HL Deb 17 March 1997 vol 579 cc716-21

7.15 p.m.

Lord Lucas

My Lords, I beg to move that this Bill be now read a second time. It concerns Awdurod Datblygu Cymru. For those of us who do not have the necessary qualifications to speak the language of the angels, I shall conveniently refer to it as the Welsh Development Agency throughout my speech.

The purpose of the Bill is to amend Section 18 of the Welsh Development Agency Act 1975 to raise the financial limit of the Welsh Development Agency from its present level of £950 million to £1,350 million.

The proposed new limit carries no implications for either spending or policy decisions. Such decisions will be made in the usual way.

The Bill also makes provision for future increases to that financial limit to be made by order of my right honourable friend the Secretary of State, subject to the affirmative procedure. Of course, it being a purely financial affirmative procedure, it will not touch this House. So on future occasions the increase in the limit, if the Bill goes through, will not come before this House. The matter has been discussed with the Delegated Powers Scrutiny Committee, though it has not had an opportunity to meet formally. No objections have been raised with me or the Welsh Office. It seems to us and I believe to others to be an entirely appropriate change, simplifying and reducing the burdens on the time of this House.

I should not like the Bill to pass without drawing attention to the achievements of the Welsh Development Agency since its creation. In that respect, I should like to pay my respects to John Morris, who was Secretary of State for Wales at the time of its creation and still graces the other place with his presence. I am sure that many of my noble friends and others disagreed with him at the time he introduced the agency, but it has been an enormous success and indeed has been a great success under our stewardship.

The agency has played a key role in the transformation of the Welsh economy, which now has a far more diverse and well balanced industrial structure. We have seen growth in manufacturing output. We have seen falling unemployment. We have seen a great deal of inward investment—over 855 projects since 1983, creating or safeguarding over 100,000 jobs. We have seen a great deal of effort put into encouraging indigenous business; that again has been an area of considerable success. Having achieved that level of success, principally in what has been referred to as the eastern M.4 and A.55 corridors, we are now determined that that success should be replicated in those areas of Wales, principally the far west, where high unemployment persists.

We have set the WDA more demanding targets and given it more scope to give additional aid to projects in those areas where the inconvenience of getting there requires such aid in order to encourage companies to go there. The agency has also been involved in land reclamation with considerable success. I am sure noble Lords opposite will know a good deal more about that than I do.

I commend the Bill to your Lordships and hope that in the ensuing days it may find favour with all sides of the House and achieve a speedy passage.

Moved, That the Bill be now read a second time.—(Lord Lucas.)

7.20 p.m.

Lord Elis-Thomas

My Lords, I rise not just to congratulate the Minister on his excellent pronunciation of the Welsh Development Agency in Welsh, but also to indicate my support from these Benches for the new strategy of the agency, as agreed with the Welsh Office, of setting targets to develop in the western areas of Wales.

The agency has also, through its "Source Wales" programme, been effective in providing new employment opportunities arising from inward investment. Indeed, Cardiff Business School recently estimated that over 4,000 were directly employed in Sony. That can be multiplied by a further factor of four for those employed in industries which are providing our suppliers with the "Source Wales" programme. In addition to that, the recent technology plan of the European initiative will have a substantial effect on the skills base of the Welsh economy as it develops.

Finally, I should like to emphasise that the agency's role in all aspects of innovative development in the economy needs to be looked at. I should declare an interest as chair of Screen Wales—the agency is on that board—and also of the new agency where the WDA itself is a senior partner. In paying tribute to that role of the agency, it is important to remind the House that its environmental activity is a long-standing activity and was part of its package at the very beginning. The noble Lord, Lord Crickhowell, expresses agreement with me from his position in the Chamber. The noble Lord was the Secretary of State who took on the agency, as the Minister indicated.

There is also a lesson here in that the agency was conceived as an object of political disagreement but became a consensus agency in developing the Welsh economy through successive governments. One hopes that that will continue in the future. In that context I pay my tribute to the stylish and effective work of the chairman, David Rowe-Beddoe. He brought to his role in public life in Wales all his skills of communication, and his reputation abroad as a successful business person has been translated effectively into public sector ambassadorship on behalf of Wales. It is appropriate that we pay tribute to him in this debate for his work.

7.22 p.m.

Lord Hooson

My Lords, I have always been a great believer in a mixed economy. Thirty-five years ago I fought a by-election on the basis that we needed a development board in rural Wales; I wrote a booklet on the matter. I always felt that the way to obtain a combination of public and private investment was with such bodies as the Rural Development Board, the Land Agency and the Development Agency, because one then had a combination of public money with the discipline of private enterprise utilising that money. It has been of enormous advantage to Wales to have a body which has primed the pump.

I add to the tribute paid by the noble Lord, Lord Elis, to the present chairman. He was a wise choice. He has been shrewd, energetic, business-wise and sensible in his approach. It makes a great deal of difference to have a man in charge of such an agency who is business-wise; who knows what business expects and deals realistically with the problems.

With impeccable timing, I found in my post today a paper headed, "The Welsh Development Agency: a briefing". That perhaps shows the business wisdom of the chairman. It is interesting to see that it points out the locations in Wales of the international companies. But we should perhaps issue a word of warning. A perceptive article was recently published in the New York Herald headed something like, "Wales: the problem of investment". I took some photostat copies of the article and distributed them.

The article was perceptive in showing not only the advantages to Wales of internal investment, but also its dangers. It laid emphasis on the point that a high proportion of the jobs coming in were low level jobs; many did not provide the higher level of employment that could be hoped for in an industrial nation as well developed as ours. It pointed out the advantages that come to Wales, but when jobs are subsidised at the rate of £30,000 each—that was the rate of subsidy recently—one is bound to ask whether that money could sometimes be spent on home industries. I have had the experience of seeing one company in Wales develop from having two employees into an enormous employer. Sir Bernard Ashley told me that it was easier to obtain help once he could manage without it than it was to obtain it when he really needed it.

A good deal of consideration should be given in the future to whether it is possible to help young thrusting entrepreneurs—there are a number of them in Wales—with risk capital in particular at an earlier stage. That would mean a certain amount of discrimination, appreciation and assessment of the individuals and the companies involved. There is a danger in Wales of becoming too dependent on subsidiaries. That is reflected in other ways; for example, in sponsorship. Sponsorship problems arise in relation to rugby, football, music and so forth. One often finds that companies with a considerable presence in Wales are not making the contribution to the social and cultural life of Wales which one could expect them to make. That is partly because they are generous in their contributions elsewhere—perhaps where the head office is located—but that does not happen sufficiently often in Wales.

Perhaps I can add a personal note. When I saw the list of achievements in Wales, the international companies included Bosch. Perhaps I can express a personal reminiscence in that regard. I should like to pay tribute to the late Sir Brandon Rhys Williams who was, in the end, responsible for the site being developed. Although he was a political adversary of mine and we often disagreed—he was a highly eccentric man—I enormously admired his courage and determination. I appeared for him in planning cases and in quashing compulsory purchase orders on land that would have prevented the development. Years after his death—perhaps one day his story will be written—it is right to acknowledge his contribution on an occasion like this.

I was tempted to table an amendment to the Bill. I have no objection to the increase in the capital to be distributed from £950 million to £1,350 million. However, there is a provision which states, or such greater sum as the Secretary of State may from time to time by order specify". I was tempted to table an amendment to strike that out. One of the advantages of making the development agency come back to the House for an increase is that it allows for a short debate of this kind so that one has the opportunity of assessing its work. However, I decided that it may delay the Bill and this may not be the best moment to move such an amendment.

All in all we are pleased with the work done by the agency. I was pleased to hear the Minister congratulate John Morris who initiated the idea. But it is right that all parties supported the agency. The successors to John Morris—one of them, the noble Lord, Lord Crickhowell, is sitting on the Benches opposite—continued the work and there was no disagreement between the parties as to the value of the work once the initial expected political reactions had died down.

7.30 p.m.

Lord Williams of Mostyn

My Lords, I thank the Minister for introducing the scheme of the Bill and for his tact and grace in not making any indecent reference to the final score on Saturday. I particularly want to echo the tributes which have been made to Mr. Rowe-Beddoe; and not simply to the chairman but to the board and staff, because it is notoriously well known that there were black patches in the history of the WDA relating to corruption and malpractice. It is difficult to reinvigorate staff in those circumstances. There is no doubt in my mind that if it had not been for this chairman that work would have been much more difficult.

I certainly endorse what the noble Lord, Lord Hooson, said about the energy and foresight shown by the then Secretary of State, Mr. John Morris. It is interesting to see how the world has changed. All Conservative Members in another place voted without dissent against the creation of the WDA. But as has rightly been said by both noble Lords who have spoken, all political parties and all subsequent Secretaries of State have made the agency work well.

I was particularly pleased to hear the Minister's emphasis on moving away from the eastern concentration. West Wales is lightly populated but the problems there of high unemployment and low investment continue. It is critically important that the West Wales rail links should be maintained intact and that the North Wales rail links should be improved.

All in all, this is a most welcome Bill—an increase of £950 million to £1,350 million coming into effect and available to the Welsh Development Agency just at the appropriate time—two months from Royal Assent—when there will be a new regime to ensure that these moneys are properly distributed in the interests of the people of Wales. In respect of the Minister's admirable stab at speaking the language, for which we are most grateful, I hope that he continues with his lessons; and, who knows, in about 10 years' time or so he may be able to sit on that Bench and speak Welsh with equal fluency.

7.32 p.m.

Lord Lucas

My Lords, I look forward to sitting on this Bench—or at least on these Benches—for a long time. I am afraid though, given my facility with languages, that it may also be a long time before I feel that I have any reasonable command of the beautiful Welsh language.

I am grateful to the noble Lords, Lord Elis-Thomas, Lord Hooson and Lord Williams of Mostyn, for their remarks, particularly for their praise of the agency and its chairman. I am sure that their praise is well deserved.

The noble Lords, Lord Hooson and Lord Williams of Mostyn, referred to how the agency should go on and to the limitations of what it has achieved. It is true that one has to start building from the foundations when one has lost so much of the industry that was in Wales. The jobs in the industries one gets to begin with are not the most exotic or attractive but we are quite aware—I am sure the agency is aware—of the need to build beyond that and to get some depth as well as some breadth in the industries which have been reintroduced to Wales.

No one should doubt that it has been an enormous success story. Venture capital is a problem everywhere in the United Kingdom. One needs to find a way to encourage that for all of us. I am sure that the Welsh Development Agency has its mind set on increasing its activities in that area in Wales. We clearly needed to establish success in the easily accessible parts of Wales—the highly populated parts of Wales—before we could move out to the further limits of the region. The time has clearly come for that. I make no apologies for the fact that these matters are now being addressed more extensively than they were. The time is now ripe for that to be done.

Looking back at it, the way in which all parties, and indeed the nation, have put their mind to dealing with the problem that arose in Wales as a result of the demise of its heavy industries is a great demonstration of the value of the Union. I commend the Bill to the House.

On Question, Bill read a second time, and committed to a Committee of the Whole House.

The Earl of Courtown

My Lords, I beg to move that the House do now adjourn during pleasure. Contrary to what was said earlier, perhaps I may suggest that the Report stage of the Education Bill starts again not before eight o'clock.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 7.35 to 8 p.m.]