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Manufacturing

Volume 450: debated on Wednesday 18 October 2006

Despite the fact that manufacturing in Wales, as elsewhere, continues to face huge competitive threats from low-cost countries, it accounts for some 20 per cent. of total Welsh economic output, and we continue to attract high-level investment.

Given this Government’s appallingly dismal record on defending the Welsh manufacturing sector, including the loss of another 3,000 jobs in the past six months alone, is the Secretary of State concerned to read the report by Morgan Stanley that Tata Steel, which yesterday announced its bid for Corus, plans to shift the production of steel slab from Port Talbot to India with the potential loss of thousands of jobs in south Wales?

I am astonished that the hon. Gentleman describes our record on the Welsh economy as “dismal”, when there are record numbers of jobs and when Welsh manufacturing is doing better than manufacturing elsewhere in the United Kingdom. New companies are coming in—for example, G24 Innovations has announced that it will create 300 jobs in Cardiff through its £60 million investment—and more jobs are being created in high-tech manufacturing all the time. Yes, low-cost manufacturing is disappearing to low-cost countries. Tata Steel is a huge Indian conglomerate, and the implications of its bid are not clear. I understand that it wants to invest in steel in the United Kingdom and to take advantage of the enormous growth in India by producing steel, including in Wales.

May I draw my right hon. Friend’s attention to early-day motion 2775, which has been signed by many Labour Members and which acknowledges the importance of Airbus to the UK economy? Airbus provides high quality employment in Wales: will my right hon. Friend work with Department of Trade and Industry Ministers to ensure that the next generation of composite wings are designed and built in the UK and not in Germany or Spain?

We will work tirelessly with my hon. Friend to ensure that that is achieved. I am sure that the whole House will join me in paying tribute to his continued work and effort on behalf of Airbus, which is an excellent company that has a site at Broughton in his constituency. There are now 20,000 highly skilled jobs in the aerospace industry in Wales. They contribute £1 billion to the Welsh economy, the great bulk of which comes from Airbus at Broughton. The Prime Minister has visited Broughton, and we will continue to support Airbus.

Does the Secretary of State agree that Wales could lead the world in environmentally sustainable manufacturing jobs through technologies such as geothermal, wind, tidal, hydrogen and solar power? Does he join me in applauding firms such as Dulas in Machynlleth and G24 Innovations, which he mentioned, in Cardiff, which will lead the way in clean energy for homes and businesses? Will he agree to meet a cross-sector delegation to hear manufacturers’ proposals for an eco-strategy to make Wales a global leader in green and renewable technologies?

I, or my hon. Friend the Under-Secretary, will certainly be pleased to receive a delegation, because this is a vital subject. My hon. Friend visited Dulas and was hugely impressed with the company. I completely agree with the hon. Gentleman, as does Andrew Davies, the Minister with responsibility for economic development. Wales is a centre of clean, green energy production, as well as use.

I very much welcome the creation of 300 jobs near Cardiff in a very exciting new solar energy product, but what discussions has the Secretary of State had with colleagues in the Welsh Assembly Government about the use of initiatives such as Technium in Llanelli to ensure that investment in quality jobs reaches west Wales?

It is imperative that the enormous growth and prosperity that has been generated in south-east Wales, especially in Cardiff and Newport, spreads westward, including to Neath, but not least to Llanelli. There have been big examples of that happening recently. The Technium innovation is hugely successful in Swansea, and it will be in Llanelli, too, with the Government’s support.

The Secretary of State says that we should be happy about the fact that there is a higher percentage of manufacturing jobs in Wales than in the rest of the UK, yet that has always been the case, although the percentage was a lot higher nine years ago than it is today. How many more manufacturing jobs are going to be lost in Wales before the Government finally get a strategy to protect them?

The fact that high-tech manufacturing jobs are coming in, and the fact that companies I have visited such as Sharp in Wrexham and International Rectifier in Newport are investing more and have high-quality, long-term jobs, shows that there is an enormous strength in manufacturing. It is a bit rich for the hon. Gentleman to complain about changes in manufacturing jobs given that 100,000 of them were murdered under the Conservative Government whom he supported.

It goes without saying that a strong, modern manufacturing industry in Wales requires a high-quality skills base. What progress is my right hon. Friend making in bringing the defence training academy—a skills training academy—to St. Athan in the Vale of Glamorgan?

The Government expect to make an announcement on that in the near future. St. Athan’s proposal for a world-class, state-of-the-art training centre for the Ministry of Defence has enormous merit, but the MOD must take the decision in the proper way.

The Secretary of State will be aware that last July his colleague, the Secretary of State for Trade and Industry, said that on the sale of BAE Systems’ interest in Airbus the Government would be given a guarantee that Britain would have a role in future aircraft development. Given that last Friday BAE disposed of its interest in Airbus, can the Secretary of State confirm that under the terms of that guarantee Britain’s place in the future of Airbus and the 6,000 jobs at Broughton are secure?

In fact, there are more high-quality jobs at Broughton. The Broughton centre is the biggest and most successful manufacturing centre anywhere in the European Union, let alone in the United Kingdom. We believe that its future will be secure under a Labour Government—who knows what it will be under a Tory Government?

The Secretary of State has not replied to my question about the guarantee. Is it not expressly subject to overriding shareholder interest? In those circumstances, what weight can be given to it; and is it not in truth virtually worthless?

No, I do not accept that. Airbus in Broughton has expanded year after year under our Government. It is a world centre for wing production that cannot be equalled anywhere in the world, including by Boeing in the United States, and its future is secure.