HC Deb 04 December 2002 vol 395 cc889-92
2. Sir Nicholas Winterton (Macclesfield)

If he will make a statement on the state of manufacturing industry in Wales. [83068]

The Secretary of State for Wales (Peter Hain)

Although manufacturing has had a tough time, the picture for Welsh industry as a whole is promising, including Ford's new investment at Bridgend involving an estimated 640 jobs.

Sir Nicholas Winterton

I am grateful for the rational response that I have received from the Secretary of State. He will be aware that United Kingdom manufacturing output last June fell by the largest amount ever, which was 5.3 per cent., and that there was a similar fall in all parts of the UK. Are the Government aware that some of their measures of increased regulation and indirect taxation, despite what they are doing with corporation tax, are placing unbearable burdens upon industry? Will the right hon. Gentleman do his best to do something about it?

Peter Hain

As the hon. Gentleman will know, as a keen enthusiast for manufacturing—that is something that I share with him—corporation tax for small companies has been cut hugely by the Government, which is much to our credit. He will also, as a follower of manufacturing in Wales, have read this morning's Western Mail—

Sir Nicholas Winterton

Of course.

Peter Hain

Otherwise, he would not be asking the question. He will have read that 50 small companies—fast-growth world-beating companies—have been identified as doing very well. They have created more than 800 new jobs over the past two years. This is a pattern of Wales doing well against a difficult international climate, with employment climbing with 33,000 extra jobs between July and September. Newport, Cardiff and Swansea have some of the fastest-growing companies in Britain, and Wales has one of the lowest levels of business failure in Britain. The Welsh Development Agency has created more than 2,000 new businesses over the past year. Despite the difficult international climate, Wales is doing much better than it has ever done before in these circumstances.

Ian Lucas (Wrexham)

Is my right hon. Friend aware that only yesterday in Wrexham, a major multinational company, Owens Corning, announced redundancies involving 230 highly skilled jobs? These jobs are moving to mainland Europe. Will my right hon. Friend join me in carrying out a detailed investigation to ascertain why the company has made this decision, and then make representations within the Cabinet on my behalf to ensure that this does not happen again?

Peter Hain

I regret the company's decision and acknowledge the diligence with which my hon. Friend approaches the local economy, especially local manufacturers. I understand that no amount of financial assistance from the Government or the Welsh Assembly would have saved the plant. The company was determined to shift it to eastern countries because of cheaper labour costs. The lesson for us is that we must constantly increase our value-added production, upskill and go for high quality jobs and investment. In that context, I visited Wrexham with my hon. Friend recently to ascertain the local picture, which includes a high quality, world-class company, CP Pharmaceuticals. It shows that Wrexham is going places under the Government.

Adam Price (East Carmarthen and Dinefwr)

According to the latest Office for National Statistics figures, there was a net loss of 160,000 manufacturing jobs in the three months to September. That works out at a rate of 10,000 jobs a week. Four years ago, when the Secretary of State was Minister with responsibility for the industry, he wrote to the Chancellor to draw attention to the impact of the high pound on manufacturing. Given that the pound is higher now than it was then, will he write to his right hon. Friend again?

Peter Hain

Unemployment in the hon. Gentleman's constituency has fallen by half under the Labour Government. That shows that Labour policies are working where nationalist policies would have failed. I draw his attention to Carmarthen county council's five-year master plan, which aims to create almost 5,000 jobs and safeguard another 2,000, thus revitalising the country's economy. Under the Government and the National Assembly for Wales, more business opportunities are being created day by day, new startups are taking place and Wales is doing better than many other parts of the world, including many advanced economies such as Canada and countries in Europe. That is a tribute to the success of the Government's policies—

Adam Price

In manufacturing?

Peter Hain

It is a tribute to their success, including in manufacturing. I tell the nationalists not to talk down Welsh manufacturing because many good Welsh manufacturers have weathered the difficult international climate and are doing well.

Mrs. Betty Williams (Conwy)

Will my right hon. Friend hold early discussions with his ministerial colleagues about the difficulties that manufacturers experience in north Wales, including in my constituency, in obtaining public liability insurance at reasonable costs?

Peter Hain

I take my hon. Friend's point. That is one of the reasons why we are working closely with her, other colleagues in Parliament and the National Assembly to tackle those problems and provide new opportunities.

Mr. Nigel Evans (Ribble Valley)

No hon. Member is talking down Welsh manufacturing, but the Government are letting it down. Is not the problem with the Government's policy on manufacturing the fact that they do not have one? Business failure is much sharper in Wales than anywhere else in the United Kingdom. Job losses are occurring at an alarming rate.

In 1997, there were 210,000 manufacturing jobs; today, there are 186,000. We learned yesterday of the sad closure of Owens Corning with the loss of 230 fibreglass manufacturing jobs. Why do the Government not appear to care about manufacturing?

Peter Hain

That is a bit rich from a member of a party that hammered Welsh manufacturing, slashing jobs in mining, steel and heavy industry so that unemployment leapt to 168,000 at its peak under Mrs. Thatcher. We have already introduced policies under which jobs have increased and more and more companies have started up, including in manufacturing. Wales has gone for high-value-added, high-skill, high-tech jobs because that is our future.

Mr. Evans

There are fewer manufacturing jobs in Wales today than in 1997. Surely manufacturers want a bonfire of useless regulations and a Government that understand their needs. They need a manufacturing champion in Cabinet who will be prepared to speak up for them.

The Secretary of State is a great fan of our emerging eastern European neighbours, but travelling to those countries and seeing our manufacturing jobs that have been exported there cannot be acceptable. Will he hold urgent meetings with manufacturers to discuss the measures that can be introduced to tackle the manufacturing meltdown in Wales?

Peter Hain

If the hon. Gentleman were a Welsh Member of Parliament, he would know that employment in Wales has increased by 33,000 in the past year, and that businesses are starting up all the time. He would know that the Welsh economy is doing better than ever in the context of an international recession. The hon. Gentleman should stop talking Wales down.

Mr. Win Griffiths (Bridgend)

Will my right hon. Friend hold discussions with the Welsh Development Agency and people in the automotive industry to support the huge new investment at Ford in Bridgend—it will make that plant the major engine manufacturer in the European Union—and build up a centre of excellence for the world automotive industry with a world-class company?

Peter Hain

Yes, indeed, and I acknowledge my hon. Friend's role in helping to attract that extra investment. If Wales were doing as badly in manufacturing as the Conservatives and the nationalists maintain—following the same line, one might note—why would a world-beating company such as Ford choose to locate this extra investment in south Wales? It is doing so because Wales is doing well.