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Lembit Öpik (Montgomeryshire) (LD): It is clear that, as in previous recessions, manufacturing in Wales has suffered more than any other industry. We all know
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that, according to a CBI survey, demand for manufactured goods in Britain is at its worst for 17 years but, like the right hon. Member for Islwyn (Mr. Touhig), I believe that the recession offers us an opportunity. He accurately encapsulated the importance of having the right attitude to the challenges that we face.

In my constituency of Montgomeryshire, as in all Welsh constituencies, small, medium and large businesses face real hardship. Recently, I have made sure that, as far as possible, I am aware of the difficulties that businesses on the high street and in the local manufacturing base face. I have met many representatives from companies that are experiencing difficulty, including Woolworths, which of course tragically closed not long ago, and Stadco, which is threatening to cut more than 100 jobs in Llanfyllin.

In addition, I have met representatives from Floform in Welshpool, which closed dramatically and suddenly a week ago, and I have met Gareth Pugh, whose construction business in Abermule seems to be going well despite his problems getting loans from the banks. I have also met people from Total Network Solutions and dozens of other companies.

I have also listened to the voices in Westminster clamouring for long-term solutions to the crisis. In particular, I have listened long and hard to my hon. Friend the Member for Twickenham (Dr. Cable), our esteemed economics spokesperson. I think that I can say without fear of contradiction that, at the moment, he is effectively the Chancellor of Britain.

The definition of the problem is pretty straightforward. I think that we in mid-Wales have been in recession for about three years now: without a new direction for our Wales economy, I believe that the problems that we face will only spiral. Salaries in Montgomeryshire and in Brecon and Radnorshire are down in real terms, according to objective data. We also know that unemployment in Wales alone has risen by 28 per cent. in the past year. This month, it affects 7 per cent. of the Welsh population. There has also been a 69 per cent. increase in jobseeker’s allowance claimants in Montgomeryshire in the past year.

Even the farming industry has suffered in the past few years. It has been blighted by bluetongue and bovine TB, and there is also the continuing dispute about how farmers are able to control foxes. The inability to control that pest in the most efficient way has an economic cost for farmers in my constituency. Therefore, I hope that the Minister will assure the House that he will do everything he can to prevent the introduction of electronic identification tags for sheep in Wales, which would merely place even greater pressure on our already overstretched farmers and rural economy.

Like many other constituencies in Wales, mine has seen businesses close. Powys had the highest VAT deregistration rate in Wales in 2007, with 54 businesses closing and huge job cuts as a result. Manufacturing firms have been predominantly affected by the shrinking of consumer demand. I have mentioned a number of those companies already, but this week I learned that Control Techniques, a very successful international electrical firm in Newtown, is facing another 30 redundancies in the very near future.

As a result, it seems to me that both the Welsh Assembly and the Government here must produce a specific plan of action, because the rescue packages that
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have been announced so far are not making a discernible difference in Montgomeryshire. I certainly do not deny that the Government are operating in good faith, and I support many of the proposals that they have made, but we need the action being taken to achieve results before many more jobs are lost.

In that sense, I want to thank the Minister for agreeing to come to a meeting that I hope to arrange in the very near future. He will be able to hear directly about the problems that local small and medium-sized businesses in Montgomeryshire are facing. He has been generous in making that commitment of his time, and I assure him that he will have a constructive and insightful session. I believe that it will probably give him a good insight into the typical problems facing small and medium-sized businesses across rural Wales as a whole.

The core issue, it seems to me, relates to the banks. They should not be reining in overdrafts and increasing interest rates on overdrafts for their existing customers, as they have. I am sorry to report to the Minister that much of the good work that is being put in place by the Government is being undermined by the banks, which are paying lip service to their partnership with the Government but, in any practical sense, are reining in the level of debt that their existing customers can secure.

The Secretary of State already knows that in my constituency successful businesses have been forced to accept massive reductions in their overdraft facilities. I accept the conflicting demands on banks to shore up capital as well as to increase lending to small businesses, but they are in full knowledge of the support that the Government are giving them, yet they refuse to extend a hand to those businesses that are struggling to get by without their help. The message is simply not getting through.

I find individual bank managers very co-operative, and have had many useful meetings with the major banks, but I am very close to naming those banks in my constituency that do not co-operate with the needs of business people. I hope that the Minister can pass that message through the Treasury to the banks, which are effectively in national control. They are morally obliged to co-operate to ensure that we do not lose more jobs needlessly in Montgomeryshire and across Wales as a whole.

I would also suggest that we need a rather clearer economic narrative for Wales, and that has been touched on by other speakers, as well as an overarching strategy to pull us out of the recession. I am sure that a number of hon. Members would also agree that with the downturn mid-Wales has the potential to be the environmental capital of Britain, as we have seen through the Centre for Alternative Technology and the fact that we export many ideas to other parts of Britain and Europe. The other side of that should be to create specific eco-companies that lead the way with green technology development as well as exporting those ideas elsewhere. If we look at Wales as an eco-nation, we can ride the wave of a growth industry at a time when we need to clarify our political narrative.

Let me make two more short points. In mid-Wales, we are fast becoming not only the eco-capital of Britain but the wind turbine capital of Britain. There are mixed reactions to turbines, but in my view those turbines and
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the strategy of enforcing the installation of hundreds of new turbines in the form of wind farms in Montgomeryshire is misguided. They do not produce baseload because they are not a reliable form of energy. Although I would not be against them if they provided a substantial contribution to British energy requirements, my worry is that we would need 2,000 turbines to replace a single conventional power station. When the larger proposals come forward, as they will inevitably find their way to Westminster rather than Cardiff due to the exigencies of the legislation, I hope that local opinions and the cost-benefit analysis will be taken objectively into account. Although it looks like the Government are doing something when the turbines go up, they are not necessarily making as good an environmental policy decision as it might at first sight appear.

My other point is one of praise, and concerns flooding in Montgomeryshire. The Severn flood plan occupies an extensive proportion of the land area of my constituency and we have been blighted with some serious flooding issues over the past few years. I have been working with the Environment Agency to see whether we can modify some of the policies that are imposed. A number of my constituents are concerned that they will end up as the victims of enforced flooding in order to protect other towns and settlements downstream. I am happy to report that as a result of conversations with the Environment Agency and Ministers, the Environment Agency has modified its policies, specifically policy 6, in order to take local concerns and feedback into consideration in its decision-making activities. That is a success story and it shows that if one works strategically with the Environment Agency and similar bodies, one can make a local difference by altering national policies for the greater good. I thank Wales Office Ministers for their co-operation in achieving an all-round good result.

I should like real progress, with a partnership approach in terms of both economics and the environmental considerations that particularly affect Montgomeryshire. With the right infrastructure developments, both in connecting the rest of Britain to Wales through improved rail, road and air links, as well as a continued commitment to improving the canal and waterway system throughout Wales, we could see Welsh tourism flourish under the credit crunch, when more and more people will choose to holiday in the UK.

I close with two requests. The first is that if the Government are genuinely to feed a large amount of money into trying to restart the economy, they could do a lot worse than invest in reconnecting Montgomery canal to the rest of the network. It is a multi-million pound scheme of construction work that would provide much-needed employment in the sectors that are suffering most.

My second and final request is that the Minister heeds the advice of others who have spoken today to take a strategic approach to developing a hub and spokes air service across Wales. I declare an interest as a pilot in a fledgling air taxi company, which formerly transported the right hon. Member for Neath (Mr. Hain)—without accident. I offer my humble services to fly the Minister about if he wants but, more importantly, to ensure that Cardiff international airport is connected to Welshpool international airport—if I can describe it
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thus—for the greater good of connecting Wales by air, not, we hope, just for economic benefit but for cultural benefit too.

I look forward to seeing the Minister in my constituency and I shall make sure that his visit is satisfactory and worth while, both for him and for the businesspeople whom he will meet.

4.41 pm

Julie Morgan (Cardiff, North) (Lab): It is great that we are holding this debate, celebrating St. David’s day three days early. When I was preparing for the debate, I learned that St. David is sometimes called the patron saint of vegetarians, which was news to me. He was a committed ascetic and beer was banned in his monasteries.

I wondered how those interesting points related to modern-day Wales. The Secretary of State mentioned the historic task of the Welsh rugby team tomorrow evening in France. If the team is successful, I do not know what St. David would think about the celebrations, but I certainly think that we all wish the team every success tomorrow evening in France.

We are going through a difficult time economically in Wales and throughout the UK. As has already been said, it is important to tackle the economic difficulties at all levels—internationally, nationally, in Wales and locally. I am pleased that the Prime Minister is going to the United States next week to speak to both Houses of Congress, to hear at first hand the details of President Obama’s plans and to see how we can work together internationally to tackle the crisis.

There are long-term and short-term things we can do to help the economy in Wales. Transport links should be improved, and I am pleased that the Government are planning such improvements, in particular the rail links to Heathrow and the electrification of the railway line from London to Wales. On Tuesday, I was pleased to meet Lord Adonis in the all-party group chaired by my hon. Friend the Member for Swansea, East (Mrs. James). Other Members in the Chamber this afternoon attended the meeting, too. Lord Adonis accepts the point that if south and west Wales is to attract business and develop its economy, it is essential that direct links to Heathrow are developed. Ideally, that would involve trains from south Wales running directly to Heathrow, via a loop from the main line to Paddington. A connection near Heathrow is being considered, with a shuttle service to the airport, but a direct service from south Wales to Heathrow would be infinitely preferable. I also support improvement to Cardiff airport in Rhoose.

Many right hon. and hon. Members have signed my early-day motion, which urges the International Baccalaureate Organisation to stay at its base in Cardiff and now has 125 signatures. I thank those Members for their support. Sadly, at the organisation’s board meeting two weeks ago, it confirmed its plan to move its European base to Amsterdam. It described Cardiff as remote and criticised the transport links. I condemn its decision, which does not recognise the work of its 330 staff, who have made it such a success. It now intends to expand, doubling the number of students, to create three international hubs, with Amsterdam as the European one.

Plans to improve links to Heathrow might have played a role if their implementation had been much more imminent, but the organisation’s mind was set on no
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longer having its headquarters in Cardiff and Wales. That highlights the importance of transport links, particularly those to Heathrow. The electrification of the main line from London to Heathrow must not stop at Bristol. The Severn tunnel must not be used as an excuse not to continue the electrification into Wales. We must do all that we can to influence the Government to ensure that that happens.

To help in the present situation, we must also push forward the capital building programme, something that the Government are already trying to do. I am very pleased that we in Cardiff, North have been given the go-ahead for the £70 million Whitchurch hospital development, which will provide acute and out-patient facilities. I hope that that will start this year, as it will be a big boost to the building industry, as well as an improvement to mental health services. It will replace the old asylum-style Whitchurch hospital, which is preserved by Cadw and has a certain charm but is certainly totally unsuitable for the treatment of mental health patients in the 21st century.

The plan to build a new hospital has caused anxiety among some mental health patients in Cardiff, because the day facility—Tegfan—will be knocked down as part of the process. However, we hope that another place has been identified in the hospital’s grounds, where a small capital building programme will produce another day centre. If all that starts this year, it will be very positive and help both the mental health facilities and all the builders, plasterers, carpenters, brickies and everyone who will get the work if those capital building programmes go ahead.

I am very pleased that the go-ahead has been given for the Cardiff, North medical centre. It is a much smaller project, but it will also stimulate the building industry in my constituency and provide good, up-to-date facilities for the people of Pontprennau, Thornhill, Llanishen and all the people of Cardiff, North. The original building was lost to a devastating fire.

I welcome the extra millions of pounds committed by the Government, as my hon. Friend the Member for Vale of Glamorgan (John Smith) said, to the defence training academy at St. Athan in the Vale of Glamorgan, which is accessible to people coming from my constituency and all the surrounding constituencies in south Wales. Again, the capital building programme will provide a great impetus to all the building trades, as well providing long-term employment. Introducing such capital spending is one of the key ways to keep employment and boost the building trade. Transport and a capital building programme are two of the things that we should be working on.

I pay tribute to the Education and Skills Ministers in the Assembly—Jane Hutt and John Griffiths—for their extreme swiftness in developing the ProAct programme. It is an ideal programme, under which people will not fester at home when they are unable to work. They will be able to go out and get skills that will enable them to improve their job chances or to continue in their jobs with increased skills. That is exactly the sort of programme that we want. We have discussed today how many people it has reached, and obviously we do not yet know how many firms and individuals have benefited from it. However, I understand that 150 firms asked for information, and no doubt many of those requests will develop into actual help.

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It is important that the Government look again at the planned reductions in the number of civil servants. There have been plans to downsize the civil service to make efficiency savings, and if there are jobs that are not productive and efficiencies can be made, we should make them. However, it is worrying that the cuts will be made when there is growing unemployment in areas where civil servants are working. Furthermore, there is a real problem at the Department for Work and Pensions, given that more people need help. It makes no sense to reduce the number of civil servants and offices at the Department, given that there will be huge demand for its services. The Cabinet Office Minister at the Committee meeting that I attended this morning acknowledged that we should look at that issue—perhaps the DWP will need more, rather than fewer, civil servants, given that we want to give individual help to people so that they can get jobs.

Finally, I want to make a point about the Severn tidal barrage. I am glad that we have reached the stage of considering the short-listed schemes. We have to weigh the huge advantages of the energy that the barrage can produce against the environmental consequences and come to a decision about which will give the greater boost to the environment. Sometimes when we hear about the environmental disadvantages, we do not weigh them against the huge environmental advantages. Obviously, I want to see what the impact study comes up with, but I come from the position that the barrage would be a great step forward to harness all the power of the Severn estuary. I accept that it will be a tragedy if the Severn bore goes and I know that there are environmentally damaging features, but let us weigh those against the huge increase in energy provision.

In conclusion, I should say that St. David’s most famous affirmation was that we should do the little things; I did know that he had said that. We need to do the little things at local government and community level and build up to the international level. In that way, we will be able to tackle the difficult economic situation together.

4.52 pm

Mr. Dai Davies (Blaenau Gwent) (Ind): People in my constituency have campaigned against the funding formula for local government for more than 10 years. I was recently at yet another presentation by Lord Barnett, who accepted yet again that there is a need to consider a needs-based formula. My constituency’s uplift for this year of 1.5 per cent. will result in the loss of front-line services and a staff reduction. In my opinion, that is unacceptable. I urge the Government to bring forward a review of the Barnett formula at the earliest opportunity. The Assembly is looking into the issue, but the time being wasted is costing our constituencies very much.

The worry is that the £500 million cut for next year will be even worse for us; that cut in services will go very deep. I also ask the Government to review the rates on empty property. If local government bodies own industrial parks, they have to pay hundreds of thousands of pounds in empty property tax. The principle behind the tax—to get people to use properties quickly—was good. However, given the economic crisis that we are in at the moment, that is not a reality.

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