HC Deb 05 November 1979 vol 973 cc20-1
17. Mr. Alan Williams

asked the Secretary of State for Wales what assessment he has made of the prospects for the Welsh economy.

Mr. Nicholas Edwards

The Welsh economy is now suffering from the inevitable consequences of excessive public spending and borrowing by the previous Government, from a restrictive industrial environment, from a general level of wage settlements that has borne little relationship to output, and from a stagnant world economy.

The purpose of our present measures is to restore the competitive position of British industry and to bring down inflation.

Mr. Williams

Does not the right hon. Gentleman understand that the Welsh economy is also suffering from the activities of this Government, pushing inflation back up to 20 per cent? Does he also appreciate that we shall feel the impact of unemployment reaching almost 2 million again, as a result of this Government's policies, and that Wales will have to face that situation having lost much of the regional policy protection? We shall therefore bear more than our normal share of the increasing unemployment. Is the right hon. Gentleman aware that an official at the EEC said that the right hon. Gentleman did not even object to the withdrawal of EEC subsidies for job creation for the young in Wales? How can he justify that attitude in the context of what I have just said?

Mr. Edwards

I shall deal with the last point first. The Commission has already withdrawn that suggestion and apologised for making it. It was incorrect. I went to see Commissioner Vredeling and expressly raised the point with him. The matter is now under consideration. Of course, it was the previous Government's policy on public expenditure and borrowing that has been the major factor in creating the inflation from which we are now suffering. The right hon. Gentleman urges additional public expenditure, but one wonders what price he wishes to pay for it—either by increases in taxation or increases in interest rates. I remind the hon. Gentleman that we cover 94 per cent. of the working population of Wales in our regional inducements, as against 25 per cent. in the United Kingdom as a whole. In the special development areas that means that the relative attractions are more substantial than they are compared with areas that are not covered.