HL Deb 15 October 1998 vol 593 cc1048-50

3.25 p.m.

Lord Islwyn asked Her Majesty's Government:

What steps they are taking to offset the increasing incidence of factory closures and redundancies in Wales.

The Minister of State, Home Office (Lord Williams of Mostyn)

My Lords, job losses are unfortunately an inevitable part of the environment in a changing economy. What matters is that jobs that are lost are replaced by new ones. This year, inward investment into Wales promises almost 6,000 new jobs and capital investment of £0.5 billion, including Bank One's 1,000 new jobs for Cardiff and International Rectifier's 500 new jobs for Penllergaer. Karavale Enterprises, Cwmbran, announced its expansion project on 7th October forecasting 380 new jobs.

Lord Islwyn

My Lords, does the Minister appreciate that south-east Wales has been held up as a beacon of light in a small country which over the generations has suffered much from the ravages of unemployment? However, in recent weeks and months in Gwent alone we find that Alcan in Rogerstone has made 200 people redundant; Nicoplas at Cwmfelinfach (a German concern) has closed with a loss of 225 jobs; Parke Davis at Pontypool, the pharmaceutical concern, has made 311 people redundant; Bairdwear, the textile firm in Caldicot, has closed with over 200 people losing their jobs; Medallion Upholstery in Cwmtillery has made over 200 people redundant, and there are many more besides. Surely, it is hardly progress to take one step forward and two steps backwards, as those figures seem to indicate. Finally, does the Minister appreciate that the present value of the pound and the exchange rate are not doing any good in this situation?

Lord Williams of Mostyn

My Lords, my noble friend spoke of "one step forward and two steps back". In fact, in the area to which he refers Tomoe Tritec Ltd. has set up in Newport East, creating 100 new jobs; R F Brookes (Newport West) has created 477 new jobs; Yajima (Ebbw Vale) 70 new jobs; Yamada Europe (Ebbw Vale) 90 new jobs; and Yuasa Battery (Ebbw Vale) 148 new jobs.

Lord Clark of Kempston

My Lords, does the Minister agree that most economists in the country, with the exception of the Bank of England, think that the Bank's base rate is far too high and that that is affecting the competitive position of this country and is obviously leading to redundancies? Does the Minister further agree that if we enter the euro market, Brussels will decide what our interest rates will be? Is it not high time that the Chancellor stopped hiding behind the Bank of England and did his job as Chancellor of the Exchequer?

Lord Williams of Mostyn

My Lords, this Chancellor does not hide behind anything. In fact, he took the extremely important step of devolving to an independent committee the initial responsibilities to which the noble Lord spoke. Economists have different views about the proper level of the interest rates. The noble Lord may be interested to know that all is not doom and gloom, and a good deal of harm is sometimes brought about by those who suggest it. As it happens—I just want to let fact intrude here for a moment—employment is continuing to rise in Wales. The number of workforce jobs in Wales increased by 6,000 between June 1997 and June 1998.

Viscount St. Davids

My Lords, can the Minister tell the House whether the Government or their agency are legally regarded as the prior creditor in order to recoup any government and public money that has been spent on these failed enterprises?

Lord Williams of Mostyn

My Lords, I am not sure to which failed enterprises the noble Viscount refers. I have not referred to any failed enterprises. What I have pointed out is that employment in Wales is continuing to rise. Not surprisingly, therefore, I am able to tell your Lordships that unemployment in continuing to fall.

Lord Ezra

My Lords, the problems to which the noble Lord, Lord Islwyn, referred in Wales apply elsewhere in the country. Manufacturing industry is going through a difficult period at the moment due to many external as well as internal factors. Will the noble Lord indicate, however, whether overall he considers that present government policies could offset the present problems and the likely future problems of the next year or two in the manufacturing sector?

Lord Williams of Mostyn

My Lords, the noble Lord is right that this is not a problem limited to south-east Wales, as was identified in the supplementary question. Manufacturing in Wales has done rather better than in the United Kingdom generally. Its productivity has risen by 12 per cent. since 1990 compared with only 4 per cent. for the United Kingdom. Undoubtedly, there are world adverse conditions which are notoriously well known to everyone in this House, but I believe that this Government, under the stern stewardship of the Chancellor of the Exchequer, are doing rather well.

Lord Roberts of Conwy

My Lords, welcome as the news is of inward investment, nevertheless does the Minister agree that one must bear in mind that the 6,000 jobs to which he referred are in fact promised jobs? Indeed, there are factory closures and redundancies, and some in rural areas. Coming on top of the crisis in agriculture, does the Minister agree that the fact is that there are very real difficulties in rural Wales?

Lord Williams of Mostyn

My Lords, I do not dispute that for a moment. Of course, every job is going to be announced and therefore capable of being described as a promised job. But I believe that question is rather ungracious. The fact is that the Welsh Development Agency from 1st May 1997 to 30th September 1998 has recorded 181 projects involving capital investment of over £1 billion, which forecasts 14,059 new jobs and 4,765 safeguarded jobs. Not for the first time I am happy to pay my tribute to the former Secretary of State, the noble Lord, Lord Crickhowell, for the excellent work he did in stewarding the WDA.

Lord Islwyn

My Lords, does the Minister agree that whereas we welcome inward investment, nevertheless we are tending to rely too much on it?

Lord Williams of Mostyn

My Lords, sometimes I feel that I really cannot win, but I soon discard that. The fact is that if employment is provided in areas of serious historic difficulty, we ought to be extremely pleased that we have a trained workforce and good commercial circumstances that encourage overseas investors to invest in Wales.