Welsh Affairs

It is clear that, as in previous recessions, manufacturing in Wales has suffered more than any other industry. We all know that, according to a CBI survey, demand for manufactured goods in Britain is at its worst for 17 years but, like the right hon. Member for Islwyn (Mr. Touhig), I believe that the recession offers us an opportunity. He accurately encapsulated the importance of having the right attitude to the challenges that we face. In my constituency of Montgomeryshire, as in all Welsh constituencies, small, medium and large businesses face real hardship. Recently, I have made sure that, as far as possible, I am aware of the difficulties that businesses on the high street and in the local manufacturing base face. I have met many representatives from companies that are experiencing difficulty, including Woolworths, which of course tragically closed not long ago, and Stadco, which is threatening to cut more than 100 jobs in Llanfyllin. In addition, I have met representatives from Floform in Welshpool, which closed dramatically and suddenly a week ago, and I have met Gareth Pugh, whose construction business in Abermule seems to be going well despite his problems getting loans from the banks. I have also met people from Total Network Solutions and dozens of other companies. I have also listened to the voices in Westminster clamouring for long-term solutions to the crisis. In particular, I have listened long and hard to my hon. Friend the Member for Twickenham (Dr. Cable), our esteemed economics spokesperson. I think that I can say without fear of contradiction that, at the moment, he is effectively the Chancellor of Britain. The definition of the problem is pretty straightforward. I think that we in mid-Wales have been in recession for about three years now: without a new direction for our Wales economy, I believe that the problems that we face will only spiral. Salaries in Montgomeryshire and in Brecon and Radnorshire are down in real terms, according to objective data. We also know that unemployment in Wales alone has risen by 28 per cent. in the past year. This month, it affects 7 per cent. of the Welsh population. There has also been a 69 per cent. increase in jobseeker's allowance claimants in Montgomeryshire in the past year. Even the farming industry has suffered in the past few years. It has been blighted by bluetongue and bovine TB, and there is also the continuing dispute about how farmers are able to control foxes. The inability to control that pest in the most efficient way has an economic cost for farmers in my constituency. Therefore, I hope that the Minister will assure the House that he will do everything he can to prevent the introduction of electronic identification tags for sheep in Wales, which would merely place even greater pressure on our already overstretched farmers and rural economy. Like many other constituencies in Wales, mine has seen businesses close. Powys had the highest VAT deregistration rate in Wales in 2007, with 54 businesses closing and huge job cuts as a result. Manufacturing firms have been predominantly affected by the shrinking of consumer demand. I have mentioned a number of those companies already, but this week I learned that Control Techniques, a very successful international electrical firm in Newtown, is facing another 30 redundancies in the very near future. As a result, it seems to me that both the Welsh Assembly and the Government here must produce a specific plan of action, because the rescue packages that have been announced so far are not making a discernible difference in Montgomeryshire. I certainly do not deny that the Government are operating in good faith, and I support many of the proposals that they have made, but we need the action being taken to achieve results before many more jobs are lost. In that sense, I want to thank the Minister for agreeing to come to a meeting that I hope to arrange in the very near future. He will be able to hear directly about the problems that local small and medium-sized businesses in Montgomeryshire are facing. He has been generous in making that commitment of his time, and I assure him that he will have a constructive and insightful session. I believe that it will probably give him a good insight into the typical problems facing small and medium-sized businesses across rural Wales as a whole. The core issue, it seems to me, relates to the banks. They should not be reining in overdrafts and increasing interest rates on overdrafts for their existing customers, as they have. I am sorry to report to the Minister that much of the good work that is being put in place by the Government is being undermined by the banks, which are paying lip service to their partnership with the Government but, in any practical sense, are reining in the level of debt that their existing customers can secure. The Secretary of State already knows that in my constituency successful businesses have been forced to accept massive reductions in their overdraft facilities. I accept the conflicting demands on banks to shore up capital as well as to increase lending to small businesses, but they are in full knowledge of the support that the Government are giving them, yet they refuse to extend a hand to those businesses that are struggling to get by without their help. The message is simply not getting through. I find individual bank managers very co-operative, and have had many useful meetings with the major banks, but I am very close to naming those banks in my constituency that do not co-operate with the needs of business people. I hope that the Minister can pass that message through the Treasury to the banks, which are effectively in national control. They are morally obliged to co-operate to ensure that we do not lose more jobs needlessly in Montgomeryshire and across Wales as a whole. I would also suggest that we need a rather clearer economic narrative for Wales, and that has been touched on by other speakers, as well as an overarching strategy to pull us out of the recession. I am sure that a number of hon. Members would also agree that with the downturn, mid-Wales has the potential to be the environmental capital of Britain, as we have seen through the Centre for Alternative Technology and the fact that we export many ideas to other parts of Britain and Europe. The other side of that should be to create specific eco-companies that lead the way with green technology development as well as exporting those ideas elsewhere. If we look at Wales as an eco-nation, we can ride the wave of a growth industry at a time when we need to clarify our political narrative. Let me make two more short points. In mid-Wales, we are fast becoming not only the eco-capital of Britain but the wind turbine capital of Britain. There are mixed reactions to turbines, but in my view those turbines and the strategy of enforcing hundreds of new turbines in the form of wind farms in Montgomeryshire is misguided. They do not produce baseload because they are not a reliable form of energy. Although I would not be against them if they provided a substantial contribution to British energy requirements, my worry is that we would need 2,000 turbines to replace a single conventional power station. When the larger proposals come forward, as they will inevitably find their way to Westminster rather than Cardiff due to the exigencies of the legislation, I hope that local opinions and the cost-benefit analysis will be taken objectively into account. Although it looks like the Government are doing something when the turbines go up, they are not necessarily making as good an environmental policy decision as it might at first sight appear. My other point is one of praise, and concerns flooding in Montgomeryshire. The Severn flood plan occupies an extensive proportion of the land area of my constituency and we have been blighted with some serious flooding issues over the past few years. I have been working with the Environment Agency to see whether we can modify some of the policies that are imposed. A number of my constituents are concerned that they will end up as the victims of enforced flooding in order to protect other towns and settlements downstream. I am happy to report that as a result of conversations with the Environment Agency and Ministers, the Environment Agency has modified its policies, specifically policy 6, in order to take local concerns and feedback into consideration in its decision-making activities. That is a success story and it shows that if one works strategically with the Environment Agency and similar bodies, one can make a local difference by altering national policies for the greater good. I thank Wales Office Ministers for their co-operation in achieving an all-round good result. I should like real progress, with a partnership approach in terms of both economics and the environmental considerations that particularly affect Montgomeryshire. With the right infrastructure developments, both in connecting the rest of Britain to Wales through improved rail, road and air links, as well as a continued commitment to improving the canal and waterway system throughout Wales, we could see Welsh tourism flourish under the credit crunch, when more and more people will choose to holiday in the UK. I close with two requests. The first is that if the Government are genuinely to feed a large amount of money into trying to restart the economy, they could do a lot worse than invest in reconnecting Montgomery canal to the rest of the network. It is a multi-million pound scheme of construction work that would provide much-needed employment for the sectors that are suffering most in the economy. My second and final request is that the Minister heeds the advice of others who have spoken today to take a strategic approach to developing a hub and spokes air service across Wales. I declare an interest as a pilot in a fledgling air taxi company, which formerly transported the right hon. Member for Neath (Mr. Hain)—without accident. I offer my humble services to fly the Minister about if he wants but, more important, to ensure that Cardiff international airport is connected to Welshpool international airport—if I can describe it thus—for the greater good of connecting Wales by air, not, we hope, just for economic benefit but for cultural benefit too. I look forward to seeing the Minister in my constituency and I shall make sure that his visit is satisfactory and worth while, both for him and for the businesspeople he will meet.