Is the Government doing enough to help Wales through the recession?

It was Welsh questions yesterday.

Congleton's Ann Winterton asked about manufacturing:

"Ann Winterton (Congleton) (Con): What recent assessment he has made of the state of the manufacturing sector in Wales. [261324]

The Secretary of State for Wales (Mr. Paul Murphy): The manufacturing industry is, of course, very important to Wales. According to the latest available figures, the sector employs about 13.5 per cent. of the Welsh work force.

Ann Winterton: The manufacturing industry in the UK has taken a very hard hit in the recession, and that is perhaps even more true of Wales. Is the Secretary of State aware of the concerns of many in the manufacturing work force in Wales who work for foreign companies that there may be plans to offshore employment? Examples of such companies include Toyota in north Wales and Corus in south Wales; Corus has a plant in the Netherlands. What discussion has he had with other Ministers, and with the Welsh Assembly, to ensure that that does not happen?

Mr. Murphy: The hon. Lady makes a valid point. I have of course had discussions with my right hon. Friend the Business Secretary, and with the First Minister and Deputy First Minister of Wales. I have also discussed the issue of Corus with the chief executive of Corus. The point that the hon. Lady makes about foreign-owned companies in Wales is well taken, but I have no reason to believe that that will be a disadvantage to us in Wales in the months to come. In my constituency, for example, thousands of people work for car component manufacturers that are American-owned, and so far, so good. Obviously, they are feeling the pinch, like all manufacturing companies, and particularly those in the automotive industry, but I very much take her point on board."

Shadow Deputy Secretary of State for Wales David Jones had a follow-up question:

"The Secretary of State will know that Toyota announced today that it is putting its factory on Deeside on short-time working and its staff on reduced pay. He has already mentioned the importance of the automotive industry to the Welsh economy. Given that importance, does he know precisely when the automotive assistance programme, which was announced with so much fanfare in January, will be implemented? Is it another case not of real help now, but of jam tomorrow?

Mr. Murphy: No; the hon. Gentleman is aware that some of the schemes are to operate at different times. For example, in April at least six schemes are due to go live, including help for the automotive industry. There are other schemes that have already started. I cited to the hon. Member for Montgomeryshire (Lembit Öpik) the excellent ProAct scheme that works in Wales. The schemes are staggered in time scale, but they are about real help for people. The hon. Member for Clwyd, West (Mr. Jones) is right that the delivery of such schemes must be a main priority of Government, whether here in London or in Cardiff. Help is available, and it is up to the industry to apply for that help."

Preseli Pembrokeshire MP and Opposition Whip Stephen Crabb raised a concern that is increasingly heard - that for all the Government's announcements businesses are not getting the promised help:

"Does the Secretary of State not realise that there is a huge disconnect between the rhetoric and the words used at his Dispatch Box and at the business summit public relations exercises that are being conducted throughout Wales, and the reality on the ground, particularly in areas such as Pembrokeshire and west Wales, where small businesses are seeing precious little additional new assistance at this time of recession? Is the Secretary of State aware of the enormous disillusion in the small business community with the promises being made by Ministers and with how little is being delivered?

Mr. Murphy: There is time for rhetoric and there is time for people to pull together to help those who are out of work in Wales. I have not the slightest doubt that the economic summits that we have held—there is one to be held in a few weeks in Swansea—have done a remarkably good job in bringing together from business, industry, the trade union movement and elsewhere all the expertise that we can gather in Wales. It is true to say that it will take time for some of those schemes to start working, but some have already started working. The figures that I have just given the House with regard to ProAct are a good example of that. At least we are trying. I fear that the hon. Gentleman’s party has no ideas at all about how to get us out of the recession. It is much better for small businesses, industry and commerce in Wales to know that both Governments are trying to help them, as opposed to his party, which has said absolutely nothing."

Welsh Secretary Paul Murphy had told the House that the ProAct scheme "is unique to Wales and is very effective", adding that 75 applications have been processed, 66 from the automotive industry. He further explained that "Ten have been accepted. That represents nearly 6,000 workers, so it is a very real scheme, and it means that real money goes to help businesses".

Shadow Secretary of State Cheryl Gillan was sceptical:

"The Secretary of State has revealed today that 10 businesses have been helped under the ProAct scheme and that help for 75 is under consideration. Frankly, that is just scratching the surface. The Secretary of State’s figures are wrong; the Treasury has said today that 3,590 businesses in Wales have agreed terms to defer payments, a further 120 have been turned down and 405 are still in negotiations. That means that more than 4,000 businesses are facing trouble. Given that sort of volume, does the Secretary of State really consider that the schemes put in place by the Welsh Assembly Government and his Government have the capacity to cope with the large number of firms that are in trouble, are closing or are laying off staff?

Mr. Murphy: Yes, I think that the schemes collectively will do that. Does the hon. Lady realise that we are talking about hundreds of billions of pounds, which have been put into the banking system to prevent it from collapsing and to ensure that banks lend again? Those schemes will start at the beginning of the financial year. She should consider the importance of the schemes I have referred to, such as ProAct, ReAct and other schemes in Wales. They are meaningful schemes that are working. I agree that more work needs to be done to ensure that people are aware of them, but they are still better than the policies her party has put forward.

Mrs. Gillan: The Secretary of State is right to say that more work needs to be done, because the managing director of the leading business advice organisation in the country, Venture Wales, has said that since the Welsh Assembly Government took over the Welsh Development Agency, help to small firms has deteriorated. He says that decision-making is “slow”, that morale is “low” and that millions of pounds are “being wasted”. If that is the view of an expert on the systems of help for businesses in Wales, what is the Secretary of State going to do about it?

Mr. Murphy: That is not the message I am getting. The CBI in Wales, the Federation of Small Businesses and individual businesses in my constituency are giving me the message that real help has come from the Welsh Assembly Government to the business sector. To take one example, the finance Wales initiative—our own Wales bank to help small businesses—has invested £17 million this financial year. That is 25 per cent. more than last year, and it is real help going to real businesses in Wales."

Monmouth firebrand David Davies asked about policing:

"Does the Minister agree that there is little prospect of doing anything meaningful about internet crime when Welsh police forces are facing such drastic cuts to their budgets that they have to reduce the numbers of front-line police officers in many parts of the Principality?

Mr. David: The fact of the matter is, of course, that there is no reduction in front-line policing. Of course there are efficiency measures taking shape, and bureaucracy is being reduced, but we are seeing better front-line policing throughout the length and breadth of Wales. That is very significant and far different from what the Opposition would do if they ever had power, for goodness’ sake."

Wellinborough MP Peter Bone raised the vexed issue of central Government expenditure:

"I am grateful to the Secretary of State for his response, but in Wales £8,577 per person is spent on public expenditure. In my constituency it is only £6,936. My constituents pay the same taxes as those in Wales. Is it fair that each man, woman and child in Wellingborough is £1,641 a year worse off?

Mr. Murphy: I do not know what the rate of deprivation is in Wellingborough, but large parts of Wales are seriously deprived because of the run-down of traditional industries. The Barnett formula, which deals with central funding for Wales, Scotland and Northern Ireland, was based on the needs of those different parts of our United Kingdom. That is the reason why that difference is in place."

Mark Pritchard, MP for The Wrekin, had a question about the implications of devolution:

"Shimizu, a fine Japanese company, has factories in Welshpool and in Hortonwood in my constituency. The difference is that, on the Welsh side of the border, it receives taxpayer subsidies for wages and training. That is good news; we want people in jobs in Wales, but what about the people of Shropshire and my constituents, who would like a similar subsidy from the regional development agency?

Mr. Murphy: As the hon. Gentleman knows, one great benefit of devolution is that we can have several schemes to help businesses in Wales that might not be available in England. However, there are also effective schemes across the border in England, such as Train to Gain, the help that the Department for Business, Enterprise and Regulatory Reform gives small and medium-sized
enterprises, and the Department for Work and Pensions schemes. There are plenty of schemes—it is important that the hon. Gentleman makes his constituents aware of them."

Tom Greeves