North Wales Economic Infrastructure

Mark Tami Excerpts

Wednesday 25th March 2015 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(Mel Stride.)

[Mark Tami (Alyn and Deeside) (Lab)]

It is a great pleasure to serve under your chairmanship, Sir Roger. I begin by expressing my sympathy to the family and friends of those who lost their lives in the dreadful air crash yesterday. Airbus wings are made in Broughton, and the thoughts of those at the factory will be with everyone who has been affected by the tragedy.

It is about a year and a half since we had a debate on a similar subject. In some areas, we have seen some big improvements, but in other areas, particularly rail, progress has been limited, to say the least. Despite the title of the debate, our economic region extends beyond north Wales and includes a big proportion of the north-west of England. I want to put on record my thanks to the Mersey Dee Alliance for all its work to campaign for and promote investment in our area.

Manufacturing is key to the region. North Wales and the north-west of England have a population of some 8 million and economic output of some £140 billion. It is the largest manufacturing area in the UK, with more than £25 billion of output. The area boasts some of the top manufacturers not only in the UK but in the world. In my area, for example, we have Airbus, Toyota, Tata, Raytheon, Convatec and many others. I could stand here for a long time naming all the companies that are so important to creating jobs and growth in our area. There are many more on the other side of the border, such as Vauxhall at Ellesmere Port. The patterns of travel show that workers criss-cross the border. Some Vauxhall employees live on the Welsh side of the border, and about 40% of the Airbus work force live in England but work in Wales. The border, to all intents and purposes, does not exist from an economic regional point of view.

The success of our region cannot be taken for granted. Experience has shown us that once-great industries can and do fail. Many companies are truly global, and they have a choice over where to site their operations. If circumstances dictate, as we have seen in many cases, they can up sticks and move elsewhere. We cannot ignore that reality, and it is a danger. Many years ago, Deeside was dominated by Shotton Steelworks, a maker of colour products, which remains an important employer. It is taking on apprentices, and when I visited recently I was pleased to hear about some of the investments and progress that are being made.

The steelworks holds the record for the largest number of job losses at a plant on a single day, when more than 8,000 people lost their jobs under the Thatcher Government. That devastated the whole area. I say that not to make a point about Tories destroying jobs—

[Albert Owen (Ynys Môn) (Lab)]

Why not?

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[Mark Tami]

All right, then; I will make that point. That example illustrates the fact that no matter how big a company is or how long it has been there, if events turn against it, the impact can be devastating. More recently, UPM paper mill, which I consider to be a benchmark employer—I certainly would not have put it on a list of companies in difficulty—announced that it would be cutting 120 jobs from its 370-strong work force. Why? Because the demand for newsprint worldwide has declined. When the recession hit, people stopped buying newspapers and magazines. Even as we slowly come out of recession, people’s habits have changed and they use the internet more, so demand has not picked up again.

In 2001, Corning Optical Fibre, a high-tech firm on Deeside industrial park with more than 400 employees, closed virtually overnight when world demand for optical fibre suddenly collapsed. So sudden was the collapse that I remember seeing at the factory millions of pounds-worth of equipment that was still in its wrapping and was never fitted. The lesson is that we cannot rest on our laurels.

[Chris Ruane (Vale of Clwyd) (Lab)]

My hon. Friend speaks of the collapse of investment at Corning. What assessment has he made of the changes that the Conservatives made to the feed-in tariff when they came back into power in 2010? What impact did that have on Europe’s biggest solar panel factory in Wrexham?

[Mark Tami]

Wrexham is not in my constituency, but people who lived in my area worked at that plant, and I saw that it had a devastating impact. One of the worst aspects of the situation was that the company was, I believe, encouraged to take on a lot of employees because it saw growth, but that was cut from under it by the changes that the Government introduced. We cannot simply assume that everything will be good, and we must make sure that we give existing employers the support and encouragement that they need to invest and grow.

We must also look at what we can do to encourage new employers and companies to come to the area. I am not talking so much about financial assistance, but we can offer a high-quality, highly skilled work force and employers can look to grow their businesses. Large employers such as Airbus—with more than 6,500 employers on site, it is one of the largest manufacturing plants in western Europe—have a role in encouraging their suppliers to site themselves nearby. Airbus has been successful in doing so, and we now have about 2,000 employees who work for Airbus’s supply companies. That makes sense for the supplier and the prime, because it is much easier to sort out problems if people can walk or drive across from one company to another than it is if goods are brought in from a long way away or even from a different country.

[Chris Ruane]

I thank my hon. Friend for giving way yet again. He mentioned the fact that some 7,000 people work in the Airbus factory in his constituency. There is another factory in Filton, near Bristol, and 70,000 people are involved in the supply chain. What impact would withdrawal from the EU have on the 70,000 who work in the supply chain of the joint European Airbus?

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[Mark Tami]

That would have a massive impact. If my hon. Friend can wait a little longer—I am sure that he can—I will address that point towards the end of my remarks.

I mentioned the importance of a quality work force in attracting new companies to the area. That does not happen by accident; it happens because we train the people who are needed. Coleg Cambria has an excellent record of doing such work. It works with employers to develop training packages that meet their needs, rather than offering, and only ever having offered, an off-the-shelf programme that people can take or leave; I believe that that has been a failing of some further education colleges. Coleg Cambria is good at looking to deliver what employers want. I have talked to companies such as Raytheon, and they are pleased with the arrangement, which includes work placements. The arrangement works well.

[Mr David Jones (Clwyd West) (Con)]

The hon. Gentleman rightly praises Coleg Cambria for its engagement with industry, but is it not the case that Glyndwr university in Wrexham has a similar relationship with, for example, Airbus and that such education links across north Wales give the region added value to prospective employers?

[Mark Tami]

It does indeed. I was just about to mention Glyndwr university, which is important. Both further education and higher education institutions have to be adaptable and have to consider how they can deliver the skill base that employers need, rather than just offering courses that have not changed for years. We need such flexibility, which is important.

There are still many hurdles to get over in changing attitudes, particularly towards apprenticeships, and we have to be honest about that. There is still a culture in this country that apprenticeships are done by people who do not go to university, and who perhaps do not have the skills to go to university. In many people’s minds, apprenticeships are a second-class thing to do. I do not hold that view—it is totally wrong—but we have to be honest and admit that people still hold it, and that we have to counter it.

We are light years behind Germany and some other countries where apprenticeships and university are on the same level, and people have the opportunity to take up an apprenticeship that can lead to a university education. Airbus, through the higher apprenticeship scheme, is doing that, but far more employers should be going down that route. It should not be an either/or; people should be able to move seamlessly through one to the other. We are a long way from that. It is no good just talking about the importance of apprenticeships. We have to deliver apprenticeships for people across the gamut of qualifications so that they can move. We will then change the attitude towards the importance of engineering, but we are a long way off that at the moment.

The Deeside enterprise zone established by the Labour Welsh Government offers a great opportunity to create thousands of jobs, but it also creates challenges. The northern gateway project is a major opportunity, and I am pleased that the Welsh Government announced that they will be funding a highway through the site, which will help to speed up growth. I also welcome the £2.2 million investment for flood defences, which are long overdue and are part and parcel of that new site.

There will be other road improvements. Work on the A483-A55 intersection is still ongoing. I recognise that there are major concerns about delays but, if we are honest, the time will never be right for making road changes, which will always cause problems. If someone has a magical solution for making those road changes without causing delays, I would love to hear it. The intersection is a pinch point that needs to be addressed, and I am pleased that is happening.

As I said at the beginning of my speech, rail is the major area in which a lot of work remains to be done. Cross-party colleagues and I recently attended a meeting of the North Wales economic ambition board, in which it presented its case for the electrification of the railway line from the north-west across north Wales. The board pointed out that north Wales has not received any major investment in rail since Queen Victoria was on the throne. My hon. Friend the Member for Vale of Clwyd (Chris Ruane) probably remembers those days, but most of us in this room do not.

The board estimates that electrification across north Wales to Holyhead would create some £400 million in economic growth, help to regenerate areas that have suffered for many years and promote inward investment. If electrification stops at Chester, the board’s evidence shows that there would be a negative impact on the economy of north Wales, and even on the economy in England, too. If the project is to go ahead, we clearly need joined-up thinking to extend electrification for the length of the route. For that to happen, the Department for Transport, the Welsh Government, local government and the train operators need to work together. Although electrification is on the list of infrastructure investment projects and priorities for Wales published by the Wales Office, there is no start date, and the status is “locally supported,” which I presume is code for there not being any money and the project not being on the blocks to go ahead—certainly not in the short or medium term.

I am sure we would all like the electrification to go ahead, but if the reality is that it will not go ahead in the short or medium term, we have to consider what we can achieve on a smaller scale, and whether we can perhaps deliver economic benefit without that massive injection; electrification would clearly be an extremely costly project. The reinstatement of the Halton curve with a more modest £10.4 million investment, which I welcome, will have a positive effect. My hobby-horse, and the hobby-horse of my hon. Friend the Member for Wrexham (Ian Lucas), is the Wrexham-Bidston line. It would be fair to say that we have been banging on about that for many years. It could offer real benefits, including an improved service with more trains running. Longer term, the line could be electrified and have a dedicated station for the Deeside enterprise zone. The line could make a real difference, because Flintshire has one of the country’s highest rates of people travelling to work by car, which probably tells us all we need to know about how well our rail routes, and probably bus routes, work.

Broadband coverage in the area is improving, although not where I live, but that is probably my fault as much as anything else. We still have a long way to go before we can say that we have cracked it. A number of companies and individuals have come to see me, and they have been told that they have good coverage in their area, but when they started operations they found out that the coverage was actually very poor. It is all very well for the Government to say that 90% or so of people are covered, but that is not the same as saying that 90% or so of the country is covered. Rural areas are particularly badly affected. Broadband is not an optional extra for businesses today; it is not something they can pick and choose. If they do not have broadband, their business will suffer. The way in which we all do business has changed, which is why we have to improve broadband coverage. This is not just about rural areas, because we have not-spots in our towns, too.

Energy infrastructure is extremely important. I do not want to go on a lot about that, because my hon. Friend the Member for Ynys Môn (Albert Owen) will have something to say on the subject, but I will mention my concern about the viability of Deeside and Connah’s Quay power stations in the longer term. They are older gas stations, but they play an important role in meeting peak demand. They can operate only if they receive the right support to make them viable.

House building is another issue, because if we are encouraging companies to site in north Wales, their employees have to live somewhere. We need more affordable housing, not just to buy but to rent. I applaud Flintshire county council for starting a council house building programme, which is an important step that will help a lot of people. Like many colleagues, I know a lot of families in which both adults are working but cannot get a first step on the ladder. Getting on that ladder is very important in encouraging people to site themselves in the area. We are moving in the right direction, but major concerns remain about our rail network. We are doing better than some areas, but there is room for improvement.

Finally—my hon. Friend the Member for Vale of Clwyd has been waiting for this moment—I worry that all that good work could be undone if we put everything at risk by exiting the European Union. That would have a devastating impact on companies in our area such as Airbus and Toyota, among many others. I do not think that they would shut up shop and go the following day, but I worry that we would not see further investment, and then we would see operations starting to go back the other way. Companies such as Airbus are European partnerships, which are a great example of how Europe can and should work. Our European partners—the Germans, the French and the Spanish—would love to have that wing work. Let us not kid ourselves: if we think that they would not push harder for that work and make the case about all the difficulties of us being outside the European Union, we are naive in the extreme.

To believe that we can leave the EU and then establish trade arrangements so that we can carry on exactly as before is as ludicrous. We are not Norway, and even it has to abide by the same rules and regulations to sell its goods, but it does not have a chair at the table when those rules and regulations are being made. The think-tank Open Europe published a report this week that warned that, in one scenario, UK GDP could be 2.2% lower by 2030 if Britain leaves the EU and fails to establish liberal trading arrangements.

[Albert Owen]

On Europe, it is worth pointing out that we have £200 million net going into Welsh coffers from Europe. The Welsh economy would suffer if we were to withdraw, or consider withdrawal, from the European Union.

[Mark Tami]

That is a good point. We hear a lot in the press about what we put into Europe, but we do not hear much about the important work done with money flowing out of Europe to Wales, and the real difference that that makes to people’s lives. That is a real threat, and we should not underestimate the damage that it could do.

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[Mr Jones]

I have already said many times and I am quite happy to repeat—that is why I started by saying that frequently I think politicians in London and Cardiff do not fully understand the north Wales element—that whenever any such issues touch and concern the interests of the people of north Wales, their representatives should have the right to speak on those issues in this Parliament.

[Mark Tami]

I am very pleased to hear what the right hon. Gentleman has to say. He makes a very strong point, and one of the best examples of what he is talking about is the Countess of Chester hospital. It was absolutely established not as an English hospital but as an English and Welsh hospital, and its catchment area is Deeside and Chester; it serves Deeside as much as it serves Chester. It would not be viable without Welsh patients, so to look at it as purely an English hospital would be wrong, and he is absolutely right that people outside our area do not understand how that dynamic works.

[Mr Jones]

Yes, the hon. Gentleman is entirely right. In fact, that is a point that I put to my right hon. Friend the Leader of the House when he announced the proposed arrangements for so-called English votes for English laws.

We must have regard to the fact that people in north Wales rely on English services, not only health services but in so many other respects. Our people work across the border, and, as the hon. Gentleman rightly said, people from the north-west of England work in factories, such as Airbus, Toyota and so on, on the Welsh side of the border. It is essential that people in north Wales should have proper representation in this place whenever necessary.

Frankly, one of the other difficulties is that there has been an unfortunate tendency to equate Wales and Scotland. Wales is a very different place from Scotland. The border of north Wales is highly populated, whereas the border between England and Scotland is not. It is essential that Members from all parties should ensure that, whenever the concerns of people from Wales are debated in this place, their representatives have a full voice in those debates.

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[Alun Cairns]

Absolutely, let the people decide. Industries and businesses invest for the long term and would not be investing now if, as the Opposition say, the position of the UK Government was undermining their future plans. That clearly is not the case. Britain is getting 50% more inward investment than either France or Germany, the next two biggest recipients of foreign direct investment. The hon. Member for Vale of Clwyd (Chris Ruane) specifically mentioned Airbus, but Tom Enders has said:

“Regardless of which decision the UK will make, we are strongly committed to our operations in the UK, which are key to the long-term future of our group.”

The evidence is quite clear, from statements from the chief executive of Airbus to the record amount of inward investment coming to north Wales. Putting doubt about the UK’s role in Europe in the minds of potential investors does not support the economic growth of the area.

[Mark Tami]

Does the Minister not accept that many companies, big and small, will not speak publicly about or get involved in politics—probably rightly—but will have concerns that they raise in private? My hon. Friend the Member for Ynys Môn has mentioned some of those concerns this morning. It is incredibly naive to dismiss this issue as if it is not a fear or a threat when it is. It is a serious problem that we have to address.

[Alun Cairns]

The hon. Gentleman makes an important point, but even if I accepted it, quite obviously businesses would not be spending and investing sums of money if they had the doubts that the hon. Member for Ynys Môn has shared.

I am sorry that the time has gone in which I could have focused on rail investment. Important points have been made about the Halton curve, the Wrexham to Bidston line and the Deeside and Wirral Waters relationship, which was raised by my right hon. Friend the Member for Clwyd West. Those are really important issues. We must focus on the economic value released by railway investments rather than purely on passenger numbers or environmental benefits. Economic benefits are important, and I was delighted that my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) focused on releasing economic potential in the report to the Department for Transport by the North of England Electrification Task Force.