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House of Commons

Wednesday 11 March 2009

The House met at half-past Eleven o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—


1. Ann Winterton (Congleton) (Con): What recent assessment he has made of the state of the manufacturing sector in Wales. [261324]

The Secretary of State for Wales (Mr. Paul Murphy): The manufacturing industry is, of course, very important to Wales. According to the latest available figures, the sector employs about 13.5 per cent. of the Welsh work force.

Ann Winterton: The manufacturing industry in the UK has taken a very hard hit in the recession, and that is perhaps even more true of Wales. Is the Secretary of State aware of the concerns of many in the manufacturing work force in Wales who work for foreign companies that there may be plans to offshore employment? Examples of such companies include Toyota in north Wales and Corus in south Wales; Corus has a plant in the Netherlands. What discussion has he had with other Ministers, and with the Welsh Assembly, to ensure that that does not happen?

Mr. Murphy: The hon. Lady makes a valid point. I have of course had discussions with my right hon. Friend the Business Secretary, and with the First Minister and Deputy First Minister of Wales. I have also discussed the issue of Corus with the chief executive of Corus. The point that the hon. Lady makes about foreign-owned companies in Wales is well taken, but I have no reason to believe that that will be a disadvantage to us in Wales in the months to come. In my constituency, for example, thousands of people work for car component manufacturers that are American-owned, and so far, so good. Obviously, they are feeling the pinch, like all manufacturing companies, and particularly those in the automotive industry, but I very much take her point on board.

Nick Ainger (Carmarthen, West and South Pembrokeshire) (Lab): My right hon. Friend and his colleagues in Government should be congratulated on the work that they are doing to get information to small and medium-sized businesses about the various schemes that are there to help. However, the Treasury Committee has been taking evidence in Northern Ireland, Scotland and the north of England, and one of the messages that we are getting back from some businesses is that they are not aware of all the schemes. May I urge my right
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hon. Friend to contact his right hon. Friends in the Cabinet to ensure that all the information and all the schemes are made available direct to small and medium-sized businesses, so that they can approach the banks, and not wait for the banks to approach them?

Mr. Murphy: Yes. My hon. Friend is of course a distinguished member of the Treasury Committee, and he makes a valid point. The issue of information is very important. The “Real help now” information is available on all Government websites, and on the websites of the devolved Administrations, including the Welsh Assembly Government, but more work is necessary, particularly locally. Most local authorities in Wales are now organising economic summits in their areas. There was one in my area on Friday, for example, and I know that there is to be a summit in the constituency of my hon. Friend the Under-Secretary of State for Wales. Information is best disseminated at the most local level, but I very much take the points that my hon. Friend the Member for Carmarthen, West and South Pembrokeshire (Nick Ainger) makes.

Lembit Öpik (Montgomeryshire) (LD): Only yesterday, I received notice that the Newtown factory branch of Trelleborg Sealing Solutions is to cut about 56 jobs, following similar examples at Stadco and Floform. What plans does the Secretary of State have to make sure that the manufacturing skills gap does not widen in Montgomeryshire, and is there potential to divert money specifically into the manufacturing base in mid-Wales, so that we can replace the jobs that we are losing with green jobs in the green economy, which provides both manufacturing opportunities and sustainable economic activity for the longer term?

Mr. Murphy: Yes, and that is certainly a priority of the United Kingdom Government, and of the Welsh Assembly Government, too. It is important that the hon. Gentleman and other Members who represent Welsh constituencies are aware of the various schemes available to businesses in Wales, particularly the ProAct scheme. It is unique to Wales and is very effective. Some 75 applications have now been processed, and 66 of them are from the automotive industry. Ten have been accepted. That represents nearly 6,000 workers, so it is a very real scheme, and it means that real money goes to help businesses such as the one that the hon. Gentleman described. I take the point that he makes about the green industry; that is a priority for both Governments.

Mr. Peter Hain (Neath) (Lab): Will my right hon. Friend take no lessons from Conservative Members on the impact of the global credit crunch on manufacturing in Wales? Their policies in the 1980s and ’90s decimated manufacturing in Wales, and they show every sign of wanting to repeat those policies. I hope that my right hon. Friend will stand up against them.

Mr. Murphy: I certainly agree that, during the recessions back in the time of Mrs. Thatcher’s Government, the situation was very different. It is most important to understand that we cannot simply sit back and do nothing. The Labour Government here, and a Labour-led coalition in Cardiff, are actually being positive about the help that we can give businesses in Wales. That is something that we did not see before, and I fear that we are not seeing that from the Conservative Opposition now.

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Mr. David Jones (Clwyd, West) (Con): The Secretary of State will know that Toyota announced today that it is putting its factory on Deeside on short-time working and its staff on reduced pay. He has already mentioned the importance of the automotive industry to the Welsh economy. Given that importance, does he know precisely when the automotive assistance programme, which was announced with so much fanfare in January, will be implemented? Is it another case not of real help now, but of jam tomorrow?

Mr. Murphy: No; the hon. Gentleman is aware that some of the schemes are to operate at different times. For example, in April at least six schemes are due to go live, including help for the automotive industry. There are other schemes that have already started. I cited to the hon. Member for Montgomeryshire (Lembit Öpik) the excellent ProAct scheme that works in Wales. The schemes are staggered in time scale, but they are about real help for people. The hon. Member for Clwyd, West (Mr. Jones) is right that the delivery of such schemes must be a main priority of Government, whether here in London or in Cardiff. Help is available, and it is up to the industry to apply for that help.

Small Business Support

2. Mark Williams (Ceredigion) (LD): What assessment he has made of the level of support available to small businesses in Wales. [261325]

The Secretary of State for Wales (Mr. Paul Murphy): Businesses in Wales are receiving a high level of support from Governments at both ends of the M4. Small and medium-sized businesses in particular are the lifeblood of the Welsh economy and they make up, as the hon. Gentleman knows, some 98 per cent. of Welsh companies.

Mark Williams: With reference to one of those schemes, the enterprise finance guarantee scheme, does the Secretary of State share the concerns of many small businesses across Wales that many of the high street banks operating the scheme are demanding crippling personal guarantees of up to 100 per cent. against homes and assets, even though the Government are guaranteeing 75 per cent.? Whose guarantee is it—that of the banks or of the small businesses of Wales?

Mr. Murphy: Obviously, the guarantees are to the banks in order to ensure that they make effective lending possible, but the hon. Gentleman is right that whether the policy is filtering down to the local level—to the bank managers that we used to have in the old days—is another story. It is important for small businesses that lending starts again. It is also important to understand that banks still have to make commercial decisions. One of the reasons for the mess that we are in at the moment is that banks made the wrong decisions about risk or there was a lack of acknowledgement of risk. There are businesses in Wales that are viable and good and that deserve help. It is up to our banks, together with the help that Government in London and Cardiff give, to make sure that that lending occurs.

Mr. Don Touhig (Islwyn) (Lab/Co-op): Small businesses will be greatly helped if they can recruit people with the skills that they need. At Oakdale comprehensive school
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I saw for myself last week that young people are being prepared well for the workplace and given good IT skills. What initiatives exist to ensure that we have strong school-business links, so that when we come out of the economic downturn Welsh companies are certain that they will have a strong and skilled work force from whom to recruit?

Mr. Murphy: That is the point, of course. We cannot forget about training and education for the future, for when we come out of the downturn. The initiative at Oakdale is a very good one. I will certainly commend it to the First Minister when I next meet him. It is important that we have a properly trained work force, and our colleges and schools in Wales play a hugely important role in that respect.

Mr. Stephen Crabb (Preseli Pembrokeshire) (Con): Does the Secretary of State not realise that there is a huge disconnect between the rhetoric and the words used at his Dispatch Box and at the business summit public relations exercises that are being conducted throughout Wales, and the reality on the ground, particularly in areas such as Pembrokeshire and west Wales, where small businesses are seeing precious little additional new assistance at this time of recession? Is the Secretary of State aware of the enormous disillusion in the small business community with the promises being made by Ministers and with how little is being delivered?

Mr. Murphy: There is time for rhetoric and there is time for people to pull together to help those who are out of work in Wales. I have not the slightest doubt that the economic summits that we have held—there is one to be held in a few weeks in Swansea—have done a remarkably good job in bringing together from business, industry, the trade union movement and elsewhere all the expertise that we can gather in Wales. It is true to say that it will take time for some of those schemes to start working, but some have already started working. The figures that I have just given the House with regard to ProAct are a good example of that. At least we are trying. I fear that the hon. Gentleman’s party has no ideas at all about how to get us out of the recession. It is much better for small businesses, industry and commerce in Wales to know that both Governments are trying to help them, as opposed to his party, which has said absolutely nothing.

Mrs. Siân C. James (Swansea, East) (Lab): We have heard a lot today about the difficulties and economic challenges that face small businesses. However, the Secretary of State was kind enough to come to my constituency recently and he visited a very successful SME—Tomos Watkin’s at the Hurns Brewing Company. It has been bucking the trend. I am sure that the Secretary of State will join me in congratulating the company on its wonderful successes.

Mr. Murphy: I certainly do. Swansea is a great example of a city with thriving small and medium-sized enterprises as the very backbone of its economy. I visited a number of them with my hon. Friend, and I can certainly commend the excellent beers that Tomos Watkin’s provides.

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Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) (PC): I do not recognise the problems of small businesses in Wales to which the hon. Member for Preseli Pembrokeshire (Mr. Crabb) referred. The Secretary of State has rightly referred to the £48 million ProAct scheme; there is also the £35 million ReAct scheme to retrain and assist people facing redundancy. Furthermore, there is the £20 million apprenticeship scheme for reskilling young people and the extra business rates relief, which now assists approximately 55,000 small businesses in Wales. Is it not heartening to hear of David Rosser of the CBI going out of his way to say well done to the Deputy First Minister and his team in reacting urgently and properly to assist small businesses in Wales?

Mr. Murphy: I am happy to say well done to the Deputy First Minister and the First Minister in Wales for the work that the Assembly Government have done. The reality is that individual people and businesses have been helped by those schemes. For example, there is Her Majesty’s Revenue and Customs Time to Pay scheme, under which taxation is deferred. Some 2,600 firms in Wales benefit from that; £38 million has been deferred so that they can. There are other schemes as well. The point is that unless the Government act to help businesses, families and individuals, nobody else will.

Albert Owen (Ynys Môn) (Lab): Many small businesses in my constituency and throughout Wales rely on visitors and tourism. Does the Secretary of State agree that the product that is Wales needs extra support and help to promote its image at this difficult time? Furthermore, we should take advantage of the relatively low value of the pound sterling against the dollar and the euro. Will he raise those issues with Ministers? Next time he comes to Ynys Môn, will he meet tourist associations and operators to see first hand the problems that they face?

Mr. Murphy: Of course I will. There is no finer part of the United Kingdom to visit than Wales, and my hon. Friend’s constituency is a great example. I am going there in a couple of weeks’ time, and I assure him that he and I will look at the advantages that Ynys Môn gives the world.

Mr. Roger Williams (Brecon and Radnorshire) (LD): In these dire economic circumstances, the Welsh Assembly Government and the Westminster Government are increasing—I repeat, increasing—business rates by nearly 5 per cent. next year. What message does that send to small businesses that are struggling to survive in Wales, and what is the Secretary of State doing to stop this madness?

Mr. Murphy: There are ways and means by which firms in Wales can go to the local authorities and the Welsh Assembly Government and receive direct help, under the scheme that the Assembly Government have put forward. In addition, there is help on empty properties. I understand, however, that small firms have difficulties with this issue; that is why I referred to the HMRC Time to Pay scheme, of which many firms have taken advantage.

Mrs. Cheryl Gillan (Chesham and Amersham) (Con): The Secretary of State has revealed today that 10 businesses have been helped under the ProAct scheme and that help for 75 is under consideration. Frankly, that is just
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scratching the surface. The Secretary of State’s figures are wrong; the Treasury has said today that 3,590 businesses in Wales have agreed terms to defer payments, a further 120 have been turned down and 405 are still in negotiations. That means that more than 4,000 businesses are facing trouble. Given that sort of volume, does the Secretary of State really consider that the schemes put in place by the Welsh Assembly Government and his Government have the capacity to cope with the large number of firms that are in trouble, are closing or are laying off staff?

Mr. Murphy: Yes, I think that the schemes collectively will do that. Does the hon. Lady realise that we are talking about hundreds of billions of pounds, which have been put into the banking system to prevent it from collapsing and to ensure that banks lend again? Those schemes will start at the beginning of the financial year. She should consider the importance of the schemes I have referred to, such as ProAct, ReAct and other schemes in Wales. They are meaningful schemes that are working. I agree that more work needs to be done to ensure that people are aware of them, but they are still better than the policies her party has put forward.

Mrs. Gillan: The Secretary of State is right to say that more work needs to be done, because the managing director of the leading business advice organisation in the country, Venture Wales, has said that since the Welsh Assembly Government took over the Welsh Development Agency, help for small firms has deteriorated. He says that decision making is “slow”, that morale is “low” and that millions of pounds are “being wasted”. If that is the view of an expert on the systems of help for businesses in Wales, what is the Secretary of State going to do about it?

Mr. Murphy: That is not the message I am getting. The CBI in Wales, the Federation of Small Businesses and individual businesses in my constituency are giving me the message that real help has come from the Welsh Assembly Government to the business sector. To take one example, the finance Wales initiative—our own Wales bank to help small businesses—has invested £17 million this financial year. That is 25 per cent. more than last year, and it is real help going to real businesses in Wales.

Welsh Language Certificates

3. Hywel Williams (Caernarfon) (PC): What recent discussions he has had with ministerial colleagues on the provision of birth, marriage and death certificates in the Welsh language. [261326]

The Parliamentary Under-Secretary of State for Wales (Mr. Wayne David): My right hon. Friend the Secretary of State and I have regular discussions with ministerial colleagues on a range of issues affecting Wales, including the Welsh language. Wales Office officials have discussed the provision of Welsh language certificates with colleagues as part of work on recent and current legislation.

Hywel Williams: I thank the Under-Secretary for that answer. He may be aware of the Bill published by our former colleague, Gareth Thomas, the former Labour MP for Clwyd, West on this subject some years ago.
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Does the Under-Secretary agree that circumstances have not changed? There is a demand for Welsh language certificates. Will he strive to make parliamentary time available for a Bill on this matter, should one be presented?

Mr. David: I can tell the hon. Gentleman that the Government remain firmly committed to producing Welsh language certificates, and the General Register Office is exploring the best way to do that. I am happy to take forward discussions with the Home Office to find the best solution, but it is not a simple matter. It is not a question of introducing a Bill; we have to explore the best possible way. I reiterate that we are firmly committed to pursuing that path.

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