Wales: Economy

Lord Jones Excerpts

Wednesday 7th November 2012 Lords Chamber

[Lord Jones]

My Lords, I thank the noble Lord, Lord German, for obtaining this debate. I congratulate the noble Baroness, Lady Randerson, on her appointment to the Front Bench. It was deserved and her tenure in the Welsh Assembly Government was successful and much respected.

The Welsh Assembly has come of age; it has much to be proud of and, with hindsight, the handover from Westminster to Cardiff was seamless—truly an exceptional achievement in the history of governance in Britain. The First Minister is proving to be a safe and shrewd pair of hands—indeed, quite a statesman. The Education Minister is a genuine reformist. He certainly wants better things for schoolchildren, university students and students at FE colleges. Mrs Hart, with a challenging economic brief, has the gift of decisiveness, and we know that she is in charge. The Secretary of State for Wales knows Wales like the back of his hand. He has a good pedigree, coming as he does from Rhosllanerchrugog in the north-east, and I can imagine him discussing matters in Cardiff Bay with the First Minister in their first tongue, Welsh. These two parliamentarians can collaborate for better things for Wales. Certainly, their hands are on the levers of power, and together they can deliver for Wales.

Scotland will gain more devolved powers, if not independence. I would expect the Welsh Assembly to gain more devolved powers on the back of those Scottish gains, but probably not on the Scottish scale. Whatever, the consequence of Scottish gains means that better relations between Westminster and Cardiff are going to be an absolute priority. Wales and Westminster will need to work ever more closely together to deliver better things for the people of Wales.

To enhance the Welsh Assembly and for better working there, I would prescribe more Assembly Members. They would create a bigger Assembly gene pool and perhaps more competition for places in Cabinet. They would enhance self-esteem in the Assembly and make for a better working relationship with London. More Members in Cardiff Bay would guarantee more dissent and, arguably, more difficulties for Cabinet Ministers, but dissent and competition make for a more mature parliamentary Assembly, wherever that Assembly may be. I should like to see more questioning, more dissent, more competition and more Assembly Members for the good of the Assembly and for the good of Wales.

Perhaps I may turn to economic issues. We must keep what remains of our steel industry. I have in mind particularly the once iconic Shotton steel plant. Shotton was once an industrial town of 14,000 steelworkers—now, arguably, just 400. However, I pay tribute to the great achievements in productivity at Port Talbot. Our aerospace industry is the world’s best, and much of it is in Wales. I have in mind Airbus at Broughton. Its 7,000-strong workforce is based on high-tech skills and it pumps more than £7 million weekly into the north-east Wales and Cheshire economies. Where aerospace in Wales is concerned, what workshare we have, we must keep. When BAE bailed out of Airbus and cashed its chips for its £4 billion and invested in north America, that was a wrong call. It left the British side of Airbus without a champion at the highest table. We are now effectively contractors, not partners. That was the consequence when BAE left. What workshare we have, we must keep.

It is good to have plans to invest in Wales’s railways. I want the Wrexham-Birkenhead line to be electrified. It would enhance economic activity along a Wirral-Deeside-Wrexham axis. I agree that there must be huge investment in south Wales in the railway system, but there must be investment in the north. The electrification of the Birkenhead to Wrexham line is long overdue and would provide a huge injection to economic activity in the north-east of Wales.

To face the economic challenges of the future, I want even more skills training and retraining in Wales. We should aim for even more quality apprenticeships. I hope that we can aim for more engineering jobs, particularly engineers, but we also need to give priority to those aspects of manufacturing that are described as high end.

Let us give a fair wind to enterprise zones. We made a great start in north-east Wales. We have a fine chairman, Askar Sheibani, who is making good progress. However, I should like to see that progress made throughout Wales. The enterprise zones can be a huge opportunity. Let our banks give more assistance to small and medium enterprises, and to entrepreneurs. Let them encourage and generously assist where they might. It is time that our banks helped SMEs. We need to give emphasis to a living wage; we do not have a good record in Wales for wage rates. A living wage should be a great priority. Advanced manufacturing centres should be established in our sub-regions. In the enterprise zone in Deeside, the chairman, Mr Sheibani, wants an advanced manufacturing centre with links to world-class universities. Such centres would benefit Wales greatly in the immensely competitive global situation in which we find ourselves. We should acknowledge and encourage our established blue-chip companies, and should not take them for granted. I would like to think that they might expand and that they will always be able to encourage and mentor industries alongside them.

If only we could have our Welsh Development Agency back. It was a great success and won manufacturing work for the people of Wales. When we put it down and dismembered it, we let able, experienced and successful managers to go to regions in England and elsewhere, and be competitors for the work that we never got after we put the agency down. I might be forgiven for some bias, because I legislated the agency into being. I pay tribute to the huge endeavours of the noble Lord, Lord Roberts of Conwy, for the people of Wales, but I remember that in debates in Grand Committee and elsewhere on the agency’s likely birth, he was at fault. He will allow me to tell him that.

North-east Wales is a case in point. We now have an enterprise zone. The FE colleges of Yale and Deeside will merge to form a 22,000-student force with a £64 million budget. We have the new university of Glyndwr and the mature university of Bangor available to us. I think that HE and further education can combine the expertise available from the centres of learning to mentor and nurture our small and medium enterprises. Lastly, the great industrial parks of Deeside and Wrexham can only benefit from their proximity to our universities.

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[Lord Carlile of Berriew]

My Lords, it is a great pleasure to follow the noble Lord, Lord Aberdare. I agree with everything he said. He focused on Welsh universities, and I would like particularly to mention the work done by the University of Glamorgan. It is doing a remarkable job in converting the old skills of mature students into new skills for new industries. However, we are not seeing those new skills being put to work to best effect. I also congratulate my noble friend Lord German on obtaining this debate and on his lucid opening speech. I, too, look forward to the reply to the debate from my noble friend Lady Randerson, whose presence on the Front Bench and expertise about Wales adds to your Lordships' House. In both my noble friends Lord German and Lady Randerson we have two experts on Wales with great experience from the Welsh Assembly Government.

In your Lordships' House and, indeed, in the other place there is much knowledge and wisdom on the Welsh economy. I am not sure that it is always used to best effect in the formation of government policy. This includes my noble friend Lord Roberts of Conwy, who served as a Minister for many years and knows the interstices of Wales inside out. It includes the noble Lord, Lord Rowe-Beddoe, who was chairman of the Welsh Development Agency for a number of years, and it also includes the current Member of Parliament for my old constituency of Montgomeryshire, Glyn Davies, who served as chairman of the Development Board for Rural Wales for several years. It also includes the noble Lord, Lord Jones. I twice tried to unseat the noble Lord in what was then called East Flintshire. Even when my noble friend Lord Thomas of Gresford, as he now is, and I supported the suggestion that the Olympic Games should be brought to Wrexham, we failed dismally in our attempt to unseat the noble Lord, Lord Jones. It was a good idea for the day, while it lasted.

[Lord Jones]

The noble Lord was the ablest candidate that tried against me.

[Lord Carlile of Berriew]

I am grateful to the noble Lord.

We have heard in this debate so far about south Wales and north Wales and we are going to hear a little from me about mid-Wales, which should never be forgotten. I wish to remind your Lordships that industry, business and commerce in Wales are not merely about the M4 and A55 corridors. There is an enormous amount of Wales and a fine population in between.

Certainly in my time as Member of Parliament for Montgomeryshire, the Welsh Development Agency and the Development Board for Rural Wales provided much assistance to investment in Wales—especially the DBRW in rural Wales. Advanced factories were built and occupied. Perhaps they have had their time but they were a very good idea. Unfortunately, many of the businesses that occupied those factories and many of the businesses that took assistance from the WDA and the DBRW turned into small permanent businesses, not sizeable permanent businesses. As I see it, that is the failure of economic policy in Wales over the years. It has all been too small, too sporadic and too impermanent.

One major gap in Wales was eventually identified by John Redwood when he was Secretary of State for Wales. It is, I am sure, the only thing that I agree with him about or have ever agreed with him about—apart, possibly, from the idea that it was probably better if he did not try to sing the Welsh national anthem in Welsh. John Redwood identified—and my noble friend Lord Roberts of Conwy was a Minister at the time—the absence of a venture capital industry in Wales, and there remains no venture capital industry in Wales. Those of us who have had any dealings with sovereign wealth funds abroad or larger investment schemes know that Wales rarely features in the conversation because there is nothing specific about Wales as a place where venture capital can develop and be invested advantageously.

The banks in Wales are showing as much lack of imagination today as they showed five, 10, 15 or 20 years ago. They are fee-driven and risk-averse. I do not believe that the banks in Wales show the same attitude to new industry, particularly small and medium-sized enterprises, as they show in many parts of England. They are rarely proactive in presenting the availability of their funds to new industry in Wales. They should be following government policy and doing so but, unfortunately, they are not.

The venture capital industry has a great opportunity in Wales. Its biggest contribution would be the establishment of large new businesses, but in order for that to be achieved the Government need to introduce or establish something like venture capital champions who would be able to go out to the world outside and hunt down investment funds which are available both in the United Kingdom and abroad, thereby strengthening Wales as an investment point and making it one of the first places where companies should look if they have funds to invest.

For well over 10 years now I have been a non-executive director of one of the very few listed public companies in Wales, Wynnstay Group plc, which has operated successfully and steadily in a sector which remains unfashionable—the agriculture industry. We should not forget that there is a large agriculture industry in Wales. For every Rachel’s Organics there are potentially another 10 companies of a similar kind. In rural mid-Wales there are entrepreneurial farmers but, to be frank, there are not many of them, and few of those would claim to be entrepreneurial. However, given the encouragement of venture capitalists with imagination, we could build up a large dairy sector so that Wynnstay Group plc would be one of the smaller companies, not the biggest, in its sector in Wales.

I remind those who care to read this debate—it is very welcome to have a debate on Wales in your Lordships’ House without the inhibition of embarrassing the Assembly or embarrassing ourselves by trespassing on the Assembly—that there are many advantages to investment in Wales. It has a reliable workforce. In Wynnstay, the company to which I referred, the churn of employees, in statistical terms, is almost nil. Once a company is established in Wales, it becomes a family too. The noble Lord, Lord Jones, referred to the Shotton steelworks. I have friends in Wales whose families were in the Shotton steelworks for three generations, including the noble Lord, Lord Jones, and there may be families with a longer connection. We have a very reliable workforce with very little churn.

I think it is fair to say, without a cliche and without sounding sentimental, that people who go to work in Wales go there to work and, therefore, the productivity of Welsh industry is high and the workforce loyal. The typology of a Welsh company is stability. I cannot think of an investor who, when he or she decides to invest in building a new factory somewhere, is not looking first for stability, which we offer. That is not said often enough on our behalf. I support the Question in this debate, which urges the Welsh Assembly Government and the United Kingdom Government to go out and look for work in Wales on the basis of its undoubted virtues.