Manufacturing

HC Deb 05 May 1999 vol 330 cc923-6

2. Mr. Barry Jones (Alyn and Deeside)

If he will make a statement on the prospects for manufacturing industries in Wales. [82086]

The Secretary of State for Wales (Mr. Alun Michael)

The future of manufacturing industry in Wales is bright, provided that we work together and keep skills and productivity at the top of the agenda. The going has been tough in manufacturing industry—world growth has halved—but in Wales orders are expected to rise slightly over the next four months, and strong manufacturing growth is expected in 2000. The National Assembly will give a lead, working with business and creating jobs and opportunity. That will certainly be a top priority for a Labour-led Assembly.

Mr. Jones

To assist manufacturing in my constituency, will my right hon. Friend fight to keep assisted area status for Deeside, and to deliver objective 2 status for it?

Does my right hon. Friend agree that the prospects for manufacturing in Wales—for example, in the aerospace industry—will not be helped by separatism and nationalism? Does he agree that the leadership of the nationalist party in Wales is over-confident, overstretched and overblown?

I congratulate my right hon. Friend on his campaign, and wish him success.

Mr. Michael

My hon. Friend is right. Nearly 50 per cent. of manufacturing investment comes from foreign-owned companies, and Plaid Cymru would put that at risk. We need the balance between inward investment and the promotion of our indigenous companies that only the Labour party has promised to provide.

I certainly agree with my hon. Friend about the importance of the aerospace industry. I have made visits to his constituency with him, and I have seen the way in which management and trade unions in Deeside are working together to keep jobs and win jobs for the future.

Mr. Richard Livsey (Brecon and Radnorshire)

The House will note that, following pressure last night from Mike German, the Liberal Democrats' leader in Wales, the Secretary of State was unable to confirm the position regarding matched funding for objective 1 status. Will he confirm the statement made in a House of Commons Committee Room on 17 March by the Secretary of State for Trade and Industry that if there were to be any matched funding for objective 1 status in Wales, it would have to come from the Welsh block?

Mr. Michael

The hon. Gentleman's question is very entertaining. He clearly understands that an election is going on in Wales, and 1 commend his ingenuity in managing to mention the representative of his own party, who was last seen in a life jacket.

In fact, a Labour Government won objective 1 status for Wales. There were cynics, not least in the hon. Gentleman's party and in Plaid Cymru, who thought that that could not be achieved. Indeed, the leader of Plaid Cymru was so confident that it would not be achieved that he promised a crate of champagne to my predecessor. As far as I am aware, it has still not been delivered. But we have delivered objective 1 status, and, as the Prime Minister has made clear, a Labour Government will enable the Assembly to use it—and the finances that will be part of the overall £1.3 million—to transform the economy of Wales for the better.

Mr. Denzil Davies (Llanelli)

My right hon. Friend will not need to be told that manufacturing is always under pressure because it has to compete in a global market for exports and against imports, whereas the much larger service sector in the United Kingdom is not, in the main, subjected to those pressures. Will he ensure that the Bank of England is given that message before it starts to put up interest rates again?

Mr. Michael

I shall ensure that the needs of manufacturing industry in Wales are put at the forefront and that messages are given to colleagues in the Cabinet with other responsibilities. Recently, I was pleased to visit a company in my right hon. Friend's constituency. The link between inward investment from Japan and that company's rise in his constituency demonstrates how success can be achieved in partnership. Indeed, we are working with that company to put money into research and development to ensure that the high-quality work and skills base is developed. I understand his point. We will need to look carefully at the impact on jobs and manufacturing in Wales.

Mr. Dafydd Wigley (Caernarfon)

Is the Secretary of State aware of the dismay that he caused the manufacturing industry last night when he let slip that Wales would have to await the next spending review before it had any chance of any additional money by way of matched funding of objective 1 money from Europe, and that today's statement from Downing street, a recycled fudge on the issue, shows that we will have to rely on existing cash in the Welsh block, which means cutting health or education spending, to take up the objective 1 money that is available? Is it not clear that, as the Secretary of State has failed to deliver the goods, the only option for the Welsh electorate is to keep the pressure on new Labour by denying it an overall majority in the Assembly elections tomorrow?

Mr. Michael

What is clear is that the only way in which the leader of Plaid Cymru can aspire to success is to purvey doom and gloom and to talk Wales down. He is the one who said that we would not achieve objective 1 status, but we did. Let no one take his words seriously in future.

The right hon. Gentleman should be aware of the dismay that was felt in the hearts of people throughout Wales when it was suggested that he would have a number of seats in the Assembly —Plaid Cymru might have some effect in undermining confidence in Wales throughout the world. He should look at the comments by industrialists and employers, who say that they want a Labour lead in the Assembly because such a lead will be good for business. It will be good for Wales, for jobs and for opportunity for people throughout Wales.

Mr. John Smith (Vale of Glamorgan)

Does my right hon. Friend agree that the best way in which to improve the prospects of the Welsh manufacturing industry from tomorrow is for right hon. and hon. Members to work very closely with newly elected Members of the Welsh Assembly to ensure that we achieve the best possible deal for manufacturing industry in our country? The best way in which to achieve that is, of course, to ensure that, tomorrow, we get as many Labour candidates elected as possible, especially candidates of the calibre of Jane Hutt in the Vale of Glamorgan.

Madam Speaker

Order. If I did not know that there was an election, I know now. Let us get back to the question.

Mr. Michael

My hon. Friend is right to point to the need for the Assembly to work in partnership with the House of Commons. He has been an example in the way in which he has worked with the potential Assembly Member for his constituency. I am sure that they will succeed in delivering for that constituency, as Labour Members will throughout Wales.

Dr. Liam Fox (Woodspring)

The Labour party has now had stewardship of the Welsh economy for two years and manufacturing in Wales is in a state of decline. The most worrying thing is that, when it comes to manufacturing industry, business surveys show lower confidence in Wales than in any other part of the UK.

Can the Secretary of State tell us why that should be? Is the situation not perfectly summed up in a typical quote in the Western Mail on 19 April, which said:

We depend upon manufacturing industry. It is important to us. We're not being well served by the Government. I quote not from a captain of industry, but from a Labour Member, the hon. Member for Wrexham (Dr. Marek).

Mr. Michael

I am not surprised that the hon. Gentleman was unable to quote a captain of industry in support of the Conservative party; they are supporting Labour. I can say only that, for the hon. Gentleman, a Scot who was a member of a Government who gave us boom and bust and the destruction of the Welsh economy over 18 years, to speak about Wales, is barefaced cheek. GDP in Wales is expected to rise by 0.1 per cent. this year and manufacturing output is expected to decline by 2.9 per cent. this year but bounce back with 4.3 per cent. growth next year. That is the whole point. With the co-operation of the manufacturing industry, we are trying to develop a strong base, high productivity and high skills in a strong Welsh economy which makes use of the strong economy that has been achieved by my right hon. Friend the Chancellor.