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North Wales Economy

Volume 512: debated on Tuesday 29 June 2010

This afternoon, I hope to illustrate the progress that has been made under 13 years of a Labour Government in the economy of north Wales, how fragile that economy is, and how threatened it is by current proposals and possible future proposals from the Con-Dem coalition. I hope to look at the reasons for the success of our local economy and examine the threats from the coalition. I will be seeking specific assurances from the Minister on a number of specific points of the current Con-Dem policy.

The history of north Wales shows that in the last 40 or 50 years we have relied on tourism, heavy industry and agriculture, all three of which have taken a pounding. At Courtaulds in Flint, in the constituency of my right hon. Friend the Member for Delyn (Mr Hanson), there were 3,000 job losses and at Shotton in the constituency of my hon. Friend the Member for Alyn and Deeside (Mark Tami), there were 7,000 job losses in 1981 under the Conservative Government. That Conservative Government decimated—dare I say annihilated?—heavy industry in north Wales. Shotton steelworks had the biggest industrial lay-off in a single day: 7,000 workers were laid off in one day. That was the Tory legacy.

Labour believes in timely and positive Government intervention in key industries. When we look at the success of north-east Wales, we see that the last Labour Government gave launch aid back in 1998 to Airbus— £500 million of launch aid. From the ashes of Shotton steelworks rose the Airbus factory, the most expansive factory in western Europe, which has 7,000 workers and 700 apprentices.

Does my hon. Friend agree that one of the key issues that we must address is ensuring that future work comes to the Airbus factory and that one of the key elements in that regard was the signing by my right hon. Friend the Member for Coventry North East (Mr Ainsworth), when he was Secretary of State for Defence, of the contract for 22 aeroplanes under the A400M project, which the current Government have not yet confirmed? Will my hon. Friend seek today an assurance from the current Government that they will confirm that order for 22 planes?

I back my right hon. Friend on that issue. I give credit to the Government—I do not want to be too negative, lest anyone think that I am—for the decision that has been made about the AirTanker. People in north Wales are grateful for that decision. However, the A400M project needs to be looked at very carefully for the good of Britain’s defence and of workers in north Wales.

The Con-Dem Government have said that they do not believe in big Government intervention in industry, as they have shown by withdrawing the loan to Sheffield Forgemasters steelworks. We do not want that situation repeated in Wales.

The decision on Sheffield Forgemasters may have an impact on nuclear development and indeed on wind development in north Wales, because the casting for those projects would be done in the UK. It is essential for the supply chain of the whole of the United Kingdom, and in particular of north Wales, that those projects go ahead.

Nevertheless, I back my hon. Friend on that issue. The vision of an “energy island”—the term he created—that he wants for his constituency depends on Sheffield Forgemasters making those critical engineering components for the nuclear plant.

Under Labour, we have seen a massive investment in higher and further education. North Wales has a new university in Wrexham, Glyndwr university, which is acquiring top-class research facilities, such as the OpTIC—Opto-electronics Technology and Incubation Centre—research facility in my constituency. It is forging links with the private sector; it is doing everything that a 21st century university should do.

It is not only the HE sector that is important; FE in north Wales has made great gains. In my constituency, we have colleges in Denbigh and Rhyl and for the first time in their history there are colleges in Abergele and Llanrwst. They are community colleges, rooted in their local communities and responding to the needs of those communities for skills. Those colleges are delivering. Rhyl college is an award-winning institution. Llandrillo college has 25,000 students and is one of the best run colleges in the whole country.

However, the first act of the Con-Dem Government when they came in was to reduce the number of university places by 10,000, with more reductions likely in the autumn. How will the FE and HE sectors in north Wales, indeed in the whole of the UK, cope with cuts in funding of between 25% and 30%? How will we maintain the momentum in north Wales that I have described if those cuts are made? Will the Minister guarantee that the Government will make an analysis of the economic impact on local and national economies of those cuts before they are made? A cut of £1 in the FE or HE sectors may seem sensible, but it could lead to further cuts of £2, £3 or £4 if it means a reduction in training and research.

North Wales has a big agricultural industry. The Tories have promised an attack on red tape and bureaucracy. Before they make that attack, may I ask them to learn the lessons of history for the agricultural sector—the lessons of their last period in government? During that period, there was Alar in the apple industry, anthrax in the pig industry, botulism in the food processing industry, listeria in the dairy industry, salmonella in the poultry industry and E. coli in the meat industry, and who can forget that there was BSE in the beef industry? Many of those diseases came about because of a reduction in food and safety standards in specific industries. Will the Minister guarantee that there will be no assault on standards in the agricultural and food processing industries, which would damage the economy of north Wales?

I turn now to an issue that I hope is dear to the Minister’s heart—seaside towns. The second and third biggest towns in north Wales are Rhyl and Colwyn Bay, traditional seaside towns that have suffered the same plight as many British seaside towns during a long, 40-year, period. The cause of the poverty in towns such as Rhyl and Colwyn Bay is the conversion of hundreds of former hotels and guest houses into houses in multiple occupation. Slum landlords have become millionaires by making money out of misery. The Tories refused to introduce mandatory licensing of those premises. Labour introduced it in 2004 and north Wales councils are only now fully implementing it. I believe that the Con-Dems are reviewing the HMO licensing scheme. Will the Minister guarantee that HMO licensing legislation will not be watered down?

Colwyn Bay and Rhyl, along with Prestatyn and other north Wales coastal towns, have benefited from co-operation between the national central Government and the Labour-led Welsh Assembly Government. In the whole UK, the WAG are leading the way on seaside regeneration by adopting a strategic and thematic approach, not in just one seaside town but in five or six seaside towns along the north Wales coast, stretching from Prestatyn to Colwyn Bay. Welsh colleges, the local authorities, the Department for Work and Pensions, voluntary organisations, the private sector and the public sector are all playing their part in that regeneration. Will the Minister guarantee that he will positively engage with the WAG on seaside town and town centre regeneration?

It is not only seaside towns that need regenerating. When the Labour Government came to power in 1997, they told the national lottery to stop giving money to the Churchill family—£12 million for the Churchill diaries—and to the playing fields of Eton, which had received £5 million. They told the national lottery to vire such heritage money to towns that had architectural merit and deprivation, so towns in north Wales, such as Holywell, Rhyl, Denbigh, Llanrwst and, I think, Holyhead, have benefited because of those instructions.

Dolgellau is another one; I thank the hon. Gentleman for that intervention.

So we have done well. In my constituency, Denbigh received £10 million of funding from the Heritage Lottery Fund under Labour. Will the Minister guarantee that limited lottery funding will be vired towards the areas with most need?

The key to the success of seaside towns and other towns is the back to work initiative, including programmes such as the city strategy, the future jobs fund and fit for work. We have only two city strategies in Wales. One is for Rhyl—Gareth Matthews from what was then Working Links and I got it for the town in 2007—and the other is for the heads of the valleys area. I think the town of Rhyl has the best practice in the whole UK. Rhyl is leading the way. Its town-based, small area, co-operative, collegiate approach across the private, public and voluntary sectors resulted in an almost 20% drop in the number of people claiming jobseeker’s allowance in the Vale of Clwyd between January and May 2010. The number fell from 2,242 to 1,836. That is 406 people back to work in my constituency in the past five months, the best result in north Wales.

The future jobs fund played an important part in those results. The Rhyl city strategy hopes to put 340 young people back in work by September this year; 190 are already back in work. The strategy has achieved 100% of its targets to date. Young people have been given a wage, training and a reason to get up in the morning. Their confidence has been restored, their CVs enhanced and their job prospects maximised, but all that is under threat. One of the first acts of the Con-Dem coalition was to axe the future jobs fund.

I congratulate the hon. Gentleman on securing this important debate. I appreciate fully what he is saying about the back to work initiative. Is it not strange that the Government want to cut back on social welfare payments and, at the same time, on back to work initiatives? Where are we going in terms of social justice?

It is déjà vu all over again. It is back to the future—back to the 1980s, when whole communities were parked by the Conservative Government, who said, “Stay on the dole. Bring your kids up on the dole, and your grandkids as well.” We are only just beginning to unwind 18 years of misrule under the last Tory Government.

We have the facts and figures to prove that the policies we have pursued are working in north Wales. More than 2,000 people went back to work between January and May this year. Our policies are working. We want a continuation of the future jobs fund. The cuts were implemented without even an assessment of whether the programme was successful. Will the Minister guarantee that he will monitor youth employment in north Wales over the next 18 months and that if it starts to rise, he will press for the reintroduction of the future jobs fund? What assessment has he personally made of the effectiveness of the future jobs fund, which has put young people in his constituency back to work?

The previous Tory Administration were riven with factionalism over Europe. We all know what the Tory Prime Minister, John Major, called certain troublesome MPs, so I will not repeat it. Was internal conflict in the Tory party the reason why the Tories failed to engage positively with Europe during the 1980s and 1990s? When they were closing the pits and the steelworks and letting seaside towns rot, they did not even bid for objective 1 funding for Wales. In 1997, when the Labour Government came in, they applied for objective 1 funding, provided match funding and implemented the scheme. I pay tribute to my right hon. Friend the Member for Neath (Mr Hain). At the behest of the hon. Member for Dwyfor Meirionnydd (Mr Llwyd), Betty Williams, Gareth Thomas and me, he included Denbighshire and Conwy in the scheme. As a result of that brave decision, which was taken against civil servants’ advice, Denbighshire county council received £124 million in public and private objective 1 funding over a seven-year period. I presume that Conwy received the same.

We have made being in Europe a success for Wales. Labour provided the match funding. Will the Minister assure me and the people of north Wales that during the Con-Dem cutbacks, match funding and convergence funding—the follow-on funding for objective 1—will not be cut back and will be included in the Welsh block? It makes economic sense. For every £1 given by the UK Government, we can draw down £2 or £3 from Europe. North Wales cannot afford cutbacks on that scale.

Will the Minister inform the House why the Tories did not bid for objective 1 funding for parts of Wales earlier, when they closed Shotton steelworks and the pits? Ireland did so and turned its economy into the Celtic tiger. Could Wales have done so in the early ’90s? Will he guarantee that blind prejudice towards Europe will not interfere with negotiations on the next phase of EU funding—tail-off funding, which should come at the end of convergence funding?

Energy, particularly renewable energy, has been a success for Labour in north Wales. Sharp has located its biggest solar panel factory in Europe in Wrexham. The biggest solar panel in the UK is at the Technium OpTIC in my constituency. The Technium OpTIC has just pioneered photovoltaic paint and is working on fission power. We will have the largest array of offshore wind turbines in the world when the Gwynt y Môr wind farm is completed, despite the fact that the leader of the Conservative party has referred to north Wales turbines as “giant bird blenders”. Will the Minister guarantee to give up his personal opposition to the Gwynt y Môr wind farm and promote wind energy in Wales?

Non-renewable as well as renewable energy companies operate in Wales, including BHP Billiton, which is based in Northop, in the constituency of my right hon. Friend the Member for Delyn. We also have E.ON, which has a gas-powered power station in Connah’s Quay. North Wales has so much energy that we shall be exporting it.

My hon. Friend mentioned that the previous Conservative Government did not claim objective 1 funding. Does he not find it surprising that a former Conservative Secretary of State for Wales, the right hon. Member for Wokingham (Mr Redwood), returned to Whitehall money that was due to the people of Wales? Many businesses in north Wales, especially in our villages and small towns, are small businesses. Does my hon. Friend agree that the Government’s changes to VAT will have a devastating effect on such businesses?

I concur on both points. The right hon. Member for Wokingham returned £120 million to Whitehall while Welsh schools were closing and services were being cut, and the impact of the VAT rise on spending power in the high street will have a devastating effect.

North Wales will be exporting power through the Irish interconnector, from Connah’s Quay power station through Prestatyn in my constituency and over to Ireland. The project is being paid for by Eirgrid.

I highlight the good work of my hon. Friend the Member for Ynys Môn (Albert Owen), who coined the phrase “energy island”. It is not just a phrase; it could become a reality, if the Con-Dem Government do not renege on Labour’s decision to let the replacement of Wylfa proceed. Will the Minister guarantee that his party and his Government will not do a U-turn on the new nuclear plant for Anglesey?

I am grateful to my hon. Friend for mentioning the energy island concept. North Wales can be a centre of excellence for both aviation and low-carbon energy for the future, building a skills base of transferable, high-level skills, which is what the Government aim to do. With respect to the Minister—I know that he has been supportive of nuclear power in north-west Wales, and I hope that will continue—a centre of excellence for highly skilled jobs is what we are all aiming for.

Order. Mr Ruane, I point out that a number of issues have been raised. If you are to give the Minister sufficient time to answer them, you will have to start looking at the clock.

Thank you, Mr Hancock. In conclusion, north Wales has an excellent story to tell. The fastest growing local economy in the country is the Deeside hub between Deeside, Wrexham and Chester. We have some of the biggest increases in employment; five of the top six constituencies in Wales for increasing employment are in north Wales. We have a proud tale to tell. I do not want the progress that we have made in the past 13 years to be undone by a Con-Dem coalition demolition job on the Welsh economy.

I congratulate the hon. Member for Vale of Clwyd (Chris Ruane) on securing the debate, which is, of course, dear to my heart because I am the Member of Parliament for the constituency immediately adjacent to his. There can be no doubt that the recession has hit north Wales as hard as many other parts of the country, if not harder. In fact, over recent months, there have been significant job losses right across the region—134 jobs lost at David McLean, more than 50 jobs lost at JCB, 130 jobs lost at PT Construction on Deeside and, most significantly, major job losses at Air Products in Wrexham, Anglesey Aluminium and the Indesit factory in the hon. Gentleman’s constituency. The Indesit factory was, in fact, a major employer for my constituency, where more than 300 jobs were lost.

Although the hon. Gentleman paints a rosy picture of employment and industry in north Wales under the Labour Government, it is not quite so rosy. Indeed, without wanting to put too fine a point on it, over the past 10 years, the claimant count in his constituency has increased by 40%, long-term unemployment has increased by 16%, the youth claimant count has increased by 63% and long-term youth unemployment has increased by 71%. Although one does not want simply to trade statistics, as I say, the rosy picture that he painted in his opening remarks is, unfortunately, not borne out by recent developments in north Wales.

Given that the hon. Gentleman has already taken 19 minutes for his opening comments, I feel that I have to make some progress. He mentioned a number of important points that will be of concern to all hon. Members who represent constituencies in north Wales and, because he raised those specific points, I would like to comment on as many of them as I can in the time remaining.

The hon. Gentleman mentioned the A400M project, which is of significant importance to north Wales. Indeed, the Airbus factory should be regarded as the jewel in the crown of industry in not only north Wales, but the whole of the United Kingdom, because it provides high-quality, high-tech jobs that must be the way for the future. The A400M is, of course, actually developed in Filton, as the hon. Gentleman will know. However, the wing technology that is being developed at Filton is shared at Broughton. The Wales Office is certainly very supportive of the A400M project, but having said that, as the hon. Gentleman knows, a strategic defence review is under way and, of course, all announcements must wait on its outcome. I gently inform him that the Labour Government did not progress the A400M project or commit themselves to it.

My right hon. Friend the Member for Coventry North East (Mr Ainsworth) signed a contract for 22 planes before the election. That is part of the ongoing review.

Yes, but as the right hon. Gentleman knows, a number of projects were signed up to—including the Sheffield Forgemasters project—very late in the day during the election period for a reason that is patently obvious to even the most charitable observer.

The hon. Member for Vale of Clwyd mentioned Glyndwr university and Technium OpTIC. I endorse his commendation for OpTIC. In fact, the first official visit that my right hon. Friend the Secretary of State and I paid to north Wales after our respective appointments was to Technium OpTIC. I particularly commend Professor Mike Scott, the vice-chancellor of Glyndwr, for forging ahead with OpTIC and, as the hon. Gentleman has pointed out, ensuring that the university forges strong links with the private sector. Such an approach is certainly the way forward.

We also heard about Landrillo college. Again, I can do nothing but commend Landrillo, which is, in fact, headquartered in my constituency. I pay tribute to Huw Evans, the principal of Landrillo college, for forging links with the private sector.

The hon. Gentleman mentioned agriculture. I think it is fair to say that over the years, the Conservative party has shown nothing but support for the agricultural sector and it will continue to do so.

The hon. Gentleman also mentioned seaside towns—an issue of personal interest to me. Colwyn Bay is an important town that has declined over recent years. It is, in fact, currently in receipt of strategic regional assistance moneys from Europe via the Welsh Assembly Government. I echo what he said about houses in multiple occupation, which have been a scourge of seaside towns—Rhyl in his constituency and Colwyn Bay in mine alone. However, I must gently criticise the Welsh Assembly Government’s policy of attracting people into north Wales who have no connection with the area because doing so has ensured that incomers can leapfrog indigenous north Waleseans. That has caused a great deal of concern to councillors in my constituency and, I am sure, in the constituency of the hon. Member for Dwyfor Meirionnydd (Mr Llwyd).

The hon. Member for Vale of Clwyd mentioned the Heritage Lottery Fund. I remind him that the lottery was a Conservative innovation. He has already mentioned John Major. If I remember rightly, the lottery was John Major’s pet project. I am glad to say that the coalition Government intend to review the operation of the lottery to ensure that it reverts to its original aims of supporting good causes. We want to ensure that it is not rifled by Government as a support to taxation.

The hon. Gentleman mentioned the Rhyl city strategy and the future jobs fund, which he regards as important. We have to make a decision in this country: whether we create real jobs, with some prospects of creating real wealth, or whether we subsidise jobs that are guaranteed only for six months. Doing the latter does not create real wealth and runs the risk of returning the young people on those programmes to the dole. The focus of the Government should be on creating real wealth. That is the nub of the difference between the Labour Government and the coalition Government. The previous Government were happy to fritter away this country’s resources through borrowing to mortgage our children’s and our grandchildren’s future, without tackling the root causes of the problem that the economy faces, which is essentially the enormous deficit that this country is running. The enormous structural deficit and debt run the risk of strangling each and every one of those young people before they get a job at all.

This Government intend to focus on reducing the deficit, on restoring real jobs to the economy, and on ensuring as far as possible that those who are able to work can do so. That is why I commend the work programme that was announced today by the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), which was criticised by the hon. Gentleman. This Government are not afraid to face the real decisions that we need to take to put the country back on the right track. We may receive criticism from the hon. Gentleman, but we have received the support of the OECD, the G8, the Governor of the Bank of England and any number of chief executives he may care to mention. The future of this country is real, genuine, honest employment.

If the hon. Gentleman would like to listen, he might actually be pleased with what I am about to say. I commend him for his advancement of the energy island concept. He understands that only real jobs will rescue Anglesey, and I commend him for it. I repeat my previous support for Wylfa nuclear power station. I hope that it gets built, and but for the fact that the Labour Government effectively had no energy policy for 10 years, Wylfa would now be well on the way to being built. We have had 13 wasted years of Labour, during which time we ate the seed corn for future generations. It is time to get Britain back to work; it is time to get Britain moving again. I believe that the coalition Government will do just that.