North Wales Economy

Mark Tami Excerpts

Tuesday 1st April 2014 Westminster Hall

[Mr Hanson]

I would rather see them as giant economic growth drivers. Only last week, we had a great announcement for Hull, with Siemens bringing manufacturing to the United Kingdom. In north Wales, we have a strong renewable energy offer and lots of expertise. We have wind farms and the potential for more wind farms offshore, and a good opportunity to build on our economic success in that area. We also have strong manufacturing in the paper sector, with Kimberly-Clark and SCA in my constituency. We still have, despite many years of contraction, a strong steel-making industry with Tata Steel in the constituency of my hon. Friend the Member for Alyn and Deeside (Mark Tami).

[Mark Tami (Alyn and Deeside) (Lab)]

Would my right hon. Friend join me in welcoming the fact that Tata has taken on a number of apprentices this year? It is seeking to invest for the future, which is good news for the plant.

[Mr Hanson]

It is good news, and I welcome the investment in apprenticeships. Other companies, such as Airbus, do the same in our area. We also have a strong automotive industry, and this week Toyota made a strong case for engagement with Europe to ensure that we can export models from the United Kingdom to Europe.

North Wales has the strongest manufacturing base in the UK, and I shall focus on Airbus, which employs between 1,500 and 2,000 people in my constituency, with more employees coming from across north Wales. It is a vital manufacturing industry for UK economic growth. A potential 30,000 new aircraft will be built between now and 2032, representing a staggering $4.4 trillion-worth of business. Airbus has the opportunity, with active Government support, to secure a key part of that market. That is important, not just for the 7,000 people who work at Airbus, but also for many others, including those who are part of the UK supply chain. Airbus has spent £180 million on that supply chain in north Wales. The strong site at Broughton was developed with active support from the Labour Welsh Assembly and the previous Labour UK Government, and with the new wing development we have the potential to grow the site further.

We also have strong sectors in other areas. Tourism is a key activity for north Wales. We have a great tourist offer, which we can grow still further. Millions of people are within a two-hour drive or train journey of our tourism economy. We have a strong agricultural sector with sheep and cattle farming, as well as milk production. Food production and distribution are growing in importance. For example, we have food festivals in Mold in my constituency. That industry has a £3 billion value to Wales as a whole, according to a briefing I obtained yesterday from NFU Cymru. We have strong local and national Government, with many people putting their wage packets, through employment in the health service and the county council, into the economy. We have a particularly vibrant small business sector, which is extremely important in growing our economy. Many wage packets come into north Wales via the car manufacturers, such as Vauxhall at Ellesmere Port, the banking sector in Cheshire and the Deeside north Wales hub, which is one of the strongest areas in the United Kingdom.

The lesson that we must learn is that we need active Government engaged in all those issues, particularly the Deeside enterprise zone in the constituency of my hon. Friend the Member for Alyn and Deeside, which has the active support of the Welsh Assembly and has invested through a capital programme in schools and colleges in our constituencies. In my own county, £64.2 million of that programme is going into four facilities in my county of Flintshire, one of which is the community learning campus at Holywell high school. The theme I am developing is active Government. That investment is finding its way into construction and supply in the private sector, which is building and developing those facilities.

North Wales continues to benefit from EU funds. It is important, in the run-up to the European elections, that we do not allow people to take the stance that the EU is bad for Wales, because more than 8,000 new businesses have been created, and £665 million of contracts have been won. Some 13,000 businesses are supported in Wales, and north Wales has a considerable number of those businesses.

We face some key challenges, however. In Flintshire, wages have fallen in real terms by £3,000 per family on average since the economic crisis in 2007. A TUC study has shown that north Wales has suffered the biggest wage cut in Wales, with an average drop of £57 a week. The latest figures show that the number of unemployed people in my constituency has increased in the past year and that the number of unemployed young people is still rising. In my county, 1,567 people are each losing £880 because of the changes to the Government’s spare room subsidy—the so-called bedroom tax.

The cost of energy bills is also hitting the north Wales economy hard, with the cost of energy rising by some £300 over the past three years, meaning that money is taken out of the economy instead of being spent on creating jobs and services for the future. Although we do have strong sectors, such is the lack of recovery in the area that only yesterday Creative Foods, which is operated by Brakes, announced that it would consult on the loss of some 150 jobs and the closure of its food manufacturing plant in Flint. The consultation will end in late May. Will the Minister contact the Welsh Assembly and the company to see whether the factory can remain viable or whether an alternative buyer can be found? Brakes has operated in Flint for the 20 years in which I have been a Member of Parliament, and it is a vibrant factory. Aaron Shotton, leader of Flintshire county council, has arranged for the council’s enterprise department to meet Brakes to examine the situation.

In addition, this week I received a notification from Aviva as part of the Budget submissions. The letter states:

“Wales had one of the lowest levels of confidence in general economic conditions over 2013”.

Although our manufacturing, tourism, renewables, businesses and agriculture are strong, both the Welsh Assembly and the UK Government should use business policy to develop our offer and improve and grow our economy still further.

--- Later in debate ---

[Mr Hanson]

That is an extremely valid point. The link from Holyhead in my hon. Friend’s constituency along the north Wales coast and down through my constituency into north-west England, and even the links across to Humberside, down to London and to mainland Europe, are extremely valuable. I know that the Minister supports that, but I think that he wants to be sure that he has the support of Opposition Members who represent north Wales to go forward with HS2 and to try to make those links in a positive way.

This is not only about electrification and links to HS2 and the south, but about the links between north Wales and Merseyside and Manchester. My hon. Friend the Member for Halton (Derek Twigg) and I are meeting the Secretary of State for Transport regarding the Halton curve, which is a link to Merseyside and Liverpool airport that will provide access for business. A direct link to Manchester airport should also be considered. Two great airports lie within 40 miles of my part of Wales and while Assembly investment at Cardiff is fine, it does not serve the needs of the north. I hope that the Minister will be able to liaise with others on that.

Transport and rail infrastructure are key, but I also want to stress the importance of Europe. My part of north Wales does not benefit from European structural funds, but much of north Wales does. My hon. Friend the Member for Vale of Clwyd (Chris Ruane) played an active role over many years in developing that funding with two former Secretaries of State for Wales, my right hon. Friends the Members for Torfaen (Paul Murphy) and for Neath (Mr Hain).

[Mark Tami]

Even though we do not get that level of funding, we gain through what Europe gives us, which allows big companies such as Airbus and smaller ones to invest, because they know that the market is important.

[Mr Hanson]

My hon. Friend predicts my thoughts, because I was going to say that although my constituency does not depend on European objective 1 funding, the fact that many businesses in Flintshire such as Toyota and Airbus, and Vauxhall, which is nearby, are able to sell goods to the European market without tariffs is vital to the area’s economic growth. I want the Minister to commit to supporting a strong European Union.

--- Later in debate ---

[Mr Llwyd]

Yes. When I represented the valley, I used to help him as well. I got him started, so I can take part of the credit. I am pleased to join the hon. Gentleman in congratulating his constituent. It is a great pleasure to see a business such as his succeed. We have fishing, climbing, sailing, hiking—the whole lot. Of course we need to increase footfall, but the main thing we need to address is the need to increase the visitor spend. We need to up our game, but it is not beyond our knowledge and ken to do that.

Other measures that can improve the north Wales economy include a private sector-led industrial development authority to leverage investment into the Welsh economy. That is not dissimilar from the suggestion that the hon. Member for Wrexham (Ian Lucas) made. I still believe it was a mistake to do away with the Welsh Development Agency. Yes, it was a quango, but it did a good job and it was a brand that was known worldwide. But it went, and with it went the Development Board for Rural Wales, and nothing has been put in its place. The small business sector in rural Wales has lost that important arm of assistance, which was always there and was effective.

We believe that we need a public development bank to lend to SMEs and help develop local industries. Five years on from the crisis, SMEs are still being squeezed and the banks are still not giving them fair play. We should focus on the productive economy, rather than using funding for lending to asset-lend in the form of mortgages and pumping up another house price bubble.

[Mark Tami]

The banks are still telling us that they are lending far more money to SMEs. However, as hon. Members know, SMEs that come to see us tell a very different story—in particular, about their overdraft limits being cut and the problems associated with that.

[Mr Llwyd]

The hon. Gentleman is absolutely right. Not only that, but the four major clearing banks have an understanding that they will not support tourism enterprises unless they are heavily persuaded. Think of the effect that has on the Welsh economy.

We need a Welsh public development bank, which could be geographically tied to Wales, similar to the Sparkassen and Landesbanken in Germany. Plaid Cymru has been calling for that for years. I am pleased that the Minister, Edwina Hart, has moved on that issue and has called for another review. I hope the Welsh Government in Cardiff will give priority to it, because it is vital to enable the SME sector to trade out of the recession. It could assist us all, and give a massive boost to the Welsh economy. It is the main sector that we need to concentrate on.

Finally, although I have a high regard for the right hon. Member for Delyn, I disagree with him on having ever closer links with the Chester-Liverpool region—although my legal chambers are in Chester, so who am I to say that? The problem with the Wrexham-Chester-Liverpool city region is that Welsh interests may be drowned out and become subservient to those of the north-west. That is the likelihood, if the numbers living on both sides of the border are compared. The super-prison in Wrexham—we will hear from the hon. Member for Wrexham shortly—demonstrates that point. It is a priority for an England-centred justice system: a gigantic Tory-style, “lock ’em up and throw away the key”-type prison to house offenders from all over the north-west of England. There will be 500 prisoners from Wales, and 1,500 unfortunate people imported in. Strategically, it answers the needs of the north-west, not those of north Wales. I agree with much of what the right hon. Member for Delyn said about transport links, the living wage and many other things. However, when I hear talk about that sort of axis, I fear the likelihood is that we will come off second best.