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Rural Economy

Volume 487: debated on Wednesday 28 January 2009

1. What assessment he has made of the contribution of the rural economy to economic performance in Wales; and if he will make a statement. (250633)

A strong rural economy is vital for Wales as a whole, particularly during the present challenging economic conditions. We and the Welsh Assembly Government are committed to supporting rural businesses with the range of packages that were announced recently, which are designed to help all businesses.

As the Minister knows, Montgomeryshire has seen shops such as Woolworths closing and businesses such as Stadco preparing to lay off scores of staff. Indeed, the number of job losses has risen by more than 60 per cent. in the last year. While the new assistance package is welcome, is the Minister aware that banks are putting such a tight squeeze on local firms that their viability is threatened? Will he meet local business representatives in Montgomeryshire to hear about the effect of reduced bank lending? Such a dialogue would undoubtedly help firms, and also the Government.

We are, of course, aware of the situation in mid-Wales, and in the hon. Gentleman’s constituency in particular. We are especially concerned about what has been happening to Stadco, where the loss of 100 jobs was announced recently. The important point is that we are essentially on the side of people who are suffering in this way, and totally understand their predicament. As Members will know, the proposals announced recently by the Government are designed to promote cash flow and to help small and medium-sized enterprises. In Wales in particular, high street banks have been turning down applications for loans, and Finance Wales has stepped in successfully to help. We are certainly aware of the problems, and we want to see the position improve.

I should be delighted to visit the hon. Gentleman’s constituency. Perhaps we can discuss an appropriate time later.

The rural and valley areas in Wales need better opportunities to embrace the knowledge economy and, to that end, the Welsh Affairs Committee is about to start an inquiry into digital inclusion in the country. Does the Minister agree that Governments at all levels should encourage the public, private and voluntary sectors to work together to overcome the current difficulties in such communities and reduce the isolation that they experience both socially and economically?

I entirely agree. It is vital that we maintain and reinforce our commitment to the development of a knowledge economy in Wales: that is the future.

Speaking as the deputy Minister for digital inclusion, I also consider it important for us to recognise that our investment in new technology and full participation must continue apace. We must not use the present economic downturn as an excuse not to proceed with that agenda; on the contrary, the downturn must be used to reinforce our commitment to its development. We must also ensure that at all times we are strongly committed to the public and private sectors working together. That, too, is the future. I commend what my hon. Friend has said, and the work of his Committee.

Does the Minister agree that enacting legislation that will require all companies, or at least private companies, to use the Welsh language in all forms of business could prove very detrimental not just to the rural economy but to the rest of the economy in Wales, at a time when, tragically, we are seeing hundreds of jobs lost?

The hon. Gentleman should choose his words carefully. I am sure that the last thing any Member would want to do is be seen to be against the Welsh language. It has developed over the past few years, and we want to ensure that it continues to develop with the consent of all the people of Wales.

As the hon. Gentleman will know, the draft Welsh language legislative competence order is due to be published next week. I hope that, as a result, there will be full discussion among all the people of Wales about what is the best way forward.

Does my hon. Friend agree that the rural economy in Wales needs to recognise the vital opportunity provided by the economic downturn, and the fact that people are holidaying in the United Kingdom, to promote our wonderful natural environment, particularly the environmental protection areas? My constituency contains the national nature reserve at Kenfig, and there are local nature reserves all along the coast. In the constituency of my hon. Friend the Member for Ogmore (Huw Irranca-Davies) is the wonderful Garw valley, one of the most beautiful spots in Wales. Does the Minister agree that environmental tourism is a real saviour?

That is a very difficult one to answer.

I entirely agree with my hon. Friend. My constituency contains the magnificent Caerphilly castle, the largest castle not just in Wales or Britain but in the whole of Europe. There are plenty of opportunities for Welsh tourism, and we need to recognise that indigenous tourism is particularly important at this time. I am delighted to say that the Welsh Assembly Government have invested some £2.2 million in the United Kingdom campaign to extol the virtues of Welsh tourism.

Does the Minister agree that one significant boost to the rural economy of west Wales at this time would come from the construction of the new gas-fired power station at Pembroke, in the constituency of the hon. Member for Carmarthen, West and South Pembrokeshire (Nick Ainger)? The project has taken four years to reach this point. It has passed its environmental consents, and merely awaits a decision from the Minister’s colleague the Energy Minister. Will he speak to the Energy Minister and unlock this important project? The United Kingdom needs the generating capacity, and my constituents need the jobs.

The hon. Gentleman is entirely right: this is an important project. We are mindful of that; discussions have taken place with my hon. Friend the Member for Carmarthen, West and South Pembrokeshire (Nick Ainger), who represents the constituency where the new installation will be based, and I am sure that, across all Departments, we are absolutely committed to ensuring matters are expedited as quickly as possible, but also in a proper manner.

Market towns are a key component of the local rural economy across Wales, and they have maintained a range of quality independent retailers, which make them attractive not only to the people who live there, but to tourists and visitors. Town centres with closed shops and pubs are very unattractive, however. As our thoughts turn towards the spring and Easter holidays, will the Minister intervene with his colleagues in the Assembly—and, indeed, in Westminster—to find ways of reducing the burden on these businesses, particularly in respect of business rates? The Government come forward with new initiatives day by day, but will the Minister now stand up for the retailers and shopkeepers of rural Wales?

Indeed, we stand full square behind small enterprises generally, and in particular retail businesses. The business rates issue has been looked at, and the Government nationally and in Wales are doing everything possible to help. We can be absolutely certain of one thing: we will do everything possible to help people get through this difficult period. I must say, however, that I am impressed in all sectors of the Welsh economy, including the one the hon. Gentleman refers to, by the determination and commitment of the people of Wales. It is very important that we reinforce the determination to get out of this economic downturn as quickly as possible, and I hope the hon. Gentleman will work closely with us to achieve that.

Does the Minister recognise that small and medium-sized enterprises in Wales are vital for employment throughout Wales, and in particular in rural areas? Will he join me in congratulating the Welsh Assembly Government on their £290 million flexible support package for business, the £7 million rates relief package for smaller businesses and the £115 million investment fund? Does he not agree that the Assembly Government have been very proactive at a time when such action is required?

Yes, I agree. I am pleased that the hon. Gentleman has listed some of the initiatives that have been introduced, and it is important to recognise that, in the critical area of the development of our economy, we are seeing good practical examples of the Government here in Westminster and the Welsh Assembly Government working together and pulling together in the interests of the people of Wales. There are other initiatives as well as those that the hon. Gentleman has mentioned. I also believe we have led the way in the United Kingdom in holding economic summits. There have been three very successful economic summits, and another one in north Wales is planned shortly. That reinforces the partnership that has been established not just between Cardiff and London, but between all the main players in Wales.