Acer of Taiwan creates 1,000 jobs in Wales and revives row over 'poaching' between regions

Click to follow
The Government yesterday attacked what it claimed were 'wild and unsubstantiated allegations' that Wales was engaged in turf wars with English regions to poach inward investment projects.

The outspoken comments, by Ron Davies, the Welsh Secretary, came as a Taiwanese computer giant announced plans to create 1,000 jobs near Cardiff. Chris Godsmark, Business Correspondent, reports.

Acer, which claims to be the world's third-largest manufacturer of personal computers, has chosen a 20 hectare site on the M4 corridor east of Cardiff to build a factory making colour monitors.

The company said it would invest pounds 25m at the plant over five years in two phases and would inject pounds 5m of working capital. It would ultimately have capacity to make 2 million monitors a year. Work on the first stage in the project would start in January, with the first monitors rolling off production lines in August.

Acer had examined a location north of Newcastle, and a site near its existing operations in the Netherlands, but insisted the subsidy package on offer in Wales was not the main reason for choosing Cardiff. It pointed to the site's two-hour driving distance from Heathrow Airport and the fact that some of the UK's leading plastics suppliers were located in a 10-mile radius of nearby Newport.

Mr Davies said the project brought to an end "a great deal of unhelpful and inaccurate speculation about Acer's intentions and allegations that we have poached the project from other parts of Britain".

However, both Mr Davies and the Welsh Development Agency (WDA) refused to reveal the level of state aid offered to Acer. The WDA is building the factory, which will be leased to Acer, reducing the cost and risk for the company. Other help includes work to create approach roads and spending on training for employees.

The row over subsidies exploded in October when Sir George Russell, chairman of the Northern Development Company, publicly accused the Welsh Development Agency and the Welsh Office of poaching investment projects. Animosity intensified last year when Wales was picked over Tyneside by Lucky Goldstar of Korea for its pounds 1.6bn investment programme.

Sir George, who could not be contacted yesterday, told the North East Chamber of Commerce that William Hague, the former Welsh Secretary, had "gazumped" ministerial colleagues and accused him of a "blatant disregard" of the rules.

Following the speech, some Tyneside MPs had joined the row, claiming the Welsh Development Agency had been able to gazump any aid package offered to Acer in the North-east.

It emerged last night that the Cardiff site should have been eligible for smaller grants than Tyneside because, according to the regional assistance rules, it was considered to be in a less deprived area. Unlike the Tyneside site, the Welsh location does not qualify for the highest level of regional assistance grants.

Though he did not name Sir George, Mr Davies yesterday said he was glad the project had not been damaged by "wild and unsubstantiated allegations by some organisations and individuals". Rhodri Morgan, MP for Cardiff West, went further, accusing Sir George of acting in an "aggressive and unprofessional manner".

The Welsh Development Agency added that it had received complaints from several companies which had already invested in Wales about the arguments, which were damaging the UK's prospects for attracting future funds.

Margaret Beckett, President of the Board of Trade, has attempted to end the gazumping row by suggesting the Department of Trade and Industry should act as a clearing house for all inward investment projects. The issue is still being discussed by ministers.

Meanwhile, Honda unveiled plans to invest a further pounds 60m at its Swindon plant in preparation for a new version of the Civic model and the replacement next year for the Accord saloon range. The cash, which brings to pounds 460m the amount invested so far, would create 400 new jobs, taking the total workforce to 3,000.