Select Committee on Welsh Affairs Minutes of Evidence

Examination of Witnesses (Questions 280- 299)



  280. Would you like to see less grants and more tax breaks?
  (Mr Jones) That is a thing which you have got to balance. You have got to balance your profit with your cash flow, and I think this is a question of when you do block your grants because then you do have that cash flow addition to it, but then you have tax breaks. For instance, in Germany they have far more tax breaks and I know in Japan they have far more tax breaks. For instance, in Germany they have far greater tax allowance on the depreciation of their assets and that is a big factor on the cash-flow implications. You have got to balance it out. I could not give you a quite categorical statement at this stage, but it is something which we have got to consider. These tax breaks are something we are lagging behind on and this is really why we are not really investing in some of the new machinery, not keeping up with our counterparts and it is something which we have got to change.
  (Mr Spratling) If I was in the privileged position of being able to tinker with the grant system I would certainly make grants more attractive to inward investors at least or, for that matter, indigenous companies who maybe are not Welsh but have their headquarters in England. If they were encouraged to put a certain amount of their R&D expenditure into Wales I would certainly want to tinker with the grant system to ensure that if they put their R&D into Wales—and there are plenty of facilities for research and development within the principality—they should qualify for some preferential treatment. I do not sit where I would like to sit in that particular regard, but I think it should be an input into the thought process about how you handle a grant. It is quite a big factor.

Ms Lawrence

  281. I want to go back to the monitoring aspect you referred to earlier. Do you feel, for example, that there should be more monitoring done on displacement and the impact on indigenous businesses that suddenly find themselves faced with perhaps a skills shortage as a result of displacement within inward investment?
  (Dr Haywood) I think, to be fair, that the monitoring angle is reasonably well handled. One of the things that we have suggested for a number of years to the Welsh Office and which I think has now been picked up to some extent is that we need to move somewhat down the road of actually doing some pre-training of people, so we have almost got a pool of labour. I am a little wary of suggesting that we go totally down the Irish route because you can end up in the worst case scenario with a vast quantity of fairly highly educated graduates on the dole queue which is not a good idea either. In many cases in the past the problem has been people have been chasing inward investment, it has eventually arrived and then people have ought, "Ah, what are we going to do about the skills and the jobs?" We really need to get that angle much sharper and work at it much more sharply in terms of actually starting the training at an earlier stage. Again with LG to some extent that has happened and I think largely because it was such a huge project, people had to go about it, but it has not always happened in the past, and I would like to see that continue. It is one of the reasons why we pushed very hard for a skills needs survey to be expanded over the whole of Wales and we are delighted that that is going to be happening. There is a lot to be done there, but I think one of the points we have continuously made in the CBI is that throughout all of this discussion about inward investment and indigenous business, the crucial underlying factor is business infrastructure because that is key to all businesses and it does not matter whether they come in from outside or whether they are home-based and that includes things like skills so that you can look at the skills that existing companies are using and are likely to want as well as where the gaps would be if any one investor came in, so you are looking at transport, you are looking at energy, you are looking at sites and premises, you are looking at a whole range of things and all of those benefit all the companies whether they are local or whether they are inward investors.
  (Mr Jones) Can I just add to that on the skills issue? It is not a question of skills these days, but it is a question of higher skills because companies are demanding this extra, additional technical expertise and it is something which is becoming quite prevalent and this is inextricably linked with your investment programme, with your infrastructure, with your R&D and your technology. I think this is really the crux of the matter, that it is the higher skills which are now coming to the fore.

Mr Edwards

  282. Can I ask you then what do you think is the priority or what should be the priority for education and training institutions to achieve that aim—higher education, further education and schools?
  (Dr Haywood) This is a wide question. I think we have to start with the basics and we have to get the core skills, the key skills right. We know that there are problems, that Wales is actually starting from behind the UK, it is starting from behind the European base in terms of actually delivering those foundation skills of reading, writing and arithmetic, et cetera, but we have to get that right at the primary school level. I think there needs to be much better liaison both between teachers and business generally and between schoolchildren and business generally in terms of the possibilities of careers within different parts of industry. I actually think that we have probably been very bad at putting that across and I would hope that the new careers services will be able to help in that. I think there are a number of stepping stones in there, but that is, if you like, taking the early stages because there are still going to be companies who need to take on school-leaver-level people whom they will then train in-house and I think that is a good thing because on-the-job training can be very, very valuable. On top of that, as my Chairman rightly says, there are a number of companies now who are looking for higher and higher skills often at technician and just above level, but also at graduate, postgraduate, whatever. There is good graduate development within Wales. I am not entirely sure that we use it to our best advantage and I think again that is a question of liaison between the higher education centres and industry generally within Wales. Very often people leave and go to businesses outside Wales partly because the career structure is there and they see, for example, the South East of England as being a possibility for development, but it is partly because companies in Wales are unaware that they are available. There is a lot of liaison to be done, but I think we have to be aware of the sorts of needs that companies have and believe they will have over the next five to ten years. That is not going to be 100 per cent correct—it cannot be—things always change and you can have an economic crisis outside the UK which will have a major effect on sectors within Wales. We know that from the Asian crisis and we know that from the strength of sterling currently. So there are a number of issues that can affect that, but you can at least make an attempt to say what sort of training is going to be required over the next five years and try and make some adjustment for it which is what we hope the skills needs survey will do.

  283. Do you feel you are adequately represented on bodies like the Further Education Funding Council for Wales and the governing bodies of further education colleges and universities?
  (Dr Haywood) What we actually do is have pretty good links with both individual colleges and universities, but also with the councils themselves and I think we are fairly well represented. We often get asked to go and talk to them and I think the message is beginning to get through about the need for greater liaison and we certainly have more discussions now than we used to have, say, five or ten years ago.

Dr Lewis

  284. One of the witnesses earlier this morning was very dismissive of the gold standard of the A-level and was arguing very passionately for the merging of vocational and academic education and the introduction of a Welsh Baccalaureate. At least one Member of the Committee, namely myself, thought that this would be a step backwards and that it would enhance the fears of some universities that they would have to introduce four-year rather than three-year courses. How does the CBI look at that sort of proposal? Would it be of benefit, instilling an enterprise culture, or would it be a step backwards?
  (Dr Haywood) I think there are a number of questions mixed into that. I think the A-level system has served us very well in the past with one major exception and that is that vocational training in the UK is not seen as being first class, but it is seen as being a second-class citizen and that is highly dangerous, particularly in the sort of businesses that we have in Wales. So we would like to see a system, and I am not advocating throwing out A-levels, but we would like to see a system which somehow showed that vocational training was actually as good as going down the academic route of A-levels. Now, that is largely a culture change which is terribly difficult to impose and I am not sure that I can necessarily come up with any wonderful ideas as to how to do it. On the question of a Welsh Baccalaureate, we at CBI Wales supported the idea of a pilot project for the Welsh Bacc., but that is as far as we have gone and we were quite cautious about the idea of saying, "Yes, this is wonderful". There is already an International Baccalaureate. That can be extremely good and a lot of companies are actually quite keen on it because of the breadth that it provides, in other words, it is a wider qualification than A-levels, so it does go some way down that route, and I suppose some of the worries that we had about a Welsh Baccalaureate were that if we ended up with an International Baccalaureate and we had a Welsh Baccalaureate, what we are doing is adding to the confusion rather than removing it and I think many employers already feel quite confused, thank you very much, now that we have got all the new universities as well as all the old universities and how valuable are all these various and different degrees and do they actually match up to each other, so there are quite a few different issues in there, but we would certainly be willing to see a pilot project on the Welsh Bacc. if that were feasible.
  (Mr Jones) The only thing I would like to add in addition to what Liz was saying is that it does give the opportunity of taking science at a higher level and of undertaking a language. The limitation of the A-level is that you tend to do your sciences or you tend to do your arts and then you tend to be restricted in what kind of languages you can do and, by coming back to the original statement of the export trade, you have to understand the language of the country you are servicing and so that is a big advantage. I think once you have that entre«e, once you have the equipment of a language, then you are able to sell yourself better and communicate and be much more on the same level playing field as they are. I think that the A-level restricts you now in that if you are doing the sciences, it restricts you entirely to doing a foreign language and what I find in European terms is that these people are much more equipped in languages and they can speak two, three or four languages and they are far more advanced than we are.

  285. But that starts much younger than A-level.
  (Mr Jones) You are absolutely right. They start much younger, and it is established at that particular sort of stage in their education and they get into the way of thinking in another language and I think that is really the big advantage they have, but they have got this ability to talk two or three languages and it helps them as salesmen.

Mr Livsey

  286. I just have a question briefly about transparency and investment support. You point out that it is difficult to assess the balance of indigenous and inward investment support since the Welsh Office do not, for the most part, publish details of grants made, and this is, for example, in line with the DTI, but different from the situation in Northern Ireland where the Industrial Development Board do publish, and nowhere are published details of the value and composition of the total aid package. Are you in favour of publishing details of grants and the total aid package even where the company has requested confidentiality?
  (Dr Haywood) There may be very good reasons for requesting confidentiality, so we are not suggesting a global publication. We did try and hedge our suggestions around this. I think the idea in principle of more transparency is a very important one and I think more progress could be made, which is why we suggested they look at the Northern Ireland example because they clearly have not lost out by reason of providing some additional information. Clearly there are issues of confidentiality, of competitiveness, of competition between different areas, of perhaps companies actually trying to bid different areas up, which is one danger that we are particularly aware of, and all of those issues would have to be gone into in terms of how greater transparency was arrived at, but we do think there is an argument for providing more information than currently is available.

  287. In Southern Ireland, for example, they have now split their development agencies up into two, between indigenous and inward investment. Do you think that is a good idea for Wales?
  (Dr Haywood) No, I do not because I think if you do that you are losing the ability to ensure that there is a linkage between what indigenous companies are doing so that they can actually benefit from inward investment and I think you end up with two totally separate vertical columns and they are not liaising directly with each other, you are losing a lot of the economies of scale.

  288. Is it still CBI policy in Wales to join the Euro as soon as possible?
  (Dr Haywood) The CBI policy on the Euro I would have thought is fairly well known. We believe it is a good idea in principle and we would like to join as soon as the time is right. My own personal view is I hope to God the Euro is successful and that it will then bring the pound down rather rapidly so that we can become more competitive in Wales.


  289. You say in your memorandum that Wales suffers from a low level of local decision making, and point out that there is a "glass ceiling", whereby successful Welsh companies get taken over from outside. What consequences does this have? What do you think can be done about it?
  (Dr Haywood) The problem of a lack of autonomy really relates to the question of innovation and entrepreneurship. If you do not have headquarters functions in a particular location you are unlikely to get the design, the research and development and the innovation carried out there. You are also likely to be fairly low down on the list and maybe bottom of the pile in terms of strategic decisions for investment in the future. It also means that you are less likely to get the high fliers in that particular area, so you are less likely to get the entrepreneurs. We know that we have a relatively low level of entrepreneurship by certain definitions within Wales and that is disappointing. What you really need is to provide the opportunities for entrepreneurs to thrive. I am not suggesting that this is the only element, but it is an important element within it. So it is those two aspects of entrepreneurship and innovation which I think are particularly important. In terms of the glass ceiling, this comes into it as well because if a large number of thriving local companies want to grow they find it very difficult to get the right sort of input, particularly from the City, for instance, in Wales and so because they have not got the right success system in place they are unlikely to find a buyer in Wales, they are unlikely to find someone to come in and join them, so they then sell off to somebody maybe in the rest of the UK but very often to a foreign company. In competition terms, yes, that is probably very good, but in terms of trying to keep decision making in Wales it not necessarily so good and again this comes back to our proposal for the Business Angels network. We felt that that would provide at least one element of the assistance that growing Welsh companies currently need in order to develop to the point where they are strong enough, for example as could well be now, to take on other companies within Wales rather than letting the decision taking go outside Wales, which I think is dangerous for the future.
  (Mr O'Toole) We should not get too hung up on the fact that decision making is not taken in Wales by the major companies bearing in mind the amount of small companies that we have in Wales where, in fact, decision making obviously is taken. There is anecdotal evidence that if every small business in Wales took on just one employee our employment problems would be solved.

  Chairman: I think that is a very good point.

Mr Llwyd

  290. You refer to the importance of innovation to Welsh competitiveness and quite rightly, of course. You also refer to the Wales Regional Technology Plan and the Technology Implementation Programme. What exactly do these entail?
  (Mr Spratling) I declare an interest, I Chair the Regional Technology Plan in Wales. I would think it is a good idea, would I not? Having said that, it has been commentated on by Brussels. Several regions of Europe were asked to go along with the RTP which was implanting innovation and technology into companies that did not have it or, if they did have it, with a view to growing it. It is an all-embracing group and it is monitored by Brussels annually. The report for the last year has just come out and Wales is by a long way off top of the pile in achieving success in implanting innovation and technology into Welsh companies. I would be the first to admit it may well be because they damn well need it. This plan was evolved by Europe. Wales was asked to be one of the pioneers of it. There are at least three or four other regions in Europe and consistently Wales has been ahead of the pile in developing it. It will be alluded to in the Welsh Office drafting of the new strategic document for Wales. It is a success story. There is a plan to grow the very small resource that we are using for getting this penetration from the principality. It is a plan where there are certain small awards given in conjunction with the agency, for example, on companies that achieve the criteria for being included in the planning. This is by no means dangling a carrot. You go round and explain the necessity to grow in this particular area. Most companies, some small and some large, have gone along with the necessity of going through a technology implementation programme to grow their science in that particular field.

  291. Bearing in mind what Mr O'Toole said a second or two ago, how many SMEs are there involved in Regional Technology Plans and is the business community really aware of what is happening with the Regional Technology Plans?
  (Dr Haywood) I did not bring figures with me of precisely how many are involved, but if I can perhaps give you an example. There has just been an evaluation of the various Regional Technology Plans which have different names in different areas. Wales is one of the original four. There are probably about 100 now altogether throughout Europe. Wales once again came out on top. In that particular piece of evaluation the consultants looked at smaller firms who had actually been directly involved in whatever the Regional Technology Plan was called, perhaps either on the steering group or who had benefited directly from projects and they then took a random sample of 1,000 companies and had a look at them to see how aware they were of the technology plans. The number of companies that were aware of the technology plan and who had actually been involved in it clearly was very high. The interesting figure was on the random sampling where Wales came out with just over 20 per cent of smaller companies aware of the existence of a Regional Technology Plan. In some of the other areas it was as low as zero per cent. So although 20 per cent may not sound very high, it is, as I think most people know, extremely difficult to get the message across to smaller firms who have their heads down in terms of actually delivering day-to-day bottomline results. So that 20 per cent was actually quite good. The idea of the technology plan is to develop this culture of innovation and that relates not just to businesses but also to education, to a number of different areas. So the business angle to it is only one element within the Regional Technology Plan. There are a number of companies who have benefited. The Technology Implementation Fund is one of the programmes which is actually run by the WDA which does precisely that. It provides small sums of money to companies who are looking to develop, and it may mean adding new pieces of plant or perhaps taking up a licensing agreement, but who are thinking of introducing an innovation mechanism of some sort which will then enhance their bottom line and help to grow the company and it has been extremely successful.
  (Mr Spratling) The point that Jim very properly made is that unless you have introduced these sort of cultures into companies and enabled them to get a bigger order book, they are not going to employ more people, which was the very point Jim was making, so the thrust has to be through this Source Wales, through the RTP, these sort of ideas that will grow the innovation and awareness of companies that to live in the big, wide world, they have to change, not only change it, but implant new cultures to stay alive and that will result in employment. Jim has made a very graphic statement, and I do not know how many SMEs there are in Wales, but we are an SME-led economy and I am sure that if we could take on one person per SME as a result of doing the things we are doing, we would reduce the unemployment problem to a very tenable level.

  292. I am sure that is right. You say that the regional technology plan must be strongly supported by the Welsh Office. I take it, by implication, that it is not currently being strongly supported.
  (Mr Spratling) I would not say it is not being strongly supported. I would say that hitherto it has been very strongly supported by the Welsh Office, but because of its success, you may have to change the culture to get a more direct access using the constituent parts of the plan, to wit education, local government, and all the constituent parts in this partnership may have to be persuaded to get in with this culture a little more swiftly than has been done hitherto. My argument for the Welsh Office is that we must put more resource into this to speed up the process and I think that is, by implication, whilst we are not being critical of the Welsh Office, why we are saying that the time has now come, it has a proven track record, it is the right way to go and we must seek from the Welsh Office some greater level of encouragement, be it fiscal or bodies.

  293. Should this not be part of the new economic strategy then?
  (Mr Spratling) I am led to believe it is.
  (Dr Haywood) It should definitely be and that was certainly something that we have put forward very, very strongly.
  (Mr Spratling) I think it gets a mention in the draft three or four times, so I think it is to a degree leading the new strategy document as evidence of success in this particular field.

Dr Lewis

  294. I have two concluding points, one very straightforward one which relates to the section at the bottom of page 7 and the top of page 8 and that is where you are trying to show that there can be a complementary relationship between inward investment and indigenous industry, and you say that both of these require the right business support infrastructure and not merely the incentives of grants, and specifically you point to problems in power supplies and property infrastructure in parts of Wales. Could you elaborate a little bit more on this and are you suggesting that it is the responsibility of the public sector to provide this infrastructure or do you accept that there are opportunities here for the private sector, for example, in the creation of business parks?
  (Dr Haywood) If I can pick up the end point about whether it is up to the public or the private sector to do that and then I will ask Jim to pick up on the power and Ian to pick up on sites, I think that would be helpful. There is clearly the need for a joint approach. If you look, for example, at transport infrastructure, it is not going to be provided entirely by the private sector and probably not even going to be provided entirely by the public sector. What you want to make sure of is that there are no obstacles put in the way. Clearly in terms of energy, for example, we have had severe problems about the possibility, as it was, of a gas moratorium being extended for another five years and that was likely to cause a number of problems as far as Wales was concerned, so it is much the attitude in terms of the public sector providing the right climate for the development which may be then carried out either by the private sector or the public sector and it would depend very much on the issue. Perhaps I can ask Jim to come in now.
  (Mr O'Toole) If I could pick up on the energy first, the moratorium is adversely affecting what the proposals were for North Wales certainly and we have already lobbied quite hard in North Wales for our region to be excluded at least from the moratorium because frankly we no longer have a coal industry and our new energy and energy of the future is in fact gas and unless we are allowed to exploit that gas, we will then not have the basis for future inward investment. In fact, in the past few days my own company received quite a severe shock when we asked about energy supply, which is just not available to us unless there are horrendous costs attached to it. In addition to that, we have two projects on hold at the moment, one of which is holding up inward investment on the Deeside industrial park, but the other one, the Magnox in North-West Wales is possibly putting in danger Anglesey Aluminium, which is probably the single largest employer on the Island of Anglesey and they need continued secure energy for the next 20 years. At the moment they cannot see beyond five years. Not only is it blighting their existing business but any potential growth which they pick up. We do need a definite energy policy which looks directly at the regions's needs rather than maybe at the national need. With regard to the transport infrastructure, we have a pretty abysmal rail service into North Wales. I believe that some might say we have it in all of Wales, but I am not sure about that. Trying to get from north to South Wales is one problem. You are likely to get to Crewe in a very short space of time, but then from Crewe west is going to be quite an arduous journey. For business purposes we really need to look for freight infrastructure and this is a particular area where it is very difficult to interest the operators of freight services to look at the relatively smallish size of business which is going to be available in Wales. There should be some incentives, possibly even some arm twisting, I am not sure, to get the operators to look at putting these services in. Without rail services we cannot compete in North Wales with the rest of the UK which will have the benefit of the Channel Tunnel Rail Link, for instance, and freightliner services, etcetera down to the major ports for their exports. These are areas which are of great concern and they will definitely have a knock-on effect on the competitiveness of the region.
  (Mr Spratling) If I could just touch on the property angle for a moment. There is a severe lack of property available and in the old days, and I do not mean they were necessarily good, the WDA always had at least a shed to show somebody the potential. I chair the Swansea Bay Partnership and last year we had a guy from America who came over in his private jet with a view to looking at inward investment in Wales. We went to the Agency and all they could say was, "There is a swamp here, but do not worry about it, in six months time we will put the piles down and we will have a lovely factory." He said,"Thank you very much", got in his plane and went to Scotland. He met with the Scottish Development Board and, lo and behold, there is a shed available and he can be in it in two and a half months. If we are to streamline our property bank, and the agents here are aware of this, they have to have property available to offer to potential inward investors and not just a block of land and then say to them, "See you later, mate. There will be something there in six months". It does not work. We need something far better than that. All we have got to show in West Wales, for example, is Velindre which is a great heap of space with nothing on it and it just is not the way to go about selling your area in my judgment. We have had so many potential inward investors go elsewhere because there is nothing really tangible for them to see. I think that needs addressing in the future.

  295. Privately or publicly?
  (Mr Spratling) I hear a lot about PFI and I recognise there is no money available to throw at this and yes, what is wrong with a private scheme, government assistance? I have not got a problem with that whatever way you do it, but not to do it is not just attracting the right sort of people.
  (Dr Haywood) There is another important angle on that as well and that is that in very commercially viable areas of Wales clearly the private sector is likely to want to become involved in such deals. In the poorer areas of Wales, where the private sector is unlikely to see a return on that property then they are not going to want to be involved, which was the original reason why the Agency became involved in the property market in the first place. So again it is not a clear-cut answer and it has got to be a mixture of public and private.

  296. Finally, I cannot let pass the fact that the ritualistic plug for the euro was injected into this conversation in the face of what appears to be pretty heavy public opposition to it. As the newest Member of this Committee, can I just put it to you that whilst short-term concerns about the strength of the pound are very important, is it not the case that if economic and monetary union comes in, a great deal of control over the economy as a whole will shift from here to the Continent and that will make the efforts and deliberations of bodies like this Committee, the Westminster Parliament and indeed even the new Welsh Assembly rather irrelevant?
  (Dr Haywood) I should think we have probably all got something to say on that. First of all, I would reiterate what I said before, that to go in at the wrong level and with the economy at the wrong stage would not do any of us any good at all. Secondly, the euro is going to exist and as at 1st January next year, many companies throughout the whole of Europe and some within Wales will actually be working in accounting terms in the euro, so a lot of companies in Wales, including the smaller ones who supply those companies, are going to have to live with it and work with it, so whether we are actual participants in the euro or not, we need to be aware of it and make plans for it. Yes, there will be a number of decisions which will be taken within EMU about interest rates and about the economy through the Central Bank. It is not entirely clear yet precisely what sort of an impact that is going to have on the UK, but I think it is bound to have one myself. Businesses, I think, generally speaking, and within the CBI, as you well know, it has been well documented, have a mixture of views, but the overall majority view within the CBI is clearly that the principle of the euro is a good idea and that if the conditions are right, we should go in. I do not think there is any doubt about that. There is a vocal minority which is against the euro per se and does not want to have anything to do with it and I am not denying that. Generally speaking, within Wales the majority of my members are certainly for the idea of the euro and I do not think that that is necessarily particularly surprising when you think of the sorts of companies that we have actually based in Wales where (a) we have a lot of inward investors from the rest of Europe, so they will be dealing in the euro in any case, and (b) we have a lot of companies who are supplying those companies or who are exporting to the rest of Europe and they can see that it would be of benefit to them in terms of transparency, in terms of actually setting up their pricing regime, as well as the obvious ones such as exchange rates and not having to pay for exchange transactions and so on, so there are a number of issues there. However, I am quite sure that all three of my colleagues would like to say something on this.
  (Mr Jones) As from January, I think we will not have any choice at all because when companies start dealing in the euro currency, I think we are going to be sucked into it and I think we have no choice and, as a person doing 60 per cent of my business in Europe, we are all gearing ourselves to be ready for that particular event. The level at which we go in is the problem. I think at the present time we are out of synchronisation with the level of the bank interest rate, inflation and unemployment and that is a big situation. We find now that the bank rate is increasing, whereas we thought it had peaked and it is now up a quarter per cent in the last week and we are going further away from the bank interest rate uniformity and I think that is really the big problem that we do find with the Europeans, that we seem to be out on a limb and out of sequence with inflation, unemployment and the bank rate.
  (Mr Spratling) I think we have got to recognise that British interest rates are twice as high as the average on the Continent and our inflation is twice as high as the average on the Continent. If we stay with the pound, it is going to stay high and every day you open the paper, "Because of the pound, a, b and c", and, interestingly enough, recently we had a CBI Council meeting and somebody stood up and I agreed with the comment he made and that was simply that the pound is going to stay high, euro or not, because even in covering the currency with the euro, you pay quite a large fee to a bank to buy in the currency and if anybody was going to stop the euro happening, I think the banks would have a very serious part to play and yet they earn a lot of money from covering the currency. The point I am getting at is that I think we have to sow the culture that, euro or no euro, British industry or Welsh, as we are talking about Wales, has to realise that its competitiveness edge is not enough and we have got to go back and look again. Now, whether that means going into the euro or not, I do not care. What I am trying to get across is the culture of looking at your competitiveness and seeing whether you can become competitive enough to live in the real world, euro or not.
  (Mr O'Toole) I suppose there is always one rebel! I have certain concerns about the Euro personally and corporately. Corporately I feel that it will probably come. When? For most people that is a matter of debate. My concerns arise from what I see as the fudged convergence criteria. On the personal side, and it is very hard at times to separate the corporate man from the personal man, is the potential loss of sovereignty and not being British born, as you will have probably gathered from my name, my British passport is a very cherished thing for me and I feel perhaps the loss of control over the nation state is not what I particularly want in the UK.

  Mr Lewis: This reflects very much a discussion that I had with a number of businesses in my constituency at a lunch put on by a bank and it was quite interesting to observe that about two-thirds of them thought it was inevitable and about only one-third of them wanted it to happen. I think we have to differentiate between what we think is inevitable and what we think ought to happen.

Mr Thomas

  297. I am sure you would agree that the majority of your members are self-interested, but they are responsible business people who would regard it as the height of irresponsibility to exclude the possibility of joining the Euro. Would you agree with that proposition?
  (Dr Haywood) Absolutely, yes. I certainly hope they are all responsible!.

  Mr Lewis: The Federation of Small Businesses, of course, take a rather different view.

  Chairman: I think we have elucidated that the Government can take heart from the fact that CBI Wales supports a wait and see policy.

Mr Thomas

  298. I was very concerned by what Mr O'Toole said about the implications of the gas moratorium for the North Wales economy. It is a topical issue at the moment, as you know, because of the incident in the Irish Sea involving BHP. It is early days to speculate as to whether West Wales and the Valleys will receive Objective 1 structural funds. If it does, do you agree that those monies should be channelled in a systemic and focused way to infrastructure being not only roads and rail but also sites, skills and energy?
  (Mr O'Toole) Yes, I do agree. It is really a case of the total package which we have got to offer. The infrastructure, the roads, rail and energy are obviously very very important, I agree with that and skills are equally important, but I think we have to be more focused on where we put our energies and where we put our resources.

  299. And to that extent we could learn from other areas within the UK, not mentioning any names, which have received Objective 1 funding and perhaps have not prepared the ground in advance with a plan as to how this money is going to be spent.
  (Mr O'Toole) If I can guess the area that you might be referring to, of course the problem is that in North Wales we are actually sandwiched between two such areas and that makes life particularly difficult for us.

  Mr Thomas: Thank you very much indeed, Mr O'Toole.

  Chairman: Thank you all for coming today and for answering the questions so helpfully.

previous page contents

House of Commons home page Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 1998
Prepared 18 November 1998