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Convergence Funding

Volume 453: debated on Wednesday 29 November 2006

1. What recent discussions he has had with the Welsh Assembly Government on how convergence funding will be spent in West Wales and the Valleys. (102917)

7. What discussions he has had with Cabinet and Welsh Assembly Government colleagues about convergence funding in West Wales and the Valleys. (102924)

My right hon. Friend the Secretary of State and I have regular discussions with Cabinet and Welsh Assembly Government colleagues on a range of issues, including convergence funding for West Wales and the Valleys.

I thank the Minister for that reply, and I am sure that he will agree that the objective 1 programme has been a great success in West Wales and the Valleys. Looking to the future, however, does he agree that we need to build on that success and to ensure that convergence funding is focused on the areas of greatest need, and that there is a complementarity of existing Government programmes and a strategic focus on how the money is spent?

I certainly agree with my hon. Friend about the success of the objective 1 programme. The statistics covering the objective 1 area of West Wales and the Valleys show that unemployment there has fallen by more than 22 per cent. compared with a 12 per cent. fall in the UK. They also show that average earnings since 2001 have risen by 21 per cent. in west Wales and the valleys compared with a UK average rise of 17 per cent. A range of other statistics also shows just how successful the past objective 1 programme has been. We are now moving into the convergence funding programme, and the Assembly has rightly decided—along the lines of my hon. Friend’s suggestion—that it will focus on fewer but more strategic projects, targeting resources where they will have the greatest impact—namely, on skills, research and development, and innovation, to build on the success of the objective 1 programme. It is worth reminding Members what the Opposition said about objective 1—

Does my hon. Friend agree that the wise investment of the objective 1 funding in Wales has secured the future protection of both traditional and modern, 21st-century industries? Examples include a £1 million investment in Conwy port in my constituency, which has secured the future and development of the fishing industry there, and the £8 million investment in Technium CAST at Parc Menai in Bangor, which has ensured the continuation of the successful partnership between businesses and the university of Wales, Bangor. That has secured safe jobs in my constituency.

I congratulate the organisations that have been involved in trying to support the traditional industries as well as the cutting-edge industries such as those being developed at Technium CAST, which I visited last year. My right hon. Friend the Secretary of State also visited it recently and met representatives of Brandsauce and the Inspired Gaming Group, which are creating more than 200 new jobs there. That is a good example of how objective 1 funding has been able not only to protect existing jobs but to go into the innovative industries such as those at Technium CAST. We were regularly told that objective 1 would not work or that we would not get it, but we did get it and it has been a success, and Members on both sides of the House should congratulate the Welsh Assembly Government on the way in which they have delivered objective 1 programmes in Wales.

What discussions has the Secretary of State had with the Treasury regarding the cutting of Revenue jobs in the objective 1 areas at the same time as jobs are being created? The Government are destroying well-paid jobs in Porthmadog and in other constituencies neighbouring mine. Has the Secretary of State done anything about this, or has he just let the Treasury get on with it?

The hon. Gentleman will know that the proposals by Her Majesty’s Revenue and Customs are out for consultation. I have already written on behalf of the Wales Office to express concern about the number of jobs involved and where they will be located, particularly as a significant proportion of them are to be located in the convergence funding area. Obviously, there will be ongoing discussions on that matter. A proper, detailed consultation process is being undertaken on this, in which the Public and Commercial Services Union is actively involved. Indeed, I have already exchanged correspondence with the union. We must recognise that Wales has benefited from the relocation of public sector jobs into Wales, including more than 1,500 in the past few years from London and elsewhere into my constituency and the constituency of my hon. Friend the Member for Wrexham (Ian Lucas), as well as Cwmbran and Cardiff. So there has been a flow in, but the hon. Gentleman has raised an issue that stems from the merger of Customs and Excise and the Inland Revenue, which will result in a far more efficient bureaucracy than we had before. We must take that into account, but the problem lies in where the jobs are being taken from.

The Minister has mentioned the successes of the objective 1 project, but I am sure that he will be aware of figures obtained from the Welsh Assembly Government only last week indicating that, with just one month of objective 1 to go, only 58,500 of the 96,400 jobs promised for West Wales and the Valleys—61 per cent.—have been created to date. Does he agree that part of the problem is the Welsh Assembly Government’s over-centralised approach and tendency to micro-manage projects? Will he urge his colleagues in Cardiff bay to allow more decisions on the application of convergence funding in future to be made at local level, with the full participation of local authorities?

In relation to the success of the project and reaching the job creation target, I would challenge the hon. Gentleman’s comments. He said that the objective 1 programme had only a month or two to go. In fact, the objective 1 programme will not finish until 2008, as there is a two-year time lag. The jobs target is ambitious, but let us be honest—we needed an ambitious target, bearing in mind the economy that the Tory Government left to Wales in 1997. While there will be those who pick particular areas and say that they have not been a success, he must recognise that the objective 1 programme has been a resounding success overall. Unemployment is down dramatically, employment is up significantly and earnings are also up significantly. We see massive progress throughout Wales—