§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Coleman.]
§ 9.3 p.m.
§ The Secretary of State for Wales (Mr. John Morris)It would be inappropriate to open the Welsh Day debate of this Session without reference to the death in August of our old colleague Jim Griffiths, the charter Secretary of State for Wales and the founder of the Welsh Office. His favourite words were "Deuparth gwaith ei ddechreu"—Beginning is half the battle. The foundations were well and truly laid. He started this new Welsh institution soundly, and all of us, of all parties, concerned with serving the people of Wales remember him and his contribution with both pride and affection. I believe that he would have been pleased with the milestone we have reached tonight in the setting up of a new Welsh body—the Welsh Development Agency—second only in importance, in my view, to the creation of the Welsh Office itself.
The ground we have just covered is a vital input to our consideration of the Welsh infrastructure. We will take that as read. There are many areas where I have direct or oversight responsibility which I would have liked to mention, but the House will understand if, given the time available, I deal with only some, leaving my hon. Friend the Member for the Rhondda (Mr. Jones), the Undersecretary of State, to cover some of the others.
First, the economy. In all our deliberations tonight the problems of the economy must inevitably be dominant. The twin evils of inflation and unemployment have to be conquered in Wales as in the rest of the United Kingdom. This is a battle that we have to win. We have to win it in Britain, and we have to win it in Wales.
Both sides of industry in Wales are determined to tackle the problems ahead. A fortnight ago the Prime Minister and I, with a number of my right hon. Friends, met the Wales TUC at 10 Downing Street. We have its agreement to limit wage increases to a maximum of £6 per week. The Wales TUC is deeply concerned, as we all are in Wales, about unemployment, particularly of the young. It knows the need to remain competitive in world 833 markets. It is indicative of the attitude in Wales on the shop floor that stoppages due to industrial disputes during the past quarter were the lowest for three years.
During my recent visit to the United States in search of new industry with the Development Corporation mission, I set out fully and frankly our problems and explained how we would tackle them. The Mansager mission recently came to Wales and was impressed by the joint efforts and the will to succeed in Wales. A team of trade unionists in Wales, together with my hon. Friends the Members for Llanelli (Mr. Davies) and the Rhondda, came to London before the visit so as to be available to answer questions on the journey down to Wales. I believe that then, and in the course of their journeys in Wales, our American visitors were impressed by the evident team effort of Welsh industry.
Our primary task is to overcome inflation. While I cannot pretend that our September measures will do more than alleviate the worst effects of unemployment, they will have an impact in both the short and the medium term.
In the short term, job opportunities will be created with school leavers particularly in mind. Nothing is more demoralising for the school leaver than to go out into a brave new world and find that he or she has no job to go to. Nevertheless, the figures of unemployed school leavers are down from 9,000 to 5,000, though a proportion of the reduction may be accounted for by those returning for further study. School leavers must have a measure of priority, and it is good to note that in the first 10 days of the Temporary Recruitment Subsidy for School Leavers Scheme 103 employers in Wales have made applications. I am sure that the House will be interested to know the latest available figure. The Manpower Services Commission's Work Creation Scheme is also operational and is now considering projects.
In the medium term, we are aiming at the stimulation of investment in industry which has been our particular blind spot in this country. In Wales in particular we are suffering acutely from a previous failure to invest. Thus our injection of £20 million for advance factories and our scheme for assistance to the hard-hit construction industry—details of the latter are 834 at present being finalised—are aimed at stimulating the economy, and Wales will be benefiting directly from these measures.
I want now to deal with advance factories. The Welsh share of the £20 million allocated for advance factories is £3¼ million, which I believe fairly reflects our needs. This will enable us to make a major addition to the 660,000 sq.ft. we have already approved since taking office 19 months ago. The total will now be boosted to over 900,000 sq.ft. in 19 months, compared with little over 400,000 sq.ft. in three and a half years by the previous administration.
§ Mr. Nicholas Edwards (Pembroke)rose—
§ Mr. MorrisI usually give way, but on this occasion, in fairness to the House, I shall not do so. The hon. Gentleman will have an opportunity to speak later.
In deciding on the distribution of this new allocation within Wales I have decided to reserve a small proportion to meet the needs of firms already in Wales whose efficiency and potential expansion is being limited by having to operate in obsolete or constricted premises. Not only am I prepared to re-let vacant Government factories to rehouse firms facing such difficulties but I am prepared to let advance factories to firms already in Wales which can offer satisfactory additional employment prospects. This is an important development in our policy on advance factories, and the basis of it is that indigenous Welsh firms should be enabled to make an ever-increasing contribution to the solution of our problems. Hon Members have brought examples to my attention recently. A firm may have excellent potential for growth which is being stunted because it is operating in grossly inefficient premises. We have winners in Wales, and I believe that they should be backed. This is an important new policy.
The bulk of the new allocation will be used to meet our prime need to attract new manufacturing enterprises to Wales from outside. Having taken account of the unemployment situation—and the prospects—of each area within the Principality, the availability of land, and having also had regard to the advance factories from previous programmes which will become available for letting 835 in increasing numbers as the months go by, I have decided on the following distribution: two factories for Wrexham and one each for Llantrisant, Caerphilly, South Glamorgan, Rhymney Valley, Blaenau Gwent, Ammanford, and Bangor, plus one near Shotton. There will also be four smaller factories in Cardiff, four smaller ones in Swansea, and two more in Anglesey. In addition, I am allocating two factories to Bagillt, thus taking account of the fact that the local authority would like to build factories on its own site, but cannot do so because of shortage of funds. In all, this adds up to a total of over a quarter of a million square feet.
Today's announcement covers 22 new factories, ranging in size from 5,000 sq.ft. to 25,000 sq.ft. Our previous programmes covered 72 new factories. This makes a grand total of 94 new Government-financed factories approved by this Government—94 in 19 months, compared with 25 in three and half years by the previous Government. [Interruption.] I have been asked questions on this matter before, which I have answered. The Opposition should know the answers by now.
The new programme of £3¼ million will be a major boost for the Principality, and it comes about in part as a result of our anticipated receipts from the European Regional Development Fund. Putting it another way, I doubt whether I should have been able to announce anywhere near as large a programme for Wales today but for the existence of the RDF—and, if I may say so, our persistence in making claims on it.
On the EEC front generally, the Welsh Office has continued to play a very full part in all aspects of the Government's participation in Community activities and we have continued to develop our close relations with the Commission.
Furthermore, this is only the first round of a continuing arrangement. The next phase will involve schemes which are being undertaken by public authorities in Wales. We have submitted a substantial block of these schemes to Brussels and are confident that the outcome will be most satisfactory. All this has not been achieved without an enormous amount of hard and enthusiastic work by 836 the Welsh Office. For several months we have sought to identify schemes which satisfied the criteria laid down in the Fund regulations and we have pursued the interests of Wales—and of public authorities in Wales—with vigour and imagination. That is not simply my opinion; it is also the view of such experienced officials of the EEC as Mr. Gwyn Morgan. Indeed, he claims that Wales has led the way—and that all the credit for that is due to the Welsh Office.
So far as the next tranche of projects is concerned, those which are approved will qualify for grants of up to 30 per cent., which will be passed on to the promoting authorities. Hard cash will, therefore, be channelled to Welsh authorities—direct grants which will have the effect of reducing their borrowing requirements and, hence, their loan charges.
When the decisions are taken by the Fund Management Committee the Welsh Office will be right there, and it will be my officials who will be presenting the Welsh applications. We hear a great deal about the need for a Welsh voice in Brussels. The truth is that the Welsh voice—the Welsh Office voice—is already being heard loud and clear at the EEC on each and every occasion when Welsh interests are involved. The Welsh voices are not those of expatriate officials but of officials whose day-to-day work in Cardiff enables them to maintain the closest contact with the Welsh scene.
I now turn to agriculture. The recent trends in livestock numbers shown by the provisional results of the June census are as unsatisfactory from the Government's point of view as they are from that of the industry. Inflation, which has made such a savage impact on farmers' costs, coupled with difficult and most unusual weather conditions, has been the prime cause. The latest fodder prospects are more reassuring, although much will obviously depend on the length and severity of the winter.
To assist the hill and upland sectors, we advanced the qualifying date for hill cow subsidies from 4th June to 1st January. This will apply also in 1976. The new beef régime and the announcement of target prices for the beef premium into the New Year are encouraging fatteners to buy store cattle. This confidence is 837 confirmed in the price levels of suckled calves and store cattle sales, which to date have been very satisfactory for both buyers and sellers.
In the sheep sector the benefits of the 20 per cent. increase in the guarantees and the increase in hill subsidies are apparent. There was a 30 per cent. increase in marketings of fat lambs in the three months June, July and August of this year. Overall Welsh farmers are now fattening two-thirds of the Welsh lamb crop. Very satisfactory prices for breeding ewes and store lambs in the autumn sales are also apparent.
Both my right hon. Friend and I are, however, deeply conscious of the situation in the dairy sector, and we have been able to take positive action to improve dairy farmers' returns. The average guaranteed price for the 1975–76 year will now be 4 per cent. above the price set at the 1974 Annual Review; that is to say, 37.04p per gallon compared with 26.27p.
I have continued to meet representatives of the farming industry in Wales. I know their concern whether the new price will be sufficient to restore confidence. In this context I would particularly stress the point made by my right hon. Friend the Minister of Agriculture in his statement of 15th October when he said that there would be scope for a further increase at the beginning of the next milk year, to be decided after the Annual Review.
Next, I turn to public expenditure. I know that this is a matter that is causing anxiety to the Conservative Front Bench, although it is not always consistent on this score. Any counter-inflationary policy implies some check to demand. It would be inconsistent to hold back demand on one side while letting spending by Government, central or local, maintain continuing inflationary pressure on the economy. We have thus had to apply checks to some local authority spending on items—health, education and social services—which are of intimate concern to us all. We must try to see that this is done with compassion and that the poor and needy are protected as far as possible.
In the health field, for example, I am afraid that we must, in prudence, be prepared with plans to run the health service to the best possible benefit of our people on the basis that there may be very little, 838 if any, growth of resources in the next few years. One major problem will be that of priorities and of choice which must be faced in a service where demand will always expand to outstrip resources.
I do not believe that there is cause for despair. I repeat that the health service is not breaking down; nor are the personal social services. We shall weather the difficulties, and in the meantime, with the help of the Royal Commission, we shall prepare ourselves for the time when we can again make greater strides forward.
Our efforts must be concentrated on defeating inflation. This is our overriding concern. Without success here, all our aspirations will be lost. In the local authority sector it is for local authorities to decide how best they can meet the need to moderate their expenditure next year. However, it is valuable for us to be able to have discussions with the authorities, through their associations, on policy matters which have major financial implications. The Welsh Consultative Council, which I set up and chaired, has met twice. I am convinced of the usefulness of this new machinery.
I turn now to housing. Since we entered office, my colleagues and I have made a determined effort to tackle the problems of housing in Wales. We want more new houses. We want a blood transfusion into our older housing stock, to extend its life and improve living conditions.
New housebuilding shows a marked improvement. In spite of everything, in the public sector, completions for the first eight months of 1975, at 5,233, are 114 per cent. up on the corresponding period for 1974 and already exceed the figures for the whole of 1974. Starts, at 6,132, in the same period, show an increase of 18 per cent. on the corresponding period in 1974. Since January of this year the Welsh Office has approved cost yardsticks for schemes involving 6,472 dwellings compared with 4,351 for the same period last year—an increase of 49 per cent. This is tangible evidence that housing authorities have responded well to the Government's call to expand their building programmes to meet the manifest need.
In the private sector, too, there is an encouraging upward trend. In the first eight months of 1975 starts at 4,660 show 839 a 3 per cent. increase over the corresponding 1974 figure, while completions, at 5,942, also show a slight increase over the corresponding period in 1974. This means that over 11,000 new houses have been provided in Wales this year, and there are another four months still to come. Thus, once again real progress is being made—not as much as we would wish, not as much as any of us would wish—but it is there.
Unfortunately, there has had to be a limitation of money spent by local authorities on improving their council houses. The first priority was contractual commitments that had to be honoured. This, unfortunately, left no scope for any new improvement schemes to be included this year. Next year there will be a further allocation and we will seek to ensure that the money goes where the need is greatest.
The same problem has arisen on local authority lending. Because of our older housing stock this is a facility in intense demand in Wales, and by 26th June I had to suspend lending as the total allocation for 1975–76 had already been committed.
This halt is, I hope and believe, temporary. I am reviewing the situation, but cannot at present say when lending can be resumed. In the meantime, as my hon. Friend the Under-Secretary was able to tell the House on Monday 13th October, the Building Societies Association has stepped in by making available an additional £5 million worth of money for mortgages lending in Wales.
On derelict land reclamation, I am glad to be able to tell the House that local authorities will tomorrow be receiving details of a number of schemes—involving public expenditure of £13.2 million—which have been selected for grant-aid assistance in the current and the two succeeding financial years.
If I might adapt the famous epitaph to Sir Christopher Wren—if Members want proof of the value of this work, look around. At Cilfynydd—th Albion tip; at Aberaman—the 100 acre industrial park; at Troedyrhiw and at Gowerton, at Corris and Blaenau Ffestiniog and other places. Derelict land reclamation is proceeding in Wales with a momentum and success of which all involved can be proud.
840 I now turn briefly to devolution. As the House knows, we intend to publish a White Paper in the near future setting out our detailed proposals for devolution to Wales and Scotland. This White Paper will present the results of many months of intensive, and may I say arduous, study of constitutional problems of great complexity and importance. We have been determined to produce a workable and stable scheme which will be widely acceptable. I believe such a scheme will be presented, and I certainly will welcome the constructive scrutiny and debate which I trust will follow.
In this context I should like to take the opportunity to set the record straight on one matter. There have been recent statements made or reported in the Press which have implied that civil servants have obstructed the Government's work on devolution. I regret to say that some of these statements have been made by hon. Members opposite. I want to refute those allegations as quite baseless. In the immensely complex and difficult task to which I have referred civil servants have, as they always do, served the Government loyally, impartially and well. I know that we shall receive that same loyalty in the equally difficult tasks which lie ahead in implementing our proposals which, when approved, will bring such benefits to the people of Wales. I do not mind being attacked. My skin is thick enough. But I do object when people who cannot defend themselves are attacked.
I am aware that there are many areas I should have covered had there been time. I hope, though, that what I have said will make it clear that we have our priorities right in the Welsh Office. Jobs and homes are still our main preoccupation. Since 1st July, moreover, when I assumed new industrial powers, the economic aspects of my executive responsibilities have broadened. This brings to the Welsh Office a new workload of the utmost importance to the life of Wales. Whatever the difficulties, and indeed because of them, our task is to prepare and plan for the future. Hence, for example, the drive to build the M4, the enlarged advance factory programme and the ongoing derelict land programme.
It has been a Session without parallel for Welsh legislation. The imaginative 841 concept of the Welsh Development Agency has already won public approval. The Land Authority for Wales will provide the basis for the comprehensive development of our community land legislation throughout Wales. I believe that the least we can do for our people is to provide the institutions that are required—the tools that are needed for the job in hand—to improve the quality of life and to carry out our policies for ensuring a firm basis for prosperity in the years to come.
These are difficult times for all of us. There is so much to be done, and the resources are so limited. But although we must disappoint some immediate expectations, we must not forget how much is being achieved right throughout Wales.
I am sure the House would wish me, in conclusion, to express its thanks to the many thousands, in every walk of life—public service in particular—who serve Wales and who make this progress possible.
§ 9.30 p.m.
§ Mr. Nicholas Edwards (Pembroke)The Government have been in office for almost 20 months. It is 19 months since we have had a Welsh day debate on the Floor of the House, and it is a matter for censure that, after this exceptionally long period, the Leader of the House has given us only one hour and 56 minutes in which to debate all the affairs of Wales. He has fobbed us off with a mere stopgap after the debate on the Welsh Development Agency Bill.
§ Mr. Gwynfor Evans (Carmarthen)rose—
§ Mr. EdwardsI will not give way. The Secretary of State has set an example. As we have only one hour and 56 minutes, it would be better if none of us gave way.
It is also a matter for censure that even the extra hour we insisted upon was granted rather grudgingly, and if the Leader of the House had had his way we should have had only 56 minutes in which to debate all these wide responsibilities of the Welsh Office. It is further a matter for censure that the Leader of the House should have told hon. Members at Business Questions last week that more time had been given to Wales this 842 Session than for many Sessions past. I regret to say that that statement was simply untrue. Apart from the Second Reading of the Welsh Development Agency Bill and some private Adjournment debates, there has been no Welsh debate since March 1974.
It is not enough to say that we have had the Welsh Grand Committee. We have had no more discussion in the Grand Committee than in the preceding period. Indeed, we have had rather less. Neither the proceedings of the Grand Committee nor those on a specific Bill are the substitute for the wide-ranging debate on Welsh affairs that is traditional. These shabby proceedings are an insult to the House and an insult to the people of Wales.
Unhappily, we seem to have a Leader of the House of Commons who is insensitive to these matters and impervious to criticism. Perhaps at least the Secretary of State feels some sense of shame about what has occurred or perhaps there has been no debate because he feels a sense of shame about two sets of figures which condemn him and which form the text for this debate. These are the figures for industrial production and for unemployment.
The figures for industrial production are so bad that when I first heard them in the House I could not believe that I had heard them correctly. There is nothing in the record comparable with the drop of 10 points from the previous quarter. It is the sharpest downturn since the 1930s. It takes industrial production in Wales back to the level of 1967. The fall was more than twice that of the United Kingdom as a whole.
The fall in manufacturing output is even more catastrophic, down by nearly 13 points in the quarter, by nearly 24 points from the peak in 1973, and nearly eight points worse than in the three-day week. Under this Labour administration we have the production of a two-day week achieved in five. Iron and steel production fell by 43 per cent. in the quarter, and it is a staggering and disturbing fact that the level of production is now little more than half what it was five years ago.
These figure are the measure of the Government's failure in Wales. For all the euphemisms about development agencies and advance factories, in 20 months they have ruined Welsh Industry 843 They cannot blame it all on the world recession. Production in Wales has fallen far more than in any other Western industrial country and it is still falling. However, in the same quarter that production in Wales fell from 105 to 94, in Japan it rose and in America in the same quarter it rose at an annual rate of 1.9 per cent., and has accelerated sharply since. The Government base their hopes and policies on the expectation that the capitalist countries will rescue them from their crisis of Socialism.
The second set of figures are those for unemployment. Unemployment in Wales at 76,496 in September and 70,447 this month is now almost exactly at the same level at it was in the autumn of 1940 and the highest since 1941 except for two freak months in 1947. The seasonally adjusted figure this month at 64,300, which provides a better standard of judgment of our economic state, is at its highest level since 1946, again excepting those two frozen months of 1947. The seasonally adjusted figure is over 13,000 higher than under any Conservative Government since the war, and 17,500 higher than in any autumn since the war.
The number of unemployed, excluding school leavers and adult students, is rising remorselessly at the rate of about 3,300 a month and at this rate there will be over 71,000 out of work by Christmas. Because of the lag that occurs between a fall in production and the corresponding fall in unemployment figures, it seems only too likely that some time next year there will be 100,000 out of work in Wales.
I shall deal later with unemployment, its causes and impact. However, the House may feel that it is entitled to judge these disastrous figures against the standards established by Labour Ministers and Labour Members. In 1971, when unemployment in Wales was 16,400 lower on the adjusted figures than it is today, the Secretary of State told the House:
If there is anything that thoroughly discredits the Government it is their complete failure to deal with the employment situation.He said of the Opposition:I do not know how familiar they are with the problems of people who month after month are being denied the opportunity of employment.844 He described how he met them week by week in his constituency. He spoke again this evening of the tragedy of those leaving:school, college or apprentice course—for whom the world which should be an oyster—".At that time there were 1,100 school leavers unemployed in Wales. On 11th August this year there were 11,600, 10 times as many out of work, and over 9,000 were still unemployed in September. We have just heard that 5,000 are unemployed in October.The right hon. and learned Gentleman concluded his speech with the remarks:
people in Wales know that the Conservative Party is synonymous with unemployment, and they will not forget it."—[Official Report, 23rd November 1971; Vol. 826, c. 1216–20.]The reality is different. Labour is now the party of unemployment. In the valleys of Wales men and women who originally voted Labour because of unemployment now face unemployment because of Labour. I assure the Secretary of State that:the people of Wales will not tolerate the high level of unemployment, the bankruptcy of the Government's policies, their apologies and their failure to do anything to avert the great human tragedies which occur in household after household from one end of Wales to the other."—[Official Report, 9th March 1972; Vol. 839, c. 1740.]Those are the words of the right hon. and learned Gentleman when he addressed the House then.In August of the same year the hon. Member for Rhondda (Mr. Jones), when referring to a total of 51,500 unemployed, said that it was an absolute condemnation of the Government. In January of the same year the hon. Member for Bedwellty (Mr. Kinnock) said:
Even since the days of John Maynard Keynes, any Government allowing unemployment rates to rise not even as high as this rate"—he was referring to 56,000—have been guilty if not of a criminal act, certainly of criminal negligence"—[Official Report, 24th January 1972; Vol. 829, c. 1089.]Let us look at that act of criminal negligence and see how it came about. Let us see why there is about 14 per cent. male unemployment in Anglesey and Pembroke Dock, 11 per cent. in Wrexham, almost as much in Brynmawr and Milford, and 8 per cent. or 9 per cent. in Conway, Pontypridd and Llandrindod 845 Wells. The major share of the blame rests fairly and squarely on the shoulders of the present Government.Of course, Britain faces the problem of the commodity price increases and the world recession, but other countries faced up to that problem, took the necessary action and are now back on the road to expansion. Their unemployment figures now fall as ours rise. Britain failed to act, and is now in grave danger of being left behind.
The other set of problems are those of our own making, and they are far more intractable and far more important. For most of 1974 the Labour Government were much more interested in winning the October election than in the management of the economy. They increased Government expenditure, maintained consumer spending and allowed wages to rise, but squeezed margins and profits, placed an intolerable tax burden on industry and destroyed industrial confidence by a series of reckless measures. Industry has been caught in a Morton's fork, pinned between Government controls and escalating costs.
It seems likely that the rate of profits earned by companies in real terms has been halved since the early 1960s. As companies traditionally obtain three-quarters of their funds from internal sources, it is not surprising that they have failed to invest. It is not surprising that they have shed labour.
Inflation at the present level is a cancer. It destroys the firms that provide the jobs. The root cause of the inflation is excessive Government expenditure. In his first Budget speech of 1975, the Chancellor of the Exchequer called it a rake's progress and said that it had to stop, but the biggest debauchee was the Government themselves, and they have not finished their excesses yet. Spending this year is already up by 47 per cent. Is it to come out of the wage packet in taxes or by printing money? The Prime Minister has said that it will be provided by printing money, and the last quarter's money supply figures confirm that political admission.
There is no sign of a check. The Chancellor at the Mansion House made it clear, seven months after he said that the rake's progress had to come to an end, that there was to be a further spree.
846 Something has to give, and one of the things to give is capital investment. Labour Ministers spend most of their time these days talking about creating industrial investment. The Secretary of State spoke this evening of a previous failure to invest, but the immediate prospects is a drop of 15 per cent. in manufacturing investment this year followed by a further drop in 1976. That means more men and women out of work. It means that we shall not be ready for expansion when it comes.
The tragedy of the present situation is that hardly at all has it been caused by measures to check inflation. Those out of work have not even the satisfaction of knowing that their sacrifice is part of the price for curing the sickness. It is the sickness that has put them out of work. They are there because of the cowardice and folly of the Government in the past 20 months.
Before speaking of the cure, I want to say a word about the criticisms launched by the Secretary of State tonight and in a reply at Welsh Question Time which was as politically dishonest as it was inadequate. He suggested that I was debarred from proposing public expenditure cuts because I had pressed for benefits for my constituents. But the right hon. and learned Gentleman knows that politics is about priorities. Should we go short of schools for Wales and, for example, spend £7 million on subsidising each production Concorde aircraft? The right hon. and learned Gentleman will have to decide his own priority.
The Secretary of State cannot, with honour, suggest that an hon. Member is disqualified from pressing a particular case while urging general economy; still less is an hon. Member disqualified if he spells out the choice and the economic realities behind it. I have repeatedly warned my constituents. At a great public meeting about our hospital I warned them again and urged them to select their priorities. After that meeting I wrote to the Under-Secretary a letter in which I set out the arguments very carefully. I said:
My party has urged the present Government to reduce the huge and immensely wasteful expenditure on blanket subsidies. We have urged you to halt your equally expensive and unnecessary expenditure on nationalisation. Within existing programmes, there is plenty of room for both economy and choice. I heard 847 on the BBC this week that £2 million had been made available in Wales for educational reorganisation, in other words the abolition of grammar schools. I have no doubt at all that my constituents, given a choice between spending money to save the lives of their children or the abolition of the grammar schools in Haverfordwest would prefer the money to be spent at Withybush. Equally I am sure that, given a choice between, for example, spending money on straightening bends on minor rural roads, a process which still continues, and having 14 extra children's beds, they would choose the beds. You cannot, therefore, dodge the issue or dismiss the case that has been advanced simply on grounds of economy. Anthony Crosland said over the weekend: 'The Government could not ignore public opinion in deciding which areas of public expenditure should have priority.' At a meeting in Haverfordwest last night, a large and representative audience unanimously resolved that this was their highest priority for public expenditure.Afterwards, I returned to the subject and the local newspaper reported:Pembrokeshire's M. P. Mr. Nicholas Edwards yesterday gave a clear warning to the hospital campaigners not to expect too much too soon. 'If there is going to be a general campaign for this and that in every direction. I personally think that will be a great mistake,' he declared….As an MP, it was his duty to represent the wishes of the people of Pembroke, but it was also his duty to tell people bluntly that in the current economic crisis, money could not be found for every desirable project.I wonder how often the Secretary of State has been as blunt as that with his constituents. I only wish he would be that honest with the House and the Welsh people and tell them of the sacrifices that will be needed. Let us have no more of that sort of criticism and talk of hypocrisy from him. Let us have no more of his absurd theatricals to disguise the fact that the Government are failing to take the action necessary first to halt the reckless increase in public expenditure and then actually reduce it. When they start that task and begin to switch resources to the productive sector, there may for a time be more unemployment, although doing away with indiscriminate subsidies, which should be the first step, will add nothing to unemployment levels.The sooner the job is started, the sooner it will be finished and the lower will be the level of peak unemployment. If the Government had done this any time in 1974, they would have started with a base of fewer than 40,000 unemployed. If they start now, the unemploy- 848 ment caused by their change of course will have to be added to the total of 63,000. If they delay, it may have to be added to a total of 100,000. The fever is much higher and the cure will be much more unpleasant, but if the Government shirk the cure and inflation runs right out of control, unemployment will be not 63,000 or 100,000, but double that.
It cannot all be done at once—the scale of the problem is too great for that—but the advance must be halted and there must be a real and massive reduction in public expenditure and a switch to the productive sector. This is the only way in which to improve living standards, enhance personal choice and preserve employment. If industry is to get on with its job of creating wealth, we must restore the environment in which it can do so. This is especially important for small businesses.
In May 1974 there were 4,637 factories and plants engaged in manufacturing in Wales. A total of 63 per cent. of them—9 per cent. more than in the United Kingdom—employed between one and 10 people. This adds up to almost one-quarter of the manufacturing work force. Nearly 4,000 of the 4,637 firms employed 50 people or fewer. This is the critical manufacturing sector. The overwhelming majority of concerns are small.
In the retail trade there are over 8,000 grocers employing 17,000 people. There are nearly 3,000 corner shops, confectioners, newsagents and the like employing about 13,000 people. Wales depends upon its small industries and small businesses, and no sector has been hit more by the nightmare of inflation, by the administrative nightmare imposed by Governments, by the nightmare of unjust pension contributions, and, above all, by the nightmare of taxation and rates. Further massive rate increases are now certain in Wales. Local spending seems likely to be about 40 per cent. up. These increases will fall harshly on the domestic ratepayer, but in many cases they will fall particularly harshly on the small businessman. The Government apparently have no consolation to offer on that front.
If Wales depends on its small businesses and small industries, it depends, too, on agriculture. In many parts of 849 Wales, in Carmarthen, Cardigan and Powys, over 20 per cent. of the working population is employed in the industry. A very high proportion of the labour force is engaged in work which is directly dependent upon agriculture. A recent study has shown that in Gwynedd about 18 per cent. of the direct income of households is derived from agriculture. The health of the industry is a matter of acute concern not just to farmers but to the whole of the community. This point has been brought home by the closures and lay-offs in dairies and factories in Pembrokeshire, Carmarthen and elsewhere.
The story of agriculture in the last two years has not been happy. We have seen a catastrophic fall in farm incomes. We have had a series of stop-gap measures by the Government and delayed rescue operations which have done nothing to restore confidence. That confidence is badly shaken. In July the President of the FUW wrote to the Minister of Agriculture and to the Secretary of State about the
anger and anxiety felt by farmers".He spoke of the Government following a policy which he described as "mistaken and ultimately destructive." He described a climate of "uncertainty, disillusionment and bitterness and said that farmers condemned the White Paper as "a cruel deception".In this atmosphere created largely by political decisions—not by inflation and the state of the harvest, as was suggested today by the Secretary of State—it is hardly surprising that production has plunged. United Kingdom farm output is expected to fall by 7 per cent. this year. In Wales artificial insemination calvings are down 11 per cent. from the year before. The home production of butter has slumped from over 90,000 tons in 1972 to probably less than 30,000 tons this year. Huge quantities of cheese are being imported from Europe and Ireland.
I ask the straight question: what are the Government's intentions for the milk manufacturing sector? Do they want it, or do they intend to kill it and concentrate instead on the liquid milk market?
Nowhere has the impact of these events been felt more severely than in Wales, where the vast majority of farmers are engaged in livestock production. The collapse of the beef market last autumn, 850 entirely as a consequence of a political decision by the Government, cut Welsh hill farm incomes by at least 50 per cent. from a level already 17 per cent. below the average livestock farm income in England and Wales as a whole. That is why the unions have pushed so hard for an additional hill cow subsidy payment to tide the producers over until they have recouped their losses.
Prices are better this autumn, but they are by no means enough to restore what has been lost or to establish a basis for profits in the future. All this is the achievement of the present Government, and particularly the Secretary of State for Wales. He boasts of the recent devaluation of the green pound. But even now it is insufficient, particularly in Wales, where the fodder situation is atrocious. In any case, this is the fourth change since October 1974. The Government's technique seems to be to push the victims head under the water until he has almost drowned and then take the credit for having picked him out again. The Secretary of State has been told within the last 20 hours by leaders of the Farmers' Union of Wales that what has been done is not enough and that if the milk industry is to be saved, further action is called for. The long-term tragedy is that short-term measures have been used in such a way as to dissipate the country's productive resources. We condemn the Government for their treatment of the industry.
I have some critical things to say about the Secretary of State's conduct of his office. There has without question been a deplorable deterioration in the standard of its efficiency in handling Members' correspondence. One used to hope that one would receive a reply from a Government Department inside three weeks, but the situation has now deteriorated sharply. We wait months, not weeks, and even then it frequently requires a series of letters and telephone calls to provoke a response. I asked my secretary yesterday to take a random sample of 10 letters out of the files. They included one reply taking 11½ weeks, one taking seven weeks, three taking four weeks and only half of them three weeks or less.
I also think it deplorable that so often the Secretary of State palms off the task 851 of receiving important deputations on to his Under-Secretaries; but worse is his refusal to see them at all. The Nationalist Party has tabled a motion about the Secretary of State's refusal to meet local authorities in Dyfed over the Cleddau Bridge. The right hon. and learned Gentleman will know that I have written to him strongly on the same subject. It seems to me that when a county council, a number of district councils and several local Members of Parliament together ask to see the Secretary of State about a matter which they believe to be of vital concern, it is insufferable arrogance for him to refuse.
It is no good the Secretary of State saying that he knows the facts already. Having refused to accept the representations that have been made to him and the recommendations of his own inspector, he should be prepared to hear at first hand the consequences of his decision. Nor is it any good his talking about public expenditure, because what we are now concerned about is not spending—that has been done—but whether payment should be made unfairly by the ratepayers or fairly by the taxpayers.
I have two other points that I wish to make. Both concern priorities about which—[Interruption.] The Secretary of State cannot talk about hypocrisy. He made one of the most hypocritical speeches that I have heard in the House when he talked about his concern about the Welsh economy, which he has brought to the point of disaster.
I have two other points that I wish to make. Both concern priorities, about which I spoke earlier. The Government face a difficult question of priorities in deciding the future of Shotton. It is a decision that has many implications not just for North-East Wales but for Port Talbot and for the future of the industry as a whole. It is urgent that a decision is not delayed much longer or the damage that will be done to the British Steel Corporation's investment programme will be considerable. As to the merits of the case, at a time when it is by no means clear that the big plants can be made to work efficiently, it may be no bad thing to have an insurance policy.
852 The other question of priorities concerns housing. The Government have decided to press on with their programme of municipalisation but have cut off—in Wales suddenly and without warning—the local authority mortgage scheme. They are concentrating resources on expensive new dwellings when in many cases at much lower cost they can ensure the modernisation and maintenance of older property, obtain the personal contribution of individual families to the purchase cost and to maintenance, and help to meet one of the strongest of human aspirations—home ownership.
I am certain that the Government have their priorities wrong. There is now a yawning gap that is not being adequately filled by the building societies. Hundreds of families are suffering disappointment and hardship because of this cruelly misjudged decision. I cannot imagine how the Secretary of State can call this policy a "blood transfusion" into our older housing stock.
I have charged the Government with many mistakes. I hope that at least they will show that they acknowledge one or two of them—
§ It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.