Welsh Affairs

Thank you, Mr. Deputy Speaker. May I begin by associating Liberal Democrat Members with the profound comments that we heard from the Secretary of State and the shadow Secretary of State on the loss of Ivan Cameron? All of us, and especially those of us who are parents, will appreciate that there is nothing more sorrowful than the loss of a child in such sad circumstances. Our condolences go to the Leader of the Opposition and his family. It is a privilege to follow the hon. Member for Aberavon (Dr. Francis). I say this as an Opposition MP, but he is an excellent Chairman of our Select Committee and his pursuit of a consensual style is to be admired. I shall add to what he and the Secretary of State have said about the ingredients for the future and especially the importance of higher education and the skills agenda. We need to develop the Welsh skills base, so that businesses both large and small are supported. In particular, I shall speak from a rural perspective about small businesses. As we have heard, the report on the cross-border provision of higher education identified some of the positive steps that have been taken. However, it also alerted us to some of the great issues of concern, the clearest and starkest of which is the funding gap of some £61 million. The House does not need to be reminded that Wales has some of the finest academic institutions in the world, but if the present level of funding is not maintained or increased, there is a great danger that we will fall behind in an increasingly challenging global market. That would make it more difficult for Welsh institutions to compete for research funding which, considering our relative size, is already disproportionately low. A lack of research funding will inevitably make it more challenging for Welsh universities to keep top academics, and the knock-on effect will be that it will be harder to attract new students. Moreover, we have to compete internationally as well as in the UK context. The Committee took evidence from Professor Merfyn Jones of Bangor university, who pointed out that international students contribute well over £100 million annually to the Welsh economy through the payment of fees and through spending their money locally. Concerns have been raised with me, most recently by the vice-chancellor of Aberystwyth university, about the mismatch between the length of visas and the duration of some of the courses that overseas students wish to undertake. I do not mean to patronise the Welsh Assembly Government in any way, but our report found that, in developing the work force development fund, they could learn some lessons from Train to Gain. It was felt that Train to Gain was far better at promoting itself than the work force development fund. We took evidence from Summit Skills, the sector skills council for the building services and engineering sector, and were told that many employers simply did not know that the work force development plan existed—the Welsh Assembly Government had not advertised it at all. The Leitch review has demonstrated the importance to the future skills base of reskilling and upskilling. Learning is a lifelong process now, and not something that happens only between the ages of four and 16. In that context, I know that the Welsh Assembly Government will assert—I mean no criticism, as we have heard the same assertions from the Secretary of State—that £68 million has been spent on the ReAct and ProAct schemes. That is welcome but, like the hon. Member for Chesham and Amersham (Mrs. Gillan), I find it hard to reconcile that with the 7 per cent. cuts that have been made in further education in Wales. As one of my colleagues in the National Assembly, Jenny Randerson, remarked, we should no doubt praise the admirable further education college in the north-east that is now in receipt of £60 million a year, as that is more than the Assembly budget for further education across the entirety of Wales. The skills agenda was rightly highlighted when we found ourselves in somewhat uncertain economic climes, but it is now all the more important that we focus and refocus on it. We considered that in our report on globalisation. When the representatives of Higher Education Wales gave evidence to the Select Committee, they stated that higher education contributed £1.6 billion to the Welsh economy, which demonstrates just how important it is. As others have said, we are now moving on from developing the interface between traditional academia in our universities and opportunities in the commercial world. Examples of that are the relationship between Aberystwyth university and Bangor university, the growing associations between the other higher education institutions in Wales, and the merger of the Institute of Grassland and Environmental Research and Aberystwyth university to form the Institute of Biological, Environmental and Rural Sciences. The Under-Secretary of State was there last week and heard about the development of biofuels, the academic scientific research into that development and the need and enthusiasm at IBERS to develop commercial partnerships to take these projects further. Of course, that is all underpinned by the state of the national economy. My party certainly supported of the recapitalisation of the banks last October. We share across the House the concern that, since October, £5 billion less has been lent to enterprises across the country. My hon. Friend the Member for Twickenham (Dr. Cable) has made our approach quite clear: we favour the acquisition of ordinary shares so that the Government can have a steer on lending and remuneration. The offensive news that we have heard last night about the £650,000 pension awarded to Fred the Shred, as I think he is called—[Hon. Members: ““Outrageous!””] It is outrageous. It does not resonate strongly with what we have heard about the roles of the banks in relation to small businesses and with the difficulties that rural businesses have experienced. In my constituency, small businesses account for two thirds of the work force. Indeed, 54.2 per cent. of people in Ceredigion are employed by micro-businesses—businesses with nine employees or fewer. That is the highest percentage in Wales. When we consider rural businesses, we must make the point that the collapse of small and micro-businesses has a direct effect on the broader rural economy. When young families are forced to move away, that has an effect on the pupil numbers in the village schools and on the ability of public services to continue. That can make the difference to a community's survival. I remain very concerned, as we all do, I am sure, about the attitude of the banks. Let me use an illustration that I have been aware of for the past couple of weeks. Two constituents of mine—I will not mention their business—came to Finance Wales in good faith two or three years ago, and achieved funding for their enterprise. Difficulties followed, the cost of bank loans has risen and they are now in negotiation with one of our high street banks to renegotiate the loan. The banks displayed stridency and determination in not budging from a repayment figure of £233 a month, whereas my constituents could raise only £200. That £33 is the difference between the threat of bailiffs hanging over them and their future viability as a business, which would be assured if the bailiffs went away. One constituent of mine in the north of Ceredigion has the misfortune of having a range of empty business premises. Although the rate relief has been welcome—we heard about that earlier—for small business people with empty business premises, my constituent will not be helped by the scheme and faces an annual rates bill on empty properties of some £30,000, which directly affects his capacity to function in other areas. That is the reality of the operation of the banks on the ground. I have read the Wales Office website in some detail, and have read about some of the schemes available. It states some of the criteria and whether they are applicable to England, Wales or the UK, and gives telephone number contact details. However, there is still a problem in getting that message through to some of our small business people. I really believe that is a problem. Two weeks ago, I went to a small business breakfast in Aberystwyth armed with the website page and went through it with those people. Much of it was fresh news to them, so I do not think the message is getting through to those businesses about the extent of the help available, which they desperately need.