HC Deb 03 February 1988 vol 126 cc1092-112

Question proposed, That the clause stand part of the Bill.

11.26 pm
Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

We are grateful for the opportunity to explore further the finances of the Welsh Development Agency and the work which we hope those moneys will provide in our communities. The Bill lays down new financial limits for the WDA. It is right for hon. Members to take the opportunity to explore what the agency can achieve within those limits in the development and regeneration of our communities.

We had a useful and constructive debate on Second Reading. It was made clear that the Opposition support the Bill and the work of the agency. But we want to elicit information about what the agency will do within its new financial limits and investigate further its budget. The Secretary of State told hon. Members on Second Reading that the budget would be £113 million and he gave the amounts to be spent on various aspects of the agency's work. We can now take the opportunity of the Committee stage to prise from the Minister more details of the budget.

The Secretary of State told us that the financial provision for the industrial estates role of the agency would be encompassed in the broader financial limits of the Bill. He explained that the budget for the industrial estates function of the agency for the next financial year would be £44 million and said: Together with the increased factory rents and sales that are taking place, it means that the total potential expenditure for the agency for this coming year will increase to £113 million-31 per cent. more than the budget for the current financial year. This is not a Second Reading debate, so we can probe what he meant. The first question for the Minister is what is meant by the words: Together with the increased factory rents and sales that are taking place". What proportion of the industrial estates budget for the next financial year will be financed by sales of factories and rent increases? Both are significant to our communities, especially rents. For several years, hon. Members on both sides of the House, but particularly Labour Members, have made representations to the agency about its rental policy as we fear that, as a result of rent increases, some of the marginal companies in agency property could be threatened with bankruptcy.

11.30 pm

Sales are important for another reason. Everyone knows that a balance of available property is vital in any commercial portfolio. How much pressure is there — I suspect that there is considerable pressure from the Treasury—to sell a considerable amount of the agency's estates? What assumption of sales has been made to finance the increased budget for the industrial estates?

The Secretary of State also said: I have also agreed new mechanisms in which the agency can use its finances to attract a considerable volume of private investment into new factory and commercial building."—[Official Report, 28 January 1988; Vol. 126, c. 559.] New mechanisms should not go through the House on the nod without our knowing what they are and what method of financing will be used to make them effective. If it is a new departure, we need much more explanation of what it is about. It was not us, but the Secretary of State, who drew attention to it.

The remainder of the Secretary of State's speech on Second Reading did not describe the new mechanisms, so I examined the agency's announcements. I looked at a glossy brochure called, "Property Development Programme", which refers to this matter but does not spell out the new mechanisms and the financial arrangements to make them work.

Sir Raymond Gower (Vale of Glamorgan)

I assume that the hon. Gentleman accepts the desirability of attracting private investment.

Mr. Rowlands

We are justified in probing the Government. The Secretary of State has talked about new mechanisms, but I doubt whether the hon. Gentleman knows what they are. I am trying to find out. All I could find was not in an official document but in a WDA press release which accompanied the glossy brochure I mentioned. It gives us some insight into what the mechanisms will be. To my knowledge, it is the only source of information on these new mechanisms. We did not get any information on Second Reading, and we are hoping for some when the Minister replies.

Under the title "Private Partnership", the press release refers to an "important new ingredient" in the new property development initiative a new grant facility recently agreed by the Secretary of State for Wales. The agency and the Secretary of State might agree, but the Committee does not know what the terms of those agreements are, and we were not told about them. I am not complaining or objecting, but if a new grant facility is to be made, and used to develop private estates, the Committee should know about it.

The press release continues: The Initiative is designed to encourage private development to complement the Agency's own property programme, and more generally to encourage the participation of private developers in industrial development in Wales. Again, I am not complaining about the objectives. However, the press release also says, and this is what I question: The WDA will promote specific schemes where it might be prepared to offer a grant to private developers to help make some of these projects a viable proposition. Initial priority will be given to projects at Deeside, the Delyn Enterprise Zone, Cardiff, Bridgend, and Swansea. Is this grant facility to be confined in this fashion? What is the grant facility? What proportion of any private development scheme is to be financed by grant? Under what head of the WDA's budget is this grant to be made to private property development? I am not objecting to it, but we should know how it is to be operated, in what form, what sort of money we are talking about and in what proportion. More important, what about its geographic location and spread?

The press release goes on: A range of other measures also aimed at assisting private sector investment will be available throughout North and South Wales, including risk sharing partnerships, and help with feasibility studies and marketing of new developments. Again, I am not objecting, but these are new mechanisms, new ideas and new grant facilities. I may be less than diligent, but the only information about this that I have read comes in a press release from the WDA. Therefore, I want a much more detailed explanation from the Minister and I want to know why this private property development grant facility is initially confined to that particular area.

I asked the Minister to explain my next point on Second Reading, but, understandably, he did not get round to answering. I asked him, in the context of my constituency, how private initiatives of the kind that has been described would work. In the section on the industrial estates property called, "Heads of the Valleys region" I read, as I mentioned on Second Reading, that the regional office identified the following opportunities locally for possible private sector development — Goatmill Road, Merthyr —small factories". I did not realise that what is behind these mechanisms for attracting private investment in property development is a grant facility by the WDA. Is this area to be the subject of possible grant facility arrangements under the new mechanisms to promote private commercial industrial development?

An opportunity is identified in the property development programme; a new mechanism is announced by the Secretary of State; a press release tells us that it is a grant facility, although implying that it will be confined to certain geographical areas and enterprise zones. I want to know what is in it for Merthyr and Rhymney. I want a straightforward answer because it is extremely important to us. There is a general issue of principle, too. If the Government intend to introduce a new grant facility arid new arrangements, the Committee needs to know their exact character and nature.

When the Secretary of State opened the Second Reading debate he told us in part about the size arid character of the WDA's budget. He gave us figures for derelict land and for property — for commercial and industrial development. He did not give us figures for the WDA's budget for 1988–89—on WINvest, for example — or for the WDA's venture capital role. When I pressed the Minister during his wind-up speech he confirmed that the venture capital figure for 1987–88 was £10 million. I am glad to say that he also confirmed that he saw the venture capital role of the agency as vital, because we are worried that it might be pared and clipped. Will the Minister tell us the budgets for WlNvest and the venture capital side in 1988–89? He gave us some of the figures, but not all of them.

My main point concerns the role and finances of the WDA in relation to the needs of our valley communities. The Secretary of State was very sensitive when my right hon. Friend the Member for Swansea, West (Mr. Williams) dared to query whether the much-heralded valleys initiative was included in or excluded from the WDA budget and the known public expenditure figures. My right hon. Friend will remember that question, which got the Secretary of State to his feet on Second Reading. The Secretary of State was rather testy about my right hon. Friend's prompting. That exchange appears in column 562 of Hansard on 28 January 1988. My right hon. Friend made a fair point. It is not Opposition Members who have been advertising and trailering a great new valleys initiative; it is the Secretary of State himself. He gave an exclusive interview to the Merthyr Express and another exclusive interview to the Western Mail—two exclusive interviews—trailering a major new valleys initiative.

We were enthused and encouraged and we have been waiting with great interest for the announcement. It would not have been unfair of us to draw the conclusion from those exclusive interviews that there would be a major new special budget for the valleys initiative. It was perfectly reasonable for us to conclude that there would be a major new budgetary announcement; indeed, I assume that that is still in the pipeline.

Curiously, in the exchange with my right hon. Friend the Member for Swansea, West on Second Reading, the Secretary of State appeared to imply that at least the industrial estates side of the great valleys initiative had already been announced and that it was incorporated in the new programme of factory development that the WDA had announced that day.

I should like the Minister to clear up this point. Has the factory side, the industrial estates corporation side, of the Secretary of State's major new valley initiative, for which we are all waiting with great interest and enthusiasm, already been announced or is there more to come? Is it part and parcel of what was announced on 28 January, or is there a new package of industrial estates development?

11.45 pm

It is not our fault that we are confused about what the valley initiative is, and about what is involved in it. Are Blaenau Gwent, Merthyr and Cynon Valley the announced parts of the industrial estates corporation side of the so-called valley initiative?

Even more interesting is an answer that I received yesterday to a written question that I tabled to the Secretary of State asking him whether the valleys initiative budget was included in or additional to the public expenditure totals that were published in the Command Paper on public expenditure a week or two ago. The reply that I received yesterday stated that they were inclusive and that the valley initiative is buried in the public expenditure totals in the Command Paper.

There is a lot to be done and some questions need to be asked. If the valleys initiative is buried in those totals —[Interruption.] Indeed there should be some answers. My hon. Friends should not be too sceptical. I am sure that the Minister will give clear answers to all of this—[HON. MEMBERS: "Since when?"] I have greater faith in human nature than some of my hon. Friends. Anyway, as a result of yesterday's answer to the question that I had tabled, plus the exchanges that we had, it is at least clear that a largish proportion of the great new valleys initiative is already available in one form or another somewhere in the House, but we cannot find it. We want to know where the totals are. [HON. MEMBERS: "And the initiative."] Again, I am sorry that my hon. Friends are showing scepticism. I am willing to suspend judgment. Let us find out. I hope that there is a valleys initiative.

I am somewhat disappointed that the valleys initiative will be inclusive in the existing totals because that means that we are competing for existing resources within the Principality, whereas I thought that it would be additional money. We all thought—it was the whole notion of the two exclusive interviews that we have read—that there would be additional money in an additional budget, over and above the sums within the known totals.

I should like the Minister to answer two questions. First, has the valley initiative — the industrial estates commercial side—already been announced by the WDA on 28 January, or is there more to come? Secondly, will he give us some idea of when the initiative will be announced and in what form? I ask that because I am concerned that the valleys initiative should be a visionary, positive and forward-looking concept. Since the Secretary of State's interviews one other major piece of new information has become available to us. The Institute of Welsh Affairs has published an interesting and constructive report, entitled "The South Wales Valleys—An Agenda for Action". I think that the Secretary of State gave it a positive and constructive welcome, although I am not quite sure what he thought about it.

The Minister of State, Welsh Office (Mr. Wyn Roberts)

If the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) looks at the record, he will discover that my right hon. Friend the Secretary of State had announced his own valleys initiative and his intention to make a further statement upon it before "The South Wales Valleys: An Agenda for Action" report appeared.

Mr. Rowlands

I am sure that the Minister is correct, I am not suggesting otherwise.

I want to know how many of the interesting ideas contained in that document will be incorporated in the new valleys initiative and how they are to be financed.

The clause will raise the financial limits available to the WDA. The report "The South Wales Valleys: An Agenda for Action" contained 57 recommendations and proposals and more than 40 of them require WDA action, participation and funding. That demonstrates the relationship between the report and clause 1.

I agree that the Secretary of State announced his valleys initiative before the report was published, but how many of the report's recommendations will be incorporated in any valley initiative? I am sure that my hon. Friends will not be surprised to discover that I am anxious to know how many of the recommendations relating to my constituency will be incorporated in the Secretary of State's valleys initiative.

Under the title "A pilot area project" on pages 13–14, paragraphs 220–221, the report recommends that Merthyr Tydfil should be a pilot area project. It recommends seven or eight major action measures for the Merthyr project. All of them would involve WDA financing. The report mentions the preparation of a town development appraisal, key site properties and development opportunities. Indeed, it is pertinent to my constituency that the report discusses the relocation of the WDA's regional office from Hirwaun to Merthyr. I am glad that my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) is not here, because that is a sensitive issue.

The report also recommends the development of a key strategic industrial site at Pentrebach by the WDA with forward investment in advance factory provision. The list of specific recommendations by the authors of the report deserves a serious and genuine response from the Secretary of State. They are part and parcel of the WDA's budget and needs for 1988–89.

How many of the ideas in the report will be incorporated in the valleys initiative and, therefore, be the subject of financial requirements from the WDA in the coming year?

Mr. Gareth Wardell (Gower)

Has my hon. Friend also considered derelict land? The chief executive of the WDA made it clear to the Select Committee on Welsh Affairs that all the derelict land in Wales would be removed by the end of the century. Is my hon. Friend confident that that goal will be met by the proposals in the Bill?

Mr. Rowlands

I have not dwelt on derelict land reclamation sites tonight because I discussed them on Second Reading, when I pointed out that one of the most interesting recent reports by the Welsh Coalfield Communities suggested that we were scarcely even-stevens with the pace of land reclamation; that as much reclamation was being created as we were clearing, despite tremendous efforts; and that a budget of £25 million a year was required to make inroads. The budget will be about £20 million so it will fall short of a known need. I pressed that point on Second Reading and do not want to weary the Committee by going over the same argument.

Mr. Ron Davies (Caerphilly)

Will my hon. Friend consider the problem that will be posed by the pit closures announced today? In mid Glamorgan the programme of reclamation must inevitably fall behind. As additional closures are announced, the programme that has already been approved will not keep pace with, let alone match, the additional problems caused by new closures.

Mr. Rowlands

My hon. Friend poignantly describes the position. On Second Reading several of us said that a problem of the pace of derelict land reclamation was its tight connection with pit closures. I did not draw attention to the disastrous news today about pit closures because I hope that the two pits are not yet lost and that we can dissuade the board from proceeding with two disastrous additional pit closures.

My hon. Friend is right that If British Coal goes ahead with the proposals and attains the closures—I do not know the Abernant site but I certainly drive past the Lady Windsor site every week — there will be an enormous extra burden of land clearance. I hope to goodness that we do not reach that stage and that the pits may be saved. If they are not, a major additional problem of land reclamation and dereliction will be added to an already heavy historic burden.

Mr. Gareth Wardell

In addition, it is important for the Minister to bear in mind that the implications for the WDA budget and expenditure are important in terms of knock-on effects. British Rail, for example, relocated its freight depot at Pantyffynnon close to the Wernos washery. If the closures go ahead, with the consequent knock-on effect to that rail freight depot, we shall have an additional need for additional funding for the WDA. My hon. Friend is absolutely right that the closure of the pits is important and must be prevented.

Mr. Rowlands

I am sure that my hon. Friend the Member for Neath (Mr. Coleman), who knows the details of these matters, will catch your eye, Mr. Deputy Speaker. He will develop the points made by my hon. Friend the Member for Gower (Mr. Wardell).

I was drawing the Committee's attention to the major recommendations in "The South Wales Valleys: An Agenda for Action", especially the preparation of a town development appraisal. On Second Reading I asked the Minister about the matter, but he did not answer. I do riot complain because he could not answer all the points. But now is his chance. One of the new functions of the WDA is the creation of an urban renewal unit which will play an important role in the commercial, non-industrial development in some of our communities. I am not clear what its function will be and how its function, expenditure and budget will relate to the urban development grants which will remain with the Welsh Office.

I understand that the urban renewal unit of the agency will not be a grant-giving body. It will be a lending agency. How will it relate to what remains of the urban development grant system in the Welsh Office? We hope that it will help to develop and diversify the economy of local communities such as mine. We watched with modest envy the developments in Cardiff and Swansea and we want to see such developments extend into our valley communities. We are interested to know what role the urban renewal unit of the Welsh Development Agency will play in that.

Vital questions remained unanswered on Second Reading. This is our chance to get some answers. The agency is one of the most important and powerful instruments for the regeneration and renewal of our communities. Some people in the agency have dubbed me Oliver Rowlands, the man who always asks for more. I do ask for more because the communities that I represent have given so much historically and have every right to demand more. By supporting the Bill, we hope that we shall get the extra resources to develop the communities that we represent.

12 midnight

Sir Raymond Gower

The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) has made a far-reaching speech. It is the Opposition's job to probe, examine and question. I do riot wish to be offensive, but he would have made his job easier if he had tabled precise amendments. It would also have made it easier for the Minister to produce precise answers. It is impassible, in these circumstances, for the Minister to have any foreknowledge of the subjects likely to be raised.

Mr. Rowlands

I appreciate the hon. Gentleman's point. Opposition Members considered means of amending the Bill, but, when the money resolution on a one-clause Bill has been passed, there are only limited ways in which we can amend the Bill. We cannot amend the figures because they were approved in the money resolution, so we must try to amend the Bill through a clause stand part debate.

Sir Raymond Gower

I accept the hon. Gentleman's point, but he might have considered the matter further.

We now see the agency in a different light than we did some years ago. It had a precise role in those days when its chief function was to erect advance factories and to arrange for the clearance of disfigured parts of the landscape after the closure of coal pits. It was possible to forecast expenditure very precisely, but it is now difficult to be so precise. For example, the hon. Member for Merthyr Tydfil and Rhymney referred to the agency's function of attracting private investment. We cannot say how much private investment might be attracted, but we hope that the agency will be successful.

The hon. Gentleman rightly expressed concern about the mention of Deeside, Cardiff, Swansea and Bridgend to the exclusion of the valleys. He was right to stress the importance of the valleys, with their very great problems. Nevertheless, he should not go so far as to try to block development in Cardiff, Swansea and Deeside. That would be fatal. The hon. Member for Caerphilly (Mr. Davies) is right to do everything he can for his constituency, but it is short sighted of him to try to block the Cardiff bay development.

Mr. Alun Michael (Cardiff, South and Penarth)

One of the precise questions that was asked in last week's debate but that the Minister failed completely to answer was why there was no precision about what the WDA would be doing for Cardiff. Firms wish to develop there and factory and workshop space is required, but that need is not being met. Does the hon. Gentleman join with me in hoping that the Minister will answer that question at the end of the debate?

Sir Raymond Gower

I do not dissent from that, but my point is that it is impossible to promote great expansion in Merthyr and in Cynon valley if the natural development of Cardiff, Newport and Swansea, which lie near to the motorway, is slowed down. Some companies might be persuaded to go there, whereas even very large inducements would not persuade them to go further. Nevertheless, the very real needs of the valley communities must be attended to.

I am impressed by the number of factories that are to be built in some of those areas. That is the dispute to which the hon. Member for Merthyr Tydfil and Rhymney referred—the dispute between his right hon. Friend the Member for Swansea, West (Mr. Williams) and my right hon. Friend the Secretary of State for Wales. Our impression was that the right hon. Gentleman was treating factory building in those areas as chickenfeed, but that is not so.

I foresee that the agency will have both its old functions of clearing dereliction and building factories — in particular, advance factories and those that are ordered by industrialists who intend to come to Wales—and also new functions. It will act as a finance house, as a merchant bank. That part of the agency's work will be vital. However, it is difficult to foresee the extent of its success or failure. I hope that its success will be tremendous. My right hon. Friend the Secretary of State has done a wonderful job in publicising the work of the agency. He has a splendid sense of public relations. It is a great asset.

Mr. Donald Coleman (Neath)

I welcome this opportunity to make a brief intervention in this short debate. It should never be forgotten that if some Conservative Members had had their way when they were in opposition—including perhaps the Secretary of State for Wales, who in those days did not take quite such an interest in Wales as he does now—we should not be having this debate, because there would have been no Welsh Development Agency.

I welcome the increase in the financial limit of the agency, but there must not be untrammelled euphoria about it. There should be a larger increase in the ceiling than that proposed and there should be an acceleration in the rate at which we spend the WDA's money, because in the projected planned expenditure for Wales over the next three years — 1988–89, 1989–90 and 1990–91 — we can expect a fall compared with the level for 1987–88.

Another reason why I want a higher ceiling for the WDA—it has already been alluded to in the debate—is rather more important, particularly with regard to my constituency. This morning we heard the terrible announcement by the management of British Coal in south Wales that it intends to close the Abernant colliery and the washery at Lairgwaith, which is also in my constituency. It is a devastating blow for the area. Employment opportunities in the Amman valley will be reduced by about 800 jobs. That is a bleak prospect for the Amman valley. It will affect a number of constituencies located in the area.

When I hear the Secretary of State talk about the valleys initiative, and when I look at the Amman valley, I wonder what he means. Does he mean that we will be included in it? At present, there is precious little activity by the WDA in the valleys when it comes to providing employment.

It is all very well making advances in prestigious industrial parks. Given the magnitude of today's announced redundancies, the WDA needs to give much more attention to the valleys than it has done in the past.

I want more money to be spent, and spent more speedily. I want jobs for those men whose jobs will disappear once these closures take place. That will be the test of the Secretary of State. Let him or the Minister say how they propose to respond to that test, which is very much on his doorstep as a result of today's announcement.

Mr. Rhodri Morgan (Cardiff, West)

I want to ask four questions about the WDA: how much; how; when; and why?

The "how much" question relates to the WDA's response to the 1,500 jobs that will be lost in the closures announced today by British Coal.

I had a Kafkaesque experience this morning in the Energy Select Committee. We were examining Sir Robert Haslam on British Coal's accounts. I put the rumour to him that the Lady Windsor colliery and one other were to be closed. He did not respond. A telephone call led me to be able to put the fact, in a much firmer fashion, that the announcement had been made 25 minutes before. He said that it was a decision to be made by the area management of British Coal and that it was not a matter for him. One found the discussion moving into the realms of complete unreality. The chairman of British Coal did not appear to think that it was worth briefing himself on the loss of 1,500 jobs in an area of high unemployment like south Wales before he met the Committee to discuss the industrial relations and social aspects of British Coal's operations.

The task of providing alternative jobs cannot be left to British Coal. This morning, when we put to Sir Robert what the British Coal Enterprise initiative could do about the 1,500 jobs that would be lost in one fell swoop, he mentioned a new workshop complex at Tondu, at which one man was showing great initiative in breeding pythons. I have heard of pit ponies but not of pit pythons. I wonder how many vacancies will be provided for the pythons that formerly worked for British Coal. It cannot possibly meet the requirements that will be laid on the Welsh Office, the Welsh Development Agency and British Coal Enterprise in facing up to job losses of such magnitude, coming on top of all the other problems, including the underlying lack of diversity in south Wales.

12.15 am

The "when" question concerns our demand to know when the factories which are specified in the glossy brochure, which was published last week by the WDA and to which my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) referred, will be completed. The advance factory programme appears to be for 1.5 million sq ft. Will it be completed over the next two financial years, or sooner? If it will be carried out over the 1988–89 and 1989–90 financial years, the programme may be just below the average of the last decade. Will there be a further programme next year which will cause the figure to be above or below average? As I pointed out in last week's debate, the average was 746,000 sq ft per annum. It looks as though it will be just below that, at 740,000 sq ft, if the work is completed within the next two years. I should be glad to hear the Minister's views.

As to the "why" question, why is the WDA advance factory programme 22 per cent. behind schedule this year? To give us complete confidence that the WDA is doing its job properly and is not being hog tied by the Welsh Office and the Treasury, we need an explanation.

Mr. Keith Raffan (Delyn)

The hon. Gentleman is harping on the point that he raised last week. Does he accept that, in talking about the factory-building programme in Wales, one talks about not only the advance factory programme but the bespoke tailor-made factory units, in which the WDA has had singular success? The hon. Gentleman is selecting the advance factory programme out of the total factory programme.

Mr. Morgan

The hon. Gentleman seems to think that he has picked on a fault of mine. The problem with bespoke factories is that they need to be bespoken. Advance factories represent a commitment by the Government to build. Bespoke factories, in so far as they appear in a budget figure at all, are either a guess or a maximum. Advance factories are a minimum — a commitment by the Government. When a figure on bespoke factories is announced, that cannot be the same as a commitment. If the factories are not bespoke, they are not built, and there is no budgetary figure. Last week, the Minister did not explain whether the figure he gave on bespoke factories was a guess or whether the Treasury was imposing on the WDA a maximum beyond which it was not allowed to go.

The Government, the WDA or the Treasury and its controls have allowed the WDA to fall 22 per cent. behind the programme announced last year. We need to know why the WDA is 22 per cent. behind in completions under this year's capital programme. As the WDA accepts, this year the demand is high. If the WDA is 22 per cent. behind, it will miss 22 per cent. of its opportunities.

On the "how" question, how does the WDA intend to achieve some of its objectives when the local authorities, on which the WDA is dependent to prepare the land, are hog tied? The WDA has announced in its glossy brochure that it intends to develop a major new complex at Miskin in the M4 corridor. Although Miskin is not part of my constituency, what happens there affects my county. That is a prestige site. It will be done in partnership —according to the WDA's glossy brochure— with South Glamorgan county council. Unfortunately, the capital programme that the Welsh Office has given the council will not enable it to prepare the land in the first place. If the Welsh Office does not allow the county council the capital programme to develop the land in the first place, the European regional development fund cannot give a 50 per cent. grant towards the costs of the infrastructure. One hand of the Welsh Office does not appear to know what the other is doing. If it hog-ties the capital programme of the county council that is meant to supply the infrastructure, the WDA will never get to the stage at which it can build the factory economically. That is a major problem. I hope that the Minister will deal with it and the other points that I have raised.

Mr. Gwilym Jones (Cardiff, North)

The House is conscious that the hour is late, but it is necessary to refer again to two closely inter-related matters that I raised on Second Reading. Those matters were also touched on by my constituent, the hon. Member for Cardiff, South and Penarth (Mr. Michael), whose constituency contains almost the whole south Cardiff redevelopment area.

The points to which I alluded were the WDA's land holdings in the area of the south Cardiff redevelopment, and the apprehension abroad in Cardiff—among some people—about the use of compulsory purchase orders to pursue the redevelopment of south Cardiff. My hon. Friend the Minister replied by advising me and the hon. Member for Cardiff, South and Penarth to take up specific Cardiff problems with the WDA, as he would advise any other hon. Members who were raising constituency problems.

I want gently to chide my hon. Friend the Minister about that. The south Cardiff redevelopment is no minor constituency matter. It is a most important development. It was the inspiration of my noble Friend Lord Crickhowell. It represents a tremendous prospect for the future — —[Interruption.] If the hon. Member for Newport, East (Mr. Hughes) wants to catch your eye, Mr. Deputy Speaker, I am sure that he will. I would give way to him, but I fancy that the hon. Member for Cardiff, South and Penarth and I have a far better knowledge of this matter, which fact the hon. Member for Newport, East is giving away by his sedentary interruptions.

The redevelopment represents a tremendous potential for the future, not only for Cardiff, but—more widely—for the valleys of south Wales and the whole of south Wales. The last thing any of us want to do in Cardiff is to undersell ourselves on the south Cardiff redevelopment or Cardiff's potential.

I do not necessarily expect my hon. Friend to reply tonight. I shall be content if he will reflect on this matter after the debate and further consider the points that I and the hon. Member for Cardiff South, and Penarth tried to make on Second Reading. Perhaps he will go into them on his later visits to the WDA and the Cardiff Bay development corporation. The last thing I want is for the Government or the Welsh Office to regard the matter as a local constituency problem.

Mr. Michael

In view of the gentle and polite remarks made by the hon. Member for Cardiff, North (Mr. Jones) about south Cardiff, the Minister should take his point on board and respond to it. The point has been made in a reasonable way on both sides of the House, and the Minister should therefore listen to it.

It makes no sense to take up specific problems with the WDA because it is clear that influence has been brought to bear upon it to be involved in the area. That is why a transfer of land is going on at the present time. As I stressed on Second Reading, the whole strategy of the development of south Cardiff needs to be got right and done in partnership.

The Ministers who are involved in decision making must understand the delicate nature of the partnership and the need for them to be involved in it. They must make sure that it works so that jobs are retained and encouraged rather than lost through the process. It is important that the WDA's expertise and knowledge is fully utilised in the process. The problem with last week's announcement, the points that were raised in last week's debate, and the lack of ministerial response is that no reassurance has been given on that point.

I record a note of disagreement with the hon. Member for Cardiff, North. Whereas we welcomed the support and personal commitment that Lord Crickhowell gave the Cardiff bay development, the starting point for the scheme was the initiative of the South Glamorgan county council, a Labour authority, against Conservative councillors' opposition when it committed public investment to building the new county headquarters.

The hon. Member for Cardiff, North may be aware that the gentleman who represented his party in the last election was photographed in front of a development that he had opposed within the county council.

It is a minor matter. I raise it only because it has been referred to by hon. Members. It is only right that it be put into the right context.

Mr. Gwilym Jones

The hon. Gentleman and I have similar thoughts on the subject. I should not want to provoke a great quarrel with him, but I invite him to study the St. David's day debate in the Chamber in 1983, when my noble Friend Lord Crickhowell launched what has now become the work of the Cardiff Bay development corporation. His initiative came forward at that time. It had previously gelled from a visit to the docks by my predecessor, the late Michael Roberts, in company with the hon. Gentleman's predecessor, Lord Callaghan. It was brought out before the Welsh Select Committee visited Cardiff. The chief executive of South Glamorgan county council laid the credit at the door of my predecessor the late Michael Roberts, Lord Callaghan and Lord Crickhowell. It was then enthusiastically taken up by all political parties in the two authorities in Cardiff.

Mr. Michael

Perhaps I may intervene in the hon. Gentleman's speech. That approach can be counterproductive. With great respect, the hon. Gentleman provoked a response. What I said is true. In the first instance, South Glamorgan county council put its money where its mouth was. Despite Conservative councillors' opposition, it went ahead with its development of the new county headquarters and the partnership with private enterprise, to try to get things moving in the docklands. That takes nothing away from the fact that there was then a positive intervention by Lord Crickhowell, as he now is.

In the past, because of the nature of the political makeup of the area, we in Cardiff have managed to maintain cross-party continuity of local authority control from one period to another, as the hon. Gentleman will know. From time to time, the hon. Gentleman and I have bantered across another chamber. It is important to say where the real start of initiatives began and where the real opposition has lain. I do not wish to be taken any further down that avenue. I intended to explore it only briefly in response to what was said earlier.

There have been no answers regarding the intentions of the Welsh Office and the Ministers concerned. In Cardiff, there is a serious lack of industrial development opportunities because of a lack of land and factories. That was not spelt out in the WDA's announcement last week. There is an inevitable freeze while decisions are made about planning in south Cardiff. Nevertheless, that means that the area is losing opportunities and jobs. I hope that the Minister will reassure us that there will be a speedy response to these points and support for the local authorities as they try to tackle those elements in the area.

12.30 am
Mr. Alan Williams (Swansea, West)

My hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) should not be quite so surprised that the Conservative party is trying to lay claim to the credit for the Cardiff bay scheme, because in this debate Conservative Members are trying to claim credit for the existence and success of the Welsh Development Agency. This is a standard tactic. They oppose an idea when it comes forward, and then claim the credit once it gets off the ground.

I am delighted to see the Minister of State. It gives me great pleasure that he is to reply to the debate. We all like and have a great affection for him. We particularly like his well-known characteristic that he would not dream of leaving the Chamber until he has answered every point that has been put to him tonight. We know that that is the standard that he has set himself, and that is the standard by which we will judge him this evening. To that end, my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) has started a checklist of the various questions to the Minister. Indeed, it might facilitate matters if we organised a photocopy of the list for the Dispatch Box so that the Minister could have the list.

We welcome the Minister of State to the Chamber in the unexplained absence of the Secretary of State. Where is he? He should be here. After all, his Welsh valleys initiative is buried somewhere in the Bill and we would expect the Secretary of State, of all people, to be here to tell us about it.

Mr. Wyn Roberts

My right hon. Friend the Secretary of State has been to Brussels today and was returning this evening. While in Brussels, he was working very much in the interests of Wales.

Mr. Williams

In that case, as the Secretary of State knew that he was going to Brussels, and if he was so enthusiastic to be here, I am surprised that the man who we are told has such massive influence in Cabinet was unable to persuade the business managers to hold the debate tomorrow evening or yesterday evening instead of this evening. It is an astonishing discourtesy to Wales that on one of the few occasions when we have an opportunity to deal in Committee with specifically Welsh legislation the Secretary of State feels that he is too grand to be here. Perhaps he is out preparing yet another press release on the valleys initiative. He will not tell us about that, but no doubt there will be a press release.

My hon. Friend the Member for—[Interruption.] Sir Paul, you are fortunate this evening to be sharing an experience that we thought was normally unique to Welsh Members. I invite you to watch the hon. Member for Delyn (Mr. Raffan) carefully during the debate. You will see that he has a rather unusual characteristic. His jaw is well worth watching. It is the nearest thing to political perpetual motion that you will ever come across. I invite you to observe his conduct during the debate.

Mr. Raffan

Perhaps I should hold up a sign reading "Laughter".

Mr. Williams

There you are, Sir Paul. It is fascinating. We should record the hon. Gentleman's peculiar antics. Perhaps he will say something as well as emitting noises.

My hon. Friend the Member for Merthyr Tydfil and Rhymney hit on a very important point. He said that there is an initiative that may be of some importance. We do not know. However, if it is important and valuable, we welcome it. At least we are entitled to know about it.

The initiative relates to the use of private funds for property projects backed up as necessary where it may facilitate viability, as the press release says, with funds from the private sector.

There are important principles here as well as important points of detail and we are entitled to know about them. For example, if the WDA is to determine that its commitment of funds is appropriate to achieve viability, will it, as it is attaining that viability, get a share of whatever profits are made? Because viability is involved, will it be expected to go before the Welsh Industrial Development Advisory Board for approval?

In this context I agree with my hon. Friend's puzzlement about priority areas. I would not exclude any of them, particularly as one is in my constituency, so my hon. Friend will recognise that I speak not entirely impartially. If the valleys initiative is buried somewhere among the proposals for the Welsh Development Agency, why are the valleys excluded from the bold new initiative? One would have thought that they would be the very areas to be included.

We would also like further information on the new consultancy scheme which the WDA and the Welsh Office will be pushing in Wales. This is put forward by the Secretary of State as an important addition to his regional weaponry or his arsenal of inducements for the regions. Yet no doubt he will have seen that the regional director of the Department of Trade and Industry for the south of England, the most prosperous area of Britain, has said that that area, with 30 per cent. of the population, expects to get 40 per cent. of the money available under the new scheme.

So, far from being a regional policy, it seems to be a counter-regional policy. The area of greatest innovation will apparently get the greatest benefit. Therefore, with a relatively low level of innovation, we may lose out. We want clarification on that. It is difficult to quantify in advance projects which are dependent on demand. However, the director for the south of England put figures on it, so no doubt the Minister of State will feel able to do the same.

Derelict land clearance has been raised. The moment one points out something that is even slightly critical of the performance of the Government the Secretary of State bounces up and down in a paddy and starts muttering; occasionally he bounces to the Dispatch Box with irrelevancies. I asked specifically about this on Second Reading. The Minister of State did not answer when he replied to the debate, no doubt because he did not have time. Knowing what a courteous man he is, I am sure he intends to give me the answer tonight.

I made the point that, whereas England has two and a half times the area of derelict land that we have in Wales, about five times as much is being spent on clearing the dereliction. When does the Minister think that the programme of dereliction clearance will end? It has been pointed out that the WDA hopes to achieve the clearance of all derelict land by the turn of the century. I said on Second Reading that the programme for this year is good. Even on that performance, the agency will not achieve clearance until the year 2020. If the WDA's claim that the clearance will be complete by the end of the century is to be fulfilled, this year's programme will have to be more than doubled. Is that end of the century target an official Government target or something that the chairman of the WDA produced off the top of his head?

Does the Minister recognise that this much boosted extra money for the WDA, which the press has blazoned, is coming from other parts of the Welsh budget and the Welsh regional assistance budget? All that is happening is that the same money is being moved around.

The inadequacy of it all was shown up by my hon. Friend the Member for Neath (Mr. Coleman) when he commented on the 1,600 jobs that we have lost today. We are told how wonderfully Wales is doing, but in one day we have had three announcements—the proposed loss of the Lady Windsor pit, the proposed loss of the Abernant pit, and the proposed loss of a Wernos washery. That means that 1,600 jobs will go.

The astonishing thing about the announcement concerns Abernant, which produces anthracite. The Welsh director of British Coal went on Welsh television just before Christmas to boast of the turnaround there which had reached the point at which it was making a profit on every tonne of coal produced in November. Today, however, he announces its closure.

As for Lady Windsor, believe it or not, as a result of some investment, which is due to be completed in five week's time, and which could double output, it has the second highest productivity of any Welsh pit on one of its faces because of the changes that are in hand. As it is working ahead, as required by the rescue programme decided by British Coal with the NUM in November, British Coal rats on the agreement.

As for Wernos, the announcement has come as a surprise to everyone. I understand that Abernant is to be used instead.

These announcements delay the activities of the WDA. What is now to happen? Is the matter to go through the review procedure? The NUM is in great difficulty because, under the existing scheme, there is a £5,000 premium on redundancy payments until 31 March. If the union initiates the review procedure, it will go on beyond 31 March and therefore its members stand to lose the extra £5,000. If it does not initiate the review procedure, however, the Government will accuse it of agreeing to the closures.

Either way, we want to know what the WDA intends to do and what programme the Secretary of State will bring forward to help those three areas. We do not expect the extra demand to be met out of the extra budget for the WDA or the Welsh Office. We want there to be new money to meet these requirements. We have lost 11 pits and 11,000 jobs in the coal industry during the past four years.

Mr. Wyn Roberts

The Secretary of State has been in Brussels all day working for the interest of Wales.

Mr. Williams

The hon. Member must be careful. It was his Secretary of State who, as Secretary of State for Energy, drove the knife into the heart of the Welsh mining communities and now, as Secretary of State for Wales, he is taking away regional development grants, thus turning off the life support scheme which was intended to help them recover from the blows that he delivered. It strikes us as somewhat paradoxical that we have lost all these jobs in the mining areas, over the past four years, and they should be the supreme example of where regional aid should work, but in the same four years their special development area status has been taken away. Now the regional development grants are being taken away.

12.45 am

We welcomed the announcement on the WDA factory programme last week, as I am sure the Minister will recollect. It has said that it is taking an extra 1.5 million sq ft of factory space next year. The WDA talks about the creation of 4,500 jobs over the next few years. That means that, for every 1,000 sq ft of factory space, we get three jobs. To put the announcement of the next year's programme into perspective, we should remember that the three closures today would require more than 500,000 sq ft of new factory space to provide alternative jobs. So, while 1.5 million sq ft sounds a lot, when one sees it against the problems with which we are trying to deal, one begins to realise how small and inadequate it is.

Table 2.2 of the public expenditure White Paper lists the spending programmes Department by Department. We have all seen in the Welsh press, particularly the Western Mail, editorials about the miracle man from Worcester who is producing all this extra money for Wales. Unfortunately, he has not told the Treasury about this, and it does not know that it is giving extra, so it has done him a disservice and written it up wrongly in the White Paper. He has got it right and it has got it wrong.

Table 2.2 shows that, far from there being an increase next year, expenditure for Wales goes down by £6 million. I gave that figure in a press release some weeks ago, but was castigated by the Secretary of State for doing so. The following year, the great achievement of the wonder worker from Worcester is that we shall lose £24 million. To show that it was not a mistake the first time round, according to the White Paper, in the third year of the projected period, we shall lose another £24 million. The Secretary of State and the Western Mail are telling us that we are getting this extra money, but no one has told the Treasury, and it thinks that we shall lose £54 million in the next few years. Much as I like the right hon. Member for Worcester, I am inclined to take more notice of what is said in the White Paper than of what is said in his press releases.

Let us follow the logic of this. If next year we shall lose £6 million from our budget, but this extra funding will go to the WDA and we will get the Welsh valleys initiative somewhere in this slimmed-down budget, where is the money to come from? Which Welsh pocket is being picked to provide the funding that the Secretary of State is talking about?

I am delighted that we have an answer from the Welsh Office confirming that the valleys initiative is within these published figures. The valleys need many things. They need improvements in housing, but the housing programme is cut in the second volume of the White Paper. They need improved transport links, but spending on those, too, is massively cut.

Wales needs more spending on education. A Welsh Office press notice talks about a wonderful expansion in the education budget for Wales over the next three years —0.5 per cent. a year. Where is the initiative? We want to know, as my hon. Friend the Member for Merthyr Tydfil and Rhymney said. It does not seem to be in housing, transport, or education. So how many of these factories—how much square footage, how many jobs and at what cost—are part of the new valleys initiative, so coyly introduced by the Secretary of State?

Mr. Morgan

Sounds like a python.

Mr. Williams

I shall leave my hon. Friend to grapple with his python.

The Secretary of State is not a man to hide his initiatives under bushels, yet we have had to winkle out from him the fact that the initiative has already taken place. He has devised a new parliamentary game, hunt the initiative, and my hon. Friends are trying to do just that. Will he tell us where it is, how much it is and where the money has come from? Which part of Wales is having to pay for the so-called initiative?

Let me remind the Minister of the background to the debate, in case he gets carried away with the hyperbole used by the Secretary of State on Second Reading. In December last year, unemployment was still double what it was in December 1979. The WDA budget, which the Government are boasting about, has been £40 million, or 60 per cent., more in the past. That is how good it is now. The factory building programme that the Government are telling us about has been I million sq ft larger in the past, yet we are told, "You are lucky. Look at these marvellous achievements under this brand new Secretary of State for Wales." Just to make sure that we do not feel that there is anything to which the Government's malevolent attentions have not been turned, regional grants have been 50 per cent. higher in the past.

That is the background: less money, less factory space, less WDA funding and double the unemployment. Will the Minister please convince us now, detail by detail, and tell us what the initiative is, where the extra money is and, above all, where that money is coming from?

Mr. Wyn Roberts

It is high time that we reminded ourselves that the clause simply authorises an increase in the limit to the amount of money that can be made available to the WDA by Parliament out of the National Loans Fund or the Consolidated Fund and that we are increasing the limit from £450 million to £700 million because of the enormous success of the WDA. We covered most of the activities of the agency in the three-hour Second Reading debate last Thursday. We referred to the record factory letting this year–2.3 million sq ft—and to the WDA's intention of completing 1.5 million sq ft next year. We also stressed that the WDA's potential spending is up to £113 million next year–31 per cent. more than the budget for this year. We expect the WDA's success to continue. We expect it to continue to succeed in attracting new industry, in building and letting factories and therby bringing much-needed employment to Wales.

Expenditure by the agency depends on several factors, some of which are outside its control, such as the needs of Welsh industry for investment finance; the availability of land for environmental projects; the speed with which the agency can devise plans and implement schemes; and the ability of the agency and Wales as a whole to continue to attract inward investment.—[Interruption.] Several hon. Members have referred to the serious situation with regard to pit closures, so I should have thought that they would be prepared to listen with some attention to what I have to say.

Mr. Roy Hughes (Newport, East)

What about the 1,500 jobs?

Mr. Roberts

I expect the hon. Gentleman, who I am sure takes this matter seriously, as I do, to listen to what I have to say.

My right hon. Friend the Secretary of State and I—indeed, all Conservative Members—were naturally sorry to hear of the pit closures that were announced earlier today. However, maintaining uneconomic operations is simply not the answer to the long-term future of the south Wales coalfield, as, indeed, the Opposition discovered when they were in government and had to close pits.

British Coal has acknowledged its responsibility to mining communities by the setting up of British Coal Enterprise, which has — to date — offered £10 million assistance to small business projects in Wales. That is a valuable offer. The schemes involved are expected to create or safeguard about 6,500 jobs.

Of course, the WDA will also have an important part to play in encouraging the economic redevelopment of the communities involved. The programme of factory building announced last Thursday will provide many job opportunities throughout the south Wales coalfield.

I have been looking at the specific programmes of the WDA in the heads of valley regions, in the Treforest region and in Swansea, all of which will at least be helpful in the present situation.

The WDA is also discussing with British Coal the prospects of developing managed workshops in the valleys. Account will clearly now be taken of the latest closure announcements when deciding on particular sites.

Colliery land is often a major asset and provides an opportunity for future development. The agency will, therefore, have urgent discussions with the local authorities involved to explore whether the sites can be brought within the scope of the new land reclamation programme that the WDA plans to launch in March or early April.

Sir Raymond Gower

In connection with the valleys problem, if it is possible to have another enterprise zone in Wales in the future, could the claims of the valleys area be considered? Would it not be a great advantage if an enterprise zone were to be set up at some crucial central point in the valleys area?

Mr. Roberts

I note what my hon. Friend says. I am coming to the main theme to which he referred.

Mr. Coleman


Mr. Roberts

Perhaps I could continue by giving the House our immediate responses on the day of the announcement of the closures.

The long-term prosperity of the valleys can be secured only through a complete restructuring of its economy and a major enhancement of the environment.

Mr. Coleman

Will the Minister tell me and the House when he first knew that Abernant would be closed? I have listened carefully to what he has said. Last week he talked about announcements of factories. Did he know then?

Mr. Roberts

I was referring to what the WDA announced last week — [HON. MEMBERS: "Did the hon. Gentleman know?"] The information sheets that I have in my hand were part of the package given to hon. Members by the WDA. Of course, I did not know in advance about the closures; neither did the WDA. Such knowledge could not be inferred from the references that I have made to the activities of the WDA in the various parts of the south Wales region.

1 am

My right hon. Friend the Secretary of State is addressing the precise issues to which I have just referred in the coming weeks before he makes his announcement on his strategy for the transformation of the valleys. Labour Members have already pressed me hard this evening to give further details on the so-called valleys initiative, but, however hard they press me, they know that it would be totally inappropriate for me to make an announcement at this stage.

Mr. Alan Williams


Mr. Roberts

Because we are still awaiting the valleys initiative. Indeed, Opposition Members have been contributing ideas — the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) knows that—and we are bringing that information together. My right hon. Friend will make an announcement in due course. We want that initiative to be as good as it possibly can be.

We must remember that my right hon. Friend's predecessor, Lord Crickhowell, began a valleys initiative in 1986. I am sure that Opposition Members would want us to pursue that initiative and take further action. However, it is not for me to make an announcement tonight.

Mr. Rowlands

I still have my checklist and I have not ticked anything off yet. Will the Minister confirm whether the valleys initiative includes the possibility of additional factory space over and above that announced by the WDA on 28 January? The Minister should say yea or nay.

Mr. Roberts

The hon. Gentleman must await my right hon. Friend's announcement, which I promise will be made in due course. As the hon. Gentleman has been in government, he must appreciate that.

The hon. Member for Merthyr Tydfil and Rhymney asked me a great many questions. He asked me to put figures on various items, but I am extremely hesitant about doing so. I will look carefully at the questions as he put them to me and give him such figures as I can. However, he knows as well as I do that answers to some of his questions involve rather more than simple arithmetic, and I certainly do not intend to indulge in even simple arithmetic at this early hour of the morning.

Mr. Alan Williams

Not just one figure?

Mr. Roberts

No. I will give some figures later, but they will not have involved any calculations on my part.

The hon. Gentleman's theme was the interaction between the WDA and the private sector. There is no conflict between the two. The agency is there further to develop a prosperous self-sustaining market economy, and all its policies are geared to that end. The emphasis is increasingly on the agency as a facilitator or encourager of private-sector action, but there is much more emphasis now on partnership with the private sector and with local government.

Direct agency provision is focused on the market gaps, and naturally it will withdraw from areas when private-sector interest has been demonstrated. The property development grant is an example of the effort to stimulate private-sector solutions. It is a new grant to encourage private-sector developers to become more heavily involved in promoting industrial property in Wales. Similarly, the enterprise initiative consists of new business development grants which are administered in Wales by the WDA. The aim is to increase the flow and access to a wide range of top quality, private-sector consultancy advice. Obviously, the WDA is alert to other opportunities to stimulate greater private-sector involvement in the development of the Welsh economy.

One can say a great deal about the investment department and its workings within the WDA, but I do not think that I would be pleasing the House if I pursued the detail of that policy.

Mr. Rowlands

The Minister is moving on to deal, or not deal, with another point, as may be, but he has not said anything about the new property development grant. Will it be a certain percentage of a total project? What are the criteria? Who will make the assessments and judgments? Will it be the subject of an industrial development agency-type arrangement? It is an important initiative and we should like to know much more about the nature and character of this new grant facility. What about geographical limitation?

Mr. Roberts

I can certainly clear up the point about geographical location. There is no such thing as a geographical limitation within Wales for this grant. It is extremely difficult to do anything other than estimate, or probably guesstimate, the expenditure at this stage.

Mr. Rowlands

Give the figures.

Mr. Roberts

No. I refuse to give the figures because this is a new development and must be tested. We must see exactly what the demand for this particular service will be.

The investment policy department in the WDA seeks to ensure that viable companies have access to adequate financial backing, so as to promote economic growth and create jobs. That department complements the agency's main developmental objectives. Its policy is that it invests only when private-sector sources of venture capital cannot be attracted. It invests on a commercial basis in the expectation of a return, albeit a lower return than most private investors would be prepared to accept.

The agency's main market is seed capital and start-ups. Start-ups alone now account for over half of all new investments. In the current financial year, all agency investment in excess of £250,000 will be syndicated with private-sector partners. That is part of the new mechanism. The hon. Member for Merthyr Tydfil and Rhymney will know that a policy review was conducted with the Welsh Development Agency and the agency is now investigating whether more can be done to lessen the obstacles to private funding, particularly at the smaller end of the market.

The right hon. Member for Swansea, West (Mr. Williams) referred briefly to the scale of land reclamation in England. The Department of the Environment has provided grants worth about £440 million to clear almost 11,000 hectares of damaged land. We are also proud of our record in Wales. Successive Governments have taken pride in their achievements.

The agency's contribution to the regeneration of the Welsh economy and the transformation of the environment has been enormous. That is recognised on both sides of the House. Opposition Members claim credit for the agency, but I must remind them that we changed the character of the agency, through the Industry Act 1979, when we came into office.

Mr. Rowlands

The Minister has so far answered half of one point. Let me try him on another which should be easier. Will he cover the point about the relationship between the urban renewal unit and the WDA as a lending agency?

Mr. Roberts

I am surprised that the hon. Gentleman is not aware of the close co-operation between the Welsh Development Agency and the Welsh Office and between local authorities and other agencies. Urban development grant is very much within the control of the Welsh Office, but that does not prevent us from using it to further developments in which the WDA has an interest. I am sure that will continue. We deal with each and every project as it arises.

It is worth emphasising that since 1979 the Government have enabled the agency to invest about £850 million, at today's prices, in the redevelopment process. The output in terms of new jobs, capital projects and reclaimed land was described in detail in last week's debate. Opposition Members will not want to hear all that good work and all those great achievements described again.

We are the first to accept that the task is nowhere near complete. The Government plan to allow the agency to invest a further £345 million over the next three years—over £100 per head for every person in Wales. That is the measure of the Government's commitment to seeing the task through and of their commitment to Wales.

In order to pursue its very wide range of activities and to complement the Government's economic and regional policies, it is necessary to provide a statutory basis for the continued funding of the agency. That is the purpose of the clause and the Bill. Once again, I commend the clause to the House.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill.

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