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12.6 pm

Mr. Ieuan Wyn Jones (Ynys Mon): I congratulate my right hon. Friend the Member for Caernarfon (Mr. Wigley) on his good fortune in securing this debate, which allows many of us from many parts of Wales to make a contribution, and on the way in which he introduced the subject. The speeches that have been made from both sides of the Chamber have revealed much common ground.

I make common ground with the hon. Member for Vale of Clwyd (Mr. Ruane), who represents an area that I know extremely well. He put his case for objective 1 for his area forcefully and, obviously, successfully. Now that the European Commission and Eurostat have accepted the plan we are on our way, and we hope that an announcement will shortly be made on objective 1 status for west Wales and the valleys.

The comments of the right hon. Member for Swansea, West (Mr. Williams) struck a chord with me, especially when he spoke of jobs in rural Wales being lost and replaced by jobs of lower quality. That is a significant factor in the reduction of gross domestic product in many of the areas that we represent. The response of previous Governments to the loss of jobs in, for example, Trawsfynydd and Trecwn was to appoint task forces. I make a plea to the Minister to forget the idea of using task forces as a response to the loss of jobs in rural Wales. We need a coherent policy that replaces those jobs with jobs of equal quality, although we accept that there are difficulties in ensuring that that always happens.

I should like to respond specifically to a point that the President of the Board of Trade made in the statement on energy policy. My right hon. Friend the Member for Caernarfon alluded to the very high unemployment in Anglesey and to the fact that all parties--including the Labour party--fought the last election in Anglesey on a manifesto of support for a gas-fired power station at Porth yr Ogof on the Wylfa site. As the Under-Secretary knows, there was another application for Rhosgoch. Therefore, the statement gave rise to great disappointment.

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In a letter to me, the President of the Board of Trade acknowledged that the people of Anglesey were disappointed by the Government's energy policy proposals, which will prevent that gas-fired power station from being built. That disappointment is tinged with anger because we had a plan, agreed by all parties, that would have created hundreds of construction jobs in the next few years, created 100 permanent jobs and secured the future of Anglesey Aluminium, the other major employer on the island. The announcement by the President of the Board of Trade has jeopardised not only the construction plan and permanent jobs in the energy sector but the long-term contract for Anglesey Aluminium.

I understand that the Minister will see an Anglesey deputation next week to examine those issues. I stress the importance of looking again at plans to build the gas-fired station in Anglesey. It may be difficult for British Nuclear Fuels to do that itself, and it has highlighted the reasons for that. It is hard for a wholly owned Government company to breach the Government's energy plan. However, there is no reason why the plan could not be transferred to the private sector for section 36 consent. I ask the Minister to respond to Anglesey's concerns. If the path to prosperity is to be meaningful, quality jobs must be created in places such as Anglesey.

12.10 pm

Mr. Nigel Evans (Ribble Valley): I am grateful for the opportunity to contribute to this important debate. I congratulate the right hon. Member for Caernarfon (Mr. Wigley) on securing the debate. It was wonderful to hear the old orthodoxy in his speech. Labour may have dropped socialism, but it is good to know that Plaid Cymru has picked up the torch and is running strongly with it.

I shall split my speech into several parts, but I do not want to rehash the speech that I may make next week in Merthyr Tydfil when we discuss the economic agenda for Wales. That is especially important because of the publication of "Pathways to Prosperity". It was not one of my most gripping reads and I have condemned it as being next to useless. It is full of apple pie and spin and has more waffle than Bird's Eye. Wales needs action, not rhetoric, which is what that document contains.

Wales came a long way during the 18 years of Conservative government. Before that, in 1970, some 270,000 people were employed in mining, but the figure is now down to 2,000. More than 30,000 jobs have been lost since the 1970s. Many jobs have transferred from heavy industry and mining to the public service, other service industries and tourism. Manufacturing is vital in Wales; I shall speak later about that.

We must consider the economic context in which Wales operates. The Government have inherited the longest period of low inflation for 50 years and faster growth and lower unemployment than in any other major European Union country. Britain was winning the lion's share of inward investment from outside the EU.With 5 per cent. of Britain's population, Wales gained 20 per cent. of that investment, but not enough of it was spread to west, north-west and south-west Wales. Much of it went to the M4 and A55 corridors.

I welcome the fact that the shift in investment emphasis started when my right hon. Friend the Member for Richmond, Yorks (Mr. Hague) was Secretary of State for

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Wales. He ensured that it was more evenly spread and that there was greater emphasis on the Welsh Development Agency. One of its great challenges when it is turned into an economic powerhouse will be to compete with regional development agencies in England.

The golden legacy that I have mentioned is being wasted, frittered away. For the first time in many months unemployment is rising, and is doing so even before the introduction of the minimum wage. The Economist of 20 June stated:

Interest rates have risen six times in the past 14 months, and it is pointless to blame the Monetary Policy Committee under Eddie George because the Government set that up with the emphasis on controlling inflation, which is now rising. The target has been missed 12 times out of 13, and there is a threat that interest rates will rise again. If that happens, Welsh businesses, especially the smaller businesses of west and north-west Wales, will be hit again. Inflation is bad for their ability to predict, and higher interest rates are bad for those with loans and overdrafts. The minimum wage will have a knock-on effect on differentials, and the high pound, which has been mentioned several times in the debate, is bad for exports.

I spoke about the importance of manufacturing. The publication "Pathways to Prosperity" states that manufacturing accounts for 28 per cent. of the Welsh GDP. The strong pound is hitting exports, and higher interest rates mean a stronger pound. A non-competitive pound makes our exporters less able to compete with those in the rest of the EU. A CBI survey shows that export orders for May and June were the lowest since January 1983. In a document that it sent to me, the Federation of Small Businesses recommends the introduction of an export promotion board.

"Pathways to Prosperity" states that the Government will try to bring together a number of agencies so that there will be a one-stop shop and advice centre for exporters and those who want to export, It is said that that will be introduced at the end of this year, but manufacturers face problems now and cannot wait until then. I urge the Minister to bring that plan forward to ensure that as much support as possible is given to Welsh firms that could benefit from an increase in exports. If they can increase exports, more jobs will be created throughout Wales.

The right hon. Member for Swansea, West (Mr. Williams) spoke about investment in Cardiff. We welcome that tremendous success, but we must ensure that investment spreads to the rest of Wales. One of the local Welsh newspapers reported that about £110 million is to be invested in redeveloping Swansea city centre. I hope that that is a success and that it will attract more jobs to Swansea and, as a result of the ripple effect, to west Wales.

The Federation of Small Businesses also seeks a development bank for Wales to help indigenous firms. It is excellent that 20 per cent. of inward investment comes to Wales, but indigenous firms must be enabled to grow. In a letter to me, the federation states:

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    "Many small businesses currently find borrowing money over the medium term impossible because either the banks do not offer such facilities or the repayment conditions place an excessively heavy demand on cash flow. A development bank for Wales would ensure a greater degree of certainty that borrowing terms would be affected by cyclical factors such as inflation, recession or a housing market slump."

Farming is another disadvantaged sector in Wales. A press release from Bob Parry of the Farmers Union of Wales refers to the rally in Cardiff at the time of the European summit. It states:

    "Farmers must stand together and fight for their rights against the hostility shown to the countryside by some senior members of the Government."

He condemned the Minister of Agriculture, Fisheries and Food and said that farm incomes in some places had fallen by 89 per cent. The press release continued:

    "He is responsible for agriculture in the UK, but seems more interested in cutting costs and guarding the purse strings of the Treasury. He is the enemy within. Chancellor Gordon Brown is keeping a miserly grip on spending despite the overwhelming crisis that threatens to engulf our industry. Prime Minister Tony Blair is presiding over this farce as the entire fabric of rural life in Wales is torn to shreds."

On Monday, I was in Welshpool, where I spoke to some farmers from Smithfield. They have no doubt about who is responsible for this crisis--the Government. The Government must take urgent action to assist farmers in Wales before it is too late. It is already predicted that, if this carries on much longer, 8,000 more farming jobs will be lost in Wales. That must not be allowed to happen.

All that the report says about farming is that we should think about putting greater emphasis on organic farming. Farmers want to do the job that they set out to do. Many have done it for generations, yet all the Government can offer them is greater emphasis on organic farming. The Government are simply not listening.

The economic report talks again and again about education. It says that the Government need to invest more in education to ensure that more people in Wales get a better education, yet what do we see? Apart from the fact that we were promised lower class sizes, which are increasing in Wales, yesterday, the House of Lords threw back to this House the amendment that proposed that students in Wales, England and Northern Ireland should pay £1,000 extra if they go to Scottish universities--£1,000 more than students from Scotland, Milan and Catalonia.

That has to be wrong. I hope that the Minister will put great emphasis on that, and will have words with Ministers in the Department for Education and Employment and with the Prime Minister to ensure that we do not throw that amendment back to the House of Lords, but accept it. It is common sense and it will help all the people of Wales and Britain with their further education.

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