Debate on the Address

My Lords, I rise comforted and perhaps a little strengthened in the knowledge that the adrenaline coursing through my veins at this moment has been experienced by many noble Lords and noble Baronesses before me, and most likely overcome. From observation I realise that it is customary to acknowledge the professionalism and courtesy of the staff of this House. Custom it may well be but, endorsing the words of my noble friend Lord Bilimoria, let me assure you that the warmth of reception and attentiveness has been most extraordinary. Your Lordships have been equally generous in your welcome and our Convenor—my noble friend Lord Williamson of Horton and his staff—most helpful. It is further customary, I note, when speaking in a debate, to declare an interest. Today I declare with pride an overwhelming interest in Wales—not the mammal, although that may be in this era of increased environmental awareness, but the country, a unique constituent of the United Kingdom. It is somewhat different today from the description given in my 1888 edition of the Encyclopaedia Britannica, which, when you looked up Wales, had two words: ““See England””. I had the privilege of serving as chairman of the Welsh Development Agency under four Secretaries of State and three Welsh Assembly Ministers. I am most proud to be in the House in the company of such distinguished former Secretaries of State: the noble and learned Lord, Lord Morris of Aberavon, who kindly introduced me, together with the noble Lord, Lord Griffiths of Fforestfach; the noble Lords, Lord Thomas of Gwydir, Lord Crickhowell, Lord Walker of Worcester and Lord Hunt of the Wirral; and two former celebrated Ministers of State, the noble Lords, Lord Roberts of Conwy and Lord Rowlands. In 1975, the noble and learned Lord, Lord Morris of Aberavon, steered the legislation which created the Welsh Development Agency; a development agency that was to become a benchmark for excellence not only in the United Kingdom but across western Europe. The WDA became synonymous with the term ““inward investment””. In the 1980s and 1990s Wales regularly attracted some 15 per cent of the total inward investment flows into the United Kingdom, punching, as has already been said in other contexts, considerably above its weight when one considers that it has but 5 per cent of the UK population. However, inward investment was not the only activity of the agency. By the year 2000 it had completed the largest land reclamation programme undertaken in western Europe, returning more than 22,000 acres of derelict and contaminated industrial sites to commercial, leisure and residential use. Further, the agency encouraged, stimulated and assisted indigenous business innovation and entrepreneurship. Why was all this activity so vital? Wales had had a fairly static workforce of 1 million, of which more than one-third was employed in coal and steel after the end of the Second World War. By 1975 it was estimated that more than 400,000 jobs had been lost from those industries. As the noble and learned Lord, Lord Morris, must have realised when he created the WDA, something must be done—a statement that some noble Lords may recognise was made by the then Prince of Wales on his visit to the south Wales valleys in 1936, and used, almost 65 years later, by the noble Lord, Lord Rowlands, as the title of a publication. Something was done. Today I note that in the recently published UK competitiveness index, Wales increased 3.2 per cent year on year, the third best rate of improvement in the United Kingdom. However, we also sadly number two local authorities among the UK's worst performing five. Employment in Wales is standing at 1.3 million—an annual increase of 18,000. For much of 2005 the unemployment rate was below that of the UK. How different this story might have been if successive Governments had not seen fit to assist the transformation of the Welsh economy from black gold to computer chips. However, today the future is equally challenging. Each week the manufacturing jobs that came into Wales in the 1980s and 1990s from all parts of the world move overseas. Of course they do not move just from Wales; this phenomenon is occurring throughout the United Kingdom as the culture of globalisation embeds itself completely in the corporate psyche. Flows of large, job-creating investment are over. Downsizing and closures are the reality. It is imperative, therefore, that in the face of the diminishing manufacturing base, in which employment is now at an historical low, we redouble our focus on high value-added production to maintain some semblance of activity in this sector in the long term. There is also an increasing urgency to stimulate entrepreneurship—as we have heard this afternoon on more than one occasion—and innovation to create and sustain appropriate funding for our students and pioneering research so as to achieve and maintain leadership. We must also heed the warnings of the past and current leadership of the Confederation of British Industry that the present level of corporation tax is unsustainable if we are to retain competitiveness not just with Asian economies but with the rest of Europe. It is particularly concerning as outward flows have now begun to include regional and global headquarters and, with them, goes higher paid employment. To complicate the issue further, a World Bank study published three weeks ago, to which the noble Baroness, Lady Noakes, referred, reported that the UK lies second only to India in the global table of most complicated overall tax regimes, with the tax code in the UK about twice the length it was a decade ago. An increasingly significant factor in our economy is the role of the creative industries. Here I declare another interest. In a recent communication to the Chancellor from the National Campaign for the Arts, it was pointed out that the Department for Culture, Media and Sport believes that almost £1 in every £12 of the UK’s total gross value added is generated by the creative economy. Creative industries have grown far faster than the rest of the economy. From 1997 to 2004, employment grew at 3 per cent per annum, in comparison with just over 1 per cent for the rest of the economy. The UK’s creative industries account for 8 per cent of GDP and provide some 2 million jobs. They provide some 7 per cent of UK exports. In Wales, the creative industries are a great source of innovation, enterprise and prosperity, employing 63,000 people directly, which represents 5 per cent of the economically active workforce. Recalling the reception given by this House to that part of the gracious Speech that dealt with the proposed legislation to create an independent board to enhance confidence in government statistics, I use those figures with an appropriate health warning. However, I do know more surely about the economic impact of the Wales Millennium Centre. Coincidentally, today marks the second anniversary of its formal opening by Her Majesty the Queen. Since that day, the centre has attracted 1.2 million visitors, of whom 700,000 have watched performances. It has generated an economic contribution that is estimated at some £120 million. It is becoming a national icon, significantly increasing the profile and tourism potential of Cardiff and of Wales as a whole. It has stimulated local business and growth; 30,000 business people have attended 830 conferences. Some 28,000 schoolchildren have attended formal educational visits. This morning, at the centre, I took part in the launch of an imaginatively constructed, zero coupon, Welsh Coalfields Bond, designed to liberate creative talent in all age groups. I could go on, but suffice it to say the performing arts specifically can and do make a difference in monetary terms, but they are also vital to our education system and to community well-being. In the company of the fledglings of your Lordships’ House, I await the results of the consensus that is being created on its reform, wondering perhaps which of the accounting principles, LIFO or FIFO, may apply. Meanwhile, I thank noble Lords for their patience, and I look forward hopefully to the opportunity of future participation in your Lordships’ deliberations.