HC Deb 02 August 1972 vol 842 cc728-76

11.59 p.m.

Mr. Alec Jones (Rhondda, West)

I suppose I should apologise for delaying the House at this late hour, but in all honesty I cannot and do not apologise. If my speech becomes somewhat lengthy, it is because the subject which I propose to raise—unemployment in Wales—is of such urgent importance and concern to the people of Wales.

I know that we are near the end of what has been an arduous parliamentary session. Many hon. Members are looking forward to a holiday and a reasonable period of rest. However, for 51,496 Welshmen and women the tragedy is that they have had too long a period of rest. It has been more than rest; it has been enforced idleness which the Government have imposed upon them because of their failure not only to fulfil their election promises, when they pledged themselves to reduce unemployment at a stroke, but to deal with the important political, economic and social consequences of extremely high and long-lasting unemployment in Wales.

I am glad to have the opportunity of debating this subject on the Supplementary Estimates. I should have welcomed a massive increase in the Estimate for the Department of Employment if that increase would have foreshadowed a real attack on unemployment not only in Wales but throughout the United Kingdom. It is true that the figure of 51,496 unemployed in Wales includes 1,100 school leavers and 2,486 adult students, but the adult student figures must not be used as a means of pretending that the situation is better than it really is. We must realise that the figure of 51,496 does not include the thousands of school leavers who are leaving or who have left since 10th July, when the figures were compiled.

The August figures are more likely to be far higher than the July figures. However, not only are both figures unacceptably high to the Welsh, but the prospects for the immediate future are even worse. I refer the Minister of State to a parliamentary Question which was asked by my hon. Friend the Member for Swansea, West (Mr. Alan Williams) in 1970. My hon. Friend asked about the job prospects in Wales. He was told that on 30th May, 1970, there were 30,900 jobs in prospect. That was at a time when unemployment was 33,000. Even those figures were considered by my hon. Friends to be completely unacceptable. However, on 30th May, 1972, there were only 18,300 jobs in prospect with over 50,000 unemployed. What hope is there, using those figures, for the remaining 32,000? We need an answer to that question from the Minister of State, who represents not only the Welsh Office but the whole of the Government.

It gives me no pleasure to have to remind the House of the tragic figure of unemployment in Wales. I do so merely to indicate the size of the task facing the Government in the almost vain hope that the Government will stir themselves into some action to cure the situation. The Secretary of State for Wales is the Government spokesman for Wales, and we would wish that the right hon. and learned Gentleman was the spokesman for Wales inside the Government. If he were speaking for Wales inside the Government, advocating a reduction in unemployment and the policies to bring it about, we would feel far more satisfied with his rôle.

The right hon. and learned Gentleman has made many speeches in the House and in the Welsh Grand Committee about unemployment. Usually we have heard from him a long series of pious platitudes meaning nothing, and at the end of each speech the unemployment situation has been worse. I have three wonderful quotations from him. On 19th December, 1970, the Welsh Grand Committee debated the effects on the Welsh economy of the Chancellor of the Exchequer's statement. The right hon. and learned Gentleman said: The Committee will be pleased to know that industrial development in Wales, far from flagging, is increasing."—[OFFICIAL REPORT, Welsh Grand Committee, 9th December, 1970; c. 8.] At that time unemployment was 3.8 per cent. in Wales. On 28th April, 1971, speaking to the Welsh Grand Committee on the economic situation in Wales and Monmouthshire, the Secretary of State, referring to further Government measures, said: They will enable us to look ahead to the future with enhanced confidence."—[OFFICIAL REPORT, Welsh Grand Committee, 28th April, 1971; c. 17.] By that time, the unemployment figure in Wales had risen to 4.3 per cent. On 9th March, 1972, speaking in the House in a debate on Government policy for Wales, the Secretary of State, speaking largely to the same hon. Members who had been present in the Welsh Grand Committee on those previous occasions, said: With the prospects of continued growth in the United Kingdom, the opportunities are now very real."—[OFFICIAL REPORT, 9th March, 1972; Vol. 832, c. 1690.] By that time the unemployment had risen to 5.3 per cent. in Wales.

Indeed, those of us who truly represent Wales in this House are almost afraid to hear the Secretary of State speak about unemployment in Wales because every time he opens his mouth the position worsens considerably. I am not being disrespectful to him as a person, or being rude to him personally, when I say that either he should shut up or he should speak up—speak up for Wales and make the Government's actions match the eloquence of his own speeches on the problem of unemployment in the Principality.

If one spends an hour or so in the Library or going through the HANSARD reports of Questions in recent months, one can gather masses of facts and statistics to show how Government policies have failed Wales in the past two years. I am sure that in this debate many of my hon. Friends will give their own facts and figures to support their arguments. But we do not need to present facts and figures because we on this side, when it comes to talking about unemployment in Wales, can speak from our own experience. So many of us not only represent Welsh constituencies but reside in our constituencies and are closer to the ordinary people of Wales than is any member of the Government.

Last Monday I invited the Secretary of State to pay a visit to the Rhondda in my constituency. He told me that he had no plans to do so at the moment. We might almost say that we do not care whether he comes there or not, but it is a pity that he does not spend more time in constituencies like the Rhondda. If he came to the Rhondda and many other similar constituencies, he would learn a great deal about unemployment and the problems which afflict our people.

I speak entirely about my own constituency, but what I have to say is typical of many other areas of Wales at present. The Minister of State should look at some of the figures in Rhondda. In June 1970, when this Government took office, after spending years criticising the previous Labour Government for a high level of unemployment, and when they were elected to power on a promise to reduce unemployment, in fact unemployment in the Rhondda was 1,685. This has risen in the two years to July, 1972, to 2,130, an increase of 26 per cent., and an increase brought about by a Government pledge to reduce unemployment—a sick joke for the people of Rhondda and of Wales in general.

Mr. Gwynoro Jones (Carmarthen)

At a stroke.

Mr. Alec Jones

At a stroke, as my hon. Friend says—and it is not only the unemployment figures which are causing trouble.

We have advance factories. One is at Treherbert. That is empty. It has never been occupied and has been idle for two years, more idle than the Secretary of State has been for the last two years, if that were possible. We have a second advance factory at Ynyshir, previously tenanted and in production when the Labour Party was in Government. Today it is empty and the workers are redundant, and that is a euphemism for saying that they join the dole queues at Tonypandy and Treorchy. Last week the factory of Ray-o-Vac, at Treorchy since 1946, was completely closed and another 150 redundancies were announced, to be effective in September. They are another 150 not yet included in any published statistics. So I say to the Minister of State that the product of two years of Tory rule for Rhondda is 1,580 men unemployed and only 35 vacancies available, so that 45 men are chasing every job available.

There is a similar pattern throughout Wales. From June, 1970 to July, 1972, 32,130 redundancies have been announced in Wales and whether one picks the big cities like Swansea with 2,570 redundancies or smaller ones like Caernarvon with 650, whether one goes north, south, east or west, throughout Wales the picture is the same—more redundancies in two years than in any previous period. That is the absolute condemnation of this Government and of all the policies they have so vainly tried to pursue in the last two years.

In all honesty, it is because of the unemployment figures and the redundancies that we welcome the Government's belated decision on investment incentives in the Industry Bill. We welcome them because we know the figures of unemployment and we know that behind those statistics lie a great deal of human suffering and tragedy. We welcome the Government's decision. We are sorry it took so long, but we particularly welcome the decision to return to investment grants although the Government have changed the name and now call them regional development grants.

Those of us here will well recall that in December, 1970, when we had our debate in Welsh Grand Committee, the Secretary of State for Wales, still occupying the same position today, said: Investment grants, which have been abolished, were a very expensive way of encouraging investment and have not, in practice, achieved their objectives"—[OFFICIAL REPORT, Welsh Grand Committee, 9th December, 1970, c. 5.] It is to those that we are returning.

But in the meantime, having cut off investment grants and having reduced the level of investment and having increased the number of men and women in Wales who are unemployed, the Government see the consequences of their own folly. We welcome their conversion and that of even the Secretary of State. But his delay has greatly harmed the Welsh economy and injured the people we represent.

It is a tragedy that while we have had to wait for the Government to learn the folly of their ways, unemployment has increased and industrial development has slumped. Measured by the issue of industrial development certificates, it has fallen from 280 certificates issued in 1970 to a miserable 85 issued in 1971.

There are two especially depressing features of this unemployment. I refer to the problems of the school leavers and the long-term unemployed. There are 1,100 unemployed school leavers in Wales. But that is the figure for 10th July and most schools in Wales close after that date, so that the July school leavers were not included in that figure. The August figures will show the true size of the problem and they are bound to be worse than the July figures.

The Western Mail has been running a campaign—the consumer campaign. In a long article, it wrote of the need for careers guidance in schools in Wales. As an ex-school teacher, I know something about this subject. I know how tragic it is when boys and girls—particularly boys, and I taught in a boys school—leave school without being able to find work. The article in the Western Mail quoted a headmaster in South Wales. Speaking about careers guidance, he said: Careers guidance? Don't make me laugh. There are just not enough jobs. It's a waste of time. If a few of my leavers get dull, boring, repetitive, poorly paid jobs, with little or no chance of promotion, they'll be the lucky ones. The others will drift. The lucky ones are those who will get the miserable jobs. The others will be lucky to get a job at all.

The greatest disservice that we could do these young people would be to deny them the opportunity to work, to exercise their intelligence, to stand on their own two feet, to feel that they are making a contribution to their own families and the society in which they live. The Prime Minister is a great one for making speeches about one nation; but all the talk of one nation is drivel and cant if we fail these young people, if we fail to give them the chance to exercise their right to work.

I feel especially strongly about school leavers. I have two suggestions which could help, and I hope that the Minister of State will take note of them. In the Rhondda we have a college of further education where for the last two years we have been running training courses for the acquisition of limited skills in the engineering and building construction industries. Both these courses have been extremely successful. Is the Minister sure that the Government are doing all they can in this connection? Is he sure that we are using any spare capacity which exists in the colleges of further education in Wales to provide this type of training for our unemployed school leavers? The Government should give the strongest possible lead here. They should provide maintenance grants for any students who are willing and able to attend such courses. They should urge every college of further education in Wales to bring forward suitable schemes of training for school leavers.

I want to say a word about young people in connection with apprenticeships. I wrote a letter to BOAC Engine Overhaul Ltd. and I was staggered at the reply that I received. The reply was: This year in order to improve our financial situation … we were forced to make certain economies among which was the decision not to recruit apprentices.… For a public body faced with the level of unemployment that we have in Wales and, indeed, in the United Kingdom as a whole, to say that it would stop taking on apprentices is a public scandal.

I fear that this decision not to take on apprentices applies not only to BOAC Engine Overhaul Ltd. at Treforest but might well apply to local authorities and other public bodies in Wales. Surely the least that the Minister of State can do is to send a circular to every local authority and public body in the Principality using whatever pressures he can and urging them to take on as many apprentices this year as is humanly possible.

I turn to the second of my grievances in connection with unemployment. I refer to the long-term unemployed. The latest figures relating to the length of unemployment are those which were published in January of this year. In Wales 15 per cent. of our unemployed have been unemployed for more than six months, and a further 20 per cent. have been unemployed for more than 12 months. The long-term unemployed and their families are in the greatest distress. They have the lowest income. Any savings they had have been spent. Any redundancy payments they received have long since gone. They have exhausted benefits such as earnings related benefit. If they have been unemployed for more than 12 months they have even exhausted their right to unemployment benefit. They have become completely dependent upon supplementary benefits.

It is perfectly true that families can postpone buying new clothes and footwear. They can postpone the replacement of household utensils and that sort of thing. This can be delayed, but it cannot be put off for ever. At some time or other, their need for clothing and for replacements becomes desperate, and it is at that time that the families of the long-term unemployed suffer great hardship.

There is more than financial hardship. It is a savage blow to the pride, the self-respect and the dignity of these men to be unemployed for a long time. I read of an unemployed ex-Service man who said, "If you fall out of work today, if you are much over 40 all you can look forward to is a long and grinding stand in the dole queue". A man really is his job: if one takes away a man's occupation, one begins to chip at his identity. Take away a man's ability to maintain his family, and his manhood itself is diminished. It is far more than a matter of financial hardship. The sociological aspect of long-term unemployment ought to be the Government's concern.

Mr. Barry Jones

And the psychological.

Mr. Alec Jones

Yes, and the psychological aspect as well.

There is urgent need to give special priority to the long-term unemployed. It can be done, and it ought to be done. The Government are proud—justly proud, I believe—of some of the increases in public expenditure. It was a dirty word in 1970, but public expenditure is now acceptable even to a Conservative Government, and I welcome their conversion. The Secretary of State has many times boasted of the increase in public expenditure. We have had announcements about the urban aid programme, and we have further announcements about Operation Eyesore.

Cannot we use the money being devoted to those schemes to ensure that at least some of our long-term unemployed are put back into employment? Can we not advise the local authorities of Wales that the Government would above all else favour the use of the money on manpower rather than on machines to do work which men could otherwise do? We are cleaning up many parts of Wales, and we are all pleased to see the process going on, but is there not here an opportunity to use that public expenditure to reduce the level of unemployment? Could we not say to the local authorities, "For heaven's sake, look at the long-term unemployed and ensure that they are taken into the fullest consideration when you decide whether to employ machines or men on certain of the jobs in these programmes"?

Wales has had considerable and bitter experience of unemployment. We have had considerable and bitter experience of unemployment and Tory Governments, and for most of Wales unemployment and Tory Governments have become synonymous.

On 9th December, 1970, the Secretary of State for Wales told the Welsh Grand Committee: … we —the Royal "we", but he was speaking for the Government then— … we reject the shameful waste which has occurred in the last six years in terms of unemployment …"—[OFFICIAL REPORT, Welsh Grand Committee, 9th December, 1970; c. 17.] The "shameful waste" to which he referred never once rose above 3.9 per cent., and if there were critics of that figure, the criticism came from Labour back benchers more than from anyone else. If the phrase "shameful waste" were the right one to describe unemployment which never rose above 3.9 per cent., what about today, when the Welsh unemployment figure is 4.5 per cent.? It is 4.9 per cent. seasonally adjusted; 4.9 per cent. excluding school leavers; 4.9 per cent. excluding adult students, and 4.9 per cent. after allowing for every possible excuse which the Government can offer. There are more than 50,000 Welsh men and women who want to know from the Minister of State what the Government are going to do about the problem.

12.30 a.m.

Mr. Raymond Gower (Barry)

I compliment the hon. Member for Rhondda, West (Mr. Alec Jones) on the forceful way in which he has quite properly drawn attention to the industrial and employment problems of Wales in general and the Rhondda in particular. He rightly emphasised those points which seemed to him of particular importance, and I feel sure that my hon. Friend, and indeed my right hon. and learned Friend on studying what has been said today, will consider very carefully the matters which have been raised.

I agree with the hon. Gentleman that for the individual concerned unemployment is a particular kind of ordeal and one which, in family terms, is extremely difficult to support with dignity. Like the hon. Gentleman, I sincerely hope that in the months ahead we shall see a distinct up-turn in the employment prospects, particularly in those areas like the Rhondda which, for a long time, have suffered considerably more than other parts of the United Kingdom, and more even than other parts of Wales.

There are one or two things which I should like to point out to the hon. Gentleman, and I am not trying to deny the validity of many of his arguments. He took us back to June, 1970 and said that at that time there were 1,685 unemployed in the Rhondda area. I think he agrees that that was a considerable figure, and he says that there has been an increase since then of 26 per cent. I accept that that is a move in the wrong direction. The figure has increased by about 445, and the hon. Gentleman says that that represents a considerable number based on the figure of 1,685 in 1970.

While in no way denying the validity of the hon. Gentleman's argument, may I remind him that for a considerable period before a certain event in June, 1970, when there was a change of Government, there had been a down-turn in employment. Since devaluation there had been a tendency in the United Kingdom for unemployment in certain industries to increase. I know the hon. Gentleman does not agree, but that is a fact, and it was accompanied by something just as serious.

We inherited a serious inflationary situation, to which we have still not found a solution. The incoming Government were faced with a serious problem, because it is extremely difficult to find a solution for an inflationary situation which does not in some way make it difficult to sustain what the hon. Gentleman would describe as full employment. It is very difficult to sustain full employment while taking measures to deal with the different evil of inflation. That was one of the Government's major problems.

The hon. Gentleman next contrasted the value of grants and allowances. There is a good deal of evidence that during the past two years the amount of industry which would have moved into development areas would in any case have been less, because of the industrial problems even of the Midlands and the areas from which factories tend to move. Whether we had had grants or allowances during that period, there would have been a strict limit on the number of firms which would have contemplated that kind of move.

But we are now more hopeful. We are now combining grants and allowances in some cases, and have a wide array of incentives more varied in total than ever. They should be a powerful incentive to any industries contemplating development to have a serious look at Wales, including the areas to which the hon. Gentleman referred, as a possible place where they may develop. I sincerely hope that they will be a means of attracting the sort of industry we need. It will not be easy, but at any rate we have a more hopeful atmosphere now in this respect.

I hope that the hon. Gentleman will not disparage what I shall now suggest. All over the industrial world the modernisation of industry is proceeding, and new methods are being introduced. This has meant that much of industry is less labour-intensive. As we have seen from the experience of North America and many European countries, industry can now produce just as much with fewer employees. This creates a difficult situation, which all parties and experts, technical as well as political, will need to study very carefully. We shall have to devise methods of providing incentives for those industries which perhaps have not yet grown, which has not yet emerged. They may be in the service sector. We need not look only to the manufacturing sector. There may be new industries which we hardly suspect yet. We may be near to development in new directions. We want to study every conceivable alternative, because many of our older industries, and even many of the industries developed since the war, are today less capable of providing employment owing to the newer kind of production, the newer mechanisation and technical innovation. This is a difficulty not only in Rhondda, not only in Wales, and not only in Europe, but in much of the industrial world overseas.

Sir Anthony Meyer (Flint, West)

Is my hon. Friend aware of the calculation that by 1985 half the working population of the United States is liable to be employed in industries which have not yet been invented?

Mr. Gower

I am grateful to my hon. Friend. That is the point I sought to make.

Much of industry today has a lower manpower requirement owing to technical innovation. We can be hopeful that the new industries to which my hon. Friend referred will increasingly provide new opportunities for employment in the years ahead. But, as the hon. Gentleman has said, we have an urgent problem, and we cannot wait.

The new incentives that the Government have introduced —

Mr. Gwynoro Jones

Too late.

Mr. Gower

It is never too late in this respect. I am sure the hon. Gentleman would not wish the Government not to have made changes. I hope the hon. Gentleman will not disparage what has been done recently. Some things are new; some, on different lines, have been tried by other Governments. Some are combined with the new kinds of fiscal incentives as well as the more direct incentives to which he referred. Here again, the inflationary situation is still the important key. It is still vitally important that inflation should be contained. It is not an easy task and any of us would be foolish to suggest that it was. It is most unwise for anyone to suggest that the remedies for these twin problems are easy. Several experts have suggested remedies which, when tried, have not been so efficacious as forecast.

I am not a pessimist and I see hopeful signs. We now have a better system of communications in Wales than we had a few years ago and both Governments are responsible for that. We are continuing to improve those communications and that is of vital importance to our industry. That is a great incentive to industry to move and it is also increasing our accessibility, not only to our sources of raw materials but also to our potential markets. This may be of great advantage in the immediate future.

I am sure my hon. Friend accepts the importance of this. None of us wants to see one man unemployed if we can avoid it, but we can achieve success only if there is a spirit of determination throughout industry. Since the war we have suffered from a malaise difficult to define. Our competitors in Europe have sometimes a more vivid approach and a sense of direction which we have lacked. We shall need these things; we shall need a new sense in the community, among management and workers because it is only in that way, with the utmost Government help, that we can succeed.

12.44 a.m.

Mr. Ted Rowlands (Merthyr Tydfil)

The hon. Member for Gower (Mr. Barry) uses words as if somehow by uttering them they had the meaning he gives them. He used the word "facts" and says that they are irrefutable. What he is saying when he talks about "facts" is something which is refutable. For example, he said there was a rising trend of unemployment in 1970. There was not. Statistically it is not true. In 1970 unemployment in Wales was falling. It continued to fall throughout 1970 until January, 1971, when it took a turn for the worse, and it has never improved since.

The hon. Gentleman ought to check his facts before using them. The fact is that we have had a period of 18 months to two years of high and continued rising unemployment. The odd month of cold comfort which the Secretary of State or the Minister of State occasionally likes to draw upon cannot destroy the unfortunate and sad state of affairs that we have had a high and continuing rate of unemployment over the last 18 months.

The hon. Member also wishes to shrug it off. He likes to talk about the deep malaise in society, he likes to spread it from 1945 to 1971. He likes to pretend it is not something that has happened in the last 18 months. That is not the language of his right hon. and learned Friend on the three occasions he has spoken in major Welsh debates. We have had marvellous, false silver linings on each occasion. We have had no reference to malaise, to gloomy prospects and the new sense of purpose. We have had hopeful promises. He should have added one more to the catalogue.

The Minister will recall our exchanges on Monday when a number of us pressed him on the question of school leavers. We were told, rather rudely, that we were not listening to what he said. We were told that we had not noticed the prospects over the last six months. Apparently we should have looked at the unemployment figures for the month before when they were lower. We were told to look at the trend over the last six months. We have done so, and we find that we have had the most staggering level of unemployment one can imagine. During the whole of my adult life the unemployment figures have never been as high as they have been in the last six months. The trend over the last six months fills us with sadness and the most terrible sense of depression.

The other thing we are told is that unemployment is seasonal. The Government use this marvellous word "seasonal". The point which must be made about seasonally adjusted figures is that they are based not on the number of people who are unemployed but on the assumption that the extra influx of people to the unemployment register will disappear within a month or so. It is all very well to use the phrase "seasonally adjusted" when there is a reasonable expectation that there will be seasonal trends. But one of the most staggering features of the unemployment figures of the last year or two has been how unseasonal they have turned out to be. One might coin the phrase that we have "unemployed men for all seasons".

This is not just a temporary phenomenon with school leavers and graduates coming on to the unemployment register for a brief time. Seasonally adjusted figures were all very well when the seasons behaved as they had traditionally behaved. But in 1971 and 1972 they have not behaved in that way. That is the frightening feature of unemployment in Wales. We should not be adjusting the figures seasonally because the sad fact is that a large number of school leavers and graduates —[Interruption.] I was not referring to the hon. Member for Monmouth (Mr. John Stradling Thomas). I do not know whether he was a graduate. If he was, I hope that he was never unemployed, as a large number of graduates are now.

We probably have the best educated dole queue ever in Wales. A widow came to see me last Saturday about a certain problem, but as she was leaving she mentioned, very proudly, that her son had graduated with a good honours degree in geology from the University of Wales. She was very pleased that, as a result of scraping and saving, she had managed to put her son through college and that he had come out with a fine degree. She told me that he was searching for a job. The prospect of a job for him and for many other graduates in Wales is horrifying. Some of our best people are graduating on the pennies and savings of working-class people in South Wales and more and more people are going through college, some of whom I have had the pleasure of teaching, only to end up in the dole queue.

In September or October, what will happen to that geology graduate, the son of one of my constituents? He will have to drift out of South Wales. He will be another net loss to the population of Merthyr Tydvil. He, along with hundreds of thousands of others, will have to leave South Wales to find work in other parts of Britain—though, if he does, at the moment he will not find much of a job, but, more likely, only swell the dole queues in what were called the over-employment areas of the South-East and the Midlands.

The same applies to our school leavers. It was astonishing that the hon. Member for Barry should give us a brief lecture on the rôle of technology and the changes occurring because of technology and tell us that that is a factor which we must take into account. Of course it is, but what does he say to the fact that 50 per cent. of our school leavers in Wales go into jobs now without any form of training or apprenticeship, let alone training to fit them for the technological changes? It means that 50 per cent. of the school leavers enter dead-end jobs with no training prospects at all. On top of that is the fact that there is an increasingly long queue of school leavers who have no prospects of jobs at all this year.

One of the saddest features of unemployment in Wales at present—indeed, in Britain, but particularly Wales—is that this is happening when we had thought that the dread image of mass unemployment had left us and that none of us, even in our most depressed moments, could raise again the spectre of mass unemployment. Yet it is a spectre which an increasing number of people, particularly in our mining valleys, once more are beginning to worry about and fear.

Hon. Members opposite, when they were in opposition, spent a lot of time criticising unemployment benefits in a snidish sort of way, and criticising redundancy payments, those copper handshakes we managed to give our people, but it is no pleasure to anyone to tell an 18-year-old or 19-year-old or a 55-year-old that in 1972 he is better off on the dole than he would have been in the 'thirties. Many might say so, and especially hon. Members opposite, but it is not a line I would take, although, obviously, in money terms one has less to worry about because of the impact of unemployment in 1972 than one had to worry about when there was unemployment in the 'thirties. In terms of basic needs the worry is rather less than it was in the 'thirties, but in terms of the sense of frustration it is not. To the young 17-year-old in Merthyr Tydvil whose first year after leaving school has to be spent on the dole the sense of frustration and bitterness is no less agonising than it was to anyone else 30 or 40 years ago, even though he may be less financially affected now by unemployment than he would have been then.

The new line which the hon. Member for Barry started to peddle, and it is perhaps a new theme of at least hon. Members on the back benches opposite, is, "It has nothing to do with us".

The Prime Minister believes that all these problems and their solution have nothing to do with this Government, but are all due to other factors such as inflation. In other words, he is saying that nothing the Government have done has made any contribution to unemploy- ment. That is an absurd suggestion to make.

The whole of regional policy has been in limbo since 1970. First, we had the Davies cult of letting private enterprise do it all for us, stripped of all subsidies. The view then was that an abrasive, free-enterprise system would be the answer. But only 18 months later the whole philosophy crumbled. The loss of 30,000 jobs in Wales points to the failure of the Government's policies, and this is what we warned would happen.

Regional policy has been in tatters. Hon. Members opposite have mentioned the uncertainty among firms in not knowing what the situation was to be. Whenever have firms been able to plan in the last two years? First of all, they were deprived of grants in a savage and immediate way and the Welsh CBI, somewhat belatedly after the event, realised that these grants were invaluable to the Welsh economy.

I am now investigating a case in my constituency involving a firm which ordered machinery before the announcement about the change in policy was made. I took up the case with the remnants of the Investment Grants Office in Cardiff. I do not know whether that office, in view of the revised policy, will now be reinvigorated. The firm in question, because of delay in the delivery of the machinery, was deprived of the grants which it was expecting. That was the sort of crude cut-off and destruction of continuity and support that occurred. I should like to be told why tax allowances are supposed to be more selective than the old system.

The hon. Gentleman in his reply must answer the serious charge that over the last two years regional policy has been in limbo to such an extent that no firm knows where it stands. We now face the impact of the provisions of the Industry Bill. A number of its provisions are welcome, but I should like to be told what share of the total capital allocated under that Bill will come to Wales.

There have been welcome signs of development in one or two of the Welsh constituencies. In Merthyr in the last couple of months we have seen the prospect of over 1,000 jobs being successfully created. But that has happened despite Government action, rather than because of it. Those jobs have been obtained by the patient cajoling, encouragement and hard work of the local authority and, I am pleased to say, by the helpful co-operation of the regional administration of the Department of Trade and Industry. It is against that background, and in spite of the indecision and confusion in the Government, that we have been able to pick up those jobs.

The hon. Member for Barry, the lone ranger, has ridden off. He spoke about capital-intensive and labour-intensive industries. It has been a great point on many occasions that we should not give aid to Esso at Milford Haven but that it should go to labour-intensive industries. What was the most labour-intensive incentive provided by the Labour Government? It was the regional employment premium. That was linked directly to the creation of jobs. That is the very thing which has been destroyed. It is to be removed from the armoury of regional policy. On top of that, we have not only the much graver, deeper uncertainties in many of the valley communities about job prospects on entry to the EEC, but also the feeling that, whatever the Government do, the natural push will be to the South East, away from the regions. This will not be countered by any direct detailed forms of intervention. The moment this was attempted, the West German Government would howl a protest.

The present Government are taking almost day-to-day decisions on regional employment, the Industry Bill, the grants issue and a host of things which have made them a disaster for the economy and employment prospects of Wales.

I refer briefly to the impact of something which might, on the surface, have seemed a good thing—the so-called tax-free period occurring with the implementation of the regressive value added tax. Just when perhaps we should be looking for another silver lining, as the Secretary of State says, along comes VAT and the confusion that will reign in the intermediate period.

I should like to read a letter I have received from a firm in my constituency.

Mr. Deputy Speaker (Sir Ronald Russell)

Order. I would remind the House that Mr. Speaker has appealed for short speeches in order that we can get through most of the subjects on the list. The hon. Gentleman has been speaking for 20 minutes.

Mr. Rowlands

With respect, Mr. Deputy Speaker, I may have been speaking for 20 minutes, but it has been one of the shortest speeches this evening. I shall be concluding shortly, but I cannot let the Minister off lightly. I must tell him of the impact that the immediate implications of VAT will have on my constituency. I want to read part of a letter I received, which I sent to the Chancellor of the Exchequer well over a month ago. I have not yet received a reply from the Chancellor. The letter states: What the Government, or its advisers, have not realised apparently, is that, in anticipation of such a tax-free 'bonanza', retailers will hold off ordering in the last 3 months or so of 1972. in anticipation of placing huge orders for delivery during the tax-free period. They would then not place any orders for some considerable time after the introduction of VAT, because they would be living off the tax-free stocks which they had bought, and thus increase their profitability. A situation which we have been dreading is now becoming a very real threat to our future, because, at a time of natural expansion in our Company, being the result of a great deal of hard work by many people over many years, we will be suddenly faced with the need to declare some redundancies among our full time staff, and very many among the hundred or so outdoor workers whom we employ in the Merthyr area, during the last 3 months of 1972. Should not we add to the unemployment forecast for the concluding months of this year yet another uncertainty, another spanner to be thrown into the works, as a result of trying to implement one of the most regressive pieces of taxation we have had in recent years?

The letter continues: We realise that we are too small for the Government or the country to care whether we exist or not. The firm states that this problem is shared by a number of other firms.

I should like the Minister to reply in terms of statistics. Will he forecast the unemployment levels for this coming winter? If we are to be continually sustained on the repeated promises of what might happen, of the silver lining, the greater expansion around the corner, will he forecast what his economic planning division and statistics office predict for unemployment levels next winter? Will the Minister give a categorical assurance that they will be as low as in the winters of 1969 and 1970? Those were not to our satisfaction, but by present-day standards we would love to get back to those levels about which we could then complain. Will the Minister stand at the Dispatch Box and back his general assertions with a categorical statement that this winter the level of unemployment will drop to the levels of 1969 and 1970? We ask for that categorical assurance as a basic statement of faith, as it were, that the hon. Gentleman is not conning us along as he and the Secretary of State have done in every debate on unemployment since 1970.

The truth is that the Government do not know what is going on in the economy. They have pulled and pushed the old traditional levers and nothing has happened. They have pumped some money into the economy, but the jobs which should have emerged from doing that have not materialised. In the 1950s when Lord Butler used to move those levers he could predict reasonably well that six months or a year later a certain number of jobs would be created and a certain level of employment achieved. In 1972, when we push and pull those levers, nothing happens. The saddest thing is that, whatever arguments we may use, Wales always suffers more than the more prosperous parts of the United Kingdom. The Minister of State must answer the basic charge that, whatever the deeper measures, trends and technological changes which have taken place, the direct actions of this Government have materially contributed to the highest levels of unemployment in Wales in the lifetime of the majority of hon. Members on this side of the House.

1.7 a.m.

Mr. Barry Jones (Flint, East)

As a North Walian Member I will not attempt, at this unearthly hour, to rival the oratorial skills of my South Wales colleagues.

It is a tragedy that 51,000 Welsh people are out of work. Currently, North-East Wales has an enviable record of prosperity, acceptable environment, and relatively low unemployment figures. But in the wider context North Wales has considerable problems, because we have not yet solved the problem of the older unemployed miner and quarryman.

In my constituency workers earn their living from three highly vulnerable industries—steel, textiles and aerospace. Each is a cyclical industry regarding demand, and each suffers from a bewildering change of technologies and increasingly strong foreign competition. East Flint-shire's major industries are now unsafe. My fear is of a rapid rise in unemployment rates because all three industries could quite easily shed labour in large quantities at the same time.

Most of us know that the British Steel Corporation is seriously considering the cessation of steelmaking at Shotton steelworks. At least 6,000 men could lose their jobs as a direct consequence. In addition, 1,750 men could lose their jobs in the contractors' section of the steelworks. The total of approximately 8,000 jobs is formidable, and the prospect of seeing these men in the dole queue is horrific.

I should like briefly to examine the situation in the Shotton Employment Exchange group. Of the 6,000 likely direct redundancies from the open-hearth furnace closures, 4,470 would come from the Shotton group. In these conditions there would, therefore, be an unemployment rate of approximately 15.5 per cent., assuming that today's unemployment figure remains constant. If we add the 1,200 men employed by the contractors of the Shotton steel works who are registered at the Shotton Group, we have a total of nearly 6,000 unemployed in the Shotton area. Approximately 18 per cent. are unemployed. That colossal figure is arrived at because there is a 75 per cent. concentration of the steelworks' work force in the Shotton area.

It has been estimated that in the Shotton Exchange Group area at least 18,000 people, the likely unemployed men and their families, will feel the sharp edge of the corporation's axe. No community can suffer that sort of crippling blow even over several years. It can be said in answer to this point that Flintshire could be made a special development area, but how much Government investment will be needed to reemploy this great army of redundant steel men? Most of the men have no other marketable skill than their unique steel experience.

At nearby Wrexham, millions upon millions of pounds have been spent on the tyre and cable industry, but thousands of jobs were not created. They were capital-intensive factories, but, relatively speaking, steel is labour intensive. Why create a local catastrophe which can be solved only by mammoth Government investment? Why not be sensible and give the go-ahead to a £50 million capital investment scheme at Shotton with new blast furnaces, continuous casting, and an ore terminal at Birkenhead? Is it not a fact that we have new ovens costing £8 million at Shotton and recently refurbished blast furnaces costing approximately £3 million? Are they not likely to be scandalous white elephants if steel making at Shotton is discontinued?

Can the Government retraining centres cope with Shotton's potential army of unemployment? Only the over-60s will volunteer for redundancy and the rest will rightly insist on work. Is it not a fact that there will be 2,500 unemployed men at the Shotton works in the near future, whatever the British Steel Corporation decides to do? I doubt whether the Shotton area can sustain such a blow. Has anyone estimated the huge cost of social security payments to the 18 per cent. who will be unemployed?

Craftsmen travel to the Shotton works from as far as Caernarvon and places in Anglesey and return at weekends to their homes. The whole of North Wales would suffer if the British Steel Corporation did not bring further capital investment to Shotton. There are 1,700 men working at Shotton who come from Cheshire, and 800 from Wrexham. That is conclusive evidence that Shotton is the economic anchor for a wide area. Without a doubt, if the British Steel Corporation's axe fell, hundreds upon hundreds of youngsters would go straight from the classrooms of Flintshire to the dole queues without any future.

It is widely known that the management and the trade unions at Shotton have helped to make Shotton a consistent profit maker. I cannot understand why there are schemes now afoot to castrate an efficient works and to spread gloom and despondency over a proud community. On behalf of the Shotton community, I demand answers to the questions which I have put. Ice-cold computer planners should not decimate the job opportunities in the area which I have the honour to serve. My constituents are too good to suffer at the hands of desiccated calculating machines at the British Steel Corporation's headquarters.

Make no mistake about it, if the Government sanction an end to steel making at Shotton, we shall have to construe it as a great political defeat for the Secretary of State for Wales and his Department. It would also be the death knell of a great steel community on the banks of the Dee. The heart would be torn out from the North Welsh economy and there would be countless family tragedies alongside the lengthening dole queues.

I do not think that North-East Wales can sustain a job loss of 7,000. The Shotton area, with 18,000 people directly affected by these redundancies, will be decimated in an economic sense. No one can convince me that the Government can find 7,000 new pobs even over a period of years, and the cost of retraining anyway will be astronomical. I want an end to the uncertainty which is enveloping the area in which I live, and a declaration from the Government tonight that Shotton will receive its £50 million worth of development at last.

1.15 a.m.

Mr. Gwynoro Jones (Carmarthen)

I commend my hon. Friends for being so lucky as to have been selected to take part in the debate and for the way they have spoken. We are all aware of the problems of my hon. Friend the Member for Flint, East (Mr. Barry Jones), and I commend the efforts he is making on behalf of his constituents and the workers of Shotton and in drawing attention to the fears and concern about the pending crisis looming in his area. In the context of an unemployment debate, his contribution was important.

I will endeavour, Mr. Deputy Speaker, to follow the strictures you have laid down, although I make no promise. Thirteen hon. Members tonight have spoken for well over 20 minutes and a few for over 30 minutes. If one extra hon. Member for Wales tends to digress along the line, I do not think that it will damage the parliamentary system or the structure or continuity of the House of Commons.

We in Wales over the last two years have experienced many problems. There are genuine fears. Yesterday, the House debated the industrial situation and what is happening. In this mini-debate on Wales, we are putting forward a few of the reasons for the present atmosphere in industrial relations in Britain. It is because people are afraid and under pressure. Workers are fearful for their jobs. They have seen their fellow workers being made redundant; they have seen factory closures; they have witnessed in the last two years a great deal which has made them afraid. It is therefore right and proper that we should remind the Government of what is happening. If we failed to do so, we should be failing in our duty to Wales.

I am not endeavouring to state that the problems of Wales at the moment suddenly arose with the advent of the Conservative Government. No one can pretend that the problems of redundancies, structural unemployment and the new technologies came about with the advent of the present Government. However, I trust that tonight the Minister of State will depart from his Departmental brief, which no doubt has been well prepared for him. I hope that he will answer the specific points we have raised and follow us in attempting to argue sensibly about what is happening and why, so that at least we can get a feeling that the Welsh Office and its Ministers are genuinely concerned. If he departs from his brief, and makes a mistake, we shall forgive him, for we are all human and it would be refreshing to hear a Minister in any Government departing from his brief.

The Government stand condemned, not because things are happening now which never happened before, but on the false hope which they deliberately created in the minds and hearts of people before the election in 1970. If one were to read the manifesto of the Conservative Party in Wales in June, 1970—I will not weary the House with it tonight—the aim and promise was: An effective regional development policy as a vital element in our economic and social strategy. Because of what was thus laid down in June, 1970, great hopes were raised and great things were expected of this Government. It was not the Industrial Relations Act but the problems of unemployment and prices which were to be dealt with immediately and the promises on which the election was won had been carefully worked out and the people of this country believed a great deal. Assessing the situation, the Government inherited in 1970 a strong development area policy—something which was basically not in existence before 1964.

People far too often condemn the Labour Government when analysing the effectiveness of investment grants but we are analysing not from 1964 but from 1966–67 when we discuss the unemployment situation as it is now, and has been for many years, we must remember that before 1966, development area policy was basically non-existent, and even if the Minister of State argues that there was a policy before 1964, I do not want to reiterate what was in existence before that time, with development districts and a peculiar system of allowances the fact is it failed to begin to answer the problems. Of course there were problems before 1970 and the Government of 1964–1970 did not meet the problems completely. No one on this side will ever argue that they did. But there is certainly a great deal to be said for their work.

As The Times said, in an article called "The Welsh awakening", in August, 1970: The fundamental weaknesses in the South Wales industrial base are being repaired. If the Minister of State is to ask what that Government did, what were the fundamental weaknesses and how were they repaired, let me give him some facts. In four years, 196 new firms came to Wales and 46,000 jobs were created. In 1964, 200 people were being retrained, and in 1970, 12,000. One can go on ad infinitum, because before we can analyse the unemployment situation now, we must go back and look at it as it was then.

Sixty-two advance factories were allotted to Wales in five years. Although I was not then an hon. Member, I have read many times the remarks of many about building advance factories that lay empty. Yet by June, 1970, 34 had been occupied—not out of 62 but out of 41 built by that date. Industrial building approvals had reached an all-time record with 35 million square feet, approved from 1965–1970, more than double the figure for any previous five years since the war. That is what the Tory Government inherited.

What happened as a result of the Conservatives winning the election? Throughout 1970 Selsdon Man had been telling us that subsidies must cease, that grants must come to an end, that industry must stop imagining that it could be mollycoddled for years on end, that people must stand on their own two feet. The immediate impact of the Conservative victory in June, 1970—immediate, not after a few months—was that industrial inquiries dropped remarkably. That is true of the second half of 1970 and throughout 1971, regardless which quarter of 1968, 1969 or 1970 is chosen for comparison.

The figures became abysmally low immediately the Government took office. In the third quarter of 1968, industrial inquiries were 148; in the third quarter of 1970 they were 77; in the fourth quarter of 1968 they were 120; in the fourth quarter of 1970 they were 74. The pattern continued throughout 1971, when they did not rise much above 70, compared with as many as 250 quarterly enquiries if we go back further than 1968.

The important fact about industrial inquiries is that the inquiries of 1970 and 1971 are the factories of 1974 and 1975. If industrialists have not been making inquiries iln the last two years and unemployment is at its present level and redundancies have risen to 33,000 or 34,000 in two years, one shudders to think what will be the position in 1974 and 1975. In addition, there have been cancellations of major projects.

The Minister of State may say that this is the usual political argument and that these are the statistics frequently used in such a debate. But these are not my figures; they are the figures resulting from the CBI survey of March, 1971, into the impact of the Conservative Government's dismantling of the investment grant system, the basic cornerstone of development area policy following the programme laid down in October, 1970. That survey showed that 21 per cent. of the large and 34 per cent. of the smaller firms had abandoned or postponed expansion projects.

The Minister may say that that was as a result of the economic situation, but that was not the finding of the survey. It is a pity that Ministers from the Department of Trade and Industry are not here to answer for themselves. I am quoting the CBI, not the Labour Party, or the TUC. It said that the change in the system of investment incentives was presented as a further significant factor leading to the cancellation of new projects. The Government were told repeatedly, not only by hon. Members and not only by members of my own party, but even by Sir Val Duncan, chairman of Rio Tinto Zinc, for instance, that but for investment grants, the aluminium smelter would never have gone to Anglesey. He told a Select Committee that the smelter project would "never have got started".

Having argued for two years that investment grants were a waste of resources, costly to administer and not producing results, why do the Government now say that basically they were one of the best systems ever devised by any Government since the Industry Bill reintroduces grants. The hon. Gentleman will have to tell us why the Government waited two years, with at times up to 60,000 people out of work, with 34,000 redundancies in two years, with jobs in prospect falling, industrial inquiries falling and the millions of square feet of building approval in decline. He will have to tell us why a system which hon. Members opposite condemned for not providing the results has been presented as one way of solving the regional problems.

Hon. Members opposite have said, "Give us concrete reasons for believing that investment grants were important. Give us examples of industries and firms which decided not to come because of the abolition of the grants." My hon. Friend the Member for Gower (Mr. Ifor Davies), concerned because the Multiheat plant was not going to Abernant in his area, wrote in 1970 to the Chairman of the National Coal Board, and Lord Robens replied: … the Government's decision to discontinue investment grants had put paid to our ideas … The loss of the additional employment … is, of course, a matter of much regret, but I am afraid the Board had no option. Without the financial incentives obtainable under the Labour Government, the project was not a viable one by a very long way. I come to the question whether the Industry Bill will solve the problems of unemployment in Wales. My hon. Friend the Member for Gower (Mr. Ifor Davies) and I again wrote to the NCB, and the Carmarthenshire County Council received the following reply from Mr. Jefferies the Secretary, These grants represent an improvement on those which were available immediately before this latest Government announcement, but they will be only about half of those which were available two years ago when we formulated this project. So even though my hon. Friends have welcomed the Industry Bill, the cash grants available under that Bill, as the present Secretary of the National Coal Board has said, are only half of those which were available two years ago under Labour.

The Minister of State will have to apply his mind to these matters. It was not the large concerns such as the National Coal Board and Rio Tinto Zinc which were concerned about the loss of cash grants. Firms in the constituency of my hon. Friend the Member for Rhondda, West (Mr. Alec Jones) in December, 1970—not 1971 or early 1972—wrote to the Secretary of State for Trade and Industry and the Association of Rhondda Industries, and told the Minister … the curtailment of investment grants will present difficulties to those companies which, for one reason or another, are only marginally profitable. We particularly have in mind relatively newly established companies There is much concern in the Principality about the reason for the present situation, and it is our duty to discuss in this debate why it has happened. If the Minister of State wishes to refute the arguments which we are advancing, he is welcome to do so. Indeed, we expect him to do so. But he cannot ignore what we are telling him. He cannot ignore what the CBI, the TUC, Rio Tinto Zinc, the National Coal Board and the Association of Rhondda Industries have been telling the Government for the last two years.

There has been a mammoth reduction of jobs in prospect, from 30,000 in 1970 to 18,000 in 1972. In two years, redun- dancies have been 34,000. Never before, since the war, has it happened on such a scale in Wales. But the crucial point is that the redundancies have not happened in the older declining industries. In the last two years, the redundancy figures have been as follows: metal manufacture 9,360; mechanical engineering 3,890; electrical engineering 2,720; textiles 2,000; metal goods 1,900; chemicals and allied industries 1,800; vehicles 1,500; other manufacturing industries 1,400. In other words, many of the 200 firms which came to Wales in the four or five years before this Government came to office have been affected.

During the time of the Labour Government, we had 30,000 or 40,000 jobs lost in coal mining. The present Government have been fortunate in coming to power after that decline in coal mining had come to an end. No thanks to them. Indeed, it was not much thanks to my own Government either, for we closed down the industry far too quickly and there was a serious shortage of coal because we had wrongly assessed the situation. But if the present Government had had to face not just the loss of jobs in the newer industries but the 30,000 or 40,000 lost in the declining industry of coal mining as well, where would they have been by today?

The hon. Member for Barry (Mr. Gower) said that unemployment had been on a rising trend when the Government took over. My hon. Friend the Member for Merthyr Tydvil (Mr. Rowlands) refuted that argument. The figures from 1967 to 1969 show that unemployment in Wales increased, and it went up to about 42,000, the highest figure under the Labour Government. When the present Government took over, it was 33,000. But here is the important fact. Throughout 1970, taking each month with the corresponding month of 1967, 1968 and 1969, unemployment fell, and then the real increase began in February, 1971. The Minister of State will have to tell us why.

It is high time the Government stopped their pretence about what has been happening in Wales. It is time they stopped pretending that the blame lies solely on the Labour Government who were in office up to June, 1970. Unemployment was on a decreasing trend, and in February, 1971, and continuously since, there came a remarkable increase.

What about industrial development certificates? With 50,000 people out of work and 34,000 made redundant, what is the number of jobs created by IDC approvals in Wales in the last two years? It is expected that 14,000 jobs will materialise. In other words, the gap between jobs lost and jobs created is growing all the time. This is the worry not for 1972, not for 1973, but for the mid-1970s.

The Government say that the overall economic health of the United Kingdom will give the answer. It cannot be the sole answer. The level of industrial building approvals fell sharply from a peak of 8.2 million sq. ft. in 1968 to 2.9 million sq. ft. in 1971. In 1968, industrial development approvals were expected to create 16,000 new jobs, and in 1971 the corresponding figure was 5,600.

What are the people of the Principality supposed to think? I have in mind here those pseudo-patriots in Wales who were loud in their criticisms of the Labour Government. Some of them said that Wales was "in a state of ruin" with 35,000 out of work, but they are quiet now that there are 60,000 out of work. I recognise the alliance between them and the Government, but that is not for me to pursue tonight.

The Minister of State, Welsh Office (Mr. David Gibson-Watt)

I wonder whether the hon. Gentleman would explain what he means by that?

Mr. Jones

I should be happy to do so if it would not mean my being called to order. That party's representative voting record shows that he was far more friendly towards the Conservative Party than towards the Labour Party. But that is not the basis of our debate. If the Minister presses me I can give him the figures which I have at the back of my mind, but that will be for a later date.

Only five new advance factories have been allocated during this difficult period when the Government have had the responsibility to create jobs. That figure compares with 62 in the four or five years before. The most important point, though, is that 11 advance factories have been standing empty and idle since this Government took office.

My right hon. Friend the Member for Anglesey (Mr. Cledwyn Hughes) tabled a Question about the advance factory at Amlwch which has been empty for many months. I think the point should be made that our colleagues in North Wales also face major unemployment problems. Anglesey has a 9 per cent. rate of employment. Caernarvon has some of the blackest unemployment spots in Wales.

Looking at those two counties together, it is a matter of regret that last week two Members who have no connection with that part of the world interfered and held up the Anglesey Marine Terminal Bill which is supported by a majority of the Anglesey County Council. Two Members who are unconnected with Wales and unconnected with the county of Anglesey held up a job-creating Measure. It would have provided between 50 and 100 jobs, and to Anglesey that number is important.

Having outlined the problems, it is our duty to assess the reasons for the decline. Perhaps I may call in evidence, not my own thinking, but that of Mr. Roy Thomas of the Department of Economics at Cardiff University and Mr. Scholefield and Mr. Franks in the National Westminster Bank Review for February, 1972. They have assessed in detail the change in policy which took place in October, 1970. They have assessed the benefits of allowances paid until October, 1970, vis-à-vis the cash grant system. They have analysed the change on many grounds, and this is their general conclusion: In development areas the new system —that is the October, 1970 system which has led to the present situation, and in my view the Industry Bill has come too late to help materially in 1972–73— is significantly inferior to the old cash grant for all asset lives, because of both the reduction and the postponement of the tax allowances.… When we analyse the effects of the changes in systems and tax rates on the advantage of investing in development areas, as against non-development areas, we find that this is dramatically reduced". They conclude that The benefits of investing in a development area under the present tax allowance system are inferior to the previous cash-grant system, for plant and machinery". Then go on to point out for every £100 investment incentive in a non-development area, the equivalent incentive to invest in a development area under the old Labour grant system on a pre-tax profit of 10 per cent., and an asset life of five years, was £156, but under the October, 1970 system it was £111. The differential had been reduced. The Government carried on doing this. In July, 1971 the initial allowance in the non-development areas was increased from 60 per cent. to 80 per cent., again lessening the differential between the development and non-development areas.

I invite the Minister to look at a reply by the Secretary of State for Trade and Industry to a Question a year or so ago in which he compared on a discounted cash flow method, assuming investment of £100 and a life of 10 years the benefits under the cash grant system and the allowance system. The differential between the development area and the non-development area under the allowance system, up until the new Industry Bill, was £4 per £100 investment. Under the cash grant system up to June, 1970 it was £13 per £100 investment.

The Confederation of British Industry, writing on the Industry Bill, said: We are sorry, however, to see some perpetuation of the discrimination against service industries. My own Government, and certainly the present Government, have possibly relied too much on job creation in manufacturing industry. It is important, but we have seen over the past two or three years that job creation in that sector has been a third of the job creation in the service sector. Unfortunately, the job creation in the service sector has not been taking place in Wales or Scotland on the scale of the South East. The Guardian, in an article headed: Regions fight for plums wrote: new office work is overwhelmingly concentrated in the South-east which, with about 38 per cent. of the employed population of England and Wales, has 59 per cent. of all the people employed in insurance, banking and financial services, 52 per cent. of employees, and 57 per cent. of those in other professional services. In that sector, which The Guardian says is outstripping manufacturing by about five to three in the number of jobs created, the South East is taking all the plums. That is the tragedy of the situation. On job creation, I have mentioned that 5,600 jobs were created in Wales in 1971. Every region—the North, Yorkshire, the East Midlands, the West Midlands, the North-West and Scotland —suffered a decline in the number of jobs created last year compared with any year up to 1968, apart from the South East. In Wales 5,000 jobs were created, and in the South East 23,000.

We see a similar situation in the approval of industrial development certificates. In Wales, where there has been a decline every year since 1968, 2.9 million square feet were approved last year. There was a decline in every part of the country, apart from the South East, where there was an increase last year to 17.3 million square feet. What is happening in unemployment, job creation and IDC approval in the rest of the country is not happening in the South East.

I make this suggestion to the Minister of State—

Mr. Deputy Speaker (Sir Ronald Russell)

Order. In view of what the hon. Gentleman said at the beginning of his speech I did not interrupt him, but I would remind him that he has been speaking for 35 minutes and there are 12 subjects on the list yet to be discussed.

Mr. Jones

In that case I will make my suggestions briefly and I trust that the Minister of State, since I have been so good as to put them briefly, will pay attention and answer every one of them directly.

The Industry Bill is far too capital-intensively oriented. The cash grants are directed far too often towards the capital creation of plant and machinery and there is not sufficient concentration on labour incentive. The mix between capital incentives and labour incentives is not right. When regional employment premium comes to be phased out in 1974 I ask the Minister to consider a payroll subsidy being introduced in its place. I unashamedly commend to him the suggestion put forward by the Labour Party for the creation of four zones—development zones, intermediate zones, neutral zones and congested zones. The congested zones like the South East of England would get no subsidy but would pay a congestion levy, and the neutral zones would not pay a levy but would not get a subsidy on payroll; but the development and intermediate zones would get a direct payroll subsidy to ally incentives with jobs created.

This should appeal to the Minister because when he was in opposition this was his great argument—that grants were not sufficiently fixed to job creation. I understand the Government's difficulties because the Industry Bill says specifically that there is no attempt to relate grants to jobs created. Obviously a panic Measure.

Then on empty advance factories. I make this point about the rural areas of Wales. I say with reluctance that it is a fact that even under the Labour Government development tended to stop for instance at Llanelli and did not develop sufficiently West or into North-West Wales although 16 new firms came to Carmarthenshire from 1965–69. In the rural areas of Wales we should use the power of the State as the major purchaser, the major creator of wealth to run advance factories. Let the State run those that are empty. I am sure this would help solve the problem of rural areas.

Then there is the question of a regional development bank. It is true that new regional machinery is proposed in the Industry Bill but the difficulty about this, and the greatest criticism of this new machinery, is that it will not have sufficient financial backing. What are needed now is regional development banks for every region with hundreds of millions of pounds of finance behind them, able to plan and develop the regions properly.

In view of your strictures Mr. Deputy Speaker, I will end now, although I could go on ad infinitum on the problems facing Wales. I do not think anyone could accuse me of filibustering or failing to put forward factual analyses of what is happening in the Principality.

I ask the Minister of State to deal with this. He is a fair-minded man and that is not something I would readily say about many other hon. Members opposite. I believe that he is prepared to look at the situation and to analyse it. I ask him to look at what is happening in Wales and to tell us when unemployment will go down to the June, 1970 level. When will that day come? When shall we see in Wales 30,000 people out of work instead of 50,000? Shall we ever see such a period, when there will be industrial prospects and job creation at the rate of 1968, 1969 or 1970? Or are we to forget that? Has it ended?

Will he give an assurance that the grants in existence will not be done away with when we enter the Common Market? One of my greatest fears for West Wales on the Market issue is not the major constitutional point, but it is an important point of industrial development. We are on the verge of joining the Common Market. It is a fact that we have found it difficult to get jobs transferred from the Midlands and the South East to West Wales in the British context. I am afraid that it does not matter what investment grant system we have. Why should industrialists move from the Midlands to Wales 100 miles further away from the EEC? How will Wales fare when we are in the Common Market, if unemployment is as it is now? When will the day come when Wales can expect a fairer deal than it has had recently, certainly in the last two years, and when the jobs created begin to compare with the number of jobs lost?

1.55 a.m.

Mr. Brynmor John (Pontypridd)

My hon. Friends have mounted a formidable indictment which must be measured against two factors. First, children about to leave school are the last children in British history who will leave school at 15 years of age, and we must consider, at the end of the school year, what sort of society we are turning them into. Secondly, we must take into account the July unemployment figures. The Secretary of State tried to gloss over this matter at Question Time on Monday by saying that there were exceptional factors. That is like the excuse of the football team supporter whose team always loses by unlucky own goals. But let us exclude the factors which are said to be exceptional and compare July with July, which is a fair comparison.

In July, 1970, there were 34,900 people unemployed; today there are 51,496. The situation is as bad in July, 1972, as it was in December, 1971. This is at the height of the summer when the maximum seasonal factors, if the classifications are to be believed, are working in our favour. Since 1970 we have started each winter at a higher base unemployment level than during the summer before. We have a blackening picture which must cause the gravest anxiety. This is what causes the passionate and eloquent outpouring we have just heard on behalf of the Welsh nation. I am conscious that the hour is late, but this Parliament must articulate the desires, needs and anxieties of the nations which form this country if it is to be a worthwhile Parliament. Therefore, this debate, even at this hour, is important.

We must bear in mind that 40,000, or 80 per cent., of the 51,000 people unemployed are males. In this country the man of the family is traditionally the breadwinner. My hon. Friend the Member for Rhondda, West (Mr. Alec Jones) made the valid point that we cannot divorce a man from his job. We in our society are to blame for that; it is we who inculcated into a boy from his earliest days that labour is a worthy thing, that hard work is a virtue. Are we, then, to be surprised that the loss of a job has such a catastrophic effect upon his whole personality? Yet 40 per cent. of the unemployed are males. How is the Minister proposing to deal with this very difficult and thorny question? In modern industry not much labour is created per factory built, but it is equally true that there has been provided a higher proportion of jobs for female labour, and the eradication of that 40 per cent. will be a difficult task. The adult unemployment figure rose by a net total of 5,000 in Britain as a whole last month, and 1,100, or almost 25 per cent., occurred in Wales alone.

So the picture, far from being the euphoric one we have been presented with by the Secretary of State and all Government spokesmen on Wales, is a darkening one. This winter may find us in a worse situation than we have ever imagined, far worse than that in the darkest days of early 1972, with no immediate prospect in the medium term of any alleviation. It is no good saying to an unemployed man, "In 10 years we will have a marvellous new technological job for you." The hon. Member for Barry (Mr. Gower) who has flitted in and out like Tinker Bell sought to suggest this. One cannot tell a man on the dole, and struggling to bring up a family on social security, and amid all the disadvantages, economic, educational and social which that means for that family, "Hold your belt in for 10 years and you will have a fine job in new surroundings." It is now that we must create jobs. It is now that we must bend our efforts to remedy this unemployment situation.

The keynote of this debate has been the recognition that the task is not an easy one. We have never criticised the Government by saying that this is an easy task which they have been neglecting. We criticise them for going in quite the wrong direction, and in that sense I agree with my hon. Friend the Member for Carmarthen (Mr. Gwynoro Jones) when he says that the Nationalists, with their simplistic combination of separatism —which they have never thought through —and vague economic benevolence—which they have never thought out—can be guilty of misleading the Welsh people that they can easily overcome much of this problem. In a complex industrial society with a high standard of living it is not easy to overcome. Yet the Secretary of State for Wales has been guilty of the grossest complacency of all, and he has to direct his mind to several further substantial issues.

What are those issues? First of all, as my hon. Friend the Member for Flint, East (Mr. Barry Jones) rightly said, the Secretary of State must bend all his efforts in the Cabinet towards the preservation of employment in the giant State industries, notably the steel industry in which at present a review is going on. It is not only a matter of losing jobs, but we have the problem of 7,000 or 8,000 male jobs which will be lost there must be created alternative male employment, and the Secretary of State will not lightly be forgiven in Wales if East Moors and Ebbw Vale and the other plants in grave jeopardy in Wales at the moment are cut down and we are faced with this great mass of unemployed for whom we have no hope of creating work, judging by the Government's past record.

Also as my hon. Friend the Member for Carmarthen rightly said, office jobs are heavily over-weighted in the London area, and all the other regions—all the other nations—of Britain have a serious dearth of such jobs. It is easy in the commuter belt of the cities to take an objective view about unemployment. This is due to the fact that we as a nation have allowed an over-concentration of such jobs in those areas so that they are never subject to the vicissitudes of the market. I believe the Government must move to create in Wales jobs of the clerical or office type.

May I direct one specific problem to the Government's attention, namely the problem of Maindy Barracks. When my right hon. Friend the Member for Aberavon (Mr. John Morris) asked a Question about this matter on 9th February, 1971, he was told that about 1,500 civil service jobs were to be created on the site of the old Maindy Barracks in Cardiff. Those jobs were originally proposed by the Labour Government. We were told that a central dispersal review was taking place.

Next to "The Mousetrap", this topic must be the longest running show in London. It is true that on 9th March last the Secretary of State said that an element of the Ministry of Defence was coming to Wales, but he did not know which element. But when I pressed the Under-Secretary of State for Defence for the Army in a debate on 16th March, he said that there had been a great misunderstanding and could not be that definite. We now learn that the Government, far from creating 1,500 new jobs, propose a building merely to house existing civil servants in Wales. In other words, instead of the creation of new jobs, we are to have a new "glasshouse" to accommodate existing employees. I believe that the Secretary of State as a matter of urgency must press for a decision on the Maindy Barracks scheme. It has already been too long delayed and any further delays will cause the gravest harm in Wales.

The Government, as one of the biggest purchasers and creators of economic activity in Britain, must now start to use their privileged position in this respect to devote a specific proportion of all contracts to Wales, Scotland and to the regions of England. Only through Government action will the imbalance created by the decline of the older industry be removed, and it is the Government's duty to see that it is taken.

I turn to another area in which the Government can act for the benefit of Wales. My hon. Friend the Member for Carmarthen in the debate on environmental pollution in the Welsh Grand Committee mentioned the extreme inconvenience caused by low-flying aircraft over West Wales. He mentioned the amount of land held by the Ministry of Defence and the amount of activity carried out by the Department in Wales and in Scotland. We in Wales suffer the overwhelming majority of the inconvenience, but in return we are not getting a fair share of the defence contracts. In reply to a Question on this subject, I was told that only 1.7 per cent. of defence contracts, and 3 per cent. of the value of such contracts, found their way to Wales. That is a grossly inadequate amount of defence expenditure allocated to Wales, when we bear in mind the sacrifices made by the Welsh people for the people of Britain as a whole. The Government should take immediate steps to counteract that imbalance.

Furthermore, the effects of entry into the EEC must be fully spelt out to the Welsh people. It is no secret that we fear the entry into EEC and oppose it. I suggest that there are two main reasons for our opposition. First, we are still waiting for the Government to clarify what is meant in EEC circles by a "central area." The answer to this query will affect the type of regional benefit which we shall receive. Until the situation has been cleared up, there is no certainty about what the Government will be free to do for Wales in future. Apart from a number of references, the Government have now adopted some Trappist views. We demand that they answer these problems quickly.

Rather like an over-zealous suitor, the hon. Gentleman has pressed the advantages of the amount of aid he is now giving to Welsh industry. Incentive, of itself, does not help to correct the imbalance in an industrial society. There must be a combination of incentive and strict physical control by the IDC method. But it is precisely in this area that the control, so far from tightening, is weakening. At Question Time on Monday my hon. Friend the Member for Llanelly (Mr. Denzil Davies) put forward some very interesting facts showing that the proportion of IDCs granted in the regions, as opposed to the South-East, was diminishing. In effect, there has been more development in the South-East, and the physical control of the Government by their IDC policy is weakening. If it is weakening within Britain, how much more will it weaken when under Article 93 we shall have no right to stop the free movement of capital? If this is an earnest of the Government's intention, it is an alarming one. This must be clarified immediately.

It is time that we aided labour-intensive industry. A payroll tax should be introduced. I do not use the words as a term of art, but that is the sort of thing needed. It should be something which will differentiate between industries and positively discriminate in favour of those industries which employ people. It is the employment of people and the maintenance of a viable society that is the aim, and not the number of derricks or pylons we can erect on a given site.

In the near future we are about to see the beginning of drilling in the Celtic oil field off the Welsh coast. I should like the Minister of State to take this point very seriously. If he thinks that we shall put up with the old story of the natural resources of Wales—or those of any other region—being drained away without adequate recompense or an adequate share of the wealth created by them being devoted to the area, he is in for a very rude shock indeed. The Minister must recognise that the only way in which Wales can get its proper share of the benefit from such discoveries and drillings is by exploration by State industry and not by private concerns.

Finally, I echo again my hon. Friends. It is time that the Government had the courage and vision not only to use their contractual power to bring work to Wales but to use their direct innovatory power. In other words, the Government ought to set up State pioneering industries to create employment in those areas where no kind of incentive or IDC policy would otherwise bring employment. It is not enough to say to these men. "Hard luck. You are in the dead end of the last industrial revolution". We believe that industry, on a reasonable scale at any rate, must be brought to the people. If we have any right to call ourselves a civilised society. the State ought to be the promoter of that industry.

We have spoken with emotion, but we have tried not to let emotion be the sole criterion that we have applied. We have put forward firm suggestions which the Minister would do well to consider. We speak on behalf of a country which all Welshmen love. We are at one on that. We all consider that it is rich in social investment, culture and the quality of its people. It is at present a country which is crying to the present Government for help. I hope that it will not cry in vain, because it will be to the disadvantage of all of us if there is a deep despair not only that the Government do not respond to its cries but do not even hear them If the Government cannot and will not in the next few months move to alleviate the terrible, tragic problems of unemployment in Wales, they should move over to enable a Government which can tackle these problems to come to power.

1.15 a.m.

The Minister of State, Welsh Office (Mr. David Gibson-Watt)

I will immediately reply to the hon. Member for Pontypridd (Mr. John) whose speech was very much to the point and posed certain specific questions. I tried to count the number of questions which hon. Gentlemen have put to me tonight. I do not pretend I shall be able to answer all of them. I shall try to answer some, and specific questions to which hon. Gentlemen do not receive an answer tonight I shall contact them about by correspondence, because it would be impossible at any hour of the night or morning, let alone this one, to do the full job tonight.

The hon. Member for Pontypridd specifically asked about Maindy Barracks. I am glad he asked about that, because I am able to give him a good answer. There will definitely be 1,500 new jobs.

Another point which I must make when speaking about Cardiff is that, as a result of the Government's decision to have British Rail headquarters in Cardiff, there will be a further 2,000 new jobs there.

On dispersal, about which the hon. Member for Pontypridd spoke, that is to be a major review, and I assure hon. Gentlemen that Welsh interests are certainly being fully taken into account.

Hon. Members on both sides of the House have rightly spoken with feeling, and certainly compassion, about the problems of unemployment in Wales. I share their concern and, like them, wish to see the employment situation improved. However, I must take issue with some of the reasoning and with most of the critical comments we have heard from the Opposition tonight. I cannot share the gloom and pessimism which some hon. Members opposite, with the notable exception of the hon. Member for Pontypridd, sought to spread.

I said at the close of our debate earlier this year—[Interruption.] Does the hon. Gentleman wish to intervene?

Mr. Rowlands

I was making a reference to my hon. Friend. I did not realise he was the cockeyed optimist the hon. Gentleman was suggesting.

Mr. Gibson-Watt

I said at the close of our debate on Government policy in Wales on 9th March this year that many of the arguments I had heard from hon. Gentlemen opposite were "over-gloomy". As I said then, it is in the nature of any Opposition to be gloomy.

Unemployment in Wales is too high, as my right hon. and learned Friend and I have said on many occasions; but to improve the position we must understand the problems and introduce policies which will overcome them.

Let me look, first, at the arguments about the causes of the difficult employment situation we have had in the past two years.

The reasons for unemployment are normally of long standing. This was to some extent referred to by the hon. Member for Carmarthen (Mr. Gwynoro Jones) who, at the beginning of his speech, admitted that the advent of the Tory Government had not immediately and automatically brought unemployment. However, towards the end of his speech—about 40 minutes later—the position was entirely different and the hon. Gentleman's argument was stood on its head.

The roots for present unemployment go deep down over a period of at least six years. It is generally recognised that 1966 was a crucial year. Up to that time, from about 1954, the total register of unemployment in Great Britain had been at an average level year on year of about 1.6 per cent. After 1966 the overall level rose sharply. This was of course as a result of the Government's policy. There was very slow growth—indeed, stagnation —and heavy inflation.

Criticism of the present levels of unemployment must be levelled at the policies of the past. Employment trends cannot be changed in a week or two, but require a long period of planning and substantial changes in policy— [Interruption.] Hon. Members may not agree. We are now beginning to see improvements in the employment position in Wales as in the United Kingdom as a whole. There were good improvements in May and June. The July figures, as the hon. Member for Rhondda, West (Mr. Alec Jones) admitted, were distorted by other factors.

Mr. Alec Jones

No, I did not.

Mr. Gibson-Watt

Yes. The non. Gentleman referred to the school leavers and the students on vacation, but what he did not refer to were those who were laid off as a result of the tin plate dispute at Trostre and Felindre.

Mr. John

That was precisely the reason why I quoted the July to July figures. School leavers and students seeking employment are constant in that month. The fact is that unemployment in July of this year was 7,200 above last July. Does the hon. Gentleman think that that is an encouraging trend?

Mr. Gibson-Watt

I am trying to give the House some of the reasons why these figures are as bad as they were in July, and nothing the hon. Gentleman or his hon. Friends say will alter that.

Mr. Rowlands

Will the hon. Gentleman give way?

Mr. Gibson-Watt

No. The hon. Gentleman made an extremely long speech. With great respect, I do not want to keep the House any longer than necessary. There are many other hon. Members who want to speak. Although the importance of the subject cannot be overestimated, I hope that the hon. Gentleman will allow me to continue. One of the figures which the hon. Gentleman did not give to the House, regarding his own area of Merthyr Tydvil, was unemployment among young persons, a matter of the greatest importance, which between July, 1971, and July, 1972, decreased by 26.5 per cent. from 147 to 108—[Interruption.] The hon. Member for Carmarthen scoffs.

Mr. Gwynoro Jones


Mr. Gibson-Watt

The hon. Gentleman is better at scoffing from a sedentary position than any of his hon. Friends. It is right in a debate of this sort not merely for the Opposition to give the bad facts—there must always be bad facts—but to recognise improvements. It must have been known to the hon. Member for Merthyr Tydfil (Mr. Rowlands) that the situation with regard to young persons has greatly improved. The underlying trend continues to be favourable. Not only have the unemployment trends been reversed—the vacancy figures are rising—but the demand for labour is on the upward trend. Only yesterday, in answer to a Parliamentary Question, we learned that there were 900 vacancies in the tourist industry in Wales, to which I shall be referring later.

Mr. Gwynoro Jones

Does the hon. Gentleman agree that there is a great leeway to be made up? There are 34,000 redundancies, and 8,000 jobs have been created in two years. The Minister speaks of 20 jobs being created in Merthyr Tydfil as if that is of great credit to the Government. Is that the Tory Government's presentation to Wales?

Mr. Gibson-Watt

If I had known that the hon. Gentleman was going to make that sort of intervention, I would not have given way. I was replying to the hon. Member for Merthyr Tydfil, giving certain figures for his constituency which must be well known to him. I am telling the House about those figures because he did not do so.

In general, the economy is continuing on a course which is very much in line with the Chancellor of the Exchequer's expectations at the time of the Budget. The national economy is gaining strength. The indications are favourable. The National Index of Industrial Production reached a new high level of 131.2 in May, which compares with 127.5 in April and an average of 125 in the year 1971.

It can, of course, be said that some of this rise represents a recovery from the low production in the first quarter because of the miners' strike, but it cannot be denied that there is a definite and a promising upward trend. The same thing can be said about the figures for the Retail Sales Index which in May stood at 108.5 as compared with 104.8 for the year 1971.

There has been a reversal in the trend of unemployment and the reasons for this reversal are clear. They stem from the great boost which the Government have given to industry and to industrial confidence in their recent Budget measures and in the new proposals for assistance to industry in the regions. The recent report, issued in July, by the Welsh Council on industrial development policy said: In its previous report the Council emphasised the vital importance of industrial confidence as a pre-requisite for a sustained improvement in the state of the economy. It is pleased to record its view, based on the extensive knowledge of the industrial, financial and commercial scene which its members between them possess, together with the impressions gained from the contacts which members make with others engaged in these fields, that the period since the Budget has shown signs of increasing confidence. This reinforces the prospect that the new regional investment inducements which are being introduced will operate against a background of reasonable overall growth in the U.K. economy. It is most important that this should be so. I draw attention to this paragraph because it highlights two main considerations which will affect the future prosperity and, therefore, the future employment prospects in Wales—first, the restoration of confidence and, secondly, the new system of regional investment inducements.

There is still, I fear, some lack of appreciation about the size of the new investment in the regions. There is a tendency to argue that while the level is certainly higher than that which applied before March of this year, it is no higher than the levels which applied before 1970. The Welsh Council report to which I have already referred gives the lie to this. After a very detailed examination of the allowances and grants available now, and comparing them with the pre-October, 1970, system—and comparing them on a two year, a five year and a 10 year basis—the Council points out how large has been the substantial improvement in the position of the development areas and the special development areas. This substantial improvement points the way to improvements in job prospects in manufacturing industries.

There has been criticism in the debate that our new incentives do not pay enough attention to the service industries. We are criticised for concentrating regional assistance on the manufacturing and capital intensive industries, to the exclusion of the service industries. I remind hon. Members opposite that the present Administration have done much more for the service industries than was done before 1970. We have already removed half the selective employment tax and the remainder is to be abolished. In addition, there is the possibility of selective assistance in respect of free depreciation on plant and machinery for service industries as part of the Industry Bill.

Mr. Gwynoro Jones

I promise that this is my last question. The hon. Gentleman rightly says that the Welsh Council states that the new incentives on plant, machinery and industrial buildings are better not only than pre-October, 1970, but better than under the Labour Government. That is true. But I ask him, therefore, why abolish cash grants in October, 1970, and re-introduce them in June, 1972?

Mr. Gibson-Watt

That is hardly a new point. The hon. Gentleman has made it before. What we have introduced here is far greater than was ever introduced before by any Government.

Hon. Members opposite have referred, quite naturally, to closures and redundancies. But they have not given the hard facts about the new starts in Welsh industry and expansions in existing firms in Wales, all of which make the prospects much brighter. I will give hon. Members opposite a few examples. First, there is the new industrial estate at Waterton, Bridgend, which, when it is fully developed, will be one of the largest of its kind in Europe. Already one firm has arranged to occupy an advance factory on this site and provide jobs for over 300 people.

Another advance factory at Kenfig Hill is being taken over by an existing firm in Bridgend and this will provide another 50 jobs.

At Merthyr and Tredegar there is to be a sizeable new investment involving some 800 jobs. There are good new developments at Cwmbran, Aberdulais and Wrexham, and encouraging instances of established new firms taking on additional staff at Merthyr and Bangor.

These are by no means the end of the story. There are definite signs of busi- ness and industry turning to Wales to expand. In the first six months of this year, there were about 130 visits to Wales and just under 200 inquiries from industrialists with expansion plans under consideration. These figures are markedly higher than those for the same period last year.

We must not forget that industry in Wales is not entirely confined to the South Wales area and the North Wales coastal strip, although a large proportion of our people live there To me, one of the most reassuring features of industrial developments in recent times has been the relatively successful period enjoyed by Mid-Wales, and here, as usual, I pay tribute to the work done by the Mid-Wales Industrial Association.

There are some areas in Mid-Wales, of course, which have found the going difficult. For example, Blaenau Ffestiniog is an area causing particular concern. The overall picture in Mid-Wales is one of a much reduced depopulation rate overall, and in the last 12 months there have been sizeable and welcome developments at Newtown, Lampeter, Llandrindod Wells and Brecon.

There is one aspect of employment in Wales which is too often ignored or under-played and which has not been referred to tonight. That is the importance of the farming industry. Throughout much of Wales, employment does not rely on the big industry which hon. Members have in general been referring to tonight.

The market towns depend to a large extent on the prosperity of agriculture. Anyone with any knowledge of farming since the war will know that farmers have benefited greatly from two good price reviews and a special injection of money in the autumn of 1970. We found farming in an unhappy state two years ago when we carne to office. [Interruption.] The hon. Member for Carmarthen should know this, if his hon. Friends do not. Our policies have produced a changed picture in the countryside.

In the same way we have made a larger contribution to support of the tourist industry in Wales, our greatest service industry, which suffered a great deal before 1970. The amount of spending on the Welsh Tourist Board has gone up from just over £500,000 in 1970–71 to over £1.8 million in 1972–73. This is encouraging.

Hon. Members have raised particular problems about particular areas, but I will say a word about the coal and steel industries. I do not want to go over in detail much of what was said in our debate in the Welsh Grand Committee on 23rd February. I have to emphasise that my right hon. and learned Friend and I are in no doubt about the importance to the Welsh economy of both the coal and steel industries.

The hon. Member for Flint, East (Mr. Barry Jones) raised the question of Shotton. He and my hon. Friend the Member for Flint, West (Sir A. Meyer) have rightly put this forward on a number of occasions. As the hon. Member knows, having seen my right hon. and learned Friend only this week, a £19 million programme of improvements is currently being undertaken at the finishing end and this part of the works has an assured future in the medium term. What we call the heavy end is still a matter for the British Steel Corporation to consider.

Nobody can underestimate the importance of the steel industry for Wales. It employs one in seven of the employed male population; well over 70,000 are employed in our steelworks and this is over 22 per cent. of all British steel workers.

No decisions have yet been taken about the future of the industry in Wales. These depend in the first instance on the proposals to be put forward by the British Steel Corporation. When we have them, they will receive serious consideration from the Government, and regional factors will loom large in our deliberations.

There are bound to be problems. It is at the heart of all modern major industry that as its efficiency improves, so can the same level of production be achieved by fewer working staff. We need a viable steel industry, and that may well mean rationalisation and some redundancy, but within such a viable industry we need to safeguard as best we can Welsh steel interests and jobs.

I hope that in this short time I have been able to show hon. Members opposite and the House in general that, although unemployment is a most serious matter that we have to face and that we are still tackling in Wales, I should not wish the message from our debate this morning to be that there is any lack of confidence in Welsh prospects.

Mr. Rowlands

In view of the picture that the Minister has painted, would he make the confident forecast and give us the assurance that the level of unemployment this winter will be as low as the level of 1969–70? If we could get that assurance, at least we could test the Minister's assertions against the facts this coming winter.

Mr. Gibson-Watt

The hon. Member has asked me a question that no one in his senses would answer at this time of night in a short answer from this Box. No doubt the hon. Member would like me to give an answer and would like to prove me wrong, which is why he asked the question. I have known him to ask this sort of question in Welsh debates when he was in the House previously. I was about to conclude the debate by saying that the message that should go out from the House tonight is that there is no lack of confidence in Welsh prospects. Certainly there is no lack of confidence in Wales so far as the Government are concerned.