WELSH AFFAIRS

HC Deb 21 March 1974 vol 870 cc1352-77

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Coleman.]

4.26 p.m.

The Secretary of State for Wales (Mr. John Morris)

Anyone called to hold the office of Secretary of State for Wales must be deeply conscious of the honour of serving his nation in this way. I certainly am. Each Secretary of State has made a distinct and valued contribution to the life of Wales, and I pay particular tribute to the three of my distinguished predecessors who are in the House. The only assurance I can give is that, like them, I shall seek to act in the interests of the whole of Wales and not of a section of it, and I shall try in all my deeds to be guided by this principle.

I know that I speak for all my colleagues in Wales in congratulating the Chairman of Ways and Means upon his appointment. I know that he is now impartial, but he has led the Welsh Labour group with unparalleled zeal and drive for many years.

The House will want to know the balance sheet as I found it at the Welsh Office. In view of the reputation of my native county, the House will not be surprised that I took an immediate interest in the state of the books.

Having outlined this backcloth, it would be right for me then to outline the recent and current employment situation in Wales. Nothing is more important than the fundamental human right to work, and Governments must intervene where necessary to ensure that that right can be exercised in Wales itself.

I shall seek then to deal with some aspects of the condition of life in Wales. So varied and wide are my responsibilities that the House will forgive me if I do not cover all topics. To do so would be to deprive some hon. Members of the opportunity of catching your eye Mr. Speaker, and my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands), one of the Under-Secretaries in my Department, who will seek to wind up, will repair some of my omissions.

Lastly, I shall spell out in some detail how I view the constitutional development of Wales and how we will seek to implement the proposals which the people of Wales endorsed at the last election.

First, I turn to the books. The House will recall the severe public expenditure cuts announced by the last Government on 17th December. Capital expenditure was to be cut by 20 per cent. and procurement of goods and services by 10 per cent. Other than housing, each of the main fields of expenditure suffered a cut on its programmes for 1974–5.

It is right for us to look at these at the beginning of our endeavours. Expenditure on roads and transport was cut by £11.6 million, equal to 15 per cent. Spending on other environmental services was cut by £8.9 million, equal to 12 per cent., while expenditure on education, libraries, science and arts was cut by £6 million, representing a reduction of 4 per cent. Health and personal social services expenditure was cut by £5.5 million—equal to 3 per cent. These cuts amounted in total to £32 million—or 6.8 per cent.—of Welsh Office programmes excluding housing.

One cannot minimise the effects of these cuts. Undoubtedly we are in a serious economic situation, and, while I cannot anticipate the Budget, it is obvious that these cuts cannot now be reversed. But to all my hon. Friends and hon. Gentlemen opposite who, I am sure, would in the course of the year be making this and that suggestion for expenditure, I cannot help but underline the extent of the deferment of many valuable plans which has, and will, take place.

The economy of Wales is inextricably linked to the health of the rest of the United Kingdom economy. Anyone who advocates separatism is living in cloudcuckoo-land. Offa's Dyke has no economic relevance in the economic life of Wales.

The blunt truth is that the United Kingdom's economy—and the economy of Wales as part of the wider scheme—certainly has suffered recently, both as a result of the energy crisis and as a result of the previous Government's handling of industrial relations and other aspects of economic affairs.

My aim is to see that Wales is able to play its part to the full in the recovery operation. Unless Britain recovers, Wales will not prosper. It is obvious, therefore, that we must concentrate on our coal and steel resources, which not only provide over 100,000 jobs for men in Wales—one man in six in Wales is employed by the British Steel Corporation or the National Coal Board—but contribute in large measure to the strength of the United Kingdom economy. Beyond coal and steel, we must look to the further resource, oil or gas, which we hope will eventually come from the Celtic Sea.

Our overriding priority must, therefore, be to restore the strength of our economy, and we must continue to reduce the imbalance between Wales and the rest of the United Kingdom—indeed, our aim must be to eliminate it. I am particularly conscious here of the problems of such areas as North-West Wales, parts of Pembrokeshire and parts of the valleys such as Bargoed, to name but a few.

I should like to deal first with the economic situation bequeathed to us—an unwelcome legacy if ever there was one. Let us look first at unemployment.

It has been said many times by the Conservative Party that when it took office in June 1970 it inherited a deteriorating unemployment situation. The fact is, however, that from June 1970 till December 1970 the unemployment situation in Wales was remarkably stable, with the seasonally adjusted rate fluctuating only slightly between 3.6 and 3.8 per cent.

It was not until 1971, after six months of Tory Government, that the situation took a marked turn for the worse. Between December 1970 and April 1971, the seasonally adjusted rate increased steadily from 3.8 to 4.4 per cent. For the next three months it was static at 4.4 per cent., but it then rose steadily again to reach 5 per cent. by the end of 1971.

But even worse was to follow. In January 1972 it was 5.2 per cent.; in February 5.3 per cent.; in March 5.3 per cent., and in April 5.2 per cent. The record needs to be spelled out. As the House knows, an overall unemployment rate of 5 Der cent. means a male rate in excess of 6 per cent. Throughout the winter of 1971–72 the numbers unemployed exceeded 50,000, reaching a peak of nearly 56,000 in January 1972.

This deterioration was not due to some act of God. It was directly attributable to the policies of the last Government— in particular, their ill-fated decision to abolish the well-tried and successful policy of investment grants. We said at the time that it was a disastrous decision. Sadly, events proved how right we were, and the people of Wales suffered.

Like Saul on the road to Damascus, the last Government saw a blinding light, and in the spring of 1972 they reintroduced investment grants—although in an attempt to cover up their past folly they now called them regional development grants. Saul was re-named Paul.

With the application of this erstwhile Labour Government policy, and a flat-out race for economic growth, the situation in Wales started to improve, although it was not until late autumn 1972 that the seasonally adjusted rate dropped below 4.8 per cent. It continued to improve through most of 1973 with unemployment falling and the number of unfilled vacancies rising.

Even so, the writing was on the wall as the economy lost impetus and the boom spluttered to stagnation. This happened before the cut-back in oil supplies, before the miners' overtime ban, before the increase in oil prices, and before the full horror of the balance of payments situation was revealed.

In Wales it manifested itself in a sharp decline in the number of unfilled vacancies, and in a reversal in the downward unemployment trend, quickly followed by the grave effects of the energy crisis, which, in turn, was exacerbated by the Government's handling of the industrial relations situation.

All in all, it is a story of stupid changes in policy in 1970–71, a serious deterioration in unemployment, a death-bed conversion in 1972, an improvement in the unemployment situation in late 1972 and for the first three quarters of 1973, and then the deluge. One can only have wished that this was a nightmare, not the reality.

The publication earlier today of this month's unemployment figures only serves to underline the difficulties. Once again, they show an increase in the seasonally adjusted rate—from 3.4 per cent. in February to 3.6 per cent. now. In three short months, the rate has climbed sharply from 3.0 per cent. to 3.6 per cent.

The seeds of deterioration have been planted by our predecessors. We are faced now with the task of repairing the damage where this is a continuing threat to employment as a result of the traumatic experience industry has gone through in the last few months. It will not be easy, and it is only right to say that the prospect of a continuing deterioration in the unemployment position before we can pull the situation round is a very real one indeed. The damage of the past will take time to repair.

Turning to particular industries, the House will, I think, consider it appropriate that I should refer first to the steel industry. I do so with pride, having had the honour to represent one of the great steelmaking centres of Europe in this House for over 14 years.

Wales's importance was recognised in the British Steel Corporation's long-term investment strategy, which was made public over a year ago. There was much for Wales to welcome in that strategy. But there was also much which caused grave concern—the proposed closures at Cardiff, Ebbw Vale and Shotton, with the loss of thousands of jobs.

Our manifesto for Wales promised that Labour would halt these closures and undertake an immediate review of targets for the steel industry with the future viability of these works in mind. I can assure the House that this commitment will be carried out. My right hon. Friend the Secretary of State for Industry has already informed the Chairman of the British Steel Corporation that he will be carrying out a review of proposed closures of steel plants by the corporation arising out of planned developments as agreed with the last Government—although, as he made clear in the House on 18th March, without interfering with the present investment programme. In pursuance of this my right hon. Friend has asked Dr. Finniston to withhold any decisions or announcements on any individual closures until he has had the opportunity to review the case for them, after consultation in each case with the prinicipal trade unions and local authorities.

To remove any doubt in hon. Members' minds, I would make it clear that this request to Dr. Finniston extends to the closures at Ebbw Vale and East Moors, which have been confirmed by the corporation, as well as to those where consultation is still proceeding, such as Shotton. My Department will, of course, be closely involved in the review which is to be made.

I come to the question of coal. The first task facing the Government on taking office was to settle the coal dispute. We did so, and we got Britain back to work. The pundits of Reigate, Surbiton and Sidcup can say what they like about the attractions of the coal industry. The truth of the matter is that the miners were voting with their feet. In 1973, for example, there was a net loss of nearly 3,300 in the industry's labour force in Wales. All the signs now are that confidence is returning to the industry. Before the recent strike there were about 1,500 unfilled vacancies in Wales. The NCB has announced today that last week there were over 800 applicants in South Wales, which it has described as the biggest rush of applicants for a decade. The Welsh part of the industry will be a major factor in the Government's urgent examination of the future of the coal industry.

Let me turn now to the subject of Celtic Sea oil. As the House knows, drilling for oil or gas is now under way in the Celtic Sea. This initial programme will bring much-needed new employment, particularly to South-West Wales. But that is only a start. If there is oil or gas in the Celtic Sea in commercial quantities it needs to be exploited as rapidly as possible and on terms which will confer maximum benefit on the community.

It is vital that we do not repeat in Wales the errors of the first Industrial Revolution. We do not want our wealth to be exploited in such a way that Wales misses out on the higher-level and more congenial work. We must ensure that the education system is so geared that the young people of Wales have the maximum opportunities to exploit their skills, training and talents in the sophisticated industries ancillary to the oil industry itself.

Remembering the physical scars of the first Industrial Revolution, I hope that we shall be able to exploit any new discoveries so that there is the minimum damage to the environment. Our aim must be to reconcile or avoid potential conflicts between developmental and en- vironmental considerations in a way that combines practicality and sensitivity in right proportions.

There is considerable interest in the organisation of administrative work related to the Celtic Sea development. The right hon. and learned Member for Hendon, South (Mr. Thomas) raised the matter on Monday. I am considering several ways in which existing arrangements might be developed or altered. I have not yet come to a decision, but I am in no doubt that as the demands for the exploration work change and increase there will need to be a development in the means by which the Government oversee the work and bring their influence to bear.

Mr. Gwynoro Jones (Carmarthen) rose——

Mr. Morris

I am most generous in giving way to my hon. Friends and hon. Members, but I have a long way to go, and if I give way again I shall only be cutting other hon. Members out of the debate.

The most recent decision affecting the economic and social life of South Wales has been the decision not to proceed with the proposed Llantrisant New Town. We welcome that decision, but we are determined that it should not be seen as a negative one. Rather it must now become a renewal of our commitment to enhance and develop the existing communities which have shown a remarkable resilience and a greater potential for industrial development than was thought possible some years ago. I make that commitment this afternoon.

I want to work closely with all the local authorities in the post-Llantrisant situation, though without in any way taking over their responsibilities. I also wish to make clear that we realise the urgent need to plan properly and effectively the natural growth in the Llantrisant area. We shall give full support to planning initiatives to ensure that this will be done.

I turn now to Mid-Wales. With my roots in Mid-Wales, I am happy to be able to point to the more encouraging trends which are now apparent in some respects, as I think the right hon. and learned Gentleman did on Monday. We are now—hopefully—seeing the beginning of the reversal of depopulation. Substantial progress has been made at Newtown, where the Mid-Wales Development Corporation set up by the last Labour Government is working towards a doubling of the town's population. Progress elsewhere has perhaps been less spectacular, but by no means insignificant.

The last Labour Government initiated a policy of concentrating development in six other growth towns in Mid-Wales, and this policy was endorsed by the succeeding administration. A number of manufacturing firms have moved to these towns in recent years, and this has contributed to the improvement in population trends. What is not clear is whether this improvement has been brought about by a reduction in the drift of population from the area or an increase in the movement of people into the area.

If this healthier trend is to last, we must maintain the momentum of development. I intend to see that this is done, and I am therefore particularly glad today to announce two significant new developments. First, the vacant Development Commission advance factory at Rhayader has been allocated to Silent Channel Products Ltd. of Huntingdon, which manufactures components for the motor industry. Twenty jobs will be created in the first year of operation, and 40 jobs should be provided by the end of 1976. The company also has a factory at Maesteg, but there will be no reduction of the labour force there as a result of this move to Rhayader. Secondly, under the Development Commission's main programme of advance factory building in Mid-Wales, a new 10,000 sq. ft. factory is to be built at Aberystwyth.

The continued development of the towns of Mid-Wales is essential if the depopulation of this area—with all its economic, social and cultural implications —is to be reversed not just last year or the year before, but for good. The policy of concentrating industrial investment in a comparatively small number of attractive locations is, I believe, right. The major question still outstanding, however, is how to translate all our hopes and aspirations for the area into action. We said in our manifesto for Wales that a Development Board was needed to coordinate the activities of all existing agencies in Mid-Wales and rural Wales.

I am anxious to make progress in co-ordinating the strategy for Mid-Wales and hope to begin the task of providing the tools for the job in the way of effective corporate machinery for the area.

In all five of the Mid-Wales counties no locality causes me greater concern than Blaenau Ffestiniog—a town with a proud industrial and cultural record—which I hope to visit shortly. It is a town, too, which has suffered more than most towns in Wales from the twin evils of depopulation and unemployment. The number of persons unemployed may not be large in comparison with many other parts of Wales, but the unemployment rate is totally unacceptable to me. I am determined to do everything within my power to tackle the problems of Blaenau. In particular, I am lending my full weight to the determined efforts now being made by the Department of Industry to find a tenant for the vacant Government factory. Naturally, I warmly welcome the announcement earlier this week that a company from Colwyn Bay has decided to establish a unit in the town.

I turn now to agriculture. I think it was an hon. Gentleman opposite—the Member for Cardigan (Mr. Howells), who is not here today—who urged upon his electors the need for a Minister of State for Welsh Agriculture with, I believe, a seat in the Cabinet. With my roots so firmly embedded in the industry, I hope that when he reads my speech in due course, as I hope he will, he will not mind my asking him to remind his electors that I share this responsibility with my right hon. Friend the Minister of Agriculture, Fisheries and Food, and that I am not a Minister of State. I am proud to be the Secretary of State, and that there are at least two voices to safeguard Welsh Agriculture in the Cabinet.

I attach a great deal of importance to the future development and prosperity of Welsh agriculture. There is understandably, very considerable concern in Wales at present about the future of some sectors, which have had to bear mounting costs of animal feed, fertilisers and other essential supplies. I recognise, therefore, that this is a worrying time for Welsh farmers, and I have not to go far in my immediate family to be reminded quite sharply of the industry's problems. I also hope to take an early opportunity of meeting the representatives of the industry in Wales, and I am confident that they will convey to me their concern about many aspects of farming in Wales.

I now come to the question of roads. It is not my intention today to weary the House by cataloguing a whole host of road improvements now going on and to be commenced in Wales. My hon. Friend will deal with any particular queries. What I must say is that we have a long way to go in building an effective road pattern in Wales. It is regrettable that the original date of completion of 1976 for the M4 has slipped. I regard it as vital for South Wales that this essential artery is completed as early as possible, and I also attach importance to overcoming the social and engineering problems of bringing Gwynedd, where the unemployment rate is intolerably high, and the whole North Wales coast closer in the transport time scale to the border.

In all these matters, as previous Secretaries of State have been deeply aware, there is a dilemma. The rights of objectors have to be protected. But far too frequently—I say this with the utmost earnestness—the voice of beneficiaries further along the line of major road improvements goes unheard. If we want to get on with the badly needed improved road pattern in Wales, supporters as well as objectors—I have been an objector myself, as the right hon. and learned Gentleman knows—must stand up and be counted. That is a message I sent out, and I hope that I shall be supported on both sides of the House.

The county councils have a new role in the comprehensive development of transport in their areas. My Office will be available to give them positive support in the integrated development of cornmunications and services in their areas.

I should like to deal briefly with the question of housing. In the housing field, as in many others, we have inherited an uncomfortable situation. The Government are reviewing all the issues in order to determine priorities. As a first step. I made orders under the Counter-Inflation Act 1973 freezing all residential rents for the remainder of 1974 in Wales. There are in Wales some 280,000 council tenants and 150,000 private tenants. This is a significant contribution to holding down prices.

The major problem which confronts us is the need for more homes for our people. Waiting lists in Wales total nearly 40,000. Every hon. Member in Wales knows that the topic which occurs most frequently in his constituency work is that of housing. Yet the number of houses completed in Wales in 1973–3,377 in the public sector and 10,957 in the private sector—was the lowest since the end of the war. The number fell steadily year by year during the last Government's tenure of office. By 1973 the public sector figure had dropped to half what it was when they took office in 1970. But the fall was masked by their device of lumping together the public and the private sector figures. Now that the private sector building programme has ground to a halt, this cover is no longer available and the inadequacy of the public sector results is left fully exposed.

Clearly, this problem must be given the highest priority. We shall devote our attention and energies to reviving the house building programme. We shall encourage local authorities to press forward with programmes, and we shall do our utmost to provide the means. While local authorities are reviving their building programmes, we shall look again at the problem of maintaining existing housing in the short term. Clearance of unfit accommodation may be very necessary in itself, but we must have regard to the need to rehouse those displaced. Until accommodation is available to receive them, clearance merely aggravates the situation.

I am inviting the Under-Secretary of State, my hon. Friend the Member for Merthyr Tydvil, to use all his energies for the housing drive that is so badly needed in Wales. Local government reorganisation in Wales sets up 37 new housing authorities from 1st April next in place of the existing 169 authorities. My hon. Friend the Under-Secretary is planning to meet all the new authorities as soon as possible to encourage them to tackle their plans realistically and to discuss with them what help we can give to ensure that there is again a real move forward in house building.

In the rural areas we shall give every encouragement to housing authorities in Wales to purchase homes which might otherwise become derelict and to make them available to meet housing needs in their areas—as a number of authorities have done very successfully in the past. We are also committed to put a stop to the giving of improvement grants for second homes.

I turn now to the question of education and the Welsh language. There is only one aspect of education, a subject which we are passionately concerned with in Wales, that I have time to deal with. The cut-back of nearly £4 million in capital expenditure on schools in 1974–75 resulted in the deferment of a start on the building of some 70 replacements for pre-1903 primary schools. Since Wales has such a high proportion of very old school buildings, the delay in their replacement represented a severe blow to the Principality. I am now considering reinstating in this year's starts programme —within available resources—some of the more urgent deferred projects.

The Welsh language is a brilliant gem in our inheritance. It enriches the Welsh-speaking Welshman and the non-Welshspeaking Welshman. It is part of all our backgrounds. We would all be the poorer without it. In an age when so many of us are becoming increasingly concerned with our enviroment, I have said before that to be passionate about the physical heritage and to be unconcerned about the language as the basic ingredient of the distinct cultural way of life of so many of us would be the act of a political schizophrenic.

There is a crisis in the history of the language. There is cause for concern in the further decline in the number of Welsh speakers revealed by the last census. But, on the other hand, there are encouraging signs, too, that a large number of people of all age groups are constructively setting about safeguarding the future of the language and that new methods and techniques in education are bearing fruit. I publicly supported the action of my predecessor the right hon. and learned Member for Hendon, South in setting up the Welsh Language Council as an important step in the right direction. There is much work to be done, and we shall be looking to the council for advice as it pursues its task. I shall be seeing the chairman very shortly so that I may review the progress of the council to date.

Lastly, I am sure to the relief of many hon. Members who wish to catch your eye, Mr. Deputy Speaker, I turn to the question of devolution. In Wales a great deal of interest has been focused on the Report of the Royal Commission on the Constitution. This is not surprising, since the question of devolution to Wales has been the subject of sometimes heated discussion and argument in Welsh political circles for the best part of a century.

The party to which I belong—and we are the party of the majority of the people of Wales—has every reason to be proud of its record in this matter. Ever since the war, we have taken progressive action to ensure that the special interests and needs of Wales are taken fully into account in the processes of government. Among other steps, we established the Council for Wales and Monmouthshire in 1949, and it was we who established the Welsh Office, under its first Secretary of State, Mr. James Griffiths, in 1964. I am sure the whole House will join me in sending our good wishes to Mr. Griffiths. We set up the Commission on the Constitution in 1969, and in opposition we continued to press for increased democratic control by Wales over its own affairs.

Following the publication of the Kilbrandon Report, the Welsh Labour Group, as my hon. Friend the Member for Rhondda (Mr. Jones) reminded the House last night, put in hand a thoroughgoing study of its findings, and the trend of our thinking was made clear before the election. Our declared aim is to arrive at positive and constructive proposals which will win wide assent. I must pay tribute to the work of analysis that was done by the commission, but it then threw the ball back into the politicians' court for decision, where responsibility for action lies.

I noted with interest the comment of the hon. Member for Caernarvon (Mr. Wigley) in Monday's debate that my reply has confirmed our gravest fears that the Government's filibustering approach to the matter will do Wales a grave disservice".—[OFFICIAL REPORT, 18th March 1974; Vol. 870, c. 755.] The most charitable thing I can say about the hon. Gentleman's comment is that he must have written his speech notes on the train before he even heard my reply. What I said about consultation was that these matters would be discussed with great urgency so that we could bring proposals before the House at the earliest possible moment. Unless filibustering has a different meaning from my understanding of it, I cannot conceivably understand how the hon. Gentleman could have reached his conclusion. Anyone with the slightest spark of knowledge of how the machinery of Government works would have understood the words in the Queen's Speech.

It is now only right, if we are not to emulate the methods of authoritarian regimes, that interested parties should have the opportunity of stating and restating their views in the light of the Kilbrandon Report. Discussion now needs to be focused on the various options referred to in the report and in the memorandum of dissent. That will sharpen all our minds, and organisations in ales will be invited to focus their attention on those points. The consultations will be taking place in Wales, and I shall keep in close touch with their progress.

The House has been told of the appointment of Lord Crowther-Hunt to assist the Government and to be available to all who wish to confer with him. The consultations to which I have referred will not slow down the urgency with which the Government are buckling down to prepare their proposals.

I believe that the Labour Party in Wales gave very valuable evidence to the Royal Commission. I believe that there is a great deal of endorsement in the Kilbi andon Report to our observations.

In our Welsh manifesto we referred to the need for a directly elected body in Wales with the functions, power and finance to enable it to be an effective democratic force in Wales.

What is important is to begin this work, and to set up a body that will be a developing instrument, its powers being shaped in the light of experience and the democratic needs and aspirations of the people of Wales.

Let us get on with the work. I look forward to the production of a White Paper as soon as possible setting out the Government's intentions, to be followed by the introduction of the legislation necessary to give effect to them. I am sure that, while we could not hope to satisfy everyone, our proposals will be welcomed by the overwhelming majority of the people of Wales

This debate comes early in my tenure at the Welsh Office and in the life of the Government. In the months that lie ahead, I hope to grapple with the many problems that beset our nation.

I have found on taking office—and I am deeply gratified—an immense fund of good will right across Wales. Our history as a nation is studded with the divisions within our nation. It would be foolish to believe they would disappear.

My aim will be to seek the co-operation of every person of good will in Wales, to seek to unite rather than to tear apart, and to engineer the use of all the talents of our nation so that there is a fuller and better life for Wales as a whole.

5.7 p.m.

Mr. Peter Thomas, (Hendon, South)

I have already had the opportunity of congratulating the right hon. and learned Gentleman and his colleagues on their appointment to the Welsh Office. I do so gladly again and wish them well in their tenure of office. I congratulate the right hon. and learned Gentleman also on his speech today. It was a speech of fluency and power, and, apart from one or two passages where I think he felt impelled to make some political observations and comments, I should agree with much of what he had to say.

I join the right hon. and learned Gentleman in paying tribute to those who were his predecessors in office—apart from myself of course. I found that each person who occupied the high office which he now occupies certainly had the wish to do his best for Wales and for the Welsh people.

I am sure that it would be acceptable to welcome to the Front Bench my hon. Friend the Member for Pembroke (Mr. Edwards), who would wish, if he is fortunate enough to catch your eye, Mr. Deputy Speaker, to make a few observations on behalf of the Opposition at the end of the debate. I also see my hon. Friend the Member for Hereford (Mr. Gibson-Watt), and I should like to pay a personal tribute to him. I could not have wished for a better supporter in the Welsh Office during my three and a half years as Secretary of State for Wales. I know that the House will be glad to see that his health appears to be well recovered. I thank him for his assistance during those most interesting years.

The right hon. and learned Gentleman talked, I thought with probably lessened pride, about his party being the party of the majority in Wales. That is strictly true: the majority has of course lessened, and it is interesting to see on the Opposition side of the House aditional Members, including my hon. Friend the Member for Cardiff, North (Mr. Grist) and the two hon. Members who represent Plaid Cymru, whom we welcome to a Welsh debate. It is also interesting to see that the numbers on this side for the first time in my 23 years' experience apparently equal those on the Labour side.

I was interested by the construction of the right hon. and learned Gentleman's speech, how he felt that it was important to refer to the balance sheet and to look at the state of the books—which one expects when a person takes over for the first time. He said that he will seek to act in the interests of the whole of Wales. I do not doubt that. I have known the right hon. and learned Gentleman for many years and I know that he will try to do precisely what he said—to unite the Welsh people and to gain their co-operation. In this he will have the assistance of loyal and excellent officials.

I found his interpretation of the employment situation somewhat interesting. I would have put it a little differently. In order to paint a picture of the Welsh employment situation, I would have said that it was remarkable that in December 1973, not usually a month of the highest employment figures, unemployment in Wales was at its lowest for nine years. I would also have said that in December 1973 unfilled job vacancies in Wales were the highest for 20 years.

It seemed a good opportunity for the right hon. and learned Gentleman to point out to the House, and to have it on record as he plainly wished, that since 1970 industrial output in Wales had risen by 12.5 per cent. and in the manufacturing sector by more than 15 per cent. and that in 1972 it increased at double the United Kingdom rate. Last year alone, despite the problems of the latter part of the year, it rose by nearly 7 per cent.

The year 1973 was the first full year of operation of the Industry Act 1972. The response to that Act was tremendous and it is worth mentioning. In 1973, inquiries and visits by industrialists in Wales were twice as many as in the previous year. In 1972, they were almost double the level of 1971. So far, about 300 applications have been made for selective financial assistance, and the offers of grants which have been made under selective financial assistance in over 100 cases amount to £8.5 million, providing about 8,700 new jobs. In the industrial and service sectors, there are about 27,000 new jobs in prospect in Wales.

Another important matter, which, I think, should have been referred to is that we have over the years had a longstanding trend of loss of population through migration, but this has now been reversed, and net inward migration into Wales is mounting.

I should have liked to put the picture differently. I would say that Wales was rapidly becoming one of the most exciting and most promising regions of the European Community, and that this was rapidly being recognised in Europe, in the United States of America, in Japan and elsewhere. [Interruption.] I hear the Under-Secretary say something. He will know of the investment which is being made in his constituency of Merthyr by an American firm. He will know, too, of how in Ebbw Vale a European firm, Alfred Teves, is investing. They could have taken any part of Europe, but they decided to come to Wales. In the same way, we have had Sony and Takiron from Japan. I found during the latter part of my period as Secretary of State for Wales that the response and the interest in Wales was enormous.

This did not come about by accident. The right hon. and learned Gentleman took us through the difficult periods that we had at the end of 1970 and 1971. When I was Secretary of State, sitting in his place, I must admit that I was frequently saddened by some hon. and right hon. Members who appeared to revel in painting a gloomy picture of Wales by decrying our prospects, by exaggerating our problems and by minimising our successes.

During the time to which the right hon. and learned Gentleman referred, we sufferred from those attacks, but we had a job to do and we got on with the job. Starting from the base in 1970 which the right hon. and learned Gentleman mentioned—I still maintain that there was an underlying rising level of unemployment, and there was certainly a stagnant economy and a crisis of confidence in business—in the course of our three and a half years in office we gave priority and new, indeed, unprecedented, resources to communications, to infrastucture and to the environment.

We made the whole of Wales an assisted area. We made the whole of the South Wales coalfield a special development area. We pledged massive investment in coal and steel. We passed the Industry Act in 1972 which, together with the Finance Act of 1972, not only stimulated industrial activity throughout the United Kingdom but was regarded as being the most effective Act for regional regeneration ever. In effect, what we did was to reintroduce growth into the economy, and Wales benefited probably more than any other part of the United Kingdom.

The right hon. and learned Gentleman talked about regional imbalance. It is true that for far too long Wales has suffered from the problem of regional imbalance. For years our aim has been to try to reach that goal of parity with the rest of the United Kingdom, but it is a goal which has eluded us for a long time. At the end of last year, however, there were indications that the problem was on the way to being solved. With that picture in mind, it is sad that the fuel and world price crises, together with the coincidence of industrial disputes, reduced our momentum and postponed many of our hopes.

The right hon. and learned Gentleman talked about problems. Of course we have problems. We have been discussing those problems during the past few weeks, not only in the House but in the country. We have suffered setbacks because of those problems, but I believe that they can and will be overcome. Wales is in a better condition than at any time since the war to face the difficulties and, in due course, to continue its progress at a fast rate. The right hon and learned Gentleman has, he will find when he looks at the books again, been left a soundly based foundation for progress on which to build.

In the right climate of growth, with a fair tax system and continuation of our regional policy, Wales has great potentiality to attract investment, particularly from overseas. How Wales will fare depends on how policies emerge and, of course, much will depend on the Budget which we shall hear about next week.

I express the hope that the right hon. and learned Gentleman will seek to dissuade his Cabinet colleagues from introducing measures that will weaken that potentiality in Wales. Threats and suggestions of nationalisation, vague proposals such as a "national enterprise board"—which to any industrialist would imply interference with and regimentation of private industry—are very damaging to the prospect of investment, and, when connected to the prospect of oil and gas in the Celtic Sea, they are immensely damaging to the future of Wales.

The right hon. and learned Gentleman mentioned that when the Government first came to office their first task was—I use his words—to "settle the miners' strike and get Britain back to work". A settlement was achieved which occasioned a certain amount of relief in the country, and there is no doubt that people were glad of the opportunity to get down to a full week's work. When one thinks of the settlement in cash terms, there is very little cash difference between the relative pay offer and the settlement—which one could call the settlement of the right hon. Member for Ebbw Vale (Mr. Foot). On basic rates, surface workers received slightly more, coal face workers, slightly less and underground workers about the same. In terms of cash, the strike was absolutely unnecessary.

Mr. Alec Jones (Rhondda)

Tell the miners that, for the right hon. Gentleman started it.

Mr. Thomas

The offer of payments on Pay Board relativity recommendation, and backdated to 1st March, was made and the strike need never have taken place. In the course of time, I believe that the Government and the miners will have reason to regret that the settlement was not a relative pay settlement. If it had been, it would have been an integral part of an ordered framework for dealing with special cases within the wider context of a counter-inflationary policy.

But the settlement to which the right hon. and learned Gentleman referred with pride, is an ad hoc settlement, carried out as part of a much-publicised rejection of a counter-inflation policy. The relative pay report played no formal part in the negotiations. The National Union of Mineworkers and the National Coal Board were, in effect, given a blank cheque. Therefore, the difference between a relativity pay settlement and the actual settlement is not a difference in cash; it is a difference in principle. The practical consequences of this will increasingly emerge as various wage groups press their claims.

Already workers such as the chemical workers and the Post Office workers are reacting to that form of settlement, for the nature of the settlement outside relative pay gives wage demands an entirely new impetus. Therefore, I fear that the Government will regret that the settlement was made on an ad hoc basis and not on a Pay Board relativities award.

The miners themselves may well suffer, since one of the basic aims of a relative pay settlement was to ensure that the improvement to the miners' position in the wages league table would be a lasting one. There are many industries with the muscle of the miners, and in a wages free for-all, which I hope we shall not reach, the miners' new position could be quickly eroded.

Meanwhile, the effect of the settlement is that there is to be a substantial rise in the price of coal. A 48 per cent. increase for industrial users has already been announced. We accept that this has to be met because it was a necessary payment for a special case, but if it becomes contagious the serious inflationary effect is obvious.

The right hon. and learned Gentleman talked about housing and an unhappy inheritance. When the right hon. and learned Gentleman spoke of the freezing of house rents, he mentioned that there were 280,000 tenants in Wales. He did not refer to the 98,000 in Wales who are receiving rebates under the Housing Finance Act. There are many problems—the current problem of high interest rates, the effect of over-heating in the building industry in 1973, shortages and the cost of building materials and labour.

The right hon. and learned Gentleman mentioned the completion of houses in 1973. It is a matter of interest that, despite the many problems faced in 1973, there was an increase over 1972 in private house completions. But the right hon. and learned Gentleman concentrated on the public sector house building. It is a matter of which the hon. Member for Merthyr Tydvil (Mr. Rowlands) is fully aware. When one talks of completions of housing, one means the completion of a house which was planned and approved probably three years before. The hon. Gentleman was fully aware of that when he was Under-Secretary in the Welsh Office. He will also remember my hon. Friend quoting something he said at that time.

It would, I believe, have been of assistance to the House if the right hon. and learned Gentleman had talked about the future by quoting what are the approvals at tender stage. The approvals at tender stage for local authority house building programmes in 1973 were two and a half times the number for 1972 and, in fact, the highest figure since 1969. We can, therefore, look forward to a period of increasing housing supply.

I hope that the right hon. and learned Gentleman, if he is in office at that time, will pay tribute to the fact that the decisions were taken in 1973, in the same way that the decisions which were taken by local authorities in 1968 and 1969 produced the completions figures which we had three or more years later.

The Under-Secretary of State for Wales (Mr. Edward Rowlands)

Will the right hon. and learned Gentleman tell us how he sees the private house sector proceeding this year in Wales?

Mr. Thomas

Yes. I mentioned at the beginning that we have problems of high interest rates, over-heating in the building industry, and shortages and cost of building materials and labour. These all make a difference to any prognostication. It depends greatly on what the Government do in respect of building land. It may be that they will dry up the whole supply of building land by threatening to nationalise such land. These are things which I cannot anticipate until I hear a little more about the policies which the Government propose to put forward.

I was interested to hear the right hon. and learned Gentleman talk about the improvement of housing. The effect of the 1971 Act which the Conservative Government introduced was unprecedented in Wales. Nearly 60,000 houses have been improved in the past two years. I should have thought that that was worthy of mention.

Up to 1970, grants for house improvements held steady at between 7,000 and 8,000 a year. In 1972 they were 28,000 —that is four times as many—and in 1973 they were over 31,000. I should have thought that in presenting the housing picture for Wales the right hon. and learned Gentleman would have considered that a matter of importance and interest.

The right hon. and learned Gentleman will probably be under pressure from his right hon. and learned Friends to extend the 1971 Act. If he were able to do so I personally would greatly welcome it. It may be that he will find it something worth looking at. He will recollect that we were moving on to a more coherent long-term policy in respect of old housing, and I know that he will have read the White Paper which came out at the beginning of this year and, indeed, studied with great care the Housing and Planning Bill which was before the House before the dissolution of Parliament.

The Conservative Government felt that it was better to concentrate resources on those areas of special need rather than apply them indiscriminately and less effectively over much wider areas. I shall, however, be glad to hear what are the Government's plans for housing. If their plans are such that the housing situation in Wales can be improved, they can be certain of our support.

I wish to mention Kilbrandon—or, rather, devolution. I agree with the Secretary of State that it is absolutely right that there should be discussion and consultation. It would be wholly wrong for a new Government to take a decision in the light of this report which is an extremely complicated one—there are, I believe, five sets of proposals affecting Wales encompassed in it—and I believe it only right that there should be further discussion and consultation and that this should not be too hurried.

The majority report—that is, the report of six people—recommended the reduction of the number of Welsh MPs at Westminster and the end of the office of the Secretary of State for Wales. I listened to the right hon. Gentleman the Lord President winding up the debate on 18th March. He was asked by my hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur) whether he could give two quick assurances. The first was whether he rejected the Kilbrandon proposals that the office of Secretary of State for Scotland should be abolished and that the number of Scottish Members of Parliament should he reduced.

The right hon. Gentleman said: certainly we should wish to retain the Secretary of State for Scotland and certainly we would not wish to see the number of Members of Parliament from Scotland and Wales to the House reduced."—[OFFICIAL REPORT, 18th March 1974; Vol. 870, c. 800.] This was an important statement which appears to have escaped people's notice. First, the Secretary of State referred to Wales with respect to the number of Members it would send to the House. He firmly stated that he would wish to retain the Secretary of State for Scotland. Perhaps the right hon. and learned Gentleman, or one of his hon. Friends in replying, could let the House know whether that applies equally to Wales. We in Wales would like to know whether it is the wish of the Government to retain the Secretary of State for Wales.

Mr. John Morris

I can immediately put the right hon. and learned Gentleman out of his misery. There will be no difference between Wales and Scotland. My right hon. Friend was asked the question by a Scottish Member. When the right hon. and learned Gentleman uses the phrase "We in Wales", the House will have fresh in its mind that the right hon. and learned Gentleman has failed to find a seat in Wales for many years.

Mr. Thomas

I must say that I am rather horrified that the right hon. and learned Gentleman, who is fresh to his office, should have to cling to the old taunts put forward during his years of Opposition. I had expected him to have acquired a little added dignity and possibly extra humour. I am glad that he has confirmed the statement that the Government wish to retain the Secretary of State for Wales and for that reason reject the majority recommendation of Kilbrandon.

I will put another question in that case, because the right hon. and learned Gentleman did not answer it at Question Time the other day. We can assume that the Labour Party policy to which he referred of a directly-elected council for Wales will be deferred while consultations and discussions are taking place. Meanwhile there is the Council for Wales, which has come to the end of its period of life. What does the Secretary of State intend to do about reconstituting that Council? It has been of enormous value in advising both myself and my predecessor. It is important that a statement should be made about this. I do not want it made now but if we could be told by the Government spokesman tonight what is intended for the Council for Wales, it would be helpful.

The right hon. and learned Gentleman knows that just before I left office I was intending to reconstitute the Council, knowing that there would be a period of time while Kilbrandon was being discussed when it would be needed so that it could continue to give advice to his Department.

I was interested in what the right hon. and learned Gentleman said about steel. It is right that there is much that Wales can welcome in the strategy of the British Steel Corporation. I was interested to hear what the Government propose. The Secretary of State said that they proposed to stop the closures in Ebbw Vale, Shotton and Cardiff and to have an immediate review of steel requirements. Then he added, I think, "Without interfering with the present investment programme".

The timing of closures is of great importance and is a matter in which I have been interested. It was clear that the BSC would be flexible in its timing of closures. I hope that the right hon. and learned Gentleman is not suggesting that the major development of capacity at Port Talbot to 6 million tonnes, the expansion of Llanwern, the major investment in the finishing processes—£45 million in Ebbw Vale and £27 million at Shotton—will be in jeopardy because the Corporation made it clear that its strategy had to be considered as a whole and could not be dealt with piecemeal.

That should be clear. I know that it is the intention of the Secretary of State that this halting should take place without interfering with the present investment programme. The largest investment programme ever in the industry is involved. What is at stake is not just the future of a particular steelworks but the future of the whole steel industry. Unless this industry is modern, efficient and competitive, there will not be just a loss of jobs in some areas there will be the collapse of the whole industry. The security of 50,000 jobs in Wales is involved because if the strategy is carried into full effect these jobs would be absolutely secure.

It is always dangerous for a Government to take over the commercial decisions of an organisation such as the BSC. I am sure that what the Government wish to do is to go into the matter carefully to satisfy themselves that the strategy is right and that movement is possible, either over the timing of closures or of the actual closures. If it were possible, I know that the Government would be only too happy to accept it, and my hon. Friends and I would be only too happy to support the Government.

One of the difficulties of being in my position, having only recently been in the office of the right hon. and learned Gentleman, is that I have to resist the temptation to raise every subject within the responsibility of the Secretary of State for Wales. I will resist that temptation.

When I wished the right hon. and learned Gentleman well I meant it most sincerely. I believe that the Secretary of State for Wales still has a contribution to make. The Welsh Office has made a big contribution in the past to the well-being of Wales and today the right hon. and learned Gentleman's office and the Welsh Office still have much to offer.

I believe it was Kilbrandon which said that one of the problems facing us was the failure of communications between the Government and the people. This was referred to by the right hon. Member for Anglesey (Mr. Hughes) in his speech last night when there was talk of the remoteness of administration. I do not believe that that applies in Wales. I believe that the Welsh Office and its officials are very close to the Welsh people, that the contact between local authorities and officials and their understanding of the problems of Wales is quite unique.

There is close communication between the Welsh Office and the people of Wales. I think that the right hon. and learned Gentleman will find, during the time that he is Secretary of State, that he is served well by hard-working, loyal and efficient officials. He will find that they will serve him and Wales well. I should not like to see the Welsh Office or the right hon. Gentleman's office done away with because they have an important part to play in the life of Wales. Their functions should be enlarged.

I have no doubt that many of the policies which I have been following will be followed by the right hon. and learned Gentleman. I can offer him my support in all matters which my hon and right hon. Friends consider to be in the interest of Wales. He will not find us a divisive Opposition. He will find that we are an Opposition anxious to serve Wales in our way, as I am sure he wishes to serve it in his way.