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Innovation and Enterprise

4. Mr. Chris Bryant (Rhondda): What recent discussions he has had with other ministers and the First Secretary of the National Assembly about steps to promote innovation and enterprise in Wales. [20039]

The Secretary of State for Wales (Mr. Paul Murphy): I have regular meetings with ministerial colleagues in government and with the First Minister to discuss a range of issues, including innovation and enterprise.

The Chancellor of the Exchequer's recent pre-Budget report announced a number of measures that build on existing programmes to promote innovation and enterprise in Wales and throughout the United Kingdom. Those include the extension of research and development tax credits to all UK companies and support for small businesses, which will benefit many small and medium enterprises in Wales.

Mr. Bryant: I thank my right hon. Friend for that answer. He will be aware that there are many highly innovative medium businesses in the Rhondda, such as MFC Survival and Harwin's, but they are still based in outdated buildings, and they have terrible difficulties attracting finance for expansion. What further aid can the Government give to small businesses such as those, so that our small industries become medium industries and our medium industries become large industries that can beat the world?

Mr. Murphy: I am grateful to my hon. Friend for that question because it is important for the House to understand that small and medium-sized businesses in Wales now form the backbone of the Welsh economy. Some 600,000 people work in Wales in 140,000 companies, some of which are based in my hon. Friend's constituency. The Assembly, together with the Welsh executive responsible for European matters, has instigated the joining together of Finance Wales and Barclays to

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provide £40 million to develop Welsh firms. It is a partnership between the Government and the Assembly to help small and medium-sized firms in his constituency and in the rest of Wales. That partnership is working and that is why we have had news today that 14,000 more people are in work in Wales than in the early summer.

Lembit Öpik (Montgomeryshire): May I first add the Liberal Democrats' condolences to the friends and family of Ray Powell, whose memory will live on in our hearts?

Did the Secretary of State note, in the Chancellor's pre-Budget report, that the regional analysis showed that the gap between rich and poor is twice as bad in the UK as it is in the US and worse than in any other EU country? In order to stimulate the kind of growth that he described, would he lend his support to calls for a regional enhancement to the research and development tax credit, which could significantly help businesses to develop so as to close that gap in Wales?

Mr. Murphy: I thank the hon. Gentleman for his comments about Ray Powell, with which we all agree. The most important decision that the Government took on regional aid, which the National Assembly has implemented, was to obtain and fund objective 1 funding for two thirds of Wales. That is the means by which we can ensure that the gap between the wealthier and poorer areas of Wales shrinks. In addition, the Government indicated in the pre-Budget report that they would provide stamp duty relief for some 363 wards in Wales. We are also introducing a community investment tax credit that will deliver capital to disadvantaged communities. The aids that the Chancellor has introduced, together with objective 1 funding, are the answer to the problems that the hon. Gentleman has raised.

Mr. Dai Havard (Merthyr Tydfil and Rhymney): My right hon. Friend will share my concern that Impress Metal Packaging in Rhymney is set to close, despite the efforts of the workers to keep it open. That will be a desperate blow to an area of high unemployment, but it is an illustration of a company in an oversubscribed market that could have done with some new product development. Can my right hon. Friend assure me that his efforts will continue, to ensure that all elements of the Government will co-operate with the National Assembly and its agencies to find new employment skills and opportunities for those affected by the closure?

Mr. Murphy: Yes, and I pay tribute to my hon. Friend for the work that he has done on behalf of those people who work at Impress in his constituency. He will be aware that the National Assembly and the Government are introducing measures that should help those who will be made redundant—a decision that all of us regret—and that new jobs are coming to that part of Wales: to Tredegar with Desklink, and Ebbw Vale with Continental Teaves. He rightly makes the point that we must emphasise training, through ELWa—Education and Learning Wales—and other agencies in Wales, and I am grateful to him for introducing the subject in the House.

Mr. Nigel Evans (Ribble Valley): I wish to be associated with the remarks about Ray Powell. He represented

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Ogmore and Wales over many years and he will be sadly missed, especially at Welsh questions. Our thoughts are with Marion and his family at this time.

In the past three months, more than 2,000 manufacturing job losses have been announced in Wales, with Sony, Alcan, Corning and Alcoa among the well known names that have announced job cuts or closures. Why do not the Government care about manufacturing?

Mr. Murphy: I am grateful for the hon. Gentleman's remarks about Ray Powell; it is kind of him to make them on the Opposition's behalf. On the issue of manufacturing, the hon. Gentleman obviously did not hear what I told the House some moments ago. Unemployment in Wales has fallen again, and we have 14,000 more jobs in Wales than we did back in the early summer. That is testimony to a Government who have produced a stable and strong economy, with inflation and interest rates at record low levels. As the hon. Gentleman knows, that compares with the nearly 3 million jobs in manufacturing that disappeared over the 18 years the previous Conservative Government were in office.

I am sure that the hon. Gentleman is familiar with the statistics regarding the different firms coming to Wales. He will know that many jobs are being created in the manufacturing sector. I mentioned Ebbw Vale, but the same is true of Tredegar, Pontardawe, Abertillery, Deeside, Llanelli and Swansea. Many jobs are being created in Wales as a direct consequence of the strong and stable economy in the United Kingdom, and in Wales itself.

Mr. Evans: The Secretary of State is clearly not listening either. He knows that there has been an increase in unemployment in the manufacturing sector, which is vital to Wales. The Confederation of British Industry regional trends survey reveals that investment intentions for buildings, plant and machinery for the next 12 months are extremely weak. Will the Secretary of State look again at the climate change levy, which loads extra costs on manufacturers? Will he also give an assurance today that Welsh businesses will not face a supplementary business tax?

Mr. Murphy: The hon. Gentleman will know that business rates are a matter for the National Assembly, which is discussing that and other issues with business in Wales.

On the climate change levy, my hon. Friend the Under-Secretary of State for Wales recently met representatives of the CBI and the Trades Union Congress to discuss the matter. However, despite what the hon. Member for Ribble Valley (Mr. Evans) has said, thousands and thousands of jobs are coming into Wales, and many are in the manufacturing sector or high-tech industries. That is news to be welcomed. [Interruption.]

Mr. Speaker: Order. Could the House come to order? It is far too noisy.

Mr. Martyn Jones (Clwyd, South): Does my right hon. Friend agree that the universities form one of the engines

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of enterprise and innovation in Wales? Will he therefore support the bid of the North East Wales Institute for university status?

Mr. Murphy: I welcome the work that the North East Wales Institute has done to encourage enterprise and improve the economic life of north-east Wales and of north Wales as a whole. I am especially glad to have met recently the college's new principal, Professor Scott, and we await the institute's application for university status.

Dee Estuary

5. Mr. Ben Chapman (Wirral, South): When he plans to discuss the economy of the Dee estuary with the First Secretary. [20040]

The Secretary of State for Wales (Mr. Paul Murphy): I have discussed economic issues surrounding the Dee estuary strategy with the First Minister during our regular bilateral meetings.

I have also contacted my right hon. Friend the Secretary of State for Trade and Industry on these issues. In addition, my hon. Friend the Parliamentary Under- Secretary of State for Wales has discussed several areas of concern with Welsh Environment and Rural Affairs Ministers.

Mr. Chapman: Does my right hon. Friend agree that the Deeside economy is, in effect, unitary? The gain or loss of jobs one side of the river affects the other side equally, as people cross the river in both directions to find work. Given that jobs have been lost at Corus but gained at Toyota, does my right hon. Friend consider that the post-devolution relationship between the Welsh Development Agency and the North West development agency is as close and integrated as it needs to be to tackle these problems?

Mr. Murphy: My hon. Friend has raised this issue in the House on many occasions. He and I met recently to discuss the common purpose for industry and the environment on both sides of the Wales/England border. My hon. Friend will be glad to know that I hope to visit the Dee estuary fairly soon in the new year, and I hope that he will join me. I agree that, economically, there is much to be gained through co-operation between the National Assembly and the Government.

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