HL Deb 10 December 1997 vol 584 cc149-51

3.3 p.m.

Lord Roberts of Conwy asked Her Majesty's Government:

What steps they are taking to increase GDP per head in Wales.

The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn)

My Lords, the Welsh Office is currently consulting on An Economic Strategy for Wales. The consultation document is in the Library. It sets out the Government's proposals to increase and spread prosperity throughout Wales. It sets a framework and identifies priorities with the aim of ensuring that the public and private sectors work together in a partnership that is underpinned by sound teamwork. Inward investment is a good example of where the quality of Team Wales has achieved a large measure of success. We intend to create an economic powerhouse—that is, the merger of the Welsh Development Agency, the Development Board for Rural Wales and the Land Authority for Wales—to provide a simplified institutional framework to lead on co-ordination of economic development strategies. We are also undertaking a comprehensive spending review to determine how the resources of the Welsh Office can best contribute to increasing economic prosperity for people in all parts of Wales.

Lord Roberts of Conwy

My Lords, I am grateful to the noble Lord for that reply. In view of the exchange at the beginning of today's Question Time, will he give a firm assurance that as Wales is near the bottom of the regional league table of GDP per capita, average earnings and disposable income, the Government will give the highest priority to raising the standard of living of the Welsh people by promoting investment and the creation of worthwhile jobs? Furthermore, does the noble Lord agree that as the farming community is a substantial contributor to GDP in Wales, the Government should give urgent consideration to falling incomes as a result of the strong pound and the continuing BSE crisis, especially as I understand that some surplus European funds are available to give assistance?

Lord Williams of Mostyn

My Lords, all the points which the noble Lord, Lord Roberts of Conwy, identifies are valid points. It is true that Wales is low in the league. Wales has 83.3 per cent. of UK GDP; it was 84 per cent. in 1994. Therefore the figure has declined further. As the noble Lord rightly implied, apart from Northern Ireland, Wales has the lowest GDP in the UK. There is no doubt at all that a high priority of this Government is inward investment into Wales to produce worthwhile, high quality jobs of value. The noble Lord rightly referred to that point. We believe that the Welsh Assembly, which we shall discuss in the New Year in your Lordships' House, will have an important part to play in that area. The farming community has a special place in the life of Wales, not simply a special economic place but also a cultural place. I assure the noble Lord and your Lordships that the Secretary of State for Wales is well alive to the problems of the farming community in Wales.

Lord Mottistone

My Lords, is the noble Lord aware that the Isle of Wight has a lower GDP than Wales and a similar unemployment figure? For the past 20 years I have pursued successive governments to try to persuade them to accept that fact. In his original Answer the Minister spoke of all the nice things he intended to do for Wales. When will that happen in the Isle of Wight which, although always classed as part of the prosperous south east, has in fact a similar framework to that of Wales?

Lord Williams of Mostyn

My Lords, I have an eyeglass but even using it I cannot detect that the Isle of Wight is entirely within the scope of the noble Lord's Question as tabled. All I can say is that, as always, I shall note carefully what the noble Lord said and transmit it to the appropriate quarter.

Lord Islwyn

My Lords, is not the real answer for the Government to encourage the development of indigenous industries in Wales through tax and investment incentives? Does the noble Lord further agree that investment in public transport could provide greater mobility and help those people from the valleys and rural areas who are anxious to seek employment?

Lord Williams of Mostyn

My Lords, there is no doubt at all that the transport facilities in Wales which this Government have inherited are not entirely suitable for the needs of a modern economy. No one who knows Wales or who has tried to travel from north Wales to south Wales by motor car could dissent from that proposition. We need to develop what is presently indigenous to Wales and to benefit—I readily pay tribute to the previous government in this respect—as we have significantly, from the efforts of the Welsh Development Agency in encouraging and securing inward investment of high quality in Wales.

Lord Hooson

My Lords, without in any way disparaging the inward investment which has been so important in Wales, will the new development agency have the right or the power to take equity in indigenous companies to promote them? I have had some experience of seeing indigenous companies develop in Wales. Those companies are then taken over and have their headquarters moved outside Wales. Often the highest salaries are paid to employees of those companies who are not in Wales. Is it not possible for the new development agency to have a strategy to deal with the problem of encouraging indigenous industries and of retaining a certain degree of control over them through taking equity?

Lord Williams of Mostyn

My Lords, that is one of the aspects which the economic powerhouse will have in mind. I referred to that a moment or two ago. It is, of course, one of the reasons that we issued our consultation document, An Economic Strategy for Wales. I can assure the noble Lord, Lord Hooson, that the remarks he made are entirely apt and will be given the greatest possible scrutiny.

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