European Community (Hansard, 25 April 1994)

4. Mr. Alan W. Williams
To ask the Secretary of State for Wales if he will make a statement on the importance to the Welsh economy of the United Kingdom's membership of the European Community.

§ The Minister of State, Welsh Office (Sir Wyn Roberts)
The United Kingdom's membership of the European Community has given Wales access to a market of more than 346 million consumers and has enhanced Wales's attractiveness to inward investors looking for a base within the Community. In the past five years' almost 400 inward investment projects from overseas have been recorded in Wales, forecasting the creation or safeguarding of more than 41,000 jobs and representing a capital investment of more than £3 billion.

Mr. Williams
Why should the people of Wales be denied the rights to consultation, employment protection and equality between men and women, as enshrined in the social chapter and adopted by our 11 partners in the European Union? Why do the Government condemn the British work force to second-rate terms of employment?

§ Sir Wyn Roberts
Our exemption from the social chapter, which was negotiated by my right hon. Friend the Prime Minister, is most important to the Welsh economy. The imposition of the social chapter would cause unemployment. As my right hon. Friend the Secretary of State has said, what the Welsh economy needs is more inward investment to provide more jobs. Wales has done well in that respect in the past and will do so in the future.

§ Mr. Roger Evans
My right hon. Friend has dealt with the importance of inward investment. How much assistance is Wales obtaining from the European Union structural funds? Can he give us an indication of the importance of that assistance?

§ Sir Wyn Roberts
I am glad to assure my hon. Friend that we have done well under the new structural funds. As he knows, industrial south Wales has objective 2 status and can expect £146 million between 1994 and 1996. Rural Wales has secured objective 5b status and can expect £143 million over the same period.

§ Mr. Morgan
Does the Minister nevertheless agree that the evidence given to the Select Committee on Trade and Industry—that low wages do not make an economy competitive—is exceptionally important to Wales, as we are so dependent on multinational companies with headquarters in mainland Europe? Does he also agree with observations that formed part of the evidence to the Committee—that there are weaknesses in basic literacy and numeracy in Wales, with German school children aged 15 two years ahead of our children in mathematics? We cannot go on relying on low wages or we will be condemning our workers to permanent pauperdom in Tory sweatshops.

§ Sir Wyn Roberts
But the hon. Gentleman will know that many factories are in Wales precisely because it is the best place in the European Community for them to invest. The fact that our wages are low compared to those in the United Kingdom and Europe is certainly taken into account in decisions about the location of factories and investments from overseas. Many countries in Europe envy us because production costs in Wales are lower than theirs.