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Orders of the Day — Regional Policy

Part of the debate – in the House of Commons at 6:13 pm on 8th July 1981.

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Photo of Mr Dafydd Wigley Mr Dafydd Wigley Leader and Party President, Plaid Cymru 6:13 pm, 8th July 1981

I shall do my best, Mr. Speaker, to abide by what you have said.

I think that today we learnt of the ending of regional policy. We heard of no new initiative, and circumstances have deteriorated so much that we must question even whether there is a regional policy in operation. Over the past 10 to 15 years regional policy has been chopped and changed in a devastating way. Investment grants of 40 per cent. and 45 per cent. have come down to 20 per cent., and now in my area they are 15 per cent. Areas have been chopped and changed so that now large parts of Mid-Wales have the same status as Kent.

We have seen schemes come and go: selective employment tax, regional development premium, industrial development certificates. Companies do not know where they stand, with the result that they often do not treat seriously regional policy and the funds available under it. They are regarded as miscellaneous income below the line and as a result do not come into investment decisions.

Over the past 10 years regional policy has not worked as well as we hoped it would. We hoped to see a major effect, particularly in those areas in which there has been a serious rundown of structural employment—the ending of coal, steel, slate and other industries. Yet today I can address myself to the same problems as I did in 1974, when I became a Member of the House.

Major construction projects in my constituency include the Dinorwic pumped storage scheme, which has 2,000 jobs coming to an end. Although we have known for the past seven years that that would happen now, nothing has been done, because there is no planning system that addresses itself to such questions.

There are two ways in which we can carry out regional regeneration. One is to improve regional planning. We need to be more flexible. I noted the words of the Secretary of State for Wales in Caernarvon last week. The right hon. Gentleman said that in Wales we had difficulty in competing with the Irish package. We do. We need to look at our package of industrial incentives, examine the carrot, the grants available, and relate them to the number of jobs created. Money is often going to major capital projects that do not provide so many jobs.

We also need to consider training. There has been a rundown of the old skills in many areas, particularly in Wales. Many of the old skills have gone, and there has been no generation of new skills, so we are turning our workers into a semi-skilled work force, fit only for branch factories, which are the first to close down at the first ill wind of recession.

We need more capital support for small companies in particular, for businesses that are starting up and have no track record to attract investment by institutional investors, merchant banks and even the Welsh Development Agency. Agencies such as the WDA need more flexibility. They should take more risks with the smaller companies that are trying to start. I agree with the hon. Member for Anglesey (Mr. Best) that we also need more flexibility in service industries, because they can provide jobs that are just as valuable as those in manufacturing industries in many areas.

Our regional policy has often concentrated on the private manufacturing sector. It must be remembered that in Wales nearly 40 per cent. of the employment is in the public sector. Therefore, we cannot consider regional policy without considering the coal and steel and similar industries. Decisions on those industries should be brought into the orbit of decision-making for regional planning.

On the other side of the coin there is the question of how to generate more jobs from inside an area. There are no longer hundreds of footloose manufacturing concerns running around the world. There is the odd Nissan or two, but apparently Wales has missed out on Nissan as well. We read in the Liverpool Daily Post that the Secretary of State has intimated that that is so. Because there are many fewer footloose concerns today, we need to generate more jobs inside Wales. We should help young people to set up their own ventures. For that, we should examine our tax structure and provide tax incentives, whether the ventures are private or co-operative enterprises. There should be more emphasis in our education system on such enterprises.

We need to instil confidence in the future of areas such as Wales. Speeches about the need for people to move away from Wales to look for work do nothing to encourage confidence in the future. We should examine indigenous possibilities as well as strengthening regional policy from outside.

We also need to look at the way in which we relate to local government. We could and should have a bigger capital investment programme, geared to a regional programme, so that there is capital investment on roads, railways, schools and hospitals in those areas in which unemployment is rising. We cannot take the items in small compartments, because the policy on grants to local authorities has a big effect on the ability to provide jobs in sectors such as construction. We cannot rule out matters such as the parity of the pound and interest rates.

Over the past 15 years regional policy, as it has been administered from London, has failed to solve Welsh problems. Wales has been regarded as a peripheral region, and the action that has been taken has not solved the problems. We now need to turn away from an inbred dependence on London, which has gone on for far too long. Regional policy can tinker with the problems of Wales, but those problems will be solved only when the people of Wales decide to generate their own future from inside. For me, that means self-government, not regional government.