§ 4. Paul Flynn (Newport, West)
What recent discussions he has had with (a) ministerial colleagues and (b) Welsh Assembly Ministers on assistance for manufacturing industry in Wales. 
§ The Secretary of State for Wales (Mr. Peter Hain)
Regular ones. The Government are supporting manufacturing investment through structural funds, regional selective assistance, the research and development tax credit, regional venture capital funds and the small firms loan guarantee scheme, as well as reforming corporation and capital gains tax to encourage investment.
§ Paul Flynn
Does the Minister agree—I think that he well might—that the Government have done a magnificent job in Wales by creating 78,000 jobs in the last 12 months and halving unemployment since we were elected in 1997? However, there is the one worry about manufacturing jobs, which have long been the backbone of the Welsh economy. Those jobs are going, particularly in Newport, where a third of employment is in the manufacturing sector. They were well paid, highly skilled, long-term jobs, but they have been replaced with jobs—in call centres, for example—that are none of those things: they are teflon jobs that may be in Wales today, but in Bangladesh tomorrow.
§ Mr. Hain
We are competing in a very competitive World economy against countries, including Bangladesh, where wages are a fraction of what they are in Wales. The Welsh Assembly Government's and the Labour Government's policy of value-added investment 846 to increase the capacity of our manufacturing centre at the top end of the markets is the crucial policy to adopt. I am sure that my hon. Friend would welcome the fact that Interbrew, a Belgian company. has recently invested in Newport and created 40 new jobs. There are other stories and reports of massive investment across Wales from foreign and domestic companies, all contributing to the record increase of 78,000 jobs over the last year.
§ Lembit Öpik (Montgomeryshire)
Now that we know that the Under-Secretary will be driving through my constituency next week, would he be willing to use the time he saves from the road works to visit the town of Llanidloes, which has lost 250 manufacturing jobs as a result of the closure of KTH? What feasible support can the Wales Office give, notwithstanding the support of the National Assembly, to ensure that we avoid an economic catastrophe in the Llanidloes area?
§ Mr. Hain
I was privileged to attend the national Eisteddfod in the hon. Gentleman's constituency—a marvellous occasion in a beautiful part of Wales. The position of KTH was obviously desperate. We worked together to try to save it and provide an alternative. The hon. Gentleman knows that I will do everything that I can—and I am sure that the First Minister will do the same—to provide a decent future for the town.
§ Llew Smith (Blaenau Gwent)
Is the Secretary of State aware of the vast number of jobs in the manufacturing industry that have been lost in my constituency? He will know that many of the jobs that have replaced them have too often been low-paid, non-union jobs. Does he accept that one way of overcoming the problem of low wages would be to increase the minimum wage in October not to £4.50, but to at least £5 an hour?
§ Mr. Hain
As the Chancellor announced at the Trades Union Congress last week, the minimum wage will go up next year to £4.85 and thereafter to £5 an hour and more. That contrasts with the position under the Tories, who had no minimum wage and presided over poverty pay and the exploitation of workers. Under the Labour Government there has been more and more investment in the valleys. Today, for example, 400 new jobs in the airline industry are being created in Blackwood and Cwmbran, coupled with other manufacturing jobs in the sector. That is a sign of the manufacturing sector being given the support that it needs to go from strength to strength in difficult international conditions.
§ Mr. Nigel Evans (Ribble Valley)
I know that the Secretary of State is interested in manufacturing jobs. After all, he has manufactured enough jobs for himself over the past six years. At the last Welsh questions, I suggested to him that he set up a taskforce to address the meltdown in manufacturing in Wales. However, since then, more manufacturing jobs have been lost, and the Office for National Statistics has downgraded Wales's gross domestic product—as compared with England's—from 81.3 per cent. to 79.2 per cent. If that trend continues, the whole of Wales will be eligible for objective 1 status in six years' time.
847 Professor Dylan Jones Evans, of the University of Wales, Bangor, has pointed out thatmanufacturing is continuing to decline and we are not replacing the jobs lost with high value"—[Interruption.]
§ Mr. Hain
The hon. Gentleman has my sympathy. I know that it is difficult for him to keep up with what is going on in Wales, as he is not a Welsh MP. Let us look at the facts, instead of talking down the manufacturing sector in Wales. Last Friday, I attended the commercial launch of a big power station by General Electric, the multinational company. It involved more than £1 billion of investment, with huge numbers of jobs being created. It located at Baglan in south Wales because that was the best location for the most highly developed gas power technology. Hundreds of people from Japan, Korea, Australia and the US came to Wales to see that it is now a good place to invest, compared with the Tory years.