§ 3.13 p.m.
§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington)
My Lords, I beg to move that the Bill be now read a second time.
The purpose of the Bill is to raise the statutory financial limit for the Welsh Development Agency from the present level of £700 million to £950 million. The limit was last increased by the Welsh Development Agency Act 1988. Current forecasts indicate that the limit will be reached during the 1992–93 financial year. It is therefore necessary to raise 597 the limit now to ensure that the agency's contribution to the redevelopment of the Welsh economy is not hindered
It is customary when establishing financial limits to set a figure sufficient to cover a period of about five years. Accordingly, the Bill proposes that the limit should be £950 million.
I should explain, however, that this is a purely technical measure, with no implications for either spending or policy decisions in future years. Such decisions will be taken in the normal way.
The main aims of the WDA are to further the economic development of Wales, enhance its international competitiveness and improve the environment. The agency pursues these objectives through a wide range of activities, including the provision of modern industrial property; the promotion of inward investment and new technology; business advice and venture capital; land reclamation and environmental improvement and—increasingly—urban renewal.
Since 1979 the WDA has invested more than £1 billion at today's prices in its activities. It has used these resources well. For example, the agency's property programme has ensured that over the past six years the amount of factory floorspace rented to Welsh firms has provided the space for some 36,000 jobs. During the past five years the agency has also raised over £80 million from the sale of its factories to individual tenants and private sector investors, reinvesting the proceeds of these sales in Wales.
Welsh Development International—the agency's inward investment arm—has had great success and has done much to assist the Principality to secure major investments by such companies as Robert Bosch, Sony, Toyota, and British Airways. So far this year a further 165 inward investment projects have been secured which it is hoped will create or safeguard over 15,500 jobs.
The WDA has therefore contributed greatly to the regeneration of the Welsh economy. Furthermore, between 1985 and 1989 seasonally adjusted unemployment in Wales was halved. The average rate of unemployment is now 9.2 per cent.
The economy in Wales has diversified and is now more robust and flexible. Although not immune to recent recessionary pressures, the Welsh economy is now much better placed to move forward to renewed growth.
As my right honourable friend the Secretary of State for Wales has said, this achievement is a great tribute to the industry and resilience of the people of Wales.
In addition to greater prosperity, economic progress must also mean a better quality of life in Wales. There is therefore a parallel need to enhance the environment and remove the legacy of dereliction associated with the old traditional industries of coal and steel. The agency has a key role to play here and a first class track record.
Since 1979 the agency has invested some £220 million at today's prices to reclaim derelict land in Wales. Today derelict land is being reclaimed in Wales at the rate of a rugby pitch a day. Some of this land, 598 I would cheekily suggest, might be useful for training the sides of the future. The land is being reclaimed at the lowest cost among comparable programmes in the UK. When the schemes in the existing programme are complete, some 20,000 acres of poisoned, derelict, damaged land will have been cleared and turned over to productive use to the benefit of all the communities involved.
Reclaimed land—particularly in the Welsh valleys—is a major asset and a marvellous opportunity for development. Last year alone, business projects worth £175 million were located on land reclaimed by the agency. At current rates of progress the agency is on target to eliminate all remaining major industrial dereliction in Wales by the end of the 1990s—a major achievement for Wales.
There are challenges still to be met. My right honourable friend the Secretary of State has been able to secure increased provision for Wales next year and to increase the WDA's gross spending powers—by £13.5 million for 1992–93. It will now be more than £166 million a year: the highest ever in both cash and real terms. These resources will enable the agency to continue to build on its inward investment successes; to continue with a major programme of factory building in those areas of Wales where private sector provision is not yet adequate and to make an even greater contribution to environmental improvement and urban renewal, ultimately helping to secure a better quality of life right across the Principality.
The agency is a major factor in the creation of a new Wales. I commend the Bill to your Lordships so that the WDA can build on its past achievements and pave the way for many more.
§ Moved, That the Bill be now read a second time. —(Baroness Trumpington.)
§ 3.28 p.m.
§ Lord Cledwyn of Penrhos
My Lords, we are grateful to the noble Baroness for explaining the Bill and we welcome the extension of the statutory financial limit for the Welsh Development Agency to a ceiling of £950 million. This means that the money will be available if it is called upon, and this is therefore a sensible step. It is necessary, however, to make plain that this is a purely technical measure and that there are no implications for spending or for policy decisions in future years—a point which was made by the noble Baroness.
During its existence the Welsh Development Agency has many achievements to its credit. We should congratulate those who have worked in it over the past 16 years and, of course, my right honourable friend Mr. John Morris, who was responsible for setting it up. I had the responsibility of setting up the derelict land unit, to which the noble Baroness referred. I did that after the appalling disaster at Aberfan. I am delighted to learn from the Minister that the agency has been actively engaged in the task of reclaiming derelict land and that some substantial schemes are currently in the pipeline.
It would be a great mistake, however, to be complacent and to think or give the impression that everything in the garden in Wales is lovely. That is not 599 the case. Unemployment is acute throughout the Principality, not least in Anglesey, and job losses have been severe. The closure of plants and factories has crippled a number of communities. Brymbo steel works, which was making a profit, was closed last year; the land is lying idle and the workers have not been able to find new jobs. We can only hope that this increase in the borrowing limit will very soon help to create new sources of employment for the community.
Unemployment in Wales currently stands at 9.2 per cent. and low wages are endemic in the Principality. When I was Secretary of State I used to worry a great deal because unemployment stood at 60,000. Now that it is double that number I hope that Ministers are equally concerned and that they will urge and encourage the agency and the Development Board for Rural Wales to pursue imaginative policies to deal with the very real and longstanding problems which have been with us for far too long.
Wales was notable for having one of the best workforces in Western Europe, but the decline, and in some cases the disappearance, of the heavy industries which created wealth for Britain as a whole have demonstrated the urgent need for new skills and a new and relevant training policy. The coal miner, the steel worker, the tinplate worker, the quarryman, the men who gave the Welsh economy its backbone and Welsh society its special character, have almost vanished. I believe that the Welsh Office should now give the Welsh Development Agency new guidelines and arrange for it to become involved in ambitious training schemes. We have not begun to produce the men and women with the technological, scientific and engineering skills which are essential if we are to compete on equal terms with our competitors in Europe, let alone the United States and Japan. The descendants of the men who launched the Industrial Revolution, who mined and shipped coal to the four corners of the world and who pioneered some of the great inventions of the last century, deserve something better than to see their communities disintegrate.
Furthermore, we are on the periphery of Europe and, as the single market approaches and as Eastern Europe becomes a more potent industrial competitor, as it will, we may find ourselves stranded beyond the highest tide without the abilities to compete. Later on today we are to debate the Further and Higher Education Bill, and the reforms proposed in it should give us a new dimension and a new opportunity to produce new engineers and scientists. The University of Wales and our colleges are ready to meet the challenge; our schools must also be encouraged to do the same. But they must be given the resources, and it is here that the Welsh Development Agency could be made the catalyst to re-invigorate our entire education system. I find nowadays that when a new industry comes into Wales, the great majority of the key workers must be imported. We are of course glad to welcome them, but in this day and age we should in the main have Welsh engineers, Welsh scientists and Welsh managers to run the industries of the future.
In Scotland, the training agency has in fact been merged with the equivalent of the WDA. Perhaps the 600 Minster will tell us whether the Government propose to do the same in Wales and whether or not they envisage the creation of any formal links between the training and enterprise councils and the WDA. The agency and the Development Board for Rural Wales have been criticised for their failure to undertake evaluation studies. The National Audit Office, as the noble Baroness knows well, warned that,until the bodies undertook evaluation studies regularly and consistently they would not be in a position to assess which schemes offered the best return in terms of jobs created for the public expenditure involved".
I am loath to criticise the WDA because at the end of the day it is the Government who are responsible; the Government are responsible for the economy, for training and education, for deciding which industries are essential if we are to survive, and, finally, for inspiring the workforce which, as I have said, is one of the best in Europe. We were told in the eighties that Wales was to be transformed, but now the National Audit Office says that the projections have not been fulfilled.
There is a good deal more I should like to say but I am conscious of the important debates which follow. There are parts of Wales which are plunged into uncertainty and depression. Holyhead in Anglesey, my former constituency and where I live, is one of those. The Welsh Office has directed the WDA to find solutions to the problems of the town and its catchment area and the Minister of State, Sir Wyn Roberts, has been placed in charge of the new Holyhead joint urban venture. I welcome this enterprise and wish him well. I shall do all I can to support him. Holyhead, with its splendid port and experienced workforce, has suffered too much in recent years and deserves a more stable future.
As I have said, the final responsibility rests not on the WDA but on the Government. The launch of the Holyhead exercise proves that. I repeat that we welcome the Bill. The view of the great majority of the Welsh people coincides with that expressed by the noble Baroness—namely, that the Welsh Development Agency should be strengthened and its responsibilities extended. The Government have a duty to keep Wales abreast of developments in other countries and they will be judged by their success or failure in doing so.
§ 3.27 p.m.
§ Lord Hooson
My Lords, from these Benches we support the raising of the statutory financial limits of the Welsh Development Agency. It has a good record. It was set up in 1976 to regenerate the environment in the industrial wastelands of parts of South Wales and parts of North Wales and also to encourage the expansion of the economy. It has done the job very well. Despite the Government's view to the contrary, it shows that there is a place for massive public investment. We have seen an agency investing public money to prime the pump for private development. It is a combination of the two that we have seen successfully exploited by the Welsh Development Agency.
I entirely agree with the noble Lord the Leader of the Opposition that it is time the agency's guidelines 601 were looked at again. In 1980 the guidelines were changed. Its powers were curtailed, particularly its powers of investment. In the present economic circumstances I believe that the guidelines should be expanded once again.
On the land reclamation side, the record of the Welsh Development Agency is very impressive. When one goes to parts of Wales which we remember as industrial wastelands and sees what has been made of them, one sees the example that is set for other industrial countries of what can be achieved. I understand that many people from Eastern Europe are now visiting Wales to see how the job has been done.
We welcome the extension of the statutory limits. I hope that the noble Baroness will take back to the Government the view expressed by the noble Lord the Leader of the Opposition that it is time for new guidelines for the agency.
§ 3.29 p.m.
§ Baroness Trumpington
My Lords, I sometimes feel that the Opposition Benches are entirely made up of Welshmen, so I always feel a certain temerity in talking about Welsh affairs. I thank the noble Lords, Lord Cledwyn and Lord Hooson, for their welcome for this measure. I pay tribute to the foresight shown by the noble Lord, Lord Cledwyn, in his work in this area in the past. That has been extremely valuable today.
Perhaps I may just answer some of the questions asked and comment upon the various points made by the noble Lord. Naturally it is extremely sad to learn of any business closure. However, I could read to the noble Lord a long list of new, big and valuable businesses which have gone to Wales because of the assets which are to be found there.
I believe that the noble Lord, Lord Cledwyn, mentioned Europe. Of course, Europe is one of the most vital areas for business. The WDA has an important role to play in continuing the development of links between smaller firms in Wales and other member states. An active programme of links is now in hand with what are known as the "four motors" of Europe; namely, the regions of Baden-Württemberg, Catalonia, Lombardy and Rhone-Alpes. As part of the approach to Europe, the WDA will also be opening an office in Brussels in the near future. Therefore the agency will have a challenging future both at home and abroad.
With regard to the training agency to which the noble Lord, Lord Cledwyn, referred—I hope that the noble Lori, Lord Hooson, realises that, in answer to his plea, I am speaking to both noble Lords—there are no proposals to merge the WDA with the training and enterprise councils which were set up earlier this year. The agency is in close consultation with the training and enterprise councils to ensure that their programmes are both complementary and comprehensive in order to meet the training needs of Welsh businesses. I am grateful to the noble Lord, Lord Cledwyn, for giving me advance warning of that question.
602 The following may also interest the noble Lord, Lord Hooson. Yesterday my right honourable friend the Secretary of State for Wales announced a further £29 million expenditure under the Wales Rural Initiative. The WDA will play a full part in that initiative and will increase its spending in rural areas to £32.5 million in 1992–93. That is an increase of £7.5 million over this year.
The noble Lord, Lord Cledwyn, mentioned the report of the National Audit Office. I have to tell him that the NAO's examination of the factory building programme of the WDA and the DBRW revealed that in a sample area, 72 per cent. of jobs originally forecast for delivery up to March 1989 had been achieved. That is a very high percentage. An examination of 40 factories by the NAO under the agency's factory building programme indicated that, of the total workforce, 90 per cent. were additional. Again, that is a very high percentage.
Finally, my right honourable friend the Secretary of State for Wales recently announced an £80,000 urban programme of funding in 1992–93 for the first two projects in the Brymbo—I hope that that is right—regeneration action plan. That is a partnership between the Welsh Office and the WDA based on tiers of local government, the community and the private sector. Clearance of the site will take time, but we hope that it will be developed to provide employment locally.
I am grateful to the noble Lords who have spoken. I hope they appreciate that I have given as full a picture as I possibly can in reply.
§ Baroness Seear
My Lords, before the noble Baroness sits down, does she not agree that we English have really done rather well by importing a large number of Welshmen not only onto the Front Bench of the Labour Party and elsewhere but also into very prominent positions in our country? It is a little sad that the Leader of the Opposition does not apparently reciprocate this attitude of the free movement of labour.
§ Baroness Trumpington
My Lords, I agree. The wonderful Welsh people have haunted me all of my life. I should tell the noble Lord, Lord Cledwyn, that, at dinner the other night, I was introduced as having worked under Lloyd George as a land girl. I hasten to say that the word should have been "for".
§ On Question, Bill read a second time, and committed to a Committee of the Whole House.