speaking to the Conservative amendment, which would remove the ability of the economic powerhouse or super-agency even to continue what the three predecessor agencies are now able to do, especially the Development Board for Rural Wales, in promoting social development in mid-Wales.
I hope that my hon. Friend the Minister will deal with whether the addition of the words "and social" will allow the merged agency to continue what the DBRW does now in mid-Wales and with whether the intention is to extend the social development function to rural areas of Wales that are not in mid-Wales. Finally, is it intended that there should be social development in any part of Wales, be it urban, non-mid-Wales rural or a continuation of the area of mid-Wales?
Mr. Denzil Davies:
There is no question of intent; we are dealing with what the legislation will provide. Social development will cover the whole of Wales. It will not be restricted to Powys or rural areas generally. It is not a matter of intent. Perhaps my hon. Friend will read the proposed legislation.
Mr. Morgan:
I do not know why my right hon. Friend thinks that I do not understand that. Perhaps the issue is whether ministerial replies have any purpose. I am saying that ministerial replies have a function in the proceedings of the House of Commons. That being so, there is some purpose in asking the Minister to explain what the clause is intended to mean in terms of the operation and budgeting of the agency and what the merged agency will be told to do, for as long as he has any influence over it. My hon. Friend will be aware of the influence of judicial reviews in grey areas. We know that what Ministers say at the Dispatch Box counts in grey areas. That is why I am asking the Minister to perform the usual function that Ministers undertake when they reply to debates in Parliament.
It is obvious from the way in which the Bill is structured that we are terminating, through the legislative structure of the Bill, the DBRW and the Land Authority for Wales. We are making the WDA the taking-over body, legislatively, of the other two agencies to which I referred. This may be a merger in the minds of Ministers, but legislatively there will be a takeover. That is clear from the structure of the Bill.
The issue is whether we should try to buy off the possible opposition of those who work in or are served by, in the case of mid-Wales, the DBRW, including those who have a particular interest in urban regeneration and land development, by saying, "Do not worry. As we are making the WDA the superior agency, we shall try to curry some favour with you by doing something for you in the wording of what will be an Act--for example,
adding the words 'and social'--so that it is clear that the DBRW will have a continuing influence even though its legal being has been terminated."
The same process is occurring with staffing levels. My right hon. Friend the Secretary of State has already said that the chairman of the WDA will be the successor chairman, and that the chief executive will be the successor chief executive. Including the words "and social" could be seen as the quid pro quo for these two processes. Even this is being said, "The WDA can take over the other two bodies and we shall be the superior body, but we shall draw back from some of the activities of the WDA that the DBRW never undertook, including inward investment from abroad by having offices abroad." The international division of the WDA feels very much under threat precisely because of that quid pro quo.
We have the words "and social"; a parallel in terms of the staffing structure is that the WDA gets the chairman and the chief executive. At the same time, the DBRW-type attitude that business services are important while inward investment is not so important will be reflected in the staffing structure. That is an alarming prospect. The parallel structure to what is proposed in the amendments will gnaw away at the international division and the overseas representation of the WDA.
The WDA is already the smallest of the bodies that serve the British Isles through overseas representation. The development authority for Northern Ireland has 57 people working abroad. The Locate in Scotland office has 37, the Northern Ireland Industrial Development Board has 33 while the WDA has 25 from 1 April. Perhaps these words are being used, "We know that the WDA will have the chairman and the chief executive, but do not worry. There will be a lot of DBRW and LAW influence below that level. We are showing you that by shrinking the international division. The DBRW was never so involved in mid-Wales because the WDA always acted for you. The styling of the agency is to withdraw from some of the overseas markets and no longer to have a presence abroad." That would be a tragedy.
The parallel that can be drawn from the amendments is a structure that will work away at staffing levels. Given the staffing structure being devised in the merged arrangements and the announcement that was made a few days ago about the chairman and the chief executive, we shall have not an economic powerhouse but an economic power mouse. There will no longer be the ability to draw in firms from abroad. The pass will have been sold. In effect, it will be said, "The WDA can have the top jobs, but after that we shall start drawing in the horns of the old WDA function because it was expensive. There were offices in Seoul, Tokyo, north America and elsewhere. If we pull out of that, the Invest in Britain Bureau in London will be very happy, as will the Department of Trade and Industry. We shall pull out of all that."
"to further the improvement of the environment in Wales".
25 Feb 1998 : Column 399
That means clearing the slag heaps. Another purpose is
Mr. Morgan:
That is precisely my point. The question was how environmental the WDA should be. The question now is whether the social aspect dilutes that function. That was the point made earlier by my hon. Friend the Member for Merthyr Tydfil and Rhymney. In other words, if functions are added to an economic development agency, is its focus diluted?
"to further the economic development of Wales".
5.30 pm
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