HC Deb 16 January 1995 vol 252 cc438-40
4. Mr. John Marshall

To ask the Secretary of State for Wales if he will make a statement about inward investment in Wales.

Mr. Redwood

Inward investment continues to be a Welsh success story. Another £600 million was identified between April and November of last year.

Mr. Marshall

I thank my right hon. Friend for that answer. Does he agree that that inward investment has taken place because Wales boasts a low corporate tax regime and does not have the incubus of a minimum wage and because the country did not accept the advice to leave the European Union when it was proffered by the right hon. Member for Sedgefield (Mr. Blair)?

Mr. Redwood

Those are three very important points which influence investment in Wales. I would add one other, which is the quality of the work force. That emphasises the importance of the work that we are all doing to improve education and training standards in Wales to continue the drive towards lower unemployment and more inward investment.

Mr. Denzil Davies

Does the Minister agree that for major investment projects in Britain, which includes Wales, the lead Department is the Department of Trade and Industry and the lead agency is the Invest in Britain Bureau? Is the right hon. Gentleman not concerned about the fact that there seems to be evidence that more and more major projects are being steered away from Wales by the DTI and the bureau?

Mr. Redwood

There is no evidence of that and, of course, the Welsh institutions are important in their own right in attracting business to Wales. That has been demonstrated by the recent run of announcements about investment in different parts of the United Kingdom, including Wales. The most recent large one is by the important NEG Schott and it looks as if that will come to Wales when all the details are sorted out. I hope that they will be sorted out shortly. We are proud of Wales, which continues to attract more than its fair share of inward investment.

Dr. Spink

Does my right hon. Friend agree that inward investment in Wales would be destroyed if the Government followed policies on a minimum wage or implemented the social chapter—socialist policies which are advocated by the Labour party? What impact has inward investment had on the Welsh economy and particularly on jobs?

Mr. Redwood

My hon. Friend is right. Destroying flexibility for manufacturers and employers in general would put them off. We do not want a low-wage economy: we want employers to have the right to manage sensibly, as they do in Wales. Employers are increasingly attracted to Wales and often create good jobs with good salaries, which is what we are after. There are now 280 foreign manufacturers in Wales and they account for many tens of thousands of jobs.

Mr. Ieuan Wyn Jones

Does not the Secretary of State recognise that the kind of Thatcherite policies that he espoused in his article in today's issue of The Guardian would be extremely damaging to Wales's prospects of getting more inward investment in future? His analogy between the proper use of public expenditure and a spoilt child begging for more sweets is entirely inappropriate, bearing in mind the fact that young people are desperate for jobs in Wales. Does he not realise that what Wales wants is not an obsessed ideologue but someone who is prepared to fight for us in Cabinet?

Mr. Redwood

I regularly fight for Wales in and outside Cabinet and the results are there for all to see in more jobs, more investment and better public services. I shall carry on because there is still room for improvement. Does not the hon. Gentleman recognise that all Wales's success in attracting inward investment has come about since 1979 under successive Conservative Governments following the policies that I outlined in The Guardian?

Mr. Sykes

My right hon. Friend is right about the past 15 years. Does he agree that, in 1979, Cardiff was a completely rundown city, but that anybody who cares to visit it today in 1995 will see a completely transformed major capital city? That has much to do with our reforms of the past 15 years.

Mr. Redwood

My hon. Friend is quite right. Cardiff improved beyond recognition over the 1980s and early 1990s. There is more to do in the bay area, which I think will develop quite rapidly over the balance of this century. I look forward to that.

Mr. Ron Davies

The Secretary of State's comment about new investment stemming from 1979 shows a complete lack of understanding of the Welsh economy. Does he accept that if we are to attract inward investment we must maintain high levels of public expenditure to maintain services and improve the infrastructure and must encourage investment? It is not a matter, as the right hon. Gentleman implied in his article in this morning's issue of The Guardian, of calling for more extravagant confectionery from the local sweetshop.

How can he reconcile his latest views with his claim in December that a 2.9 per cent. increase in public expenditure was good for Wales and for the Welsh economy? Does he not think that he is being disingenuous by saying one thing to one audience and the opposite to a different audience? Perhaps his Cabinet colleagues had it right two weeks ago when they compared him to a mad professor tinkering in his laboratory.

Mr. Redwood

That was a pretty poor effort by the hon. Gentleman. Some people in Wales, as well as in England, read The Guardian. I should have thought that the hon. Gentleman would have noticed that. I put the same views to different audiences. I am very proud of the Government's increases in spending on public services. I argued for them, agreed them with my colleagues and was pleased to announce them to the House.

I spelled out the priorities, which are there for all to see, such as police, care in the community, health, education and welfare. Those are the priorities that the Government have identified since 1979 and which I have supported all of the time that I have been part of the Government. Those are the areas on which we want to spend money. I have also identified areas of waste or unnecessary expenditure under Labour and where we have made changes. I am pleased that we have had money from privatisation because we have been able to spend it on better welfare services.