HC Deb 31 March 1958 vol 585 cc981-92

Motion made, and Question proposed, That this House do now adjourn.—[Colonel J. H. Harrison.]

10.0 p.m.

Lady Megan Lloyd George (Carmarthen)

I wish to bring to the attention of the House the urgent need for industrial development in South-West Wales. The bare facts of the deteriorating situation are very well known to the Government. In October last year there were over 3,500 unemployed in the area, now there are over 8,000 and it is estimated that the final figure will be between 14,000 and 15,000. There is no prospect of alternative work for these men, a great proportion of whom are over 50 years of age, and there is no hope for the school leavers, of whom there are about 2,300 a year.

For the first time since the war we find ourselves having to invoke the pledge given in the White Paper on Employment in 1944, and we should like to ask the Government tonight whether they accept as one of their primary responsibilities the maintenance of a high and stable level of employment. I want to ask the Government how they propose to implement that pledge in South-West Wales.

I want to make it perfectly clear that we do not regard migration as any answer to this problem. Wales is already far too full of derelict villages and dying communities. Half-a-million people have been driven out of Wales in the last thirty years by economic circumstances, and we say that it is not migration of men that we need now but migration of industry into Wales.

This is not a situation which has suddenly developed overnight. Four years ago, the Government appointed the Lloyd Committee to investigate the special problems which arose from the closure of the old tinplate works. The Report of that Committee has never seen the light of day. It has seen only the twilight of Whitehall. Recently, the Government appointed a four-man Committee—six weeks ago—to inquire into the possibility of adapting some of the old tinplate works to modern production. The Committee was to report as a matter of urgency. I should like to ask the Minister whether he can tell us when we are to expect that report. We in Wales feel that we have had enough of reports, investigations and inquiries. We feel that the moment has come for concrete proposals and action to implement those proposals.

I want to say something about short-term policy. We need to have a diversication of industry in Wales. This was a policy which was very successfully initiated by the Labour Government. May I ask one or two questions about industries which are already in being, in Carmarthenshire in particular? Can the Minister give any kind of assurance not only about the immediate but also the long-term future of the Royal Ordnance factory at Pembrey? Will he undertake to have due regard to the need of this establishment when the Government are placing contracts and orders not only now but in the future?

May I also ask him about the R.A.F. establishment at Pembrey? I understand that it is now on a maintenance basis, and I should like to point out to him that these are premises which if they are not needed for the R.A.F., could easily and properly be converted to factory use. There is also a food depôt at Llandovery which is certainly non-productive at the moment. It occupies premises which again could be adapted for industrial premises to give employment in an area where it is very much needed. I am quite sure that hon. Members could multiply instances of this kind in their own constituencies.

What is the President of the Board of Trade doing to induce, to encourage and to steer industries to South-West Wales? In a speech last week, he said that one foreign chemical firm had decided not to go to South Wales because he could not give it a guarantee that the chemical industry would not be nationalised. The President of the Board of Trade has certain responsibilities in the industrial field, and I should have thought that before he made such a statement he would have made some inquiries as to whether, in fact, nationalisation of this industry was in the next Labour Government's programme.

Did he take any steps at all to assure the industrialists concerned that, even if that were so, they would be compensated fully for any capital they invested in this country, according to the normal practice of the Labour Party? I thought that although the right hon. Gentleman was on the other side of the House, at least he was on the British side of the Atlantic. If I may be so bold, I would tell him that it will take him all his time to explain why it is that with all this growing unemployment in South-West Wales, he has succeeded in bringing only one factory there, and has done practically nothing to alleviate the grave situation that obtains there today.

There is unemployment also in the rural areas, and in the market towns. Here, we need industries that are ancillary to agriculture, and are rural in character. How far will the Government be prepared to assist local authorities in any requests they make for financial assistance to build factories in rural areas? As the hon. Member knows very well, there is only one means of securing loans for the erection of factories in rural areas, and that is through the Development Commission, a Commission which was set up, may I remind the House, by the Finance Act, of 1909—a sunny, vintage year, full of rare and refreshing fruit.

Those powers have been used extensively—although, perhaps, not as widely as some of my hon. Friends would like to see—both in Caernarvon and Anglesey, to establish factories. I should like to see those powers used much more extensively in South West Wales as well.

I suggest that the Government, with the assistance of the local authorities, should consider a programme of development works. Goodness knows, there is plenty of work crying out to be done. There is the building of new schools, the clearing of rural slums and the building of roads. Three years ago, £4 million was set aside for improvement of access roads to hill farms, and £2 million of that was to be spent in Wales. So far, only £250,000 has been allocated. Why could not more be allocated for this purpose? It would mean work on the roads and in the granite quarries as well.

Would the Government consider increasing grants for the maintenance of roads, and for sewerage works and water supplies? Would they be prepared to use their influence with the Central Electricity Authority to accelerate its schemes for the electrification of the countryside?

I know that that is not a direct responsibility of the Government, but will they use their influence? After all, these are all services that are essential to the amenities of the villages and, above all, to the development and efficiency of agriculture.

I turn now to the most important project of all—the proposed strip mill of Richard Thomas & Baldwins. I am quite sure that the long-term answer to our problem is that that mill should be sited in South-West Wales. On sociological grounds, of course, the case for South-West Wales is overwhelming, and I do not think that either the Steel Board, the Government or Richard Thomas & Baldwins would deny that. We are told that vital as are those sociological considerations, the economic aspect is even more important. I do not underestimate the importance of the economic considerations. Let us consider that aspect for a moment. Let me take, first of all, the question of manpower and let me take as my first witness the Iron and Steel Federation which has stated in a recent publication: In these days of brimful employment and labour immobility, a factor even more important than access to more materials and proximity to markets is that of an adequate supply of suitable labour. …It is thus impossible to contemplate any large-scale development of a new site unless the necessary supply of skilled labour is assured. The labour force required for the new steel plant is 10,000. That force will be available in South-West Wales and without building new houses and schools, without uprooting men from their homes either in Wales or in England, and without unbalancing the economy in any way.

We have also, we believe, the ideal site in Kidwelly. We can produce the essential water requirement for the plan. Limestone is available in great quantities in Carmarthen. Only five miles from the site there are large deposits of silica for making suitable grade silica bricks for the furnaces. No doubt, we shall be reminded of the objection of the National Coal Board which states that approximately 920 million tons of high-quality coking and anthracite coal are located in the Kidwelly area. Also there are 700 million tons under Carmarthen Bay. The National Coal Board say that 2 million tons of the coal might be sterilised if the siting of the plant were at Kidwelly. The new pit at Cynheidre, which is one of the largest new developments in Britain, is estimated to produce about 1 million tons a year. If we were to produce at the same rate at Kidwelly, the unsterilised reserves of coal would be worth more than 250 years' supply. I do not think the Government need worry themselves unduly about that. If they survive 250 days they will be lucky. It is a great advantage to have this coal actually on the spot. It is an economic factor in favour of Kidwelly.

There are other interesting developments to which I would refer. The greatest part of the steel industry's requirements of iron ore would be met by imports. It is perfectly clear that, as the Steel Board has reported, substantial tonnages of ore will be brought from Labrador and Venezuela in United States carriers of up to 40,000 tons, and, as they point out, no United Kingdom port serving a steelworks could accommodate the ships of this size but the deep-water port of Milford Haven. That could be used for handling these large ore carriers. The Steel Company of Wales has already acquired a site at Milford Haven. No doubt, they realise that it will be much more economic to bring iron ore to Milford, even if it has to be transhipped from there or brought by rail to Port Talbot and that is further away from Milford Haven than Kidwelly.

The siting of the new strip mill will be a Government decision. It is no use the President of the Board of Trade saying that he has no powers in this matter. He has one very important negative power. He reminded us of that in the House on 24th February of this year when he said Anyone who wants to build more than 5,000 square feet of industrial premises has to come to the Board of Trade. … As a matter of regular policy, we refuse the certificates when the area is congested. … I assure the House that we are firmly using the negative sanction of industrial development certificates."—[OFFICIAL REPORT, 24th February, 1958; Vol. 414, c. 148–9.] I hope that the hon. Gentleman, with that pledge on his lips, will not site the mill in an area of full employment, with healthy industrial prospects, leaving another area derelict, with highly skilled men out on a limb. If he does, the country will want to know the reasons. People will want to see the balance sheet. If they are not satisfied that the economic reasons are overwhelming, the hon. Gentleman will provide the best argument for the renationalisation of steel that has yet been advanced.

10.15 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. F. J. Erroll)

The hon. Lady the Member for Carmarthen (Lady Megan Lloyd George) has raised a number of points in, as one would expect, a well composed speech. I shall have difficulty in doing justice to all her arguments, but I believe that I can, quite briefly, deal with her last point on the location of the fourth strip mill.

Before dealing in detail with what she had to say, I think it would be right to remind the House of what has been going on in West South Wales since the end of the war. The amount of industrial building approved for West South Wales since the end of the war, until February this year, totals no less than l2½ million square feet, either completed or still under construction.

A great deal has been done, and is still being done, for this area, which we all recognise is one of peculiar difficulty in the provision of additional employment. Of the total, no less than 1½ million square feet has been financed by the Government of the day. There are still one or two important extensions planned by some of the existing firms, particularly non-ferrous metal firms, but I will admit frankly that their labour requirements will be small, and I do not suggest that this will provide a solution to the difficulties which have been underlined by the hon. Lady.

The traditional industries of the area—coal, steel sheet and tinplate—have been substantially augmented by oil refining, light alloy rolling, chemicals, clothing, light engineering—in fact, a major effort at diversifying the industrial activities of the region has been attempted, and, to a very large extent, has been successful. The Government have said on a number of occasions that they will be prepared to consider favourably applications from suitable firms for the erection of factories, with Government finance, not at their own expense, under the Distribution of Industry Acts. We do all we can to tell industrialists of the opportunities which exist. As I have explained to several hon. Members who have been to see me about the situation in their own areas from time to time, we pursue a policy of persuasion. It would be quite wrong to try to direct firms to particular areas. As the hon. Lady said, we have a negative power, the withholding of an industrial development certificate; but we proceed, rightly, I think, by a policy of persuading firms to go to the area where we should like to see them go.

Perhaps the House will regard as an important and useful piece of news that, only this afternoon, I spent considerable time discussing a particular firm's development problem. As a result of the discussion, a prominent firm of manufacturers at present in the South Midlands has today expressed its readiness to consider setting up a large factory in West South Wales, and it will be making investigations very shortly. The House will, I am sure, understand that I cannot say more at this stage. I mention this example partly because it has arisen only today, but partly also to show that a policy of persuasion can produce results. In the present climate of opinion in the country, I am sure that it is the right policy for the Government to pursue.

The hon. Lady referred to the tinplate works. Some of the redundant tinplate works owned by the Steel Company of Wales are being put into fit order and are available for occupation by industrialists. I particularly stressed that to the firm today, saying that there were factories already available for it to occupy straight away if it so wished. It will, of course, look at some of these vacant factories in the course of its own investigations.

I must admit that, apart from the development which I have just announced to the House, we have no other applications for premises in West South Wales, although there are some small but welcome developments at present being tentatively discussed in connection with our vacant sites at Swansea where six firms are considering building for themselves. Hon. Members may well ask, "What are you doing about it? Are you just sitting back and doing nothing?" We are doing as much as we possibly can.

One development has been for us to take the Board of Trade Midlands Con- troller down to West South Wales on an extended tour so that he can see for himself the opportunities which exist. He has now returned to Birmingham and has been busy telling the Birmingham industrialists about these opportunities in order to try to persuade them to look outside their own area. The interest has been very considerable. There has been a good deal of publicity in the Birmingham newspapers about the Controller's visit and what he saw there. Therefore, in one of the most prosperous areas of the country we may hope to have sown a fresh seed of enthusiasm which we believe may well lead to expanding industrialists looking at West South Wales as one of the places to which they might go.

Perhaps I might underline one of the points which the Controller himself has made in Birmingham in support of West South Wales, that new projects which are already established there have demonstrated the adaptability of the local labour supply. This is not an area of hard-bitten old men who refuse to learn new ways and will not be able to adapt themselves to new and modern factory techniques. It is very much the reverse. Manufacturers who have set up in the area have spoken highly of the quality of the labour available.

Mr. Cledwyn Hughes (Anglesey)

Will the hon. Gentleman also say that the Controller visited North-West Wales and made exactly the same point about the workers there?

Mr. Erroll

As the hon. Member for Anglesey has now made the point, it is hardly necessary for me to repeat it. Had he been successful in obtaining the Adjournment debate tonight, I am sure I should have been saying the same about North-West Wales, because it is perfectly true.

There is one other item of news which may not be known to all hon. Members, that it has recently been announced that the firm of Richard Thomas and Baldwins proposes to establish in the Gorseinon tinplate works a new press and fabricating shop to operate in conjunction with its existing Swansea works. That is an important development which should be operational in a year's time and should be employing about 450 workers.

The hon. Lady raised a number of individual points to which I shall try to reply briefly. First, she mentioned the remarks of my right hon. Friend the President of the Board of Trade on television the other night. I do not expect that she would like me to embark on a long debating speech on this matter tonight, because my right hon. Friend will himself be replying to a number of Parliamentary Questions on this very subject tomorrow afternoon.

Mr. Percy Morris (Swansea, West)

If we reach them.

Mr. Erroll

There is also Thursday, when Questions will be taken from eleven to twelve o'clock. I think they should be reached on that occasion if not tomorrow.

It is only right that I should say that it is unfortunately only too true that this firm to which I have referred has undoubtedly been influenced by the existence of the Labour Party's nationalisation programme. Hon. Members opposite could remove the doubts and difficulties once and for all by publicly renouncing their intention of nationalising or threatening to nationalise certain sections of British industry.

Mr. James Griffiths (Llanelly)

Would the Minister care to name the firm? Would he care to convey to it that during the period of the Labour Government, a large number of firms from other countries came to South Wales and established themselves there and are proving very successful? What kind of people does the hon. Gentleman think we are? Does he think that we would be influenced by what we regard as a bit of political blackmail?

Mr. Erroll

We are concerned not only with the Welsh people, but with the nationalities who might come and set up industries there. All I would do tonight, apart from asking the right hon. Gentleman to await the answers to Questions tomorrow which, I hope and think, will satisfy him concerning one of the points he raised, is to appeal to hon. Members opposite to take the step which I have suggested and so remove an obstacle, albeit a marginal obstacle, to the further expansion of British industry.

Lady Megan Lloyd George

Is it not a fact that five chemical industries have shown complete readiness to establish themselves in Wales?

Mr. J. Griffiths

And very successfully.

Mr. Erroll

I said that marginally that obstacle undoubtedly makes a difference. It is just as well that hon. Members opposite should realise some of the consequences of the policies which they choose to initiate. They must be prepared to accept the consequences of those policies.

The hon. Lady asked about the Government's four-man team. The arrangements for setting up this team were announced on 7th February. My right hon. Friend the Minister for Welsh Affairs, whose presence at Adjournment debates I appreciate, in consultation with other Ministers, set up the team to examine further methods of meeting the difficulties raised by the closure of certain steel sheet and tinplate works in West South Wales. The team got to work quickly. It held its first meeting on 11th February and agreed as a first step to make a tour of inspection of most of the works that were in danger of closure and some works which already had been closed. The team also held meetings both with the management and with the trade unions and trades councils concerned. It is now completing its examination of the problem and is considering its findings. We expect that its conclusions and recommendations will be submitted to my right hon. Friend the Minister for Welsh Affairs at a very early date.

The hon. Lady referred to the Royal Ordnance factory at Pembrey. I understand that she has been in touch with my right hon. Friend the Minister of Supply, who, I believe, has given her as full an answer as it is possible to give at the moment. I checked with my right hon. Friend today on this very point to see whether there is any later information I can give, but there is nothing I can usefully add to the information which he has already supplied to the hon. Lady. I would only add that this is an explosives factory. Therefore, the opportunities for large-scale manufacture in peacetime are somewhat limited; but there is, as the hon. Lady well knows, the programme for breaking down ammunition, which should go on for a number of months.

The hon. Lady referred to the Royal Air Force establishment at Pembrey airfield. I am told that this airfield is now surplus to R.A.F. requirements, but under standing arrangements for dealing with redundant Government property the premises are being offered to other possible Government users. Until this process of inquiry has been completed, it is not possible yet to say whether the premises will in due course be available for industrial use or whether other additional employment could be provided.

Concerning the food depot, to which the hon. Lady referred, at Llandovery, I understand that the hon. Lady is already in correspondence with my right hon. Friend the Minister of Agriculture, Fisheries and Food. These buildings are fully used by the Ministry for essential purposes and so cannot be made available for use by other industry.

There is barely time for me to refer to new industries in the rural areas, nor, indeed, to the interesting suggestion by the hon. Lady about development works generally by local authorities, such as electrification and road works. As I have pointed out, however, my right hon. Friend the Minister for Welsh Affairs is present this evening. He will take note of those points which are not directly the concern of my right hon. Friend the President of the Board of Trade and he will ensure that they are adequately attended to.

The Question having been proposed at Ten o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at half-past Ten o'clock.