APPENDIX 17
Memorandum from the Friends of the Earth
CYMRU
I believe that the Committee is investigating
post-Assembly development in Wales and the most effective means
of economic support. We have been very interested in this issue
for some time, and would like to convey to you our latest thoughts,
for your information and consideration.
There are regions of Wales, such as the Valleys,
West Wales and Anglesey, that are economically depressed and that,
in our opinion, could and should be supported by appropriate investment.
We believe that such regional economies could reliably be strengthened
and expanded in ways that achieve a resilient and sustainable
manufacturing, commercial and service sector. We do not believe
there is any one measure or quick fix in achieving this.
For this reason we are concerned about what
is and consequently what is not invested in, for a given and limited
support fund. The current focus, of many commentators, on the
strategy of trying to attract major inward investors, and usually
by the call for major and expensive road building is of great
concern to us.
Considering that there are limited funds to
support any one region, we believe that the strategy to attract
inward investment may be significantly undermining opportunities
to expand indigenous companies and create new local enterprises.
Furthermore, the Government's own Standing Advisory Committee
on Trunk Road Assessment (SACTRA) has recently made clear, in
their Interim Report on roadbuilding and economic development
(February 1998) that road building to peripheral regions could
actually damage their economies. Indeed, it is the smaller and
self-employed businesses, which are more predominant in peripheral
areas, that can particularly suffer due to predatory competition
from larger centralised economies.
We remain to be convinced that spending vast
amounts of public funds attracting major inward investors, like
LG, could not secure more jobs, spread across Wales, if invested
in more diverse ways, possibly through local authorities. Indeed,
the LG development itself has created local economic distortions
and environmental pressures.
That said, even if new major inward investors
were attracted to peripheral areas, such a dependence on
one or two major employers would not necessarily help the resilience
of the local economy should the investor pull out for any reason,
for example, in response to fast changing global concerns or markets.
Indeed, Pembrokeshire has been hit hard by the closure of the
ESSO and Gulf refineries, and the remaining refineries are exposed
to increasing health and environmental concern, not least the
likely requirement for low-sulphur fuels in the EU. If Anglesey
Aluminium Metals closed for any reason (energy costs/supply or
market metal price) then that would create a major hole in the
island's economy.
Furthermore, it is often the case that an inward
investor's activities lie mainly within the manufacturing sector.
Over concentration on manufacturing at the expense of other economic
sectors, can also have negative repercussions in today's "strong
pound", "two speed" economy.
However, we are not arguing against inward investors,
rather, we are concerned that their elevation to almost "Holy
Grail" status, by some, can significantly distort funding
priorities and infrastructure spending to the disbenefit of job
creation, the economy and the environment.
On the issue of roadbuilding, not only could
such massive "investment" be ineffectual or potentially
cause a net loss of jobs, major new roads would encourage even
more unsustainable transport activity in the UK than we have currently.
We regard roadbuilding as an economic gamble and a highly unsustainable
one at that.
We believe that investment support should be
directed to encourage new sustainable enterprises, inward and
indigenous and expand local businesses: much increased investment
in TECs and FE to provide skills training is essential. A major
programme of home and business energy-efficiency is essential
(and would pay great social and environmental dividends). Funding
should also be directed to: grants/tax breaks for businesses (site
development, new machinery, etc.) organic farming, agri-environment
schemes, woodland product schemes, IT support, and green tourism
(cycle routes, public transport initiatives) and renewable/CHP
energy schemes.
Neil Crumpton
North Wales Office
12 June 1998
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