Budget Statement and its Implications for Wales

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Mr. Paul Flynn (Newport, West): The phrase ``set aside'' gets my mind going. We talked about the changes in industry and the terrible events that are probably about to take place in the steel industry now. Oh that we had set aside the steel industry. The other word that my right hon. Friend used was ``compensation''. He said that it has been discussed, but it was unheard of before in certain industries where it is now being considered. If the Government are considering compensation for other industries that have never had it before, will they consider it for steelworkers? The deal that has been offered to Welsh steelworkers is abominable, compared with that offered to their fellow steelworkers in the Netherlands and other countries.

Mr. Murphy: I would use the word ``help'' rather than ``compensation''. Individuals will receive help with reskilling and retraining if they have to change jobs, and new industries will have to be attracted so that people can move into other work. The Employment Service does an excellent job in trying to ensure that people can make such a transition. However, I do not wish to pre-empt any package that we might announce in the weeks ahead; negotiation is continuing between the trade unions and Corus on the future of the plants.

Despite all the changes in employment, there were 2,201 unemployment claimants in Torfaen in 1997. At present, there are 1,580. A thousand young people were given jobs under the new deal, and half of them found jobs afterwards. Of course, we must deal with the decisions announced by Corus. As many as 300 or more families might be affected when the decisions regarding Llanwern take effect, if they do. The impact upon the community of Ebbw Vale of the closure of the steelworks there, if it happens, would be enormous. I worked for 17 years in that steel area.

The leaders of all the main Churches in Wales sent a statement to the directors of Corus, in which they said:

    ``Leaders of the churches in Wales, in the light of the commitment and productivity of the workforce and the needs of their communities, as key stakeholders in the Welsh steel industry, call upon Corus to rethink the strategy which has demanded such a heavy price in terms of job losses.''

That is what the Church leaders say and, as representatives of the people of Wales, we are saying that, too. You have said it yourself, Mr. Jones, as the right hon. Member for Alyn and Deeside. Whether at Shotton, Gorseinon, Llanwern or Ebbw Vale, and in other places as a result of the knock-on effects, we are still urging Corus to rethink its decisions. We believe that they are short-term and that the plants in Wales are among the most productive and efficient in the whole of Europe.

We await the outcome of the negotiations and discussions towards the end of this month. In the meantime, the Government and the Assembly must work together to find ways to alleviate the situation. Ultimately, the best way to do that is to bring in jobs to replace those that have been lost. That is why there are 600 new jobs at Ford in the constituency of my hon. Friend the Member for Bridgend (Mr. Griffiths). That is why 260 new jobs are coming in wireless technology.

Mr. Win Griffiths (Bridgend): As my right hon. Friend said, Ford has announced that it is boosting production in Bridgend, principally but not entirely because of production of the new Jaguar engine, and has estimated that more than 600 jobs will result from that. However, the unions at that plant, which are not known for being overly optimistic on such matters, believe that, once production starts and the engine begins to sell, there could be even more jobs in Bridgend than the 600 already mentioned.

Mr. Murphy: That is exceptionally good news, not just for the people of Bridgend but for people in other parts of Wales who work at that Ford plant.

Last week, I visited a company now called Technicolor—previously Nimbus—that makes compact discs. They employ 450 people and cut as many as 100,000 compact discs every day. That is an indicator of the sort of changes to which I referred earlier.

Mr. Lembit Ipik (Montgomeryshire): Does the Secretary of State agree that the tragedy of losing 200 jobs in a small town such as Llanidloes, through the loss of the former BSK plant, is every bit as serious to the local people and economy as the Corus closures in south Wales? Does he further agree that it is incumbent on Ministers to work with their opposite numbers in the Welsh Assembly to ensure that we do not forget smaller factories, such as the former BSK plant, and that we implement the same strategy of replacing jobs in those areas as we do in others?

Mr. Murphy: I could not agree more. It is right to work together because what matters is the impact on a community and its individuals. For geographically isolated communities, where much of the employment depends upon one small factory, the impact of its closure is as considerable as that of the closure of a steelworks. I understand the hon. Gentleman's point about the problems in his constituency but, as bad as the Corus announcements are, there is the other side of the coin: 17,000 more jobs came into Wales last year.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney): To illustrate as vividly as I can my right hon. Friend's point, I draw attention to my constituency. Who would have thought, even five years ago, that the two fastest-growing employers there would have been a call centre, One 2 One, and a meat company, St. Mervyn Meat Company?

Mr. Murphy: Indeed, who would have thought that that would happen in a great steel and coal town such as Merthyr? However, that is the nature of the change in Wales. That is the case in the aerospace industry in your own constituency, Mr. Jones, where BAE Systems is creating many jobs, and in fibre optics and optronics in north Wales too.

Mr. Nigel Evans (Ribble Valley): I hate to intrude on all the back-slapping, but will the Secretary of State tell me his assessment of the impact of the climate change levy on manufacturing industry, especially in Wales? He will know that the CBI, the Institute of Directors and representatives of small to medium-sized enterprises are worried that that new tax will make Wales less competitive than other European countries, and that we could easily lose jobs to them. The Chancellor of the Exchequer had a great opportunity last week to alleviate the damage being done by the climate change levy, but he did nothing and jobs will be lost as a consequence.

Mr. Murphy: I do not think that jobs will be lost. The hon. Gentleman will have seen today's news of the huge importance of addressing climate change. Unless Governments throughout the world address the problem, we will store up enormous trouble for the future. Industry must play its part and ensure that it regulates itself, so that we look after our climate and environment. I have no doubt that discussions took place between my right hon. Friend the Chancellor and the relevant associations of businesses and industries. Of course, some will complain and grumble, but we must address the issue of the environment.

This is not a question of back-slapping. My point is that, although we have problems and it is important to understand the implications of Corus closures and the points made by hon. Members, we must tell the world that Wales is a flourishing country in which it is good to invest. We must tell people that because it is not only important, but true. We should examine the figures: we have the lowest unemployment since 1972 and all members of the Committee can point to the fact that fewer people are out of work in their constituencies now than for more than a quarter of a century.

Mr. Dafydd Wigley (Caernarfon): Is the Secretary of State not in danger of being complacent about the problems that face so many communities in places such as Ebbw Vale and my constituency? We are debating the Budget, so will he now answer the question that I put to the Under-Secretary earlier? What has happened to the bid that was to be made for operating aids in objective 1 areas? It was recommended unanimously by the Select Committee on Welsh Affairs and pressed for by the First Secretary and Deputy First Secretary in Cardiff? Is the bid still on the table or has the Minister given up?

Mr. Murphy: Discussions are still under way about the issues raised by the First Minister and the Deputy First Minister. I completely reject the right hon. Gentleman's accusation of complacency; how can I be complacent when hundreds of my constituents will lose their jobs if the Corus announcement is fulfilled? Individual human beings and their families will face hard times. However, there are alternatives; something good is happening in Wales. There are many extra jobs in different industries and the trick is to ensure that the people who lose their jobs are reskilled, retrained and led into new, and good, jobs.

Mr. Chris Ruane (Vale of Clwyd): On the issue of Wales being able to regenerate itself, I give the example of my constituency, where three years ago 800 jobs were lost at Kwik Save. However, in the past four years, unemployment in my constituency has been reduced by 25 per cent.—an extra 564 jobs. There are 150 manufacturing jobs at TRB and 170 at Hotpoint, and in the service sector there are extra jobs in WTS Holdings. What does my right hon. Friend have to say about that?

Mr. Murphy: Obviously, I welcome those jobs but, again, the trick in my hon. Friend's corner of Wales, where 350 people will be made redundant in Shotton, is that they will have the opportunity to move into new industries and businesses. That shows how important it is to ensure that Wales has a diverse economy, which is not dependent on single industries and which attracts more small and medium-sized firms, dependent, of course, upon the nature of those firms.

Mr. Flynn: Does my right hon. Friend agree that Plaid Cymru's doom-mongering is an incurable addiction and its picture of the despair and dereliction of Wales greatly damages us in the eyes of the rest of the world? We will fight for those areas where the jobs are going, but will the Minister remind the Committee that, last week, the two high-tech companies chosen to receive the top prizes for innovation were Welsh, from Newport. Cannot Plaid Cymru look at the figures on unemployment and realise that in many parts of Wales, especially mid-Wales and south Wales, there is a phenomenon that we have never had before: unemployment lower than what used to be called full employment in the 1950s and 1960s? There is now something called nano-unemployment in some areas. We should celebrate that and boast about it and tell the rest of the world that Wales is a progressive country, which is a good place in which to live and set up new businesses.

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Prepared 12 March 2001