Almost £250 million spent to attract LG - Michael German comment

11.16.34am BST (GMT +0100) Tue 5th Sep 2006

Further investigation by local AM Michael German has uncovered that in total £247.2 million was paid to LG by Welsh public bodies to attract the company to Newport in 1997. Welsh Liberal Democrat Assembly Leader Mr German made the enquiries following the closure of the LG Electronics plant earlier this month, with the loss of the final 315 jobs.

Mr German said: "It turns out that almost £250 million was paid to attract a company to Newport to create jobs. This company barely stayed for ten years. Newport needs long-term investment in companies that will create prosperity and be rooted to the area. This was not a value-for money investment.

"I will be calling on the Enterprise Minister Andrew Davies to disclose publicly the full set of accounts detailing which public bodies provided support to LG.

"It worries me that so much money was paid to a firm which has left us with nothing but redundancies. The Welsh Assembly Government needs to make it harder for companies to take the money and run.

"Effectively, this means that Welsh public bodies paid LG around £ 25 million a year to stay in Newport. This cannot be the best way to invest in South East Wales."

Welsh Liberal Democrat Economic Development spokesperson Kirsty Williams said: LG is a textbook example of inward investment that failed to live up to the hype and I hope that the Welsh Assembly Government will learn from these mistakes. I want to see investment in companies that will stay in Wales as well as more transparency about how public money is spent to attract business.

"This sum of money could have been better invested in transport infrastructure across South Wales East, such as the rail link to Ebbw Vale, and there would still have been enough funding to create hundreds of long term jobs in Newport."