HC Deb 25 February 2003 vol 400 cc1-23WH

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Woolas.]

9.30 am
Mr. Martyn Jones (Clwyd, South)

I am delighted to have the opportunity to debate employment in north Wales and to give the Chamber a chance to reflect on the Labour Government's positive achievements in the north Wales economy.

Labour Members have a great deal to be proud of in north Wales. However, I am sure that my Front-Bench colleagues will not allow that success to be usurped by any hint of complacency. It is essential that our employment successes in the region are sustained, and that can be done only in a vibrant economic environment—one that the Government have skilfully and successfully maintained since coming to power in 1997.

I am sure that many of my hon. Friends will want to speak this morning, so I intend to keep my remarks as short as possible. However, I am delighted to see at least some representatives here from other parties. One, a Conservative Member, is not from north Wales but he is none the less welcome. It is a refreshing change to see the Conservative party showing an interest in employment in the region; it did not seem to do so when it was in power and had Members in north Wales. I look forward to hearing about the party's support and praise for what Labour has done for the north Wales economy since 1997, and for the levels of job creation in the region.

I am delighted also to see a representative of the Welsh nationalist party here. Constituencies such as Meirionnydd Nant Conwy have benefited most from Labour's policies over the past six years, and they have experienced the largest falls in the number of jobless. Against that background, it is little wonder that the hon. Member for Caernarfon (Hywel Williams) should have come to pay tribute to the excellent work done by the Government not only by protecting jobs in those constituencies but by maintaining the right economic conditions to allow companies to expand and create more jobs for places such as Pwllheli and Blaenau Ffestiniog.

Finally, I am of course delighted to see here today so many of my hon. Friends from north Wales. I am sure that my hon. Friend the Member for Alyn and Deeside (Mark Tami) would have told us about the exciting work going on at Airbus.

Chris Ruane (Vale of Clwyd)

He is in Northern Ireland.

Mr. Jones

Yes, he is on parliamentary business in Northern Ireland. It therefore falls to me to mention Airbus at Broughton. Recent investment has not only protected jobs in that part of north Wales but ensured that hundreds of jobs in Welsh supplier companies throughout Wales will benefit. In that vein, I am sure that my hon. Friend the Member for Vale of Clwyd (Chris Ruane) will tell us about the huge success of the Optronics technology and incubation centre in St. Asaph.

I am sure that my hon. Friend the Member for Ynys Mon (Mr. Owen) will tell us about the exciting future that lies ahead for Holyhead, and about the plans for the ferry port and the possibilities for Royal Air Force Valley. That much-needed investment provides hope for a part of Wales that has lagged behind for too long.

I initiate this debate because it is worth reminding ourselves of exactly what Labour inherited when we took office in 1997. Opposition Members like to promote the myth that Labour inherited a very happy ship; if only that was the case. Nationally, 3 million people were unemployed, and 250,000 young people had been unemployed for over six months. One million jobs had disappeared during John Major's years as Prime Minister. The economic landscape in north Wales was equally bleak. People should remember the Tory legacy that we inherited: the national debt had doubled between 1992 and 1997; interest rates were above 15 per cent. for one year and above 10 per cent. for four years; and inflation was over 10 per cent.

Let us contrast that decline in economic achievements with what Labour has secured in the six short years since it came to office. North Wales is enjoying its lowest unemployment for 27 years, and youth unemployment has been cut by 76 per cent. We have the lowest inflation for 30 years—and the lowest in Europe—and the lowest long-term interest rates for 40 years. We also have the lowest mortgage rates for 50 years, which is saving home owners an average of £2,400 a year compared with 1979.

Wales is top of the UK league for business support grants. The rate of job creation is 10 times higher than the UK average, and 36,000 new jobs have been created since 1999. North Wales has built up Europe's highest concentration of food manufacturing and processing businesses. That is an incredible turnaround in the fortunes of the north Wales economy, and that is precisely why we re-elected the Labour Government in 2001.

Before Opposition Members jump up and down, I should add that there have been individual setbacks along the way, and none has been more serious than those in my own backyard, in Wrexham. As the Minister knows, there have been job losses in recent months. Most notably, 230 jobs were lost at Owens Corning before Christmas, and 300 jobs went at Sharp Electronics earlier last year. There were quite separate reasons and circumstances behind those job losses.

In Corning's case, the increase in global competition in recent years has affected the Wrexham plant's competitiveness. The message from that is that all companies must study their costs so that they stay competitive, retain market share and hold on to jobs. That is nothing new, and it will always be the case in the truly global economy that we have today. Sharp's reasons for job losses were based on the acute decline in demand for video recorders and the probable rise in demand for DVD players.

Both sets of job losses were a great blow to Wrexham and its prosperity, but the overall economic context in north Wales is one of stability and increasing prosperity and confidence. It is against that background that new jobs continue to be created across the region. The examples of job losses that I have given are extreme, and it is disappointing that we experienced them in north Wales. However, the day-to-day success of the economy provides a very different picture, and I will briefly tell hon. Members of the success stories from our region.

Last year, clothing retailer Matalan made a huge investment of £1.1 million in Rhyl, creating 100 new, non-tourism jobs for the constituents of my hon. Friend the Member for Vale of Clwyd. Local construction company Watkin Jones is expanding its operation at the Britannia park in Bangor. That will create 70 new jobs, taking the total at that site to 500 or more. Again in Bangor, the Book People—one of the UK's largest direct mail booksellers—has opened a new facility and created 180 permanent jobs. Interestingly, ETL Solutions will expand its work force in Blaenau Ffestiniog, in the constituency of the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd), to 25. That is the result of private finance and regional selective assistance from the National Assembly.

Those are not symptoms of an economy in decline; far from it, they are a testament to an economy that is confident, vibrant, attractive to investors and a good bet for prosperity and growth. In discussing the success stories, it is important to recognise Government support for the creation of such an environment. I congratulate the Welsh Assembly on backing north Wales entrepreneurs. Through such mechanisms as the Assembly investment grant and regional selective assistance, small and large companies have secured direct help from Cardiff.

The Assembly investment grant is discretionary and it is aimed at smaller businesses making capital investment in Wales. It helps companies to expand, to modernise or to restructure and assists with the setting up of new businesses, which are crucial in encouraging new ideas to flourish in north Wales. Regional selective assistance is a focused, discretionary grant scheme administered by the Assembly. It contributes towards the fixed cost of capital investment projects that will help to produce or safeguard jobs in the assisted areas.

I pay tribute to the work of the Welsh Development Agency in the whole of Wales, not just in the north. Labour's success has been not only in grabbing big headlines but in creating the right conditions for small and medium enterprises to start or expand in a way never before envisaged. On these Benches we recognise that small businesses are the backbone of the north Wales economy, and they make a massive contribution to the region's wealth and success.

Finally, I make a plea to the Minister. An improvement that will help north Wales greatly in the coming years is the introduction of broadband technology. The Welsh Affairs Committee, which I have the honour and pleasure of chairing, recently reported on broadband and made recommendations to the Government. The Committee fully supports the Assembly's aims and objectives, as set out in the document "Cymru Ar Lein", or "Online for a Better Wales". However, many of the objectives will be realised only with the support of the United Kingdom Government.

Wales lags seriously behind regions of the UK in many aspects of the exploitation of information and communications technology, and there is a danger that areas in which services are slow to become established will suffer from a growing digital divide. Businesses, individuals, public services and the economy of north Wales can only benefit from investment in broadband services. I shall end there, so that my hon. Friends can have their say about their constituencies and the economy of north Wales, and about the success story and the opportunities that lie ahead.

9.42 am
Hywel Williams (Caernarfon)

I congratulate the hon. Member for Clwyd, South (Mr. Jones) on having secured the debate. It is timely, because employment, or lack of it, has been a central concern of Welsh politics, not least in north Wales, for many years. We must look at the long-term picture. I am happy to play a part in success stories, as is my party, and I shall refer later to a number that have been brought about in my constituency by objective 1 funding. My party welcomes the fall in long-term unemployment, particularly the scourge of youth unemployment, which has led to the problem of migration from north-west Wales. The problems associated with unemployment have affected north-west Wales over the life of many Governments. We have experienced the solutions proffered by successive Governments, including the big project, the instruction to "get on your bike" and the injunctions to be more enterprising which come with the—usually unspoken—condemnation that we Welsh people have some sort of congenital deficiency in the enterprise department. Those answers have never been more than partially successful. Projects such as building nuclear power stations mopped up medium and short-term unemployment to a degree, but some projects brought long-term costs with them.

Albert Owen (Ynys Môn)

The hon. Gentleman mentioned nuclear power. Does he accept that Wylfa nuclear power station in my constituency, which is the only nuclear generator left in Wales, contributes a quarter of Anglesey's GDP? It is very significant as it is the largest employer; it has been there since the 1960s and could last another 10 years. Instead of dismissing it, will he agree that it makes a major contribution to the local economy?

Hywel Williams

That is an interesting intervention. There is a nuclear power station on Anglesey, and hon. Members will recall that nuclear power was put on the back burner by the announcement yesterday, so I am not sure that the Government share the hon. Gentleman's confidence in its long-term future. However, Anglesey's economy is certainly dependent—some might say over-dependent—on large-scale projects. That is the point that I am making.

Studies such as that done by Lovering on the building of Trawsfynydd nuclear power station show that big projects have often had a negative effect on local economies, depriving local enterprises of their best and most skilled workers, who are drawn away by bigger pay packets. However, those may be available only during the construction phase and, in the long term, only for a minority of workers. I know of local workers employed on a succession of big projects who had to keep moving on; for example, once the Dinorwig pump station project was completed, they moved on to the channel tunnel. When that was completed, who knows where they went?

For those people at least, coming back to north Wales was not an option because the local economy was going through another big post-project slump. That is quite apart from the serious consequences for the local economy of the siphoning off, away from the area, of the profits of big enterprises. Small businesses spend locally. Big ones, on the whole, do not. McDonald's, of course, purchases and delivers everything from its centres, from the buildings to the ketchup on the tables.

Those considerations apply equally to the longstanding injunction to the people of north Wales to "get on your bike". Getting on their bike brought some relief to the more mobile and the more desperate, but it distorted local unemployment figures and denuded our economy of the very people whom we need to ensure long-term prosperity. Generation after generation has had to leave north Wales—and the valleys as well, for that matter—to work elsewhere and to contribute to the prosperity of other places. That is to say nothing of the negative effect of that migration on Welsh language and culture.

As to our supposed lack of entrepreneurial spirit, we might call that interpretation a classic case of blaming the victim. Economic activity is weak, and that is presented essentially as the fault of individual economic actors, rather than as being caused by more fundamental, long-term structural factors such as low investment, concentration of Government funding in the south-east and lack of venture capital. There is low investment in structural economic goods, such as railways, roads and, as the hon. Member for Clwyd, South mentioned, broadband.

I understand that the ludicrous suggestion has been made that the broadband map for Wales, instead of being Wales-based and following the objective 1 and non-objective 1 areas, as the National Assembly has argued, should be based on a division of Wales, linking north Wales with the north-west of England, mid and south Wales with the midlands of England, and Cardiff with Bristol in a putative Severnside. That is reminiscent of the discredited economic thinking of the 1950s, with its wilful disregard for the unity of our country. It pays no heed to the business reality of working in the context of economic planning by a Government for Wales at a Cardiff-based National Assembly. I ask the Minister to assure the Chamber that the proposals are to be dumped.

Mr. Nigel Evans (Ribble Valley)

The hon. Gentleman seems to be ignoring the economic reality too. He will know that the people of north Wales tend to look towards the north-west of England to do business, and that there is great interaction between the two areas. The same applies to south Wales and Bristol. That is a two- way street, but the hon. Gentleman seems to want it to be completely cut off, instead of wanting proper interaction between England and Wales.

Hywel Williams

On the contrary. Conservative and Labour Governments devolved power to Cardiff, and the structure for economic planning in Wales is the Assembly. That is why the objective 1 map is cut into east and west, and why broadband should be planned on a Wales basis. That is the context within which businesses, large and small, must work. They do not look to the north-west for economic development; they look to Cardiff, to the WDA.

There is an over-concentration of Government investment in south-east Wales, and especially in southeast England and the Thames valley. Wales, and north Wales in particular, gets nothing like its fair share of Government research and development spending per head of population. We would receive a great deal more if we had a regional policy that actively directed Government investment and jobs away from the golden triangles of south-east Wales and south-east England.

North Wales suffers from a lack of venture capital, and the Venture Capital Association showed in its recent reports that venture capital is overwhelmingly invested in the south-east of England—48 per cent. is invested there. Those are private investment decisions, but they take place under a Government who are obsessed with developing south-east England rather than the English regions or Scotland or, for heaven's sake, Wales.

Chris Ruane

The hon. Gentleman is right to point out past mistakes, but will he give no credit for action that has been taken, such as the establishment of Finance Wales, by a Labour Administration in Cardiff to make venture capital more accessible in Wales? Will he give credit for the research and development centres in St. Asaph in my constituency, the Optronics project and the centre at Parc Menai in Bangor?

Hywel Williams

Indeed, I began my remarks with a welcome for the growth in certain types of employment. Per head of population, however, north Wales has not had its fair share of investment. I hope that the hon. Gentleman accepts that. He and I should be working to increase the proportion of research and development spending.

The north Wales economy is weak and less able to sustain growth from inside—the Chancellor's famous "endogenous growth." The economy has many very small enterprises of one or two persons. In other circumstances those could be the engine of economic renewal and growth, but they struggle to prosper in a hostile climate without the capital backing to weather storms and to expand. When a business in my constituency catches a cold it can prove fatal.

Not for nothing are north and west Wales an EU objective I area; they are defined as such by their low GDP, which is the result of low investment and low levels of economic activity. The Catalyst report of December 2002, "The Challenge of a Longer Life—Economic Burden or Social Opportunity?", illustrates the regional element clearly. It shows that between March and May 2000, the activity rate for men aged 50 to 64 and women aged 50 to 59 were 61.3 per cent. in Wales, compared with 76.8 per cent. in south-east England. We have an under-employed work force, and that is a long-term structural problem.

That is also, however, an opportunity, as I am sure hon. Members will agree. We have the work force; we have people with the life and work experience to take jobs, if there were jobs available. Unemployment in north Wales is higher than in many other parts of the country. Last month, at 4.8 per cent., unemployment in my constituency was the sixth highest in Wales. I will not argue now about how we arrive at those figures, but the broad point is that unemployment in north Wales, and in north-west Wales in particular, is higher than elsewhere.[Interruption.] Indeed, as I have already said twice, we have a seen a welcome drop in unemployment. However, I am concerned that in my part of north Wales unemployment remains higher than elsewhere. Why does that disparity exist?

I see the hon. Member for Ynys Môn (Albert Owen) busily working on his speech. Perhaps he would like to include the following statistic: although unemployment in my constituency is the sixth highest in Wales, unemployment in Ynys Môn is the second highest at 5.9 per cent. That compares with 2.9 per cent. for Wales as a whole.

There are hopeful developments, and I pay tribute to Government agencies and those entrepreneurs—in small and large businesses—who are making sterling efforts. I note briefly the small business sector in my constituency, which is overwhelmingly important. Small businesses form the major part of Gwynedd's economy and are the potential engine for growth. It is a truism, but if every small business employed one extra person, we would be out of the mess that we are in. However, there are hopeful developments, such as Gwynedd council's objective 1 scheme, the business development grant, which is funded with European money. Extra money will come from London eventually.

Chris Ruane

Delivered by Labour.

Hywel Williams

Eventually. That cost someone his job in Cardiff. He is now doing penance by taking the Hunting Bill through the House.

Chris Ruane

Very skilfully.

Hywel Williams

Indeed. We all extend our sympathies to him.

The business development grant to fund new jobs in the small business sector in Gwynedd has been hugely popular and tremendously oversubscribed. The capital set aside for two years has been exhausted in only a few months. That is an excellent example of the local public sector priming and supporting organic economic growth, with support from the Assembly, the Government and the European Union. Before hon. Members point it out, Gwynedd has so far received approval for objective 1 grants to the tune of £12 million, which is very useful indeed.

Another example of potential job creation is in a sector that sometimes sets people's pulse racing: call centres. I say "potential", because on the WDA's list of 164 call centres in Wales, which employ more than 20,000 people, only one is in Caernarfon. That is the Manweb centre, which employed some 25 people when I visited it some time ago. Those are valuable jobs, but there are only 25 of them. There is another call centre that, as far as I can see, does not feature on the WDA list, which is the Galw centre in Porthmadog. That is a rural project supported by the Cymad rural development agency, but it employs only six people. That, with the 25 jobs in Caernarfon, is the sum total of call centre employment in my constituency.

There are some interesting points in the WDA's brochure for call centres. The WDA points out that Cardiff has half of call centre employment and one third of the centres. Newport has 20 per cent. of the jobs and 10 per cent. of the centres. Swansea has 20 per cent. of the jobs and 13 per cent. of the centres. There is room for growth. Some 1.1 per cent. of the people employed in call centres in the UK are in Wales.

Mr. Martyn Jones

Is it not the case that call centres tend to be based in areas where the accent is recognised as being understandable? Consequently, there may be a problem in Caernarfon.

Hywel Williams

I doubt that my constituents would agree that their accent is not understandable. With such matters it all depends on where one starts. After all, London is a long way from everywhere. However, the hon. Gentleman raises an interesting point, and I shall refer to language skills.

The vast majority of call centres are located in Cardiff, Swansea and Newport. Some 75 of the 164 call centres listed by the WDA are in the south-east-42 are in Cardiff—yet only 12 of those listed are in north Wales, and only one is in Caernarfon. On the hon. Gentleman's point, one would assume, perhaps naively, that in a bilingual county some call centres would be located in areas where there is an unemployed work force that includes older people with life skills to help them in their work, or that they would be located in areas where there are linguistic skills, so that the service can be provided in both the languages used in the country. There is no reason why call centre work cannot be remote from the main centres in, say, Cardiff or London—that is the blessing of the new technology.

What does the WDA tell us about linguistic skills? It is quite instructive. Of course, the WDA works in the private sector, but its pitch is that 14 per cent. of staff speak major European languages and 16,000 foreign nationals live in Wales. There is not a single mention of the Welsh language, but given that Government call centres deal with the local population, rather than foreign businesses and exports, there is a strong case for considering the issue.

Albert Owen

Is the hon. Gentleman aware of a call centre in my constituency which deals with travel information? It provides a full bilingual service and employs disabled people, giving them an opportunity to come into the workplace. Unfortunately, private sector funding is wanting, but the centre is a huge success, and I agree with the hon. Gentleman that others are too.

They do not have to be in Cardiff; the centre in my constituency serves the whole of Wales by providing Wales-wide integrated bus and train information.

Hywel Williams

The hon. Gentleman makes a valuable point; indeed, it makes itself. However, there must be the political will to site centres, particularly those that provide Government services, away from the golden triangle in the south-east. We are looking for that political will from the Government, and I ask the Minister to give us an assurance that proper consideration will be given to locating the new Jobcentre Plus call centre in north Wales and, if possible, in northwest Wales. The centre will create 250 long-term, rather than fly-by-night, jobs, which will be well paid by local standards. If we have a call centre in Swansea, we also need one in the north-west, for the reasons that I outlined earlier.

The nature of unemployment and employment in north Wales is instructive for developments in the UK, where the not-so-hidden hand of Government favour has made the south-east of England massively rich, while making it increasingly difficult for people on average incomes to live there. The Minister will no doubt note that help is available, but RSA grants, for example, are falling, as theFinancial Times noted yesterday. We need a proper interventionist regional policy for Wales and the UK. Investing in the poorer regions in the north and the west is a political choice, and it is a question of priorities.

10.2 am

Ian Lucas (Wrexham)

I congratulate my hon. Friend the Member for Clwyd, South (Mr. Jones) on securing a debate on the essential issue of employment in north Wales. It is particularly important in the Wrexham area, which is often described—particularly by me—as the economic powerhouse of north Wales.

Wrexham is commonly associated with manufacturing employment, and 28.5 per cent. of employees in Wrexham are in the manufacturing industry. Interestingly, that is more than twice the UK average, which shows that manufacturing in Wrexham is strong, vibrant and continuing.

However, Wrexham also has an intensely successful service sector. When I first moved there 16 years ago, the town centre was in the process of redevelopment. Locally, it was called a bombsite, and it remained in that condition for seven or eight years. My hon. Friend the Member for Clwyd, South is nodding sagely; he clearly remembers the situation well. I am delighted to say, however, that hon. Members who visit the town now will see how vibrant and strong a cultural centre it is. Its cinemas, shops and pubs regularly attract people from poorer climes such as Chester. Friday nights are a delight to behold and are often very busy.

The service sector is attracting finance and good jobs, which we should not decry, because they play an important part in our economy. They are often flexible jobs, and we should encourage rather than criticise the creation of such jobs when we discuss unemployment. It is telling that so far in the debate we have heard little about the service sector.

I shall concentrate on modern manufacturing because it is especially important in my constituency, as I mentioned. I do not want to talk about the past and the traditions of mining at Llay, Gresford and Bersham in Wrexham, and steel making in Brymbo in my hon. Friend's constituency. With due respect to the hon. Member for Ribble Valley (Mr. Evans), a tradition of inward investment has developed over the past 20 years, especially in Wrexham. Two substantial companies from Japan—Sharp Manufacturing, as already mentioned, and Hoya Lens, a Japanese company—have invested heavily in Wrexham and have been very successful for many years.

Sharp Manufacturing is an interesting case in point. It has developed worldwide expertise in renewable energy, especially in photovoltaics, which, given the publication of the energy White Paper yesterday, are very much in the news. The development of that new technology in Britain is not as advanced as in other parts of the world. The successful 100,000 roofs programme in Germany has led to the domestic introduction of photovoltaics, so that renewable energy is used in households much more widely than it is here. That is also the case in Japan.

Sharp knows what an excellent work force it has in Wrexham in north-east Wales, and I hope that the energy White Paper will also show that Sharp is a worldwide investor and that Wrexham, and Wales, are great places for the future development of renewable energy and investment in photovoltaics. I hope that the chairman of Sharp Manufacturing, whom I shall meet later today, will understand how strongly members of the Government believe that renewables must have a future and that there should be investment in photovoltaics in Wrexham and Wales.

Hoya Lens is a very interesting company that benefited from inward investment—before 1997, to give the then Conservative Government their due. Last autumn, it secured a visit from the lord lieutenant and received the Queen's award for export—a tremendous achievement for the company, and the result of the hard work of its management and employees. It has become clear in my dealings with the company and on my constituency visits that one of the reasons for Wrexham's success in manufacturing is the close working relationship between management and trade unions. They talk to each other, deal with difficult times together, and share the spoils of success. Any business must succeed on that basis. It is sensible to adopt that approach, and to work together especially when times are difficult. The best example of that, of which we are all aware, is the excellent work done by the AEEU and the Airbus company in the immediate aftermath of 11 September and the flexible, sensible and long-term way in which the company and the work force responded to that crisis.

We must not forget that not only Airbus in north Wales provides employment to workers in our area. Only last week, I visited Mayflower Aerospace in Llay in my constituency, which works closely with Airbus and supplies components to it. A huge and developing aircraft sector is developing in north-east Wales that we must cultivate, strengthen and develop.

Wrexham is in one sense a victim of its own success, because for many years it had grant-aided status. I have said that there was substantial inward investment in the past. Because of that success and the fact that Wrexham's unemployment rate is now 3.2 per cent., compared with over 20 per cent. 20 years ago, it no longer has grant-aided status. That means that the town and the economy must compete with objective 1 areas to the west and east, which obviously has its difficulties. Benefits that were offered in the past cannot now be offered to certain companies to bring them to Wrexham. We must therefore do all that we can within the local economy to ensure that there is the right infrastructure for development.

At times, there are disappointments. My hon. Friend the Member for Clwyd, South referred to the jobs lost at Owens Corning last autumn. We face intense competition. It is clear whenever I talk to representatives of industry in my constituency that that is the one thing that is constant. There is competition from other objective 1 areas, as we have heard. There is also competition from abroad, including from the developing countries in central Europe—the accession countries—which can often offer lower wages and sometimes cheaper jobs. They may not be able to offer the same skill levels as our area, but they are certainly real competitors. Companies often move to such areas if there are setbacks in our economy.

There is also developing competition from the far east. We are all aware of the intensity of the competition in a worldwide market and a worldwide economy. Therefore, we must create a strong infrastructure. By infrastructure, I mean two things—a strong physical infrastructure and a strong education and training infrastructure.

I shall deal first with the physical infrastructure. The Wrexham industrial estate in my constituency is huge. It has employers such as Kellogg's, Tetrapak and JCB Transmissions, which employ large numbers of workers with a high skill level in excellent jobs. The estate has been very successful in competing with the different areas of the country and the other parts of the globe to which I have referred.

The one thing that the estate lacks, as I often hear from managing directors and trade union representatives on the estate, is a decent road connection. The current road connection is along Hugmore lane, and is precisely that—a lane. It is not good enough that such a developed and intensely successful industrial estate should have a road connection of that nature. That has been discussed for the past 20 years, so it was a matter of grave concern when the Welsh Assembly Government recently decided that a proposal for a link road to the industrial estate should be rejected. I should like my hon. Friend the Minister to pass on in his discussions with the Welsh Assembly my concern that the necessary road infrastructure is not being provided. That disadvantage for the local economy needs to be addressed.

The second type of infrastructure that is necessary in a high-skill economy such as north-east Wales is the one that will create the strongest and best work force. That involves close links between education and industry. I am very happy with the work to develop close links with local industry that is being done by the North East Wales institute and Yale college, which are in Wrexham, and by Deeside college, which is outside my constituency. One reason why north-east Wales in general and Wrexham in particular have been able to develop as they have is that they have a good, loyal work force and a strong culture of learning, developing and extending skills. The nature of the work force that we need means that that has to be done with major universities and learning institutions, and I welcome that great work. We need to extend it, but we are seeing real benefits and the prospect of improving our work force and making them even more competitive.

One area that needs development in my constituency is the culture of entrepreneurship, which is lacking generally in north-east Wales. In Wrexham, there are 2.24 registrations for VAT for every 1,000 adults compared with a UK average of 3.41. That is a consequence of there being no great tradition of entrepreneurship in our area, and we have often looked to larger employers to provide work. That is beginning to change, partly because of the good work done by the Welsh Assembly Government with European funding for projects that aim to provide skills to villages that have a mining or steel background.

In places in my constituency, such as Llay and Gwersyllt, work is being done with the local council to develop an entrepreneurial culture and improve employment prospects in those areas. That is a long-term goal, and it will not happen overnight, but progress is being made. If we are to have a strong economy in the long term, we need a society in which individuals start their own businesses and eventually take on employees themselves. That has not been common in the past in our area, but there is no reason why it should not be in the future.

The view from Wrexham is positive. We have a strong manufacturing economy, but we need to do things better and cultivate an atmosphere of entrepreneurship for smaller companies. Unemployment has fallen substantially in my constituency since 1997, and we must continue to work to reduce it further. I am confident that with low interest rates, a strong economy and a loyal work force, that will be done.

Mr. Deputy Speaker

Two hon. Members have indicated that they want to contribute, and I remind them that there are three Front-Bench spokesmen and the winding-up speeches must start at 10.30.

10.18 am
Chris Ruane (Vale of Clwyd)

I shall keep my comments as short as possible. I am aware that some Members have taken 20 minutes for their speeches, but I hope to give my hon. Friend the Member for Ynys Môn (Albert Owen) at least half the time left.

The economic success in north Wales has not been an accident or a legacy of the Conservative party. It has been the result of deliberate actions of the Labour Government since we came to power in 1997, and I can give examples. Labour has secured objective 1 funding for Wales, especially for Denbighshire and Conwy, which were left out initially. Labour has utilised grants in Wales to develop parks such as the St. Asaph business park, which was developed under the Tories 11 years ago but created only 100 jobs in seven years. Under Labour, some 1,500 jobs have been created since 1997, and an extra 1,000 are expected. There will be as much development in the next eight months as there has been during the past eight years.

We should also consider the heritage lottery, which under the Conservatives was used for the playing fields of Eton and to spend £12 million on the Churchill diaries. Labour's philosophy is to use the heritage lottery funding for places where there is heritage, architecture and poverty and to benefit towns such as Denbigh and Rhyl, which between them will receive a £12 million package. We have also had social justice, with the minimum wage, which has helped the poorest in our society. The Conservatives said that that would cost hundreds of thousands, if not millions, of jobs, but that has not occurred. In my constituency, unemployment has decreased by almost 50 per cent.

When the Conservatives were in power, there were no further education colleges in my constituency, but under the Labour Government two have been established, in Rhyl and Denbigh, giving access to education for 4,000 local people. The Labour Government have provided the infrastructure, but the extra jobs have been provided by the hard work of local business people in my constituency. Those business people include John Sutherland from Vanguard, Mike and Shaun Walsh from Anglia Building and Tony Palframan from Phoenix Glass, ably supported by Steve Pender. They are local lads, some of whom grew up on the same council estate as I did. They are contemporaries of mine who have prospered through their hard work and have provided employment opportunities for hundreds of people.

Under the Conservative Government, there was no foreign inward investment in my constituency, but under this Government two key investments have been made—by TRB, a Japanese automobile component manufacturer, and Pachem, an Austrian company, providing work for more than 200 people. There are large employers in my constituency such as Thales and Hotpoint, which between them employ more than 1,500 people. Some of those jobs, especially at Thales, are highly skilled—50 per cent. of satellite glass that circulates the globe is made in Bod St. Asaph.

There are also successful small employers in my constituency, such as H & D Fitzgerald. Heather and Dennis Fitzgerald employ only 10 people, but their company is the chief density calibrationist in the world, and exports to 70 countries. CMG Payroll is involved in intermediate labour force, which is key to getting longterm unemployed people back to work. Clogau Gold, one of the foremost jewellery brands in the whole of the country, is in my constituency, as is Tweedmill, a retail and tourism development that is one of the top 10 tourist attractions in north Wales. Tweedmill had growth of £900,000 in 1996 and £7 million this year. I could mention many other companies—Buckle Insurance, Craig Bragdy pottery and Caradon, for example. There is, therefore, a good tale to be told about my constituency. The Government have provided the infrastructure, but the people in my constituency have created the wealth, jobs and opportunity.

Looking to the future, we will need to look after the traditional sectors—retail, agriculture, tourism and energy—which have all been hit hard over the past 10 to 20 years. However, we must also diversify and create specialisms. In an earlier intervention, I mentioned that the speciality in my constituency was opto-electronics—the optic project based in the St. Asaph business park. That project has a £50 million investment objective, which will create 22 new companies every two years, and an estimated 900 highly skilled jobs. That will make north Wales, and St. Asaph, one of the top opto-electronic centres in the world. That is what we should be aiming for. We do not want crumbs from the table—we want the best for Wales.

We should concentrate on specialisms, whether it be software in Bangor, opto-electronics in St. Asaph or aerospace in the Deeside area, and should train our young work force in those areas. Education and training are key to such development. Our universities—I hope that Wrexham will obtain university status—and our further education colleges should be tied into local training for local needs, not only to support the companies that are currently in the area, but to attract new companies in future.

We have a bright future. Will the Minister consider the issue of structural funds, which will come to an end in 2006? We have done great things with structural funds. My constituency, and the wider county of Denbighshire, have the highest draw-down in Wales—£140 for every man, woman and child, and those funds have been put to good use. Will the Minister ensure that we get a good deal after 2006 and that there is justice both for my constituency and for Wales?

10.24 am
Albert Owen (Ynys Môn)

I, too, congratulate my hon. Friend the Member for Clwyd, South (Mr. Jones) on securing this important debate.

Unemployment has affected my constituency rather more than other constituencies in Wales. Throughout the 1980s and the early 1990s the levels equated with those experienced in the 1930s. It is said that during the period of boom and bust in the 1980s, Anglesey just got the bust. That is a little unkind, but the period resulted in mass depopulation which had a profound effect not only on the economy, but on the social and cultural fabric of north-west Wales and Anglesey in particular. Our young people were haemorrhaging away as a result of the lack of job opportunities.

There has been good news since 1997. According to the House of Commons research department, unemployment in my constituency, based on residence base rate, stood at 2,451 in December 1997. That fell to 1,855 in December 2002, which represents a drop of 36 per cent. in that period. Equally impressive is the fact that in the last 12 months unemployment fell by 15.4 per cent. However, that rate is still too high at 5.6 per cent. compared with the Welsh average of 3.5 per cent. However, male unemployment was over 18 per cent. for the whole of the 1980s. Before I was elected to the House I was a manager of a centre for the unemployed. I saw at first hand the blight that high unemployment is on communities and individuals.

I support the thesis that the Government set out that low unemployment and low inflation can co-exist through sensible macro-economic policies and planning. The impact of Government policies such as the minimum wage has also been profound in my area. It has benefited more than 2,000 low-income families. Indeed, of those 2,000 families almost half saw their wages double from £1.80 an hour to £3.60 an hour. Instead of the downturn forecast by the Opposition, jobs have been created since the introduction of the minimum wage.

I mentioned the macro-economics of the Labour Government but, as my hon. Friend the Member for Vale of Clwyd (Chris Ruane) said, it is down to the businesses themselves. We must create the confidence. The policies that the Government have introduced have helped, but we need the infrastructure. Roads are a basic form of infrastructure that was sadly lacking during the 1980s. The dualling of the A55—the road to opportunity—stopped at Llanfair PG under the Conservatives. It was meant to link Chester and Holyhead on the way to Dublin. I can recall lobbying the Wales Office when this Government were elected. My right hon. Friend the Secretary of State for Wales was the Under-Secretary of State at the Welsh Office at the time and he gave the go-ahead for that road-building project so that we got that basic infrastructure.

I do not accept that north Wales, north-west Wales or Anglesey are on the periphery. That is just a London-centric, Cardiff-centric view. Anglesey is at the heart of the British Isles, bang in the middle between mainland Wales and the island of Ireland. We need to look westwards. That is what happened when the port of Holyhead submitted a major bid for objective 1 status so that it could attract trade from Ireland. I was happy to lead a delegation to the Under-Secretary of State for Wales, my hon. Friend the Member for Islwyn (Mr. Touhig), and to the Secretary of State for Transport after I had met with the Minister for Economic Development from the Welsh Assembly and Members of the European Parliament.

It was a real partnership of Westminster, the Assembly and Europe working together that secured that £3.4 million bid. In addition to that sum there was £9 million of private investment, making Holyhead the principal port on the western seaboard. It enjoys the benefits of the Celtic tiger economy. The fastest growing economy in the last 20 years has been in Ireland. The Irish tiger merges at Holyhead with the Welsh dragon. The claw and the paw meet. It gives a real Celtic lead to economic revival.

As there is not much time, I will concentrate on another major job boost in addition to the port of Holyhead, which is RAF Valley. At a time when jobs have been contracting in military bases throughout the United Kingdom, last year 100 additional jobs were announced at RAF Valley in the private sector working with the military establishment. This is a huge boost to the area; 90 of those jobs will be highly skilled civilian jobs. The employees will learn their trade and work and live in the area rather than having to leave the area after training as was the case during the 1980s and 1990s.

My campaign is to get civil aircraft landing at RAF Valley. It has huge potential and it has been underused for many years. The only people who use it now are rich individuals who fly in on chartered flights. I want to see a people's airport there that can bring business people to the area, who can link up with the rest of the United Kingdom. That is important. I hope that the Minister will continue to help; I know that the Wales Office has been proactive.

Confidence is growing in my area because the Government have invested in its infrastructure. It is wanting on new technology such as broadband, as my hon. Friend the Member for Clywd, South and the hon. Member for Caernarfon (Hywel Williams) said. We must work together to achieve a proper infrastructure in new technologies. Yesterday's White Paper will be of great assistance to us. We should run with that and say that north Wales is the place for renewable energy. Let us be proactive. In the port of Holyhead we are talking about constructing windmills that can be put out to sea anywhere. Let north Wales have those skills and develop in a positive way.

10.31 am
Mr. Roger Williams (Brecon and Radnorshire)

I, too, congratulate the hon. Member for Clwyd, South (Mr. Jones) on obtaining the debate. He welcomed all hon. Members to the debate this morning, including some hon. Members who were not actually present, but he neglected to welcome me. I am concerned as to why I was left out.

Two hon. Members here are refugees from the Standing Committee on the Hunting Bill. It must be a great relief to them to have the opportunity to debate the serious issue of employment in north Wales. We have had a good debate. The one aspect that I expected to be given more prominence but has been left out is the public sector, which is very important in Wales and, of course, in north Wales. Not only does it provide employment, job opportunities and a promotions system and job progression that are sometimes unavailable in smaller companies that are active in the Welsh economy but it contributes hugely to the quality of life that people enjoy in north Wales.

I supported the increased investment in public services. One of the problems will be providing training and education for people in social services and the health sector, from care workers to consultants. We desperately need more opportunities for training so that those skills can be made available. The same applies to education. There is a shortage of teachers in many disciplines in schools in Wales.

I would like to make one point in particular to the Minister about public sector employment. The two-tier system in public services that have been put out to tender is a scandal. For instance, in a number of local authorities in Wales where residential homes have been externalised, employees who transferred over were protected by the Transfer of Undertakings (Protection of Employment) Regulations 1981 and are now protected by contracts of employment. However, people employed after that time often have much worse terms and conditions, with much less pay and holiday entitlement. It is a scandal, and I am pleased that the Government have announced that they will do something about it. I urge the Minister and the Wales Office to play a full part in ensuring that the situation changes as soon as possible.

Manufacturing has been mentioned. Other speakers have demonstrated a huge swell of optimism, but things are not so rosy everywhere. I think particularly of KTH Wales Limited, the aluminium forging company in Llanidloes, which has experienced great difficulties. It has lost almost 250 jobs, which is a huge burden for a small community—in terms of the proportion of the population in employment, it is the equivalent of 25,000 jobs lost in Cardiff. I am pleased that both the Secretary of State for Wales and the Assembly's First Minister have shown a great interest in the matter and are working well with the action committee on Llanidloes.

However, there are lessons to be learned. The first is that problems can arise if a small community depends on one employer who gets into difficulties. Secondly, Wales has previously been sold as a country that can bring to inward investors the benefit of low unit costs based on low pay rates. However, with the enlargement of the European Union, there is a danger that such businesses will move to other areas with low wages. The Government have not merely to reduce unemployment but to improve the quality of the employment that is available to people in Wales, so that Wales can compete on the basis of more and better skills rather than by turning out low-value products that are dependent on a low-wage economy.

My final concern is the transport system in Wales. The hon. Member for Ribble Valley (Mr. Evans) has mentioned that Cardiff is involved in the economy of Bristol and the west country. Cardiff and south-east Wales could be involved with the economy in north Wales as well if there were better transport between south and north Wales. That would make for very large improvements, not only in north Wales but in mid-Wales. There seems to be no real determination to put that right. I hope that the Minister will address the issue, because it is key to improving the economy of Wales—especially in the north.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)

I agree with what the hon. Gentleman has just said. I urge, through him, that Ministers intervene in the question of the proposed cut in franchisees' costs by the Strategic Rail Authority. The all-Wales franchise will inevitably mean further cuts in railway services.

Mr. Williams

The hon. Gentleman makes a good point. I hope that the Minister will address that issue as well. The hon. Member for Ynys Môn (Albert Owen) made an important point about improving RAF Valley so that air transport could he spread throughout Wales. A hub and spoke system based in Cardiff would ensure that air transport, which is so necessary for the development of modern industries, would be available to the whole of Wales.

The challenge to the Government is not to reduce unemployment, although there are unemployment blackspots where particular effort is needed, but to improve the quality of employment in Wales so that young Welsh people have the opportunity to stay in Wales and have a full career based in the businesses there.

10.39 am
Mr. Nigel Evans (Ribble Valley)

I congratulate the hon. Member for Clwyd, South (Mr. Jones) on securing this debate. I hope that it will not replace the St. David's day debate, which was to be held tomorrow but has, for understandable reasons, been moved. I hope that there will be an announcement shortly as to when it will be rescheduled.

If this debate has proved anything, it is that there will not be a referendum on the euro during this Parliament. Not one Member has mentioned the importance of joining the euro to the vitality or economy of Wales. That is important, and I noticed it.

The hon. Member for Brecon and Radnorshire (Mr. Williams) mentioned the importance of the public sector—heck, we know that. It has grown dramatically since 1997, not only in Wales but throughout the country. I was interested, though not surprised, to read the Government's plans for the Welsh Assembly. It is proposed to scrap the post of Secretary of State for Wales and to reduce the number of Westminster MPs who would be able take part in debates such as this, but to increase the number of Assembly Members in Cardiff by eight. That is another example of growth in the public sector created by the party to which the hon. Member for Clwyd, South belongs. That is not the way to create a vital economy in Wales, and certainly not in north Wales.

I think that it was the hon. Member for Caernarfon (Hywel Williams) who said that London was a long way from north Wales. In many respects, Cardiff is also a long way from north Wales. It seems that north Wales is losing out, and we need to refocus to ensure that all parts of Wales benefit from any upturns or increased economic vitality in the United Kingdom.

From travelling around Wales, I must say that Ynys Môn is one of the most attractive parts of the United Kingdom, never mind Wales, and I am very fond of it. The hon. Member for Ynys Môn (Albert Owen) mentioned RAF Valley. He did not have enough time to go on at length about it, but I agree with him completely. It is important that something is done about the regional airports in Wales, and to consider how commercial traffic can be facilitated in getting to Ynys Môn and north Wales generally, to open up the area. It is important that business people do not think, "Goodness me, Ynys Môn is five hours away by road from many parts of Wales, never mind England." If we can open the region to commercial traffic and show that business people can get from parts of England into north Wales very quickly, it would boost employment prospects.

Albert Owen

Does the hon. Gentleman realise that RAF Valley is not only easily reached from England but is only eight minutes from Dublin airport?

Mr. Evans

The hon. Gentleman mentioned looking westwards. Swansea is also looking to get a hub in Ireland and then in the huge markets of the United States of America. There is no reason why RAF Valley ought not be looking ambitiously at such potential.

The hon. Member for Clwyd, South mentioned broadband, which is important. We do not want Wales to be left behind in the information technology revolution; nor do we want rural areas to be left behind in comparison with urban areas. He also mentioned call centres, and there is no reason why north Wales ought not to get its fair share of them. He was skating on thin ice when he said that callers could not understand what people in north Wales were saying. Many call centres are located in Scotland, and people there might be accused of suffering from the same disadvantage.

Mr. Martyn Jones

I thank the hon. Gentleman for giving way during such a short speech. The people who establish call centres reckon that the accent in southern Scotland is considered trustworthy, and therefore useful. I am sure that that is also true of Caernarfon, but at the moment that is not certain.

Mr. Evans

The ice is getting thinner every time the hon. Gentleman speaks.

I want to concentrate on agriculture, a sector in which there are real problems in respect of incomes in north Wales. The incidence of suicides among depressed farmers is much higher than for the rest of the population and we must try to tackle that. Manufacturing has been mentioned and is also vital. The DTI manufacturing advisory service, Cymru, has produced a glossy supplement. It is the first edition, but unless it helps manufacturers throughout Wales, I hope that it will be the last. We want real help and the best way to accomplish it for businesses and for services is to listen to what they are saying.

A list was produced of factory units facing closure over recent months. Eastern Europe and the greater attractiveness of EU accession countries has been a problem, and we must do all that we can to retain our employment. Hon. Members will recall the survey of Welsh businesses conducted by the Federation of Small Businesses, which highlighted as a major problem the volume, complexity, rate of change, interpretation and implementation of EU legislation. That helps to explain why businesses are not expanding as they should be. Red tape is a real problem.

The front page of today'sFinancial Times states: The Better Regulation Taskforce will report Whitehall officials to the National Audit Office claiming that they are producing `poor quality' assessments of the burden of new red tape. The British Chambers of Commerce estimates the cost of regulation to business has climbed by £20 billion since 1998. Something must be done about that, and we need to reflect more on the burden of red tape. We have all received in the post the "Have You Heard? By Law" leaflet outlining all the health and safety rules and regulations that businesses have to comply with. It specifies a host of rules and regulations that people have to abide by and it is estimated that it would cost 100 for the entire pack to be displayed in offices.

Is it not time that we talked to businesses and offered a commonsense reduction—perhaps a bonfire of unnecessary regulations as well as the bonfire of quangos that we were promised a long time ago? Our businesses—particularly small businesses, which have always been the engines of employment growth in local areas—must be given every opportunity to expand. The hon. Member for Caernarfon was right to refer to small businesses, rather than the bigger boys, sourcing and networking locally. We should therefore give small businesses in north Wales as much support as possible.

I have noticed a touch of complacency in the debate. I fully understand what Government Members are doing, but we must be more realistic about the problems of north Wales. Transport infrastructure is one key problem that requires attention. The perceived remoteness should be completely eradicated. North Wales people have the skills and a good quality of life, which means that businesses would be welcome to start up there.

Sadly, in Ynys Mön, unemployment stands at 5.9 per cent., substantially higher than in areas such as Montgomeryshire and north Cardiff where unemployment is 1.7 and 1.9 per cent. The disparity between areas of the lowest and the highest unemployment in Wales is considerable. I am not the greatest enthusiast for the National Assembly of Wales, but we should encourage it to redirect its attention to the problems that I have mentioned. I recall that during the halcyon days of 18 years of Conservative Government the Welsh Development Agency commanded great respect as an institution and secured a good deal of inward investment. Now it is competing against several development agencies throughout the United Kingdom, so the competition is stiffer.

I hope that the Minister will start to address some of the problems that I have mentioned today. There is no reason why we should not work together to try to lift the burdens of taxation and national insurance contributions—a tax that will start on I April—and all the other rules and regulations that hamper businesses in Wales. We should let those businesses grow. We will be looking carefully to see whether, in the Budget, the Government will start to pay a little more respect to the hard work, energy and commitment that our businesses give to the people of Wales.

10.50 am
The Parliamentary Under-Secretary of State for Wales (Mr. Don Touhig)

In the short time available to me, I shall try to respond to all the points raised this morning.

I congratulate my hon. Friend the Member for Clwyd, South (Mr. Jones) on securing this debate. It has been an important debate and we have heard many interesting contributions. Unemployment has fallen in every region of the United Kingdom since the 1997 general election, and it has fallen also in every constituency in Wales. In particular, since 1997, north Wales has seen unemployment fall by 40 per cent., youth unemployment by 84 per cent., and long-term unemployment by 61 per cent. Furthermore, Wales has seen the biggest increase in employment of any part of the UK and the biggest fall in the inactivity rate.

I think that all hon. Members accept that a major factor in that change has been the new deal programme. New deal is working hard in Wales; it has delivered substantial reductions in long-term unemployment and long-term youth unemployment. The better Wales target is to help 30,000 people under 25 years of age to leave unemployment and move into work or training by April 2003. That target is being achieved; by September 2002 more than 27,000 young people had already secured jobs.

That is a significant achievement, and I pay tribute to the staff of the employment service, Jobcentre Plus. There has been a sea change in the way in which the service focuses on getting people into work and on making sure that people can move from benefits into work. There are now 61,000 more jobs in Wales than there were last year. Despite the hits caused by the job losses that hon. Members mentioned, Wales continues to attract new job opportunities. That large increase in the number of jobs in Wales represents a high proportion of the total job increase in the UK as a whole; it is real evidence that the employment gap between Wales and the rest of the UK is closing. We are moving towards full employment.

In his pre-Budget report, my right hon. Friend the Chancellor of the Exchequer confirmed an extra £2.3 billion of planned public investment in Wales over the next three years. We should contrast that with the 20 per cent. cuts proposed by the Opposition. That investment will put Wales on the road to becoming a high-quality, world-class economy. That is vital to our future prosperity. For instance, the £427 million of objective 1 funding committed to 759 projects in Wales is expected to create more than 6,000 jobs.

To create jobs, we need more businesses with enterprise and innovation, and with a commitment to invest and develop. In recent weeks, I have seen for myself that we have such business in Wales. I visited Airbus with my hon. Friend the Member for Alyn and Deeside (Mark Tami). What a company that is; it has a huge commitment to investment and to modern apprenticeships. That is the way forward for such companies. I also visited rural Wales, and saw Rachel's Dairy near Aberystwyth. That small business, started by one person, has now expanded to provide quality jobs producing and marketing good Welsh products, which is so important.

I went with my hon. Friend the Member for Preseli Pembrokeshire (Mrs. Lawrence) to visit Petroplus at Milford Haven; that is an exciting development. I visited also a small industry, Llanboidy cheese, which works hard and is developing a market for Welsh products. That is to be encouraged. Wales has people with the vision, ambition and enterprise necessary to make businesses grow, and we need to encourage them.

The pre-Budget report contains good news for business in Wales. Business success means rising employment, and a stable tax base means that we can fund our public sector investment. Corporation tax has fallen for 5,900 companies in Wales, which is also to be welcomed. The first half of 2002 saw more than 2,000 new businesses created in Wales—a 60 per cent. increase over the same period in 2001. On top of that—it is a startling figure—the number of self-employed jobs in Wales is rising. About 165,000 people now run their own businesses in Wales—that is 13.3 per cent. of the work force, compared to 11.9 per cent. in the United Kingdom. That is encouraging, as it shows that we have the confidence to go out and start businesses and help our economy to grow.

As a result of the Government's measures, the unemployment rate in Wales is now lower than the average of the European Union average, the United States and Canada. It is now at the same level as that of the United Kingdom. Such achievements are possible only in a stable economy, with low inflation, low interest rates and low unemployment. We have succeeded at quite a lot in the past few years, but there is still a great deal to do. Colleagues have mentioned that there is no room for complacency, and that is right.

I want briefly to respond to comments made during the debate. My hon. Friend the Member for Clwyd, South insisted that there should not be complacency, and there will be none. Working in partnership with the Labour-led National Assembly we shall push forward our agenda for investment and the growth of the Welsh economy. We certainly remember, as he reminded us, the legacy left by the Conservative Government.

My hon. Friend also raised the important issue of broadband. The Government have responded to the Select Committee's report—which highlighted good practices in the NHS in Wales—and we are working closely with colleagues in the Assembly to deliver broadband across Wales as quickly as possible. That is our objective.

The hon. Member for Caernarfon (Hywel Williams) welcomed several measures that have reduced unemployment. He highlighted difficulties in his constituency, but unemployment has fallen by 60 per cent., which I am sure he welcomes as much as we do. I found it hard to follow some of his arguments. He seemed to suggest that there was a major conflict between large and small employers in an area. I understand that some difficulties can exist, but I think that the mix is essential for the expansion and growth of the economy.

I am sorry that the hon. Gentleman developed an idea that was somewhat isolationist with respect to broadband. The broadband provision that is planned will provide economically viable geographical parcels throughout the United Kingdom. Public consultation led by the Department of Trade and Industry has shown that the restriction of the parcels to Welsh national boundaries is not what business wants; that is not what is required. My colleagues in the Assembly have agreed to be bound by the outcome of the public consultation. The DTI and Assembly officials are working closely together to secure the maxium broadband coverage across Wales.

The hon. Gentleman made an important point about the Jobcentre Plus call centre. I take every opportunity to encourage the development of such projects, and always, like my right hon. Friend the Secretary of State, bring to the attention of colleagues in Government the need to think of Wales as somewhere to locate. Shortly I shall be in Swansea to open the Pensions Agency. That shows that the Government are investing by moving Government facilities and jobs where appropriate.

The hon. Member for Caernarfon mentioned the drop in regional selective assistance grants and referred to aFinancial Times article, of which I have a copy. The DTI has made it clear that regional selective assistance is demand led. Companies are required to bid for the funding. If bids have fallen back, that is the reason for a reduction in RSA.

My hon. Friend the Member for Wrexham (Ian Lucas) made some important points about the strength of the manufacturing industry and the service sector in his constituency. We certainly want to encourage that. My hon. Friend the Member for Vale of Clwyd (Chris Ruane) also spoke about the importance of public investment in his constituency. He talked about structural funds post-2006, and the Government are currently considering their response to the cohesion report. Discussions will take place between our Department and other Departments, and our Assembly colleagues.

My hon. Friend the Member for Ynys Môn (Albert Owen) expressed his appreciation of the investment that has been made in his area to reduce unemployment. I know how hard he has worked to bring about investment in the port of Holyhead in particular, and that is very welcome.

The hon. Member for Brecon and Radnorshire (Mr. Williams) raised the issue of the two-tier system in the public sector. My right hon. Friend the Secretary of State and I will play a full part in developing the Government's views and policies. I am glad that the hon. Gentleman welcomes the recent initiative that we announced. He made particular mention of KTH at Llanidloes. I know what a blow the news was to the community. The First Minister in the National Assembly has asked Team Wales to investigate how we can respond and help there.

I can reassure the hon. Member for Ribble Valley (Mr. Evans) that the St. David's day debate will be rescheduled and will take place shortly. He touched on regulation and the problems that it may cause to business. The Government are committed to ensuring that regulation is fair and effective. We are trying to provide as much protection as possible to business and industry in that context. The Government have listened; they listened and responded accordingly when business and industry suggested that they could reduce the administrative burdens of the national minimum wage.

Last week I was in Belgium. I was struck by the fact that unemployment levels are higher there. I met Ministers and officials who were impressed by our efforts to reduce unemployment. In particular, they were pleased to hear about our new deal initiatives. In spite of the worst global slowdown for nearly 30 years, Wales is achieving great things—more jobs, more opportunity and more investment. Every constituency in Wales is benefiting. We have achieved much and we must be confident. It is important to show the confident face of the new Wales. We may be on the edge of Europe geographically, but there is no reason why we should not be at the heart of Europe economically. The first step is to have confidence in ourselves and Welsh business and industry. If we all work together and show that confidence, Wales will have a good future. We will build on the strong economy and develop prosperity for all our people.

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