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BBC Wales's Miles Fletcher
""Jeopardising the Assembly's credibility"
 real 28k

Thursday, 4 May, 2000, 18:32 GMT 19:32 UK
Welsh economy in 'relegation' zone
First Secretary Rhodri Morgan
Rhodri Morgan: Faced protests from aerospace workers
Welsh Assembly First Secretary Rhodri Morgan has said Wales is in the "relegation zone" of the British economic league.

He was speaking at the Wales TUC conference in Llandudno where the problems of the manufacturing industry have been top of the agenda.

Mr Morgan also faced protests from workers from the aerospace plant at Broughton, angry at his decision to refuse grant aid for the new A3XX airliner.

The refusal of the 25m grant to help expand the north Wales plant - earmarked to build the super-jumbo's wings - has left hundreds of jobs in Wales under threat.

Threat

But there was a generally warm reception for the Assembly's First Secretary.

In his speech he acknowledged the serious problems facing industry caused by the strength of sterling and said Wales was in the "relegation zone" of the British economy.

But European Objective One funding of up to 1.2bn, he said, offered the chance to fundamentally improve the economy.

"I believe we can work together to create a Wales in the 21st century that we can all be proud of," he said.

Implications

Mr Morgan's warning came on the same day that the biggest steelworkers union in the UK - the ISTC - met Chancellor Gordon Brown for emergency talks on the future of Welsh plants.

The union fears there is a significant threat to the thousands of Welsh jobs in the industry.

But after the meeting, the Chief Executive of the ISTC, Michael Leahy, urged The corus Group which employs thousands of steelworkers in Wales to "hang on in there".

Mr Leahy said problems caused by the strength of the pound against the euro were short-term.

He appealed to The corus Group not to take precipitative action which would have long-term implications.

Asked if he was optimistic about the Welsh plants' future, he said: "We always remain optimistic.

"It would be criminal to shut down plants which are the most efficient in the world."

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