Welsh Economy

Part of the debate – in Westminster Hall at 10:33 am on 29 November 2000.

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Photo of Mr Richard Livsey Mr Richard Livsey Liberal Democrat, Brecon and Radnorshire 10:33, 29 November 2000

My sincere apologies, Mr. Deputy Speaker. I shall not make that mistake again.

The history of Wales is littered with stories of success and of decline. Our main problem is that we have not experienced sustained growth over long periods of time. The creation of the National Assembly has given us the opportunity to focus on long-term planning.

The history of my family is in Cyfartha Ironworks in Merthyr Tydfil, which hit the buffers in the 1920s. The ironworks was mentioned in the book by Mr. Rowlands entitled "Something Must be Done"--the phrase with which the then Prince of Wales responded to the devastation in Dowlais. Fortunately, there was investment and regeneration in the 1940s, which the hon. Gentleman described in his book. Rural Wales thrived during and after the war, but now that prosperity has plummeted. There are serious infrastructure problems in the Welsh economy that must be addressed.

The scourge of Euro-scepticism has affected almost all British political parties, but it is essential that we enter the eurozone at the right exchange rate as soon as possible. Whereas the Welsh manufacturing industry constitutes 28 per cent. of the economy, London's, for example, constitutes only 10 per cent. We are affected badly by the disparity in the exchange rate, and for that reason, agriculture has been hit by a 40 per cent. drop in commodity prices. The Welsh economy must be directed towards job creation, which is the most important issue. The challenge is to change and develop our traditional skills, and get rid of obsolescence. The economy is still out of balance: there are too many traditional industries and not enough new, cutting edge ones.

We must improve our infrastructure; our roads and railways are appalling. Efforts are being made to improve matters, but that process needs a massive injection of capital. One problem is that we have little banking or insurance in Wales and minimal access to risk capital. There is a lack of innovation, entrepreneurship and skills, and we need to diversify. The National Assembly for Wales is addressing all those points, but, as has been said, the problem is the continuing decline in gross domestic product. We must make up the difference between Wales and the remainder of the United Kingdom, which is why Wales qualifies for objective 1 and objective 2 funding. Welsh people have many innate skills at their elbow, but we must have more small business growth, technological change, increased skills, investment and marketing.

Population exchange is a big problem. Young people are leaving Wales and older people are moving in, so there are fewer economically active people. As a result, there is a productivity gap, especially in manufacturing.