The Budget Statement and its Implications for Wales

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Mr. Hain: I will. Again, the Valleywood project is testimony to the excellence of the local Member of Parliament. The site that was chosen offers great potential. Wales has a great deal of experience in multimedia and digital technology, which will help us to provide the critical mass that will make the project a great success.

Mr. Llwyd: On the Lyons review, should not the right hon. Gentleman have spoken with his colleagues beforehand to ensure that north Wales also benefits? He is right that Newport, Cardiff and Swansea are excellent places for relocation, but apparently we are talking about only 500 jobs, whereas we are probably entitled to about 1,500. I may be wrong on that, but I remind him that there are excellent universities in north Wales. We must spread prosperity throughout Wales, which means including the north. He said recently:

    ''A skilled workforce is vital if Wales is to compete at the highest level for the jobs of tomorrow.''

That is absolutely right, but it will give the wrong signal if north Wales and mid-Wales do not share that prosperity.

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Mr. Hain: I agree. Indeed, north Wales and mid-Wales are sharing in the overall prosperity, including in the hon. Gentleman's constituency, that I described. The initial assessment of the Lyons report identified as prime locations Newport and Cardiff. The criteria used involved a certain population size and population demographic mix, but that does not alter the fact that the hon. Gentleman is right. Wales has excellent university institutions, such as those at Bangor and Aberystwyth, and we must make the case. I say to all hon. Members that they should make the case for their area and tell me about it. If they identify good sites, I will discuss them with the First Minister and my Whitehall colleagues and we will ensure that Wales benefits not only from the 500 jobs that the hon. Gentleman mentioned, but from many more. If we have good locations, I am confident that we can achieve that.

Lembit Öpik (Montgomeryshire) (LD): May I make the case for my area? It seems counter-productive to shift jobs from the overheated south-east of England to the south-east of Wales. Many other areas offer much higher potential quality of life, without an enormous increase in traffic pressure and congestion in the Newport and Cardiff areas. This is a great opportunity for the Government to show vision and creativity and to use modern technology—broadband and everything else—to locate some of the jobs in truly rural areas, where members of staff from the public sector can enjoy that high quality of life and will not contribute to pollution and the stresses that are causing great difficulties for people trying to get around in the south-east of Wales.

Mr. Hain: The hon. Gentleman makes a persuasive point. I might add that I think that the best location for the jobs is Neath—indeed, there is no better location. We should all make the case for our area. However, we must not fall into the traditional Welsh parochial trap of not looking at the big picture. The big picture is that there is a fantastic opportunity for Wales to get high-quality jobs—public sector jobs in this case, which will complement the private sector jobs. We must all make the case that we can. However, we must not get into a turf war about which site might be better. We need the jobs in Wales, but they should be spread as far and wide as possible. I have one other point, which relates to those made by the hon. Gentleman and by the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd). The Assembly is relocating jobs out of Cardiff, which is to be welcomed, and a case should be made for that.

Julie Morgan (Cardiff, North) (Lab): I am sure that my right hon. Friend knows that Cardiff, North has a higher number of white collar jobs than any other constituency in Britain. That includes 2,500 jobs at the Inland Revenue and 1,000 jobs at Companies House, as well as jobs at the Department for Work and Pensions and the Health and Safety Executive.

There is a huge concentration of public sector civil service jobs in the constituency, and I am sure that my right hon. Friend is aware of the anxiety that is caused by the proposals for job losses in the civil service. Can he assure me that Cardiff, North will be high on the

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consideration list to fill any jobs that are relocated from the south-east?

Mr. Hain: Yes, I can. It was for precisely that reason that Cardiff was identified as a prime initial site for relocation. As my hon. Friend says, Cardiff, North has a proven track record of providing those skilled jobs, and would therefore be an attractive location if any job transfers take place.

Mark Tami (Alyn and Deeside) (Lab): Will my right hon. Friend give way?

Mr. Hain: May I make one other point before taking my hon. Friend's intervention? The job transfers and job losses are occurring in a climate in which jobs are constantly being created, and in a global economic situation in which it is not possible to stand still. Taxpayers would not thank us if we did not ensure that we operated the public sector in the most efficient way possible, offering the highest-quality front-line services. Any job transfers that occur will result in a net increase in employment, with some people taking advantage of earlier retirement, others choosing to leave to do other jobs, and others saying, ''No, I can do a better job. I can gain or deliver the extra skills needed for a front-line service.'' Great opportunities will open up in that context.

Mark Tami: My right hon. Friend will recognise the importance of the 6,000 jobs at Airbus, and the many thousands more that supply the plant at Broughton. He will also be aware of the current difficulties with the Environment Agency over the export of the A380 wings. The launch of the first wings that will go to Toulouse is next week. Will he join me in hoping that the problem can be resolved as quickly as possible? I hope that he will also examine how to ensure that that sort of problem does not happen again, because it may send negative messages to potential large-scale investors in Wales.

Mr. Hain: My hon. Friend knows that I share his concerns and sentiments on that matter, because he invited me to visit the Broughton plant and accompanied me on that visit. The Broughton plant is awesomely impressive. It is, in many respects, the jewel in the crown of the economy of north-east Wales. I do not want to do down any other companies in comparison, but Airbus is a fantastic company. Nothing must jeopardise its competitiveness, or the ability of Broughton to deliver those monster wings that it makes to such a high quality and specification.

I hope that the situation triggered by the Environment Agency's decision can be resolved, and am confident that it will be, if we work together. I have discussed the matter with Rhodri Morgan and know that he and his officials are examining it. Discussions will take place with various parties, including the Environment Agency, to examine the wider public interest, in order to ensure that those wings get out of Wales and are attached to the fuselage in Toulouse.

Several hon. Members rose—

Mr. Hain: I will take two more interventions, but after that I must make more progress. I have so far reached only page two of my brief.

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Hywel Williams (Caernarfon) (PC): We all welcome the migration of jobs to large urban centres, but we have a structural problem in Wales in that it is, geographically, a collection of widely separated small communities. Has the Secretary of State any creative ideas as to how some of the butter can be spread a bit further to communities such as those in my constituency, perhaps by the use of new technology, so that we can have a creative change in Wales rather than the usual pattern of shifting 6,000 jobs here and 3,000 jobs there? Does he have such ideas, or will people continue to have to travel from my constituency to Broughton, Bangor, Swansea or Cardiff?

Mr. Hain: I think that there is now common agreement across the parties that Wales's future lies in maximising the advantages of new technology, in particular broadband, for outlying areas such as the hon. Gentleman's constituency. The opportunities offered by it are shown by the increasing numbers of small businesses that are choosing to locate outside congested urban areas in beautiful parts of Wales such as the one that he has the privilege to represent. There are great opportunities, and we must work with the Assembly, local authorities and the Welsh Development Agency to maximise them.

Mr. Bill Wiggin (Leominster) (Con): I was listening with interest the Secretary of State's answer to the hon. Member for Alyn and Deeside (Mark Tami), who asked about Broughton. The Secretary of State has spoken to the First Minister, but what else can he do? The Environment Agency can take a long time, and it is possible that it will delay the A380 wings. What can he do about the dredging?

Mr. Hain: Let us consider the situation soberly, because the hon. Gentleman has asked an important question. The Environment Agency's decision was taken under the European habitats directive, and the agency has the power to determine such matters unless there is a question of overriding public interest. That assessment is currently being made. A number of other regulatory authorities are involved, including the Assembly in respect of dumping should any dredging take place. There is also the question of marine navigation regulatory responsibilities. There are many different fingers in the pie, and all are involved in resolving the matter.

What I am doing is working with all concerned to try to achieve a satisfactory outcome. I assure my hon. Friend the Member for Alyn and Deeside that I am confident that we will achieve a satisfactory outcome. Jobs depend on Airbus's operations. Investment has been made, including £500,000 of launch aid provided by the Department of Trade and Industry. We must see a successful outcome, and we are working towards it.

I should like to make a bit of progress before hon. Members catch my ear, or your eye, Mr. Griffiths. [Interruption.] My Parliamentary Private Secretary is always helpful to me, but mentioning my nose was not his best contribution.

There was yet another rise in employment in the third quarter of last year, resulting in more people

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being in work in Wales than at any time in our history. Our low unemployment rates fell again during the year to a 28-year low. Economic growth is being further encouraged by the objective 1 programme for west Wales and the valleys, under which £715 million has been committed to 1,060 projects worth a total of £1.7 billion. So far, that has created 24,000 gross jobs and safeguarded a further 32,000 jobs.

That economic success is no accident. Nor is it merely a matter of luck or the upward swing in the cycle of boom and bust. The Governments and the National Assembly have worked hard together to deliver a strong and stable Welsh economy. Not that long ago, when the world did badly, Wales did much worse. Today, in a period of global economic uncertainty, Wales has done much better. We will face the challenges of the future with renewed optimism on a platform of stability and growth.

That is a great contrast with the record of the previous Conservative Government, when unemployment in Wales reached 168,000 and remained above 100,000 for the majority of the 18 years that they were in office. Tens of thousands of manufacturing jobs were lost, and the coal industry was all but decimated. Where we see Wales's future in terms of high-value industries and the highly skilled work force, the Conservatives believed, and still seem to believe today, that Welsh businesses should compete on the basis of low wages, low skills and low public investment.

That is one reason why the Conservatives so vigorously opposed the introduction of the statutory minimum wage. In fact, the Leader of the Opposition went so far as to claim that it would cost the country 1 million jobs. Far from jobs being lost as a result of the minimum wage, employment has risen by more than 1.7 million throughout Britain since 1997.

The robust state of the labour market means that the Government were able to confirm last week that we have accepted the recommendation of the Low Pay Commission that the national minimum wage rate should increase to £4.85 in October this year, or to £4.10 for young workers. That will benefit up to 110,000 people in Wales. In addition, we have accepted its recommendation to introduce a national minimum wage of £3 for 16 to 17-year-olds, about which I am especially pleased.

The national minimum wage is a demonstration of our belief that a strong, stable economy and a fair society are not mutually exclusive goals but that they can go hand in hand. The Tories left behind them a country where unemployment was rife, where public services were starved of vital investment, where young people were denied the chance to acquire skills and to take advantage of employment opportunities and were condemned to life in despair on the dole, where higher education was denied the funding needed to ensure the competitiveness of our science and research base, where training places for nurses and midwives were cut, and where the budget for hospital building had all but disappeared. We have worked steadily to overcome the dreadful Tory legacy and we have proved that Labour public investment for all,

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underpinned by economic stability, is the answer, not Tory spending to fund Tory tax cuts for a few.

 
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