HC Deb 26 July 1976 vol 916 cc14-6
9. Mr. Wyn Roberts

asked the Secretary of State for Wales what proportion of the proposed public expenditure cuts will be borne by Wales; how it will affect employment in the Principality; and if he will make a statement.

Mr. John Morris

The reductions in 1977–78 in the public expenditure programmes within my responsibility will be of the order of £12 million at 1976 survey prices. On the other hand, an extra £20 million has been made for housing in Wales and in addition extra resources will be made available to the Welsh Development Agency. There is no reason to believe that employment in Wales will be more adversely affected by these changes than elsewhere in the United Kingdom.

Mr. Roberts

Is the right hon. and learned Gentleman aware that the absence of a detailed breakdown of the £12 million suggests that these cuts were imposed upon him directly rather than that they were the result of consultation? Secondly, does he not regard the combination of a reduction in regional employment premium, delayed payment of investment grants and increased employers' national insurance contribution as particularly unfair to assisted areas such as Wales? Is he aware that the resultant unemployment may be considerably more than—possibly three times as great as—the 60,000 projected unemployment talked of by the Chancellor of the Exchequer? Finally, what additional funds are to be made available to the Welsh Development Agency, or are they to be a sort of conciliatory gesture?

Mr. Morris

I listened to the hon. Gentleman with great curiosity. I begin to wonder which party he represents because he speaks with a forked tongue. On the one hand he questions the public expenditure cuts, and then he wants increased public expenditure. He must make up his own mind about this.

Nothing was imposed. All this came about as a result of consultations and discussions. I am not prepared at any time to disclose discussions which go on in the Cabinet. The cuts are broken down into particular items pro rata with the English Departments. Given the reputation of the Tory Party for house building in Wales, I should have thought that the hon. Gentleman might welcome the substantial increase in money for house building in Wales.

Mr. Anderson

Will my right hon. and learned Friend indicate what is the likely effect on unemployment in the construction industry in Wales which is now in crisis? Secondly, he has fought single-mindedly and very effectively for the M4 as vital to the development of Wales. Will last week's cuts have any effect on the development of the M4?

Mr. Morris

I continue to give, as I have done throughout my period of office, top priority to the building of the M4. I believe that the completion of this long-awaited road is of the utmost importance to the industrial regeneration of South Wales and its future.

As regards unemployment, all I would say is that the estimates I have heard in the past have been grossly exaggerated and that the extra money we have obtained for house building in Wales will certainly help greatly in the construction industry.

Mr. D. E. Thomas

I welcome the extra money which is to be made available for housing in Wales, but will the right hon. and learned Gentleman explain what this sum is extra to? There were planned cuts on a fixed programme. Is not this merely a restoration of what ought to have been a reasonable level of spending to change the position where one in every seven houses is unfit? Expenditure on housing has to be seen in relation to the overall problem.

Mr. Morris

The cuts were imposed in the down-trend in house building in Wales as part of the philosophy of Tory Members. We have a tremendous record for new house building in Wales of which I am very proud. The figures for last year rose 140 per cent. on the previous year. This will mean that last year I obtained between £20 million and £30 million extra for house building in Wales, which would bring the figure to £183 million on 1975 prices compared with the Conservative figure of £101 million. Next year there will be an additional £20 million, which will give us, again at 1975 prices, £162 million compared with the Conservative figure of £105 million.

Mr. Nicholas Edwards

Will the right hon. and learned Gentleman explain how the massive increase in wage costs which is now to be imposed on Welsh industry by the Chancellor's announcement and which will have a particularly severe effect in the regions can lead to the upturn in industrial development and production which we all so much desire?

Mr. Morris

Our vital need as a country is to ensure that we conquer inflation, and in that I should have thought that we would have the support of the hon. Gentleman. Instead, what he wants on the one hand is a decrease in public expenditure, yet on the other hand he is opposed to cuts.