Financial Support (Business)

Oral Answers to Questions — Wales – in the House of Commons at 11:30 am on 30th April 2003.

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Photo of Richard Younger-Ross Richard Younger-Ross Liberal Democrat, Teignbridge 11:30 am, 30th April 2003

What recent discussions he has had with the First Secretary of the National Assembly on financial assistance for Welsh companies.

Photo of Richard Younger-Ross Richard Younger-Ross Liberal Democrat, Teignbridge

I thank the Secretary of State for such an insightful and helpful response.

Although I wish the First Secretary of the National Assembly every success in creating jobs for workers in Wales, will the right hon. Gentleman raise the concerns of my constituents who work for Aircraft Materials Ltd. who face redundancy because the company is relocating to Wales with the help of regional selective assistance from the Welsh Assembly? When he meets the First Secretary will he tell him that it is a waste of taxpayers' money to move jobs from one part of the UK to another—and to stop poaching English jobs?

Photo of Peter Hain Peter Hain The Secretary of State for Wales

The answer to that is an emphatic no. The alternative plan for Aircraft Materials Ltd., which is a US-owned company, was to locate the jobs in the United States. Under the rules applied rigorously and scrupulously for regional selective assistance, we were able to safeguard those jobs and increase them in the rest of the UK instead of allowing them to be exported to the US. I would have thought that the hon. Gentleman would welcome that, although I understand his concern as a constituency Member of Parliament.

Photo of Mr Denzil Davies Mr Denzil Davies Labour, Llanelli

Although Corus is not a Welsh company, it has a substantial presence in Wales. Will my right hon. Friend assure not only the First Secretary but all of us that should Corus ask the Government for financial assistance, it will not be ruled out, given that it would be unthinkable for Britain, and Wales in particular, to be without a steel industry?

Photo of Peter Hain Peter Hain The Secretary of State for Wales

I agree with my right hon. Friend and we will consider what we can do, both through the National Assembly and elsewhere, to ensure that we have the most competitive and excellent steel-making company in Britain, including, of course, Wales.

The Corus announcement yesterday was excellent news for Port Talbot. There are to be an extra 35-plus jobs and a huge investment to increase production from 3.7 million to 4.7 million extra tonnage. At least the reduction in jobs at Llanwern was relatively small. Obviously it was unwelcome given that the Llanwern workers have been battered and bruised over so many years by Corus. It was good at least to see a secure and sustainable future for both Llanwern and Port Talbot. That will have the full support of the Labour Assembly and a Labour Government.

Photo of Adam Price Adam Price Plaid Cymru, Carmarthen East and Dinefwr

On a number of occasions over the past nine months, I have written to Assembly Government officials drawing attention to the alleged financial irregularities at Elev8, a call centre based in my constituency that the Secretary of State recently visited. The company went into receivership yesterday, with a loss of more than 60 jobs. Is not that yet more evidence of the failure of the Labour-Liberal Administration to bring jobs to all parts of Wales? What does the future hold for the Amman valley, which he and I represent?

Photo of Peter Hain Peter Hain The Secretary of State for Wales

The hon. Gentleman really should stick to the facts and stop relying on smears. The truth is that unemployment in his constituency has been cut significantly. Employment across Wales increased by nearly 60,000 last year. He should be attacking the unemployment in the Tory years rather than Labour's efforts to increase jobs because we have cut unemployment substantially.

I did visit the call centre and what has happened is regrettable, but the fact is that new jobs are being created all the time in our valley constituencies and right across Wales. The hon. Gentleman should stop talking down Wales and support the investment and efforts that are being made to start-up businesses all over the country.

Photo of Mr Jon Owen Jones Mr Jon Owen Jones Labour/Co-operative, Cardiff Central

If financial assistance is given by the Welsh Assembly to companies such as Corus, what assurances can the Secretary of State give us that that money will be used to secure Welsh jobs, and that it will not go into the pockets of fat cat directors to further enrich themselves and sacrifice workers throughout Britain?

Photo of Peter Hain Peter Hain The Secretary of State for Wales

As far as I am aware, Corus has not asked for any support in terms of extra grant aid or any other facility that could be approved by the Welsh Assembly or by the Department of Trade and Industry, but no doubt we would consider such a request if it came. My hon. Friend is right. There is a revolt by shareholders and pension fund representatives at the way that representatives and directors who have failed in their jobs often walk away with huge bonanzas. That is not acceptable, and it is why my right hon. Friend the Secretary of State for Trade and Industry is examining the matter. With reference to the workers who are to lose their jobs at Corus, that is a particular attack on their rights, and it must not be allowed to continue.

Photo of Nigel Evans Nigel Evans Shadow Secretary of State for Wales

With regard to Welsh business's lack of growth, is it not the case that the Government are the problem, not the solution? We have had the national insurance tax increases that have just clobbered Welsh businesses, the climate change levy, the landfill tax, fuel tax increases, business tax increases and red tape that means, on average, 15 new regulations on business every working day. It is no wonder that we have seen some huge job losses in Wales since the Government came to power. When will the Government get off the back of business and give it a chance?

Photo of Peter Hain Peter Hain The Secretary of State for Wales

When will the hon. Gentleman rely on facts instead of rhetoric? That is the question. Let us look at the facts. Three thousand more businesses were created in Wales last year. There has been a higher start-up rate of businesses than in any other region of the United Kingdom, owing to Labour's support policies for Welsh businesses. There is a lower failure rate of businesses than in any other region of the United Kingdom, owing to the support that the Labour Government are putting into the Welsh economy. That is a record to be proud of, compared with the Tory record of record bankruptcies, record high unemployment and record collapse in manufacturing across Wales.

Photo of Nigel Evans Nigel Evans Shadow Secretary of State for Wales

The Secretary of State says, "Let us look at the facts", so let us do so. We have had Welsh agriculture on its knees under the present Government, and Welsh manufacturing has been decimated. It is incredibly difficult to get objective 1 money because it is so difficult for small businesses to work through all the red tape. The Federation of Small Businesses chairman, Gwyn Evans, has stated that public liability insurance premiums are crippling small businesses because they have shot up in price. One beneficiary of the insurance increases that are crippling business is the Government, who take a percentage of the premiums in tax. While the Chancellor is laughing all the way to the bank, do the Government feel no embarrassment about their windfall tax gain, or do they just consider it a nice little earner, like all their other stealth taxes?

Photo of Peter Hain Peter Hain The Secretary of State for Wales

What would happen to Welsh businesses that are in receipt of a great deal of grant aid and support from the National Assembly and the Government when the Tories cut spending on Welsh businesses by 20 per cent.? There would be massive, savage cuts in support for businesses right across Wales. What have we done for small businesses? We have abolished stamp duty to cut the cost of property purchases in areas of Wales, we have enhanced appreciation allowances to cut the cost of land clearance and tackling dereliction, and there is the prospect of enhanced capital allowances to cut the cost of initial investment, and community investment tax relief to cut the cost of risk capital. The Government are friends of business, creating more businesses and more jobs in Wales than ever before. A record level of employment was created last year, with a 60,000 rise in employment in Wales as a result of the Government's excellent policies.