WELSH AFFAIRS

HC Deb 04 February 1980 vol 978 cc35-168

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

3.48 pm

The Secretary of State for Wales (Mr. Nicholas Edwards)

This is the second Welsh day debate since the general election. Whatever other criticisms may be levelled against me and my colleagues today, I hope at least that no one will suggest that I am reluctant to provide Welsh Members with opportunities for debate. Our determination to restore the Welsh day, abandoned by our predecessors, and our decision to bring it forward at this difficult time, is a recognition of the seriousness of the situation we face and an acknowledgement that it should be fully debated.

The future of the coal and steel industries and the industrial and social consequences of the BSC's proposals will form the centrepiece of the debate and I shall deal with them before commenting on a few other matters of great importance to Wales.

First, I want to say a word about the economic background to those events. They are events which any Secretary of State for Wales, faced already with a depressing inheritance of social and industrial difficulties, would do almost anything to avoid. But no Secretary of State can, any more than can Government or people, dodge and evade economic reality for ever. It is at least in part because the previous Administration tried to do so that our problems are so formidable today.

Search though I may, I can find no way of avoiding the need to adjust to the further doubling, within the last 12 months, of world oil prices, or of the necessity to face up to the financial consequences of our spending far more than we produce. Neither am I able to see a way in which our industry can be insulated from the need to be competitive, and adjust to the size of the market it can obtain.

As I reminded an audience in my constituency 10 days ago, by spending more than we earn we are adding staggering amounts to the burden of public debt. The previous Government added £41 billion to it during their period in office, and it is likely that about £9 billion will be added to it this year. The consequence is that we are now spending about £10 billion each year in debt interest—more than the total spent each year on the health and personal social services, on education or on defence.

The inescapable consequence of the need to fund this huge burden of debt is high interest rates, which not only have unpleasant consequences for individuals, but which destroy industry, large and small, so that we produce even less. Unless we can escape from this destructive cycle I can see no way to avoid sharply lower living standards, and unemployment certainly higher than we are likely to face as a consequence of adjusting our spending to our output.

Faced with that situation there is no alternative—at least I have seen none seriously suggested—to the need either to cut expenditure or to raise taxes. There is a way—that is, to produce more—but I cannot see that happening with higher taxes and higher interest rates. Therefore, I accept, and support my colleagues in, the unpleasant but necessary task of reducing public expenditure.

That brings me to the argument whether we should continue using public money to sustain our steel industry at a larger size than it can itself support, by selling competitively in the market. Of course, I understand the argument of those who say that we face a temporary recession and that we should support the industry until the market recovers. But I have to face two unpalatable facts. The first is that if we add to the already enormous sums that have been paid into the steel industry in recent years that money will either have to come from the social services or by way of higher interest rates and taxes, which are likely to reduce output and destroy jobs in other industries.

Secondly, I have no evidence, and the Government have no evidence, to support the view that BSC's long-term assessment of the market is wrong or too pessimistic. The consequences of past Government interference are with us today, and I am not encouraged to repeat the process.

There are those who say—and no doubt it will be said today—that the BSC's decisions are entirely determined by the Government's adherence to the target that the BSC should break even by the end of the financial year 1980–81. But that is not a new objective. It was an objective that was given the backing of the previous Secretary of State for Industry, who sought to achieve it a year earlier. He stated in his White Paper—"British Steel Corporation: the Road to Viability"—: The over-capacity that would result from unchanged policies would be more costly than either the Corporation or the country can afford". The reality is that what now compels the BSC to act is not a financial target but the need to remain competitive with other countries' steel industries which are not standing still but which are moving still further ahead in their competitive position.

If the BSC does not adjust to its reduced market, losses will be bound to accelerate upwards again very sharply. No steel company in the world can operate so far below capacity and remain competitive.

Whatever the size of the future market, the BSC's ability to take its full share of it, to keep out imports and to export depends upon its ability to reduce its manning to the level of its competitors. If it does that, with all the new plant that is the result of recent investment, it has the prospect of success and of expanding production in future.

The Government are being asked to intervene in two ways—to impose a different judgment on the BSC of the size of the market—I cannot believe that would be right—and to delay. The TUC, in the meeting on Thursday at which I was present, asked for more time. Unfortunately, there is no reason to think that our problem will grow any easier by postponing it, although it is up to the BSC to negotiate with unions the time table for the reduction in manpower, as well as the details of the future structure of the industry.

Mr. Dafydd Wigley (Caernarvon)

The Minister states that one of the questions facing the Governmeint is that of judgment of the size of the market. Does he not accept that one of the options open to the Government is to control the size of that market in regard to imports, particularly from steel-producing industries that are indirectly subsidised through subsidies on coking coal? Does not that play a major part in the equation?

Mr. Edwards

I shall talk about coking coal later. With regard to import controls, we must remember that we are a trading nation. If we adopted additional controls other than those already exercised by the EEC, we would further damage our trade in the world. Also, our other industries, which depend on the steel industry for their supplies, would have less competitive supplies on which to base their efforts.

The BSC's decisions clearly have very serious consequences for the coal industry in Wales, although the real reason for the reduction in the demand for coking coal is the inability to sell steel rather than the closure or scaling down of plants. It should also be recognised that the coking coal problem is only part of the problem facing the NCB in South Wales, and the consequences of the BSC's position should be seen in context. Out of a total output of Welsh coal of 10.5 million tonnes, less than a quarter goes to the BSC in Wales. As hon. Members know, there are other high cost pits that the NCB believe might only have a limited life.

Obviously, a substantial reduction of consumption by the BSC will put South Wales pits at risk and lead to closures and loss of jobs, but they would be far less than some of the figures being bandied about, which include high cost pits that might have to be closed over a period, whatever the situation in the steel industry. No firm decisions have been taken by the NCB either on the timing or numbers, although the local management has put forward a number of possibilities.

There are no firm proposals from the National Coal Board, and I am unable therefore, at present to discuss firm figures here today.

Mr. Edward Rowlands (Merthyr Tydfil)

Do not the Minister's remarks contest the view of Mr. Philip Weekes, area director of the National Coal Board in South Wales, that the consequences of the combination of the rundown at the BSC and the large-scale imports of coking coal into South Wales—40 per cent. to 50 per cent. of the BSC's needs—will be massive closures and large-scale unemployment in the coal industry? Does the Minister deny the figures put forward by Mr. Weekes?

Mr. Edwards

Mr. Weekes has put forward a number of different figures on a number of different occasions.

Mr. Rowlands

That is not true.

Mr. Edwards

With respect, I have seen a great many different sets of figures. For example, I know that Mr. Weekes told a meeting of Labour Members recently that up to 10 pits might have to close. My point is that only a number of those closures are a result of the reduction in coking coal consumption. The coking coal problem is only a part of the problem which faces the National Coal Board in South Wales.

Mr. Rowlands

Has not the Minister had a meeting with Mr. Weekes? What did Mr. Weekes say about the number of jobs lost and pits closed as a result of the cutback in steel production at the BSC, and the amount of coal imported from the United States and Wales? Will the Minister give figures of the potential number of pit closures and lost jobs that have been given to him by the NCB in Wales? Does he deny that that is a reasonable assessment made by the NCB?

Mr. Edwards

I have been given a number of different estimates over a period by the National Coal Board. It has taken no firm decisions.

I have been asked about a subsidy for coking coal. The Government's position is quite clear. They have authorised, as part of their coal strategy, a substantial investment programme of over £600 million and are providing grants of more than £250 million. The Government have authorised the NCB to provide a coking coal subsidy from within its own finances and subject to its own commercial judgment. The NCB has asked for an additional £18 million towards the agreed cost of £33 million, but, since the subsidies and cash limits were agreed, the price of oil has risen sharply raising the Coal Board's headroom and the Government can see no reason why, on the scale of a total turnover of around £3,000 million, the NCB should not be able to find the necessary funds. At the request of the TUC last Thursday, we are again pressing the chairmen of the two industries to seek agreement.

The Government accept their share of the responsibility for cushioning the impact of change, and they will seek to do everything possible to encourage and assist the growth of new industries in affected parts of South Wales.

Mr. Roy Hughes (Newport)

Can the Secretary of State elucidate the conundrum on coking coal imports for Llanwern? According to the managing director of the BSC Welsh division, a contract was signed some years ago for what he called very dear coking coal from Germany. Apparently that coking coal is not going to Llanwern, but is being diverted to Redcar. The second part of the cunundrum is that the BSC is talking about signing contracts for the import of cheap American coal for Llanwern. I think that some elucidation is required.

Mr. Edwards

That is a management decision for the BSC. If British Steel is to be competitive, it must have competitive coal.

I turn to the question of responsibility for encouraging change and development. I know that there will be anxiety about assisted area status. The Government have already made it clear that the grading of the relevant areas will be reviewed. But the BSC's plans are still the subject of negotiation with the unions—which has been delayed by the present industrial dispute—and we do not yet know just what the relative impact of closures will be on the travel-to-work areas most likely to be affected. My right hon. Friend the Secretary of State for Industry is reviewing the situation and will be making an announcement as soon as possible after final decisions have been taken by the BSC following consultation with the unions.

I am, however, most anxious that an early start should be made in providing the infrastructure needed to attract new industries to the area in Wales affected by the BSC's plans. I should add that my right hon. Friend the Secretary of State for Industry is urgently considering what may be necessary in the areas affected in England.

The prime need is for the acquisition, preparation and development of industrial sites together with a substantial programme of advance factories within the areas most affected, and taking advantage of the excellent communications provided by the M4 and the trunk road and high speed rail networks. There will be need for a continuing programme over a number of years which can be worked out as the situation becomes clearer. What is needed now is to launch a new infrastructure programme so that we can get things under way and give people the assurance that action will be taken.

I can now tell the House that within the reduced public expenditure programme we have been discussing the Government are planning to make available some £48 million over the next two years for remedial measures of this kind. The major part of these additional resources will go to the Welsh Development Agency, which is preparing detailed plans for this purpose. I have also asked the Cwmbran development corporation to discuss with local authorities whether they could develop industrial land in or around the new town as a contribution to providing alternative jobs in the Llanwern area. I am also in touch with BSC Industry to see what further contributions it can make.

I have discussed the situation with the WDA. My announcement today will enable it to get on without delay with a substantial programme of acquisition and development of industrial sites which will be available for both public sector and private sector development. I should again emphasise, as I have before, that we are determined to obtain an increasing private sector participation in the development of industrial sites, but this will take time, and the programme that I am announcing is an essential first stage.

Apart from this new programme, in the coming financial year the WDA will be spending about £12 million from its normal programme in the areas affected by the closures, including £8.5 million in Ebb Vale and Cardiff, while I have already announced a programme totaling £13 million for the first year—including BSC Industry's contribution—at Shot ton.

I should add that despite the overriding necessity about which I have spoken earlier to obtain public expenditure reductions I have defended the key motorway and trunk road programme, including the M4 and A55, which will proceed on the basis already announced.

All this is clear evidence of the Government's determination to tackle on a realistic scale the task of providing the infrastructure that will enable modern industries to develop in Wales.

Mr. Ioan Evans (Aberdare)

The right hon. Gentleman is talking about attracting new industry to Wales, but there are the existing industries. Last July he said that he was considering investment in the Phurnacite smokeless fuel plant, which is affecting coal pits in Wales. What decision has been reached by the Government on that investment?

Mr. Edwards

That is the responsibility of my right hon. Friend, who will in due course be making a statement about the future strategy of the coal industry. It is primarily a management responsibility of the National Coal Board. The hon. Gentleman knows that there are difficulties, which the ANCIT proposals do not overcome, in connection with the environment. There is also the fact that, even with the increased price of gas, it is unlikely that many of the supplying pits will become competitive. That matter will be dealt with in due course.

The contribution by the Government to the job of assisting with change is not confined to the WDA and Cwmbran development corporation programmes or to the construction of trunk roads. I recently announced an urban aid programme for 1980–81 amounting to a record £8.4 million. In considering new schemes for approval, I paid particular attention to the needs of areas affected by job losses in the steel industry. The schemes that I have approved in these areas will assist both in alleviating the social consequences of major redundancies and in attracting new employment by promoting the development of industrial sites and the construction of small factory units. It will not be the last such programme.

The MSC also has a major role to play. At Shotton it quickly established a job centre at the works and it is carrying out vigorous training programmes. It is preparing to do the same in the South Wales closure areas. I am well aware that there is great anxiety about the future of the skillcentres, particularly those at Llanelli and Blaenau Gwent. The MSC has been concerned about the under-utilisation of its centres and the need to make effective use of resources, and it hopes to provide facilities to train more individuals than at present at less cost. I have made it very clear to the chairman, Sir Richard O'Brien, and to the commission that I consider that there are other important factors as well—the geographical availability of such centres and the part they have to play at a time when so many existing jobs are under threat. He knows very well the importance that I attach to the work of these centres. I am glad that the MSC has decided to undertake further consultation with local committees and others and has undertaken to provide adequately for major redundancies. I shall continue to keep in close touch with the chairman and with my right hon. Friend the Secretary of State for Employment on this important issue.

Mr. Keith Best (Anglesey)

Does my right hon. Friend accept that, whilst it is important to provide as many training facilities as possible within the skillcentres and others that he has mentioned, the best form of training is always undertaken within existing industry. Does he also accept that there is still a large capacity within workshops in existing industry that could be used for training purposes? Will he concentrate upon that aspect?

Mr. Edwards

I have discussed that matter with the chairman of the MSC, and I know that it is in the Commission's mind.

I have little doubt that I shall be asked about Inmos, I wish to make it clear that no decision has been taken by the Government about the request from the NEB for the second tranche of £25 million funding for the project or its location. I would only say at this stage that I fully understand the importance of the issue, and I am in no doubt that there are many very attractive sites available in Wales and other regions.

Anxiety has been expressed outside the House—and it was expressed in the House earlier this afternoon—that the Government are not taking full advantage of the assistance available from the EEC. That is not true. The Government are making full use of existing schemes. The Commission was advised of the BSC's proposals in early December. Formal applications cannot be submitted until detailed agreement has been reached between the BSC and the unions. However, as with Shotton when £7.7 million was allocated by Commissioner Vredeling himself, this will be done at the earliest possible date. In addition, officials of my Department met an EEC representative in Wales on 31 December for dicussions in the light of the BSC's proposals and the implication of these proposals for South Wales. To eliminate any doubt, we have undertaken to examine with the TUC whether there is any further EEC aid that we could possibly obtain under existing schemes. As to the proposed social measures, involving subsidised jobs, these proposals have not been agreed and are at present supported only by Belgium.

It is clear from everything that I have said that the industrial prospects for the immediate future are extremely difficult. I would be the last person to underestimate the difficulties we face, which are not confined to South Wales and Shotton. The announcements last week of the impending closures of the Bernard Wardle factory at Caernarvon and Smiths Industries watch factory at Ystradgynlais made that point very sharply. The Bernard Wardle closure is, I understand, due to the sharp decline in orders for its products, but my officials are meeting with the company's manager today seeking further information.

Mr. Wigley

rose—

Mr. Edwards

When I have had a report I will be prepared to discuss the matter further with the hon. Member for Caernarvon (Mr. Wigley) should he wish to discuss it. It will not be easy to fill this factory, though perhaps we can take some encouragement from the facts that GKN factory in my own constituency and the Wallis and Linnell factory at Blaenau Ffestiniog have both been filled again quickly. Last week's news that Borg Warner were to concentrate its production at Kenfig also came as a considerable relief.

Mr. Wigley

Does the Secretary of State accept that over the last two and a half years there has been virtually no reduction in the market demand for the product at the Caernarvon factory of Bernard Wardle and that last year this factory made a profit in excess of £600,000? In these circumstances, does not the Secretary of State accept that this closure is the worst manifestation of the ugly face of capitalism coming from an asset stripping operation as a substitute for moving the work elsewhere?

Mr. Edwards

I shall not comment in detail until I have had a report from today's discussions. I know that the total market for the goods supplied by this company has fallen and that the company has a more modern and more recently equipped factory elsewhere. Sometimes good fortune flows in our direction, as in the case of the Borg Warner plant, and sometimes we lose out. The Borg Warner plant is evidence that there is no particular prejudice by managements against Wales where it is in the interests of good management to go to the most recently equipped and modern factory.

Because the restructuring of the BSC has taken place too slowly and too late, we have had to attempt to restore the industrial base in an uncomfortably short space of time and in a period of world recession. It is absurd and a serious disservice to Wales to talk about the creation of an industrial desert. Our industry is far more diverse than it used to be. We have good communications and a good labour force. No one who has visited the industrial estates in Glamorgan or at the Heads of the Valleys could possibly say this was an industrial desert. During our last debate on the Welsh economy I said that there were 18,000 jobs in the pipeline from projects involving Government factories or Government assistance.

Last year my industry department handled over 700 inquiries by industrialists and handled over 800 visits. But in the face of the economic recession the level of interest in the second half of the year was on a par with the second half of 1978. These figures are reflected in the all-time record of 1979 of factory allocations. These reached 140, promising just under 5,000 jobs. In just the first few weeks of this year 10 advance factories were firmly allocated, promising 700 jobs, and a further 80 provisional allocations are being processed.

I am not underestimating the difficulties, but these figures show that there is still a good deal of steam in the demand for investment in Wales.

The allocation of a 500,000 sq ft factory at Rassau to Merry weather and Son with the prospect of 500 jobs and the expansion of Alfred Teves, also at Ebbw Vale, are equally encouraging developments. I am also encouraged by the quality and diversity of major projects attracted to Wales recently. Aiwa at Penyfan, the Ferranti development at Cwmbran, Merryweather at Ebbw Vale, the selection of Shotton for the titanium plant and the arrival of the new AA office at Cardiff, are all good examples.

Mr. Barry Jones (Flint, East)

Can I assume from the assertions of the Secretary of State that he is confident that Deeside, which will need 8,000 jobs within three months, will speedily obtain those jobs? Will he also confirm that he fought against the Secretary of State for Industry's policy of non-intervention and is it not his ill-luck that he must be the apologist in Wales for the policies he opposed in Cabinet?

Mr. Edwards

I hardly believe that the policy that I have announced today indicates that the Government are standing back from their responsibilities or that they are not encouraging fresh industrial development in Wales. I have not attempted to underestimate the difficulties but the hon. Gentleman knows that there are very attractive sites on Deeside and that the area has good prospects for the future.

Mr. Tom Ellis (Wrexham)

The right hon. Gentleman has poured scorn on the allegations that Wales is being turned into an industrial desert. Will he accept that there are 11 per cent. fewer men in employment in Wales today than there were 10 years ago?

Mr. Edwards

I know that there is a great deal more diversity and strength in the Welsh economy today.

I have said little about industry in the rural areas, but hon. Members will have the opportunity in the Standing Committee on Statutory Instruments & c. to debate the work of DBRW on Wednesday. However, I want to say something about agriculture.

There is no way that farmers, any more than any other group in the community, can be insulated from the doubling of the world oil price and other economic pressures. The publication shortly of the annual White Paper will no doubt show that there has been a rise in costs for Welsh farmers and a fall in their incomes. But the Government are determined to encourage agricultural production, and I find, as I go round Wales that farmers fully appreciate how much, despite the difficulties, we have been able to do.

Farmers have seen three green pound devaluations in the past year which, together with a strong pound, have largely eliminated the currency gap. The increases in milk prices have done something to cushion the greatly reduced margins of milk producers, while the increases in the hill livestock compensatory allowances have gone a good way to restore confidence in the hills after last years severe difficulties.

Farmers understand very well the problems that lie ahead during a period when prices must be held in Europe when costs are rising. I believe, however, that confidence has been maintained by our evident determination to assist them, and by our equal determination to take the measures that are necessary to bring down interest rates and inflation.

Despite the need for expenditure cuts my right hon. Friend the Minister of Agriculture, Fisheries and Food has been able to announce the continuation of a substantial capital grant scheme. We have set out to simplify it and to restrict assistance given to the largest farm businesses, but we have maintained the general level of assistance available to farmers in the less favoured areas, and I am certain that hill farmers will welcome the enhanced grants now available for sheep housing.

My reference to less favoured areas gives me the opportunity to say something here on the issue of marginal land. My right hon. Friend answered a parliamentry question on the subject on Friday and about two weeks ago I met representatives of the NFU marginal land committee to explain that we have now reached the stage when it is absolutely necessary for field inspections to take place, particularly in England where much of the land is more scattered than in Wales, before we can confirm the areas which will meet the less favoured areas criteria of the EEC Commission.

I am afraid there is no way of avoiding this and it will take time, but I hope to complete it next year. I have to repeat my right hon. Friend's warning—a warning also given by the previous Government—that we cannot give an undertaking at this stage that the less favoured areas will be extended as a result of the survey or that extra funds will be available. There will no doubt be disappointment that we cannot get the job done more quickly, but I know that those who have studied it understand the problem and have been reassured to know that, despite the difficulties, we are pressing on with the task.

I turn now to the floods that occurred on 27 and 28 December. Fortunately, loss of life was limited, but about 8,100 houses were flooded in South Wales. In addition, a great deal of other damage was done.

The emergency services, public services and local authorities responded immediately to the emergency and I should like to pay tribute to their efforts. The Under-Secretary of State, my hon. Friend the Member for Cardiff, North-West (Mr. Roberts), and I visited some of the most seriously affected areas. My hon. Friend the Under-Secretary has since discussed some of the problems with representatives of the Welsh Counties Committee and the Council for the Principality.

I emphasise that the expenditure incurred by local authorities in taking steps under section 138 of the Local Government Act 1972 in dealing with the emergency, including any help from individuals, qualifies for rate support grant. In addition, there are Government grants for approved land drainage works undertaken by the Welsh Water Authority and district councils, and my officials are in close touch with the bodies concerned about the acceleration and revision of schemes. Grants may also be paid to farmers under the farm and capital grant scheme.

The Government have also announced that in view of the gravity of the disaster they will pay a special grant to local authorities at the rate of 75 per cent. of net additional expenditure above the product of a 1p rate incurred in dealing with flood damage. A letter setting out details and inviting claims from county and district councils was issued by my Department on 25 January.

It is not, therefore, true that the local authorities have had to shoulder the burden alone, but through rate support grant and through specific grants they will receive substantial assistance. It seems to me right that the responsibility for deciding exactly what is needed locally should be left to them.

Several Welsh authorities asked to be declared a disaster area. However, this would have no significance either in English law or for the purposes of EEC aid. As to EEC aid, the possibility of applying for European regional development fund aid in respect of new or revised flood prevention schemes which would help the development of industry is being examined.

Meanwhile, on 9 January two senior officials of the European Commission visited South Wales at my invitation. Following that visit, the Commission has made available to Wales emergency fund aid amounting to £176,000. This aid will be distributed by district councils as quickly as possible at a flat rate per house to those householders whose homes were flooded. People have been asked to get in touch with their local authority as soon as possible in order that the fund may fairly be divided between all involved.

There have been complaints that insufficient warning was given of the impending flood. The issue of adequate flood warning depends on local circumstances. Flood warnings were issued by the Welsh Water Authority but were not, I think, in every case passed on. The local authorities and the police are now reviewing the matter to ensure that the system works better in future, and I am asking to be kept fully informed of their conclusions.

While we hope that flooding on a similar scale will not occur in the near future, it obviously may happen at any time. All flood defences are being reviewed. The proposed flood prevention scheme for the River Taff in Cardiff is being speeded up and will now take about three years to complete. Meanwhile, I am assured by the Welsh Water Authority that all breaches in defences have been repaired, either permanently or to a strong enough standard to afford protection until permanent and, where necessary, improved defences can be provided.

Sir Raymond Gower (Barry)

Just after the flooding, statements were made by or on behalf of one or two local authorities, including county authorities, suggesting that they had to pay very large sums of compensation—in one case it was said, I think, £½million—before they could obtain any help from Government sources. Is my right hon. Friend able to reply to that?

Mr. Edwards

I have already made clear that any relevant expenditure quali- fies for rate support grant in the normal way, and my hon. Friend knows that that involves a substantial contribution from the Government.

I do not propose to repeat what I said recently in the Grand Committee about the Health Service or to duplicate the discussions taking place in the appropriate Committees on education, housing, the Land Authority or local government finance, but I want to say a brief word about the major transfer of responsibility for rate support grant to the Welsh Office.

It has for a long time been a weakness that the Secretary of State for Wales should not have responsibility for the administration of rate support grant in Wales, despite the fact that he is responsible for local government in Wales and that the grant represents such a large share of public spending there. It was an obvious step to take in the evolutionary development in the responsibilities of the Welsh Office and will, I believe, enable us to react with greater sensitivity to the particular needs of Welsh local authorities.

Some have suggested that Wales will get less under this arrangement than at present. There are no reasonable grounds at all for thinking that. Certainly, it has never been the experience of Scotland, which has for long operated under similar arrangements. Wales did well out of the RSG distribution this year, and I see no reason why we should do less well in future.

I think it right to take this opportunity to say something about the Welsh language broadcasting. It is my intention within the next few weeks to set out in a comprehensive form the Government's view on the Welsh language and the way in which we can fulfil our clear commitment to support it. We shall shortly be issuing a consultation document on the place of the Welsh language in the curriculum.

We have set in train the legislative steps to provide additional financial support for Welsh language teaching and, despite the financial crisis, we are planning further to improve the present financial backing given by the Government to the language. I have already announced support on an increased scale for the National Eisteddfod, which will enable those responsible to plan ahead with greater confidence. All this is an indication of our commitment.

The proper time to debate all this will be, I suggest, after I have made the announcements that I have promised, but I think it right to take this opportunity to explain the change of policy that has taken place with regard to Welsh language broadcasting. Having heard all the arguments and considered all the possibilities, I changed my mind, and I make no apology for that. There is nothing to be said for sticking obstinately to a policy when one comes to believe that it is wrong.

The arrangements that we are now proposing will, we hope, achieve at least 20 hours of Welsh television programmes a week from the autumn of 1982, and my right hon. Friend and his officials are having discussions with the broadcasting authorities about this. The Broadcasting Bill will make provision to ensure that there is consultation about the scheduling of Welsh language broadcasts.

We expect that in this way clashes will be avoided and that the Welsh language programmes will get their fair share of peak viewing times. The end result will be that when one of the four channels in operation is showing Welsh language programmes the other three will be showing English language programmes.

In providing a Welsh language television service there are two claims to be met: the interests of those who speak the language, and the interests of a larger number who do not. The one-channel solution was a satisfactory answer to the problem provided only that the fourth channel was not operating on a United Kingdom basis. To use the fourth channel exclusively for Welsh language programmes would mean that Wales would have to opt out of the United Kingdom network for nearly 50 per cent. of transmission time. It would be an almost impossible task to reschedule the programmes that were missed. That task becomes much simpler if the Welsh language programmes are spread over two channels.

I believe that there would have been great anger in Wales when people discovered that they were being deprived of the opportunity to see the greater part of what will be a very attractive new channel. And even if the single channel were available for Welsh language programmes, I do not believe that it would be in the interests of the Welsh language. It would have had the effect of confining the new channel to a comparatively small dedicated band of people who would watch Welsh language programmes irrespective of their content or quality. Far from increasing the audience, it would have reduced it.

Our solution gives as much Welsh language broadcasting as the other, it gives wider choice to the Welsh people, it enables them to enjoy much of the new English programmes on the fourth channel if they want to, it gives a sounder financial base, and it prevents the exile of Welsh language broadcasting into a ghetto. I believe that it is the best solution to a difficult problem to which there is no perfect answer.

Mr. Alec Jones (Rhondda)

I understand the reasons which the Secretary of State is now advocating for having the Welsh language on two channels, but all those reasons existed when he wrote what he did in the Conservative manifesto and when he made a television broadcast even after the election. Nothing has changed. What persuaded him to change his mind? Was it not pressure inside the Government?

Mr. Edwards

No, it was not pressure from inside the Government, and it was not a battle. I listened to the arguments and concluded, as did all my colleagues, that this was the right decision to take.

To return to the central issue, I have not sought to play down the scale of the crisis that we face. What I have argued is that if we fail to face economic reality the consequences will be even more serious. There comes a moment when one has to face facts. Even the previous Government, though they tried, could not avoid a reduction of about 7,000 in the numbers employed in steel in Wales and of nearly 3,000 in the coal industry there. Even as they left office they knew that further substantial job losses would have to follow in both industries. They could not prevent a massive increase in unemployment during their period in office.

The argument, therefore, cannot be about the need for change, only about its pace and scale. We are being asked to postpone the adjustment and to impose a level of capacity on the steel industry and a labour force larger than management considers is realistic. We believe that postponing action will not save jobs but will actually risk more. We fear that other countries will move further ahead, that we shall be even less competitive, and that what then will be at stake will be the survival of any steel industry at all.

Mr. John Morris (Aberavon)

Will the Minister give way?

Mr. Edwards

I really want to finish. I have taken longer than I intended.

Mr. Morris

For the benefit of the House, will the Minister summarise what new beneficial acts have flowed to Wales from the particular functioning of the Welsh Office under his stewardship which are not a response to the Government's policy of throttling Welsh industry?

Mr. Edwards

Welsh industry is not being throttled by Government policy.

Mr. Morris

Of course it is.

Mr. Edwards

The steel industry is having to contract in the light of its competitive position in a world market. The right hon. and learned Gentleman knows that perfectly well—or, if he does not know it, he ought to.

Mr. Rowlands

What about the coal industry?

Mr. Edwards

Frankly, I do not know how quickly the changes can be achieved. The Steel Corporation and the Coal Board have to negotiate that with the unions. What I do know is that I and the Government have a duty to accept responsibility for the social consequences of change and to assist in every possible way to bring it about. My statement today is an indication of our acceptance of that responsibility.

It is understandable that the Wales TUC and others should seek to avoid these changes; but they must recognise that, far from helping those affected, by their actions last week and their planned strike on 10 March they have added to the immensity of our task. I know already of two major overseas investments in Wales postponed or cancelled due to industrial action last year. Any further disruption will discourage the arrival of the new industry we want.

We shall make the process of change infinitely more agonising if we just seek to dodge reality and put off until too late the action that has to be taken. If we are to come through this painful period, we have to make use of all our assets—good communications, good industrial locations, the reputation of the labour force regional aids and increasing competitiveness. It is on those foundations that we have to build the future.

4.32 pm

Mr. Alec Jones (Rhondda)

In the 13 years that I have been a Member of this House, and, my colleagues tell me, for years before that, we have had these Welsh days, and this is the very first occasion that we have felt it necessary to issue to our supporters a three-line Whip indicating not only our concern with the situation that is facing us in Wales but our complete dissatisfaction at the way in which the Government are setting about their business.

In these days we have a fairly wide-ranging debate. The Secretary of State did a little ranging himself today. For my part, I shall be concentrating on one subject—a subject which is of greater importance than all the others. I accept that there are problems in agriculture. I accept that we need to know more of the Government's views on the Welsh language. Certainly our colleagues in local government are concerned about the very future of local government under the present Administration.

The Secretary of State had a great deal to say about the flooding, and I think that it is appropriate that he should have said it, because it caused a great deal of personal hardship and still causes a great deal of worry to people in South Wales who still feel themselves under threat. It is important, therefore, that we have from the Secretary of State at some stage a full statement on the financing of any preventive measures which are necessary. I am not sure that it is sufficient to say that expenditure incurred under section 139 of the Local Government Act will qualify for rate support grant assistance when we are not sure whether it will be caught by the Heseltine concept of a standard rate. We want to know a little more about that.

Mr. Nicholas Edwards

Let me make it perfectly clear that we have said that in considering any action under the transitional arrangements we shall take account of the cost of the floods, and local authorities will not be penalised in undertaking essential expenditure.

Mr. Jones

I am very grateful to the Secretary of State for that statement. I am sure that our colleagues in local government will be equally grateful.

There is another point about flooding that I want to raise. It has been raised in my constituency and in Cardiff. The right hon. Gentleman referred to it himself. People felt that they had received no warning when many people in official positions knew of the danger. The right hon. Gentleman said that the water authority or some authority was taking steps on this matter. I believe that, again, a public statement has to be made to allay the fears on this aspect, which certainly still exist, and to ensure that people are given adequate warning, not only when their property is at risk but when their lives are at risk. Fortunately, there was little loss of life—two deaths in Merthyr—but there could well have been serious loss of life. The lack of public warning was a matter of great concern.

Mr. Ioan Evans

On the question of the flooding, does my right hon. Friend agree that, while we might sort out the financial formula for Government assistance to local authorities, the cases causing the greatest anxiety are the families who have lost all their possessions and find that there is no one to whom they can turn immediately? Must we not address ourselves to the problem of funds being made available to those families to meet their immediate needs?

Mr. Jones

Certainly it is a subject which must be examined, but the solution is not as simple as some seem to think. Nevertheless, it is true that the matter is causing considerable concern. It has been met in a variety of ways, none of which is meeting the gravity of the situation.

Before turning to my main theme, I say to Conservative Members that I am quite willing to give way but that they should not, at the end of my speech, tot up the time that I have been standing at the Dispatch Box if they have taken up a large amount of it themselves.

I come to the main problem facing us in South Wales. It is also prevalent in parts of North Wales, particularly Flint-shire. I refer to the particularly high level of unemployment. We have not seen such unemployment figures since the war. Unemployment among steel workers, miners, transport workers and workers in the private manufacturing sector and in the public service sector is on such a scale and is increasing at such a rate that it threatens not only the well-being of individuals and their families but the very social cohesion of many of our communities. In fact, it is a threat to the survival of some of them.

That is why my right hon. Friend and hon. Friends and I were proud to march last Monday in the demonstration in Cardiff, where people of South Wales showed their strength of feeling. Indeed, in some ways it was a pity the Secretary of State could not have been there. He would have learnt and got a better idea for himself of the depth and strength of feeling on this subject. What those people demonstrating last Monday were asking for was not the moon or anything tremendous but that the Government should realise that this is 1980 and not 1930, and they were saying that we in Wales will not be treated by a Conservative Government in 1980 as we were in 1930. That is the truth of the matter.

Sir Raymond Gower

Will the right hon. Gentleman explain why they did not march last year, when unemployment in Wales was well over 90,000 and at one time over 100,000?

Mr. Jones

If the hon. Gentleman will wait, he will get a good answer to that question. The answer is that last year they had at least realised that they had a Government who were trying to bring down unemployment, whereas now they know that they have a Government who are willing to sit on the touchline and watch unemployment rise.

We are talking of the size of the problem. The question has been raised: is there really a crisis, and, if so, how serious is it?

The present level of unemployment is 90,900. We know that the direct and indirect unemployment in Shotton is likely to add about 9,000 to that figure. We know that the proposals for Llanwern and Port Talbot will add about 11,337, directly. We know, despite what the Secretary of State says, that if the foreign coking coal is imported as BSC wishes there will be a loss of 15,000 jobs in the South Wales coalfields. The Secretary of State may not know that, but everybody else concerned with the industry in South Wales does. To that figure we have to add about 6,850, a figure which was calculated by the standing conference on regional policy in South Wales. That conference consisted of representatives from the county councils of the three Glamorgans and Gwent. The conference added a note of caution, saying that it was a preliminary figure which was rising considerably the more the problem was examined.

On my adding up, the total figure comes to 133,087. That is not far from the estimated figure of the Wales TUC of about 140,000.

I believe that the Government have a duty to provide us and Wales with their calculations. The problem is far too grave for the Secretary of State to hide behind the convention that Governments do not forecast unemployment or disclose their forecasts. A whole range of organisations need to know the best possible estimate if they are to carry out their responsibilities. Those organisations include the Government and their agencies such as the Welsh Development Agency, the DBRW and the development corporation at Pontypool.

The industry and the trade unions involved have the right to know the figures. Local authorities have the right to know—so do the people of Wales. So far, there has been a deafening silence from the Welsh Office. If the Western Mail is to be believed—I confess freely that I have never been a lover of that newspaper—it suggested on 29 January that various projections had been produced inside the Welsh Office and that the worst of them suggested a figure of 160,000 unemployed towards the end of 1981. Whatever may be the figure, the problem cannot be faced and tackled unless all parties concerned know its size.

Therefore, we have the right to know the Government's assessment of total redundancies in South Wales. More than that, what time scale do the Government envisage before the redundancies take effect? We know that the BSC wants 11,000 redundancies at Port Talbot and Llanwern to take effect by August of this year. I understand that in Shotton the redundancies are to be even earlier. Presumably, the National Coal Board and other organisations will be forced to implement any of their redundancies no later than the end of the year. Therefore, in less than one year South Wales faces an increase of 40,000 in unemployment in the organisations I have mentioned.

I do not believe that a problem of that size can be settled or dealt with in a short time. Certainly it will not be solved by a Government who are abdicating all responsibility for the BSC's actions, who are refusing to act on the import of foreign coking coal and who are refusing financial support for industrial investment. In spite of today's announcement, the Government, since they came to office, have cut the budget of their own agencies such as the Development Agency and the DBRW.

In the past, Wales has learnt several lessons from the experience of high unemployment. One particularly encouraging development was the Ford plant at Bridgend. About 2,500 jobs are to be created there at a considerable cost to public expenditure. However, we would need about 16 Ford developments to deal with the redundancies that we face. I do not belive that anybody expects 16 Fords to appear suddenly on the horizon.

The publication "Welsh Economic Trends", No. 5,1978, indicates that it has taken 10 years to provide 32,000 jobs in industrial South Wales. I do not believe that the people of South Wales should be expected to wait that length of time before the redundancies that face them are dealt with. There must be a halt to the redundancies to provide time for the Government—any Government—to make plans for alternative employment to be developed.

If the Secretary of State believes that we can cope with the scale of redundancies in the time available, I hope that he will take us into his confidence and tell us how he sees that being done. However, if he shares our view that South Wales cannot cope with the redundancies in the time scale, again he should take us into his confidence and tell us the advice that he is giving to his colleagues in the Cabinet about the problem. Is he advising his colleagues that industrial South Wales can be written off? The right hon. Gentleman is not only the Secretary of State but he represents a Welsh constituency and a duty and responsibility towards Wales. If the Cabinet, by its blind obstinacy over the break-even date for steel and its refusal to consider a subsidy on coking coal imports, prevents the Secretary of State from discharging his duties to Wales, I wonder why he bothers to serve in the Government.

I believe, as do my right hon. and hon. Friends and the vast majority of people in Wales, that the right hon. Gentleman should now be supporting the demand for a two-year delay on any steel closure proposal. Only a delay of that scale will relieve us of the impossible pressures that we face because of the unemployment figures. We must have more time. That is the reasonable demand of the people of Wales. The time can be bought only if the Secretary of State exercises whatever little muscle he has in the Cabinet.

The time can be bought only at a cost. I am glad that the Secretary of State for Industry is here today. If that cost is an extra Government subsidy provided by taxpayers, that would be a fairer sharing of it than to expect the steel workers and miners of South Wales to bear the brunt of the exercise on their own.

The Secretary of State for Industry (Sir Keith Joseph)

Does the right hon. Gentleman realise that, two years further on, the steel industry will be even less competitive in relation to its rivals than it is today? The cutback that will have to occur then will be even fiercer than it may have to be now. Even the right hon. Gentleman is contemplating only two years' delay. Let the right hon. Gentleman meet that argument.

Mr. Jones

I am grateful to the right hon. Gentleman for getting to his feet. Last week we requested that he should take part in the debate and, perhaps, reply to it. We would have loved to have him with us on that occasion. We believe that the two years is at least a reasonable request. All the evidence including speeches made—

Sir K. Joseph

Answer the question.

Mr. Jones

The right hon. Gentleman is an expert at the Dispatch Box; at least let me learn from him.

The evidence is that we are rushing the contraction of our steel industry at a far greater speed than our competitors in Europe. That point was brought out clearly in the correspondence from the EEC that we discussed earlier.

Sir K. Joseph

Will the right hon. Gentleman address himself—he is being helped by his right hon. Friend the Member for Ebbw Vale (Mr. Foot)—to the serious question whether the steel industry in South Wales will be far worse off in two years—after a delay of two years—because our competitors will be even further ahead? Let the right hon. Gentleman answer that.

Mr. Jones

I do not have the exact figures, but I recall the preliminary statement of the British Steel Corporation. It clearly indicated that some of the threatened steelworks in South Wales, are now making a profit. The British Steel Corporation paid tribute to the others which will have done so well to approach that figure. We are simply repeating that which was indicated to us by Sir Charles Villiers.

One of the factors influencing decisions about closures in South Wales and other parts of the country was the unrealistic break-even date that had been imposed on the BSC by the Secretary of State for Industry and by the Government. If time can be found, a whole range of options will become available to the Secretary of State. Judging from the remarks of the Secretary of State for Industry, the Government will refuse that time. If no time is given, serious economic, social and political consequences will follow.

We are not discussing only the steel industry. The South Wales coalfield faces the consequences of the steel closures. The closure proposals of the BSC will mean the loss of 7,500 jobs in the coalfields. In addition, the determination of the BSC to buy imported coking coal will cost another 7,500 jobs. The Secretary of State for Industry and the Secretary of State for Wales will argue that that is the managerial responsibility of the BSC. However, the implications are so grave that we have a right to know the type of contracts that BSC has made, the length of those contracts, and the quantities and prices involved. The consequences of those contracts will be felt not by those who work in Steel House but by those who live in the valleys and communities of South Wales. If the National Coal Board and miners are expected to face the consequences alone and unaided, it will mean the loss of 15,000 jobs in the South Wales coalfield and the closure of about 20 collieries. Those collieries will never be reopened.

Mr. Nicholas Edwards

I do not know the plans of the National Coal Board, but surely the right hon. Gentleman is not suggesting that the reduction in consumption of coking coal that was pointed out by the BSC could possibly lead on its own, without closures that have arisen from other causes, to the loss of 15,000 jobs.

Mr. Jones

I am sorry if I have misled the right hon. Gentleman. I thought that I had made the position clear.

Two factors affect closures in the coalfields of South Wales. First, the closure proposals of the BSC will lead to 7,500 jobs being lost. Secondly, the import of coking coal will lead directly to a further loss of 7,500 jobs. We base those figures on information that has been given to us on numerous occasions. When one adds the two figures of 7,500 togther, the total is 15,000.

Mr. Edwards

If the right hon. Gentleman looks at the figures, he will see that the total production of coking coal by the South Wales coalfield is only a quarter of its total output. Not all of that coking coal goes to the BSC. About 28,000 people are employed in the coalfield. It is, therefore, difficult to see how the right hon. Gentleman arrives at his figures.

Mr. Jones

The figures were provided by the National Coal Board. If the right hon. Gentleman is in possession of figures that dispute what I have said, or he believes that my estimate of 7,500 is an overestimate, no one will be more pleased than I. However, there is no doubt that the figures that we have been given total 15,000 job losses in the coal industry.

Despite the difficulties of previous years, the South Wales coalfield made an improvement of 7 per cent. in its output in 1978–79 as compared with the previous year. There was an overall improvement of 9.3 per cent. in productivity, including an improvement of 17.7 per cent. at colliery faces. Its losses fell from £27 million to £8.9 million. The National Coal Board has made considerable strides. As this is a debate on Welsh affairs, the Secretary of State must have known that questions concerning Margam and the Phurnacite plant at Aberaman would be raised. It is insufficient to say that those questions are the responsibility of another Department.

The Margam development would have provided 900 job opportunities. That development proposal has been lying in a Government Department long enough and a decision should be made. The tripartite report pointed out that the replacement of sets at the Phurnacite plant could determine the future of five pits and 5,000 men. It pointed out that the investment needed would amount to about £25 million. It is not good enough for the Secretary of State for Wales to say that the matter will be dealt with in due course. We need to know a lot more now.

Turning to the subsidy of coking coal—

Mr. Ioan Evans

My right hon. Friend has mentioned that 15,000 jobs may be lost in the coal industry. The five pits that he has just mentioned must be in addition to his previous calculations. The closure of those pits will result from the doctrinaire approach of the Government. They will not give investment to the plant. Smokeless fuel will now have to be imported because of that attitude.

Mr. Jones

It is clear from the tripartitie report that if the plant at Aberavon ceases to operate we will not have the capacity in Britain to supply the smokeless fuel needed in South Wales and in most parts of the United Kingdom. Hence the Government's need for urgency in coming to a decision.

As regards coking coal imports, the National Coal Board has requested a short-term tapering subsidy. It has now put a figure on that subsidy. It has suggested a subsidy of £8 million in the first year, £6 million in the second year, £4 million in the third year, and £2 million in the fourth year, subsequently tapering to nothing. The National Coal Board suggests that that would enable it to compete on equal terms with imported foreign coking coal. That means a total subsidy of £20 million—spread over four years—that will taper to nothing. That would save about 7,500 jobs. It would retain the collieries and keep the men for future need.

Pure arithmetic shows that that must be preferable to making redundancy payments. Redundancy payments would cost about £24 million in one year if they were paid to such a large number of men. Therefore, apart from anything else, arithmetic shows that the Government are considering some form of short-term subsidy. I assume that the Secretary of State was expressing the Government's view when he said in the Welsh Grand Committee on 21 November: As a Government, we have made it clear that we see the need for a massive continuing investment in the industry."—[Official Report, Welsh Grand Committee, 21 November 1979; c. 13.] He was speaking of the coal industry. That investment is necessary to retain jobs.

"Subsidy" is a dirty word only to this Government. Our European partners do not believe that it is. In West Germany in 1978 the coal industry was subsidised by over £1,000 million whereas our industry received a subsidy of only £125 million. In a recent statement outlining West Germany's energy policy and her plan to save oil, Chancellor Schmidt said: the first priority in West Germany in the 1980s will be the use of German coal. The coal industry's already heavy subsidy will rise to more than $3 billion a year. The Germans are always paraded in front of us as the great experts. If they find it necessary to have such subsidies, surely our coal industry's request for short-term tapering subsidies should be accepted.

The steel industry and the coal industry have a right to expect at least a two-year halt in steel plant closures and a subsidy for coking coal. The Conservative Party's election manifesto for Wales stated that it would continue the modernisation of the coal and steel industries, I do not know what it meant by that. If it had already planned the savage butchery of those industries, it should have had the guts to say so. If it was a genuine declaration of intent, the Government should prove it by accepting the two-year halt and financing the modest coking coal subsidy. It would give us some time to cope with unemployment in Wales and plan for the future.

We need an urgent review of Government policies, and all plans must be co-ordinated. Regional policies need to be re-examined, which includes the question of development and special development area status. The Secretary of State's remark that proposals for such areas will be examined merely indicates that the Government's decisions in July were premature. I hope that any review will not be done on a piecemeal basis. We know from experience that such a problem can be dealt with only on a broad basis.

Mr. Delwyn Williams (Montgomery)

Is the right hon. Gentleman aware that north of Merthyr there exists an area called Mid-Wales, and beyond that an area called North Wales? This is a debate on Welsh affairs and not on South Wales. Will the right hon. Gentleman, during the following 30 minutes, deal with Mid-Wales and North Wales?

Mr. Jones

I seem to recall that I said that it was an all-Wales problem. I mentioned Shotton, which faces severe problems. I do not withdraw my statement that at present South Wales is the area under most bitter attack by the Government. If Mid-Wales is being forgotten, that is the fault of the Government, who are removing almost all regional assistance from that area.

In July, when the Secretary of State for Industry announced changes in regional policy, he said: there is no evidence whatsoever that in net terms, taking the country as a whole, there is any change in the number of jobs."[Official Report, 17 July 1978; Vol. 970, c. 1309.] Even if that is true, it is not acceptable to the people of Wales. Whether in South, Mid-Wales or North Wales, we cannot accept massive job losses, even if those jobs will be created elsewhere, such as in South-East England. It would mean the migration of our young and active men and women and the decline and collapse of our communities. We would return to the position in the 1930s—and some of us lived through those times.

Mr. Best

I do not remember the 1930s, but is the right hon. Gentleman not in an awkward position in talking of Government records? Between June 1970 and June 1974, under a Conservative Government, 24,900 jobs were created in Wales. Between June 1974 and March 1979, 54,500 jobs were lost in Wales.

Mr. Jones

At the end of 1973, having tried all the measures that are now proposed, the Conservative Government were obliged to take a U-turn, which achieved those results. I do not believe that the people in Anglesey are prepared to return to the situation of the 1930s—and I have lived there for two years. In the parts of Wales that we on these Benches represent, that is certainly so. The measures proposed in July were opposed for that reason.

Following the July measures, the Welsh counties committee said that it would be increasingly difficult to attract new industry to the area. The Gwynedd county council said that its economic future appeared extremely black. The regional director of the CBI, who is not a card-carrying member of my party, said that the Government's scalpel had cut too deeply. I welcome a review of those policies, which is not before time.

We set up the Welsh Development Agency, despite Conservative opposition. Under this Government, £3 million has been cut from the programme this year and next year the proposed reduction is from £45 million to £32 million—29 per cent.

We welcome the £48 million announced today, but it is a mere drop in the ocean compared to the task that faces us in South Wales. We are not prepared to accept that as a crumb thrown to a starving man. We need to know the time scale, the areas covered and other details. The alarm bells are ringing throughout Wales as cuts take effect.

The Glamorgan county council was told by the WDA that no new schemes for the reclamation of land should be embarked on in 1980–81. In these areas, if we do not reclaim derelict land there will be no land for industry. It is as simple as that. If we do not have land, we do not have factories, and that means that there will be no hope of reducing the length of the dole queues.

In the county of Dyfed there has been no progress on the WDA advance factory programme which was announced early last year. The county's industrial development officer, Mr. Ray Edwards, said that that programme promised Dyfed 150,000 sq ft of factory space over an 18-to 24-month building period, but so far not a brick has been laid. If the timetable of the current programme cannot be met without a much more significant increase in the WDA's budget and resources, I do not believe that the agency can get on with any additional work that it should be doing.

Governments can stimulate and have stimulated regional development by dispersing Government Departments and agencies to development areas. I realise that this is not always popular with hon. Members. The previous Labour Government dispersed the Royal Mint to Llantrisant, and that has been a success story. Not only does the Royal Mint employ a high proportion of local labour but it has acted as a focal point for other industries in the area. That is why the Government's decision to abandon our plan to transfer 7,000 Ministry of Defence jobs to St. Mellons is a serious blow to the economy of South Wales. If the Secretary of State does not think that this is so, he should have a word with some of the Conservative Members in the Cardiff authorities.

We are afraid that the same thing will happen to Inmos. We do not think it is sufficient for the Secretary of State to repeat that no decision has yet been taken in this matter. My right hon. Friend the Member for Swansea, West (Mr. Williams) played a major role in the Labour Government's determination that the production units of Inmos should be located in assisted areas. We fully expected to gain at least one of those units in South Wales. Now, we find that the first production unit will go to a non-assisted area. We are now using public finance to establish a publicly owned factory in an area which, by the Government's own standards, does not qualify for any form of regional assistance.

The Secretary of State referred to training. It is not good enough to tell us that he will keep in touch with members of the Manpower Services Commission. The proposed closures must not take place. For the Manpower Services Commission to make a decision on 25 March which will lead to the closure of the skillcentre at Llanelli, without replacement, and closures of the annexes at Tremorfa, Treforest and Blaenau Gwent must surely be the act of a madman at this time.

In my view—and I believe that I have the support of all my hon. Friends and perhaps one or two Conservative Members—we are facing a crisis in Wales, particularly in South Wales. It is a crisis of the Government's own making. On 4 July the Secretary of State told us that he had taken over an economy which was if not in actual decline, certainly stagnant".—[Official Report, Welsh Grand Committee, 4 July. 1979 c. 4.] Government actions since then have pushed the economy into accelerating decline. The Government's regional policies are such as to be incapable of meeting the current and future employment problems in Wales. By 1982–83, £35 million of regional development grants will have been lost to Wales and there will have been an annual loss of selective assistance of £1.6 million. Whole areas of the country—in the north, the south and Mid-Wales—will be denied any form of regional assistance by the Government. Despite the lip service that the Government pay to the Welsh Development Agency, it has experienced cuts, and even today's announcement is not sufficient to replace the shortfall.

By insisting on an unrealistic break-even date, the Government expect the British steel industry to do better in a shorter time than any other steel industry in Europe. Far from being modernised, the coal industry is being crucified. We shall need those pits which are to be closed and we shall need the men in them when some hon. Members are still Members of this House.

We have the right to ask the Secretary of State what he has been doing. Perhaps he is just a lightweight in the Cabinet—I think he seems more like a featherweight being blown from one folly to another—

Mr. Donald Anderson (Swansea, East)

My right hon. Friend asks what the Secre- tary of State has been doing. Surely the answer was provided in his speech 10 days ago when he made clear that he favoured lower public expenditure and lower taxes. That is what the Secretary of State has been urging in the Cabinet.

Mr. Jones

From what the Secretary of State has said in this House and from his speeches outside it, it seems that he is in favour of higher unemployment—the basic subject of today's debate.

In the debate in the Welsh Grand Committee on 21 November, the Secretary of State said: The pessimists who point only to closures and to ever-rising unemployment seem blind to the very encouraging industrial progress we are making".—[Official Report, Welsh Grand Committee, 21 November 1979; c.15.] If there is a question of blindness I do not believe that the miners, the steel workers and those threatened by redundancies as a result of the present Government's policies are the ones who are blind. They see quite clearly what is happening That is why, if one wanted to describe the prevailing mood in South Wales, it would be one of disillusion, dissatisfaction and discontent. It is not only the question of the number of unemployed being created by this Government; it is the effect on communities, and that affects the very social cohesion on which our society in Wales depends.

There is one ray of hope in today's speech by the Secretary of State. At least on one subject he has changed his mind. I still do not agree with him, but at least it has shown that he is willing to bend to pressures exerted on him by someone else. Therefore, I hope that there will be further changes of mind and that he will reverse his direction and revise his policies, or the time will soon come when he must face rejection at the hands of the people of Wales.

5.17 pm

Sir Raymond Gower (Barry)

It is only natural in present circumstances, as the right hon. Member for Rhondda (Mr. Jones) has intimated, that this general debate on Welsh affairs should tend to turn largely on economic and industrial issues. This is not because we see no importance in agriculture, tourism or environmental matters but because the bulk of our population is, unfortunately, concentrated in the industrial areas of South and North-East Wales. This is the kernel of our problems and has been for many years.

Nor do I complain that the right hon. Member for Rhondda seemed unduly pessimistic about the state of the Welsh economy. After all, pessimism is a kind of seed corn for the Opposition, with exaggeration as its handmaiden. I noted with some amusement the readiness of the right hon. Gentleman and his colleagues to march about these issues. Too little marching was done when the Labour Government had such an appalling record. After all, since the oil crisis in 1973 we have had to live in a world economy full of difficulties for exporting countries. Several of Britain's industrial rivals have coped better by methods that are quite different from those favoured by the last Labour Government.

My right hon. Friend the Secretary of State and his colleagues at the Welsh Office took over a bed of nails. We have heard much from the Opposition about the misfortunes that have befallen us in a relatively short time. But during the term of the last Labour Government Welsh unemployment rose from 38,000 in 1972 to 91,000 in February 1979. At one stage, in August 1978, it reached more than 101,000. Some of this increase, we were constantly reminded, was due to world causes. Some was not. Last month, the figure of Welsh unemployed, I confess, was at the high level of 90,864, yet this was fewer than in January in the previous two years. I wonder why the right hon. Member for Rhondda did not comment on that. After all the so-called dreadful deeds, Welsh unemployment last month was less than in either of the previous two Januaries under the Labour Government.

Mr. Dan Jones (Burnley)

The hon. Gentleman is deliberately dodging the issue. It is the prospects that matter. It was the future to which my right hon. Friend was referring.

Sir R. Gower

The right hon. Gentleman was talking not only about the future but also about the immediate past. I am not evading the issue; it is the right hon. Gentleman, I am afraid.

I am willing to confess that all hon. Members deem the present situation to be serious. I do not deny that. I am entitled to put in some of the factual material that the right hon. Gentleman omitted from his speech. Despite the increased variety of the Welsh economy since 1945 and the arrival of new industries, new firms and new processes, we still suffer from severe structural imbalance. There is still excessive dependence on a few basic industries, notably coal, iron and steel, and tinplate. Proportionately, too many of our people, for several generations, have had to look to too few industries for their jobs and opportunities.

It was said two weeks ago in this House, during a debate on the Northern region of England, that when the South-East of England had a chill, the North-East caught pneumonia. That graphic illustration has often been true of the economy of Wales, though slightly less so in recent years. Without being too optimistic, I venture to suggest that what has been remarkable since the oil crisis of 1973 has been the resilience and powers of survival of some of the newer industries. I feared that some of them would not show this resilience and power of survival. It has also been encouraging to note the ability of many employers in Wales to learn new skills in new processes.

I should like to refer briefly to the difficulties of the iron and steel industry that have occupied so much of this debate. There must be major changes. That must be obvious to any reasonable and objective person. Such changes are prescribed not only by technical and technological innovation and by the present state of world markets for steel but also by the emergence of new producers of steel in the Third world and elsewhere.

Some of the painful changes prescribed or planned by the British Steel Corporation are almost inevitable if we are to have an effective and successful industry. I shall say nothing about present strikes, particularly the iron and steel strike. I hope, like others, for a reasonable solution and that a settlement will be arrived at very soon. Britain cannot afford strikes and industrial stoppages. Wales cannot afford them. I look forward to the day, in the near future, I hope, when those overseas will have no occasion to use the term "British disease". It is an appalling phrase. I have heard it frequently in other countries. It is a sad commentary on our system that other countries should use such a phrase.

Mr. Dan Jones

I apologise for interrupting, because, although I am a Welshman, I do not represent a Welsh seat. The hon. Gentleman gives the impression that the unfortunate situation in the steel industry is contributing to economic decline. That is not the case.

Sir R. Gower

I am not saying that at all. I made an observation that Britain cannot afford strikes. Wales cannot afford strikes. I stick to that. Surely it is obvious.

The impact of these proposed changes, whatever the difficulties and the nature of them, is proportionately more severe in Wales than elsewhere in the United Kingdom owing to our undue reliance on this industry. One faces the choice proposed by the Opposition of a reappraisal of the timetable set by the BSC or, alternatively, the provision of industrial retraining and steps to encourage new industries on a bigger scale than anything contemplated before. If these unpleasant changes are delayed, a more difficult situation may be encountered in a year or two. I am encouraged by what my right hon. Friend has said about further money becoming available. But we must now think in bigger terms about industrial retraining and methods of introducing new jobs. I am not complacent about the matter.

The right hon. Member for Rhondda and other Opposition Members seem to envisage a Wales of the future in which the major industries will remain as the chief employer. That is what they seem to say. I may be doing them an injustice. I should like to see a Wales in which more people are employed in new industries.

Mr. Dan Jones

The hon. Gentleman should come into our Lobby tonight.

Sir R. Gower

That would be wrong. Opposition Members want to see these industries continue to employ the same numbers as now. I do not think that that is practical. I want to see more people employed in new industries, smaller, perhaps, in size, but more numerous—

Mr. Wigley

Where are they?

Sir R. Gower

If the hon. Gentleman does not believe that we have to change I am afraid that I must differ.

Mr. Roy Hughes

The hon. Gentleman talks about change related to steel. Is he not aware of what has been happening in South Wales in regard to the closure of East Moors, a loss of 6,000 or 7,000 jobs in Ebbw Vale and the closure in North Wales of the great Shotton works? Is he not also aware of the latest proposal of the British Steel Corporation for major reductions in the modern plants at Port Talbot and Llanwern? Does he recognise that the BSC has abdicated from the export market and talks now in terms of a target figure of 15 million tonnes production annually when not long ago there was talk of 30 million tonnes?

Sir R. Gower

Indeed I do. That is why I stress to my right hon. Friend that steel closures are having a disproportionate impact on the Principality.

In the context of our efforts to contain inflation and restrict excessive expenditure, there must be substantial economies, but I ask my right hon. Friend to consider—and he may have to fight some stern battles, even in the Cabinet, on this matter—that economies must be avoided, as far as possible, in communications within Wales.

I was encouraged by what my right hon. Friend said about the motorway programme, but there will be serious temptations to slow down some road improvements and to defer others. If a new road is not built there will be complaints, and if other roads are not properly repaired there will be moans from irascible motorists, but such action does not cause the sort of violent reactions that usually emerge from economies in health, local government or education. Consequently, there may be a temptation to cut down on road and other communications. Denying existing and potential industry in Wales the communications that it needs and deserves could inflict incalculable long-term damage on our economy and on industrial growth in the Principality.

As I have said, we must also contemplate increasing incentives, particularly in areas affected by steel closures, to bring in new industries. There is evidence that other countries, including the Republic of Ireland, have had great success in this sphere and certainly more success than has attended our efforts. I hope that the Welsh Office and other Government Departments are studying the methods employed in other countries.

I am still not quite satisfied with the degree of encouragement and help being given to smaller industries. Taxation changes have helped some of those firms and others acknowledge that efforts are being made to reduce the work involved in making returns and answering inquiries from Government Departments. They appreciate that, but they still face a number of problems.

I have spoken to several industrialists and smaller employers and they recognise the difficulties involved in trying to contain inflation. They are prepared to suffer as much as they can afford to, but the cost of borrowing and servicing interest charges bears harshly on them, especially those who do not have great resources on which to call.

Against the difficult economic background in Wales, I hope that the cooperation between the Welsh Office, the Welsh Development Agency and private industry will continue. I am not as pessimistic as the right hon. Member for Rhondda, but I recognise the difficulties facing Wales and, indeed, the whole of the United Kingdom.

Wales has additional difficulties, based on its geography and the siting of its industries, and a peculiar dependence on a few older industries. The problems are greater than those in many other parts of the United Kingdom. That is why my right hon. Friend the Secretary of State faces such an enormous task. I wish him well.

5.34 pm

Mr. Ifor Davies (Gower)

Our debate is overshadowed by the grave situation confronting our basic industries of steel and coal. The Secretary of State acknowledged that, as did the hon. Member for Barry (Sir R. Gower). The topic dominates the hearts and minds of our people. It certainly dominated the hearts and minds of the thousands who on Monday attended the greatest protest rally some of us have seen in Cardiff.

The hon. Member for Barry mentioned the steel industry. I wish to refer to the comments of the chief executive of the BSC in a recent issue of Steel News: We cannot afford massive increases in costs at a time when we are fighting for survival. The truth is that the whole of Wales—North, South, East and West—is fighting for survival.

I also draw the Secretary of State's attention to the Conservative manifesto at the last election, which said: Of course, government can help to ease industrial change in those regions dependent on older, declining industries. We do not propose sudden, sharp changes in the measures now in force. Yet within two months of that assurance it was broken. You have appealed, Mr. Deputy Speaker, for short speeches, but it would be interesting, if time permitted, to recall the occasions when answers to questions in the House have led to serious consequences.

I shall quote only one—the written reply from the Secretary of State for Industry on 1July, barely two months after the general election. The right hon. Gentleman announced the targets that he had set for the BSC and from that reply has stemmed the industrial crisis facing us, for, in quick succession, we have had further announcements of closures and cash restrictions.

Wide sections of the population have regarded the break-even target as an impossibility from the beginning. The BSC has given clear warnings. Its important and informative document "Prospects for Steel", written in 1978, says: The Corporation is not at present able to sustain its activities without substantial external financing, but it is taking the steps necessary to return to viability. I ask the House to note that the document also said: In the face of extremely depressed market conditions, however, this must be expected to take some years. My right hon. Friend the Member for Rhondda (Mr. Jones) pleaded for time to deal with the problem and mentioned a period of two years. The Secretary of State for Industry intervened to challenge him on that point. The right hon. Gentleman has insisted that he is not the management of the BSC, though he acknowledges that, for the time being, as he says, he is the representative of the owners. The right hon. Gentleman is not prepared to accept even two years, but the BSC management confirms that the return to viability will "take some years".

The BSC document also says: the Corporation will be far from self-financing in the next five years". Those who manage the industry are pleading for time, but, despite their warnings, the Government have intervened with financial limits and a break-even date. The result has been to force the industry into making what we consider to be unreasonable decisions with disastrous consequences for steel communities.

The hon. Member for Barry said that we were pessimistic. In fact, we feel even worse than that. We are in despair when we consider the consequences of what is to happen. Because of past errors of judgment, a loss of confidence has crept in. The latest cutback of capacity to 15 million tonnes a year has shocked the steel industry and has increased the loss of confidence. Some semblance of equilibrium in the short-term balance sheet of supply and demand might be achieved by cutting capacity, but the ability of the steel industry to survive in the wider international economy would be greatly affected.

The Secretary of State for Industry boasted this afternoon that there was a record demand for steel in the world market last year. That is a warning and an indication that there are markets to be won.

The decisions taken in the steel industry will inevitably affect the coal industry. They will lead to the eventual closure of many South Wales pits because of the important connection of coking coal with the steel industry.

The BSC complains that the cost of Welsh coal is too high. There is a strong case for an independent audit of the comparative cost and savings of using Welsh coal as opposed to imported coking coal. I urge that an immediate subsidy be granted to bridge the current gap in prices and thereby ensure that the BSC does not need to bear additional costs. If our European competitors can subsidise coking coal, as Belgium does at £24 a tonne, France £14 a tonne and Germany £11 a tonne, what possible reason can there be for Britain to refuse to subsidise our coal industry?

The coal industry has known resources of over 200 million tonnes and is a vital source of energy. It would be economic madness to contemplate pit closures that would mean the loss for ever of many of these assets. It would be a severe blow to our energy resources.

Another significant issue in Wales is the recent announcement by the BSC of the formation of BSC Holdings Limited. It is a management group that comprises most of the corporation's large profit centres that are currently managed within the BSC manufacturing division. The largest of the profit centres is BSC Tinplate, in terms of both employees and turnover, and part of which is in Velindre in my constituency.

The danger is that the separation of the profit centres may prove to be a further blow to the viability of the manufacturing division. The tinplate turnover represents more than half of the total turnover of the new group. The BSC Tinplate turnover is £382 million out of a total of £700 million, which is 54 per cent. of the total.

As South Wales is the home of the tinplate industry, I hope that there is no intention to remove the headquarters from Wales. I urge the Minister to take note of the strong feelings that exist among tinplate workers about that issue.

My right hon. Friends have been accused of ignoring economic realities. It is the Government who are ignoring the danger signs. Labour Members are facing up to the spectre of a disastrous economic and industrial position that will threaten the whole of Wales, including Mid-Wales. If present proposals materialise, we shall be confronted with 50,000 job losses in steel, coal and associated industries over the next few years. I accept gratefully the proposals suggested this afternoon to help industries in Wales, including the grants mentioned by the Secretary of State. However, it will be quite impossible, and there are no means whatsoever, to find jobs to cope with this situation in the short term in Wales.

The social consequences will be immense. I urge the Government to reconsider—even at this stage—their attitude and to give the BSC greater flexibility and a longer breathing space in which to cope with its financial difficulties. I ask not for charity but for common sense in order to sustain an industry that is vital to Britain as an industrial nation.

Mr. Delwyn Williams

The hon. Gentleman asks for Government intervention. Why did he not ask for union intervention in the past few years, when unofficial strikes did so much damage to the steel industry? Will he comment on the 1969 position when 250 blast furnacemen were on unofficial strike? Unofficial strikes in 1973 cost the steel industry £10 million. At Port Talbot an unofficial strike cost £131 million. Why did he not ask the trade unions to intervene at that time? He should ask the trade unions to put their houses in order.

Mr. Davies

The hon. Gentleman has chosen a bad example. It is the first time that the steel industry has been forced to strike in its history—

Several Hon. Members

rose—

Mr. Deputy Speaker (Mr. Bryant God-man Irvine)

Order. Only one hon. Member can occupy the Floor at one time.

Mr. Donald Coleman (Neath)

Is my hon. Friend aware that on each occasion that unofficial action has been taken in the steel industry it has been condemned out of hand by the Iron and Steel Trades Confederation executive?

Mr. Davies

Strike action is a last resort on the part of the steel industry. The union has done everything possible to avoid the dispute. We ask for greater flexibility, not out of charity but to sustain a vital industry.

Conservative Members say that the taxpayer cannot afford to help. The taxpayer cannot afford to have the strike continue any longer. The industry is the basis of our economic wealth, with more than £10,000 million of fixed assets and more than £4,000 million turnover per year.

If the Minister does not accept my words, let him accept the words of the BSC management. In its document, "Prospects for Steel", it states on page 20: The large borrowing which is required to finance it through this difficult period should be seen against the estimated £10,000 million replacement value of its fixed assets, and the importance to the country of retaining a business which makes possible a favourable trade balance in a commodity as central to the economy as steel. Those are not my words; they are the words of the management. I urge the Government, even at this late hour, to respond to that appeal from the BSC. If they do not want to respond to our appeal, let them respond to the appeal of the BSC and save the country from economic and industrial suicide.

5.50 pm

Mr. Tom Hooson (Brecon and Radnor)

It is appropriate that the main subject matter in this Welsh day debate today should be the economy and that it should be to industry that the larger segment of our discussion is devoted.

Since the early 1920s, Wales has always had an unemployment figure which has been more severe at any point than that of Great Britain as a whole. My hon. Friend the Member for Barry (Sir R. Gower) was quite right to draw a parallel with the problems faced by the South and the North of England. When the South coughs, the North or Wales catches pneumonia.

The tragedy that Wales suffered, particularly in the 1920s, was the great decline of the steel and coal industries. We can at least be grateful—although it is not something in which I rejoice—that while the relative importance of these industries in Wales has declined, it has also meant that to that extent the Welsh economy is now on a rather more sound basis than formerly.

I remind Labour Members that it was the unemployment of the 1920s that gave the Labour Party dominance in Wales for such a long time. It was, clearly, the despair of Welsh workers at the growth of unemployment after the First World War that gave the impetus in 1924 that led to Labour being dominant for so long in Wales—a dominance that is now clearly declining.

We have already heard the figures showing the rise of unemployment which occurred under the previous Government. Unemployment more than doubled. That is remarkable from the party that is supposed to be the party of labour. The depression that we are facing in this country as a whole—and Wales is suffering from it, along with the rest of the country—is very largely the result of the policies and mistakes of the Labour Party. It cannot be said that it is possible for a Government to create such a decline in seven months. The truth is that we inherited the incompetent policies of the years of Labour Government.

I draw particular attention to the great failure of the Labour Party to explain economic truths, not least to its supporters and members of the trade unions.

Mr. Anderson

Could the hon. Gentleman go to a place such as Ystradgynlais in his own constituency, and to other parts of Wales, and credibly say that the prospects for the Welsh economy are better now than they were last May?

Mr. Hooson

I say to the hon. Member for Swansea, East (Mr. Anderson) that there was no prospect of hope for the British economy, following as it was Socialist policies which were making industry a highly unprofitable proposition—to such a degree that there was very little incentive for money to be invested in industry. We must look for the gradual defeat of inflation, and after that we must find true incentives to make it possible for there to be investment in new jobs in Wales.

Mr. Alec Jones

I find it somewhat difficult to marry the hon. Gentleman's words with those of the Secretary of State, who emphasised that there are now 18,000 or 19,000 jobs in the pipeline. If there was this great lack of confidence when we were the Government, where did those jobs come from?

Mr. Hooson

It is true that there are about 18,000 new jobs in the pipeline. There are always new jobs in the pipeline. If we look at the net figures that have come through in the past 10 years, we see that a considerably larger increase in such net new jobs has been achieved under the Conservative Government than under the previous Administration.

We must look for an incentive for capital to be invested. This is crucial to the growth of productivity. One fact that is too little understood is the remarkably small amount of capital that is invested per worker in this country. It is about £8,000 per worker, whereas in Japan the figure is £38,000. It is only when we make it profitable for such sums to be invested that we shall be able to see significant increases in the productivity of British workers. Labour Members are perfectly aware that this is the truth. I wish that they were more willing to educate their own party in economic realities.

A remarkable feature of the Labour Party has been its failure to educate its members. We saw this under the leadership of the right hon. Member for Huyton (Sir H. Wilson) when he ran away from trade union reform in 1969. The present Leader of the Opposition gave an impressive speech at the Labour Party conference at Blackpool in 1976 about all the things that were needed to fight inflation. He dropped those needs about a year later, once the IMF had left us to manage our own economy. The former Chancellor of the Exchequer, the right hon. Member for Leeds, East (Mr. Healey) did the right things for a while, and we then saw the best growth rate of the British economy in the whole period of Labour Government. The Labour Party has on occasion started to do the right things, but it has never kept on with them.

The great need from now on is that we should carry on with the economic policies that we have started. In the coming years we must encourage new small firms in Wales. The evidence that we see from other countries, such as the United States of America and Germany, in relation to the proportion of new jobs coming from small businesses is impressive. In the United States, 80 per cent. of the new jobs created in the 1970s have been in firms in which fewer than 20 people are involved.

A considerable number of jobs can be created with relatively small investment. This applies especially to some of the service industries. In Wales, particularly in tourism, there is an opportunity for a considerable increase in the number of jobs. Indeed, the Wales Tourist Board has pointed out, in its most recent report, that already the value of tourism to Wales runs at £425 million a year.

Mr. Ednyfed Hudson Davies (Caerphilly)

On a point of order, Mr. Deputy Speaker. There seems to be smoke coming out of the ventilation vents.

Mr. Deputy Speaker

I am sure that the Serjeant at Arms has heard about it and that the matter is in hand.

Mr. Best

Further to the point of order, Mr. Deputy Speaker. The smoke seems to be coming only from behind the Government Benches.

Mr Hooson

I wrote to The Timesnot long ago about the excessive heat in this place. Possibly I am receiving retribution for making such remarks.

I was about to point out that the Wales Tourist Board projects the total number of new jobs that can be created in Wales by 1985 at 25,000.

I should like to make one or two comments on the position concerning industry within Powys. One worrying feature is the decline in orders coming to the largest employer in my constituency, Smiths Industries in Ystradgynlais. The company has been unfortunate because of two developments in recent years. One has been the considerable problems of British Leyland, which have affected Smiths clocks operations. There has also been a weak tendency meanwhile in the world clock market, and orders from the United States, from Sears Roebuck, have dropped considerably. We are therefore very concerned about the position in Ystradgynlais.

What is remarkable, however, is the number of small firms which have no complaints at all and are satisfied with the trend of business, which is adding to the number of employees every year. I pay a warm tribute to the help that the Development Board for Rural Wales has given to these firms. It is impressive that once firms have been attracted to rural Mid-Wales they have been pleased with what they have found. That is an impressive feature for the future. The element in the development board's facilities that I find is most appreciated is the advance factory. I should like an assurance from the Government that they will continue a generous level of funding for such factories. I hope that they can make it possible for companies that wish to do so to purchase those factories. I hope that the sum that is realised from such purchases will be earmarked for a rolling fund, so that further investment in factories can be made.

I conclude by referring to one of the most important Welsh industries—agriculture. This industry has an impressive record of improving its productivity compared with other basic industries in Wales. To the great credit of farmers in Wales, and in England, the annual improvement in productivity in agriculture has been about 4 per cent. The farmers know well the bad effect of inflation on businesses such as theirs. Their costs are rising, typically, by about 25 per cent. a year, but their incomes have been declining in the past few years. The price paid for lamb and mutton has been appalling during the past year, and the market for beef has not been strong.

Mr. Geraint Howells (Cardigan)

Does the hon. Gentleman agree that it is the Government's fault that prices on the sheep market have been so depressing during the past year?

Mr. Hooson

I can hardly accept responsibility for such matters as the refusal of the French Government to play fair under the Treaty of Rome regulations. I remind the hon. Member for Cardigan (Mr. Howells) that my Government increased the livestock allowances. He should note the generous remarks made by Mr. Myrddin Evans on behalf of the Farmers Union of Wales, which were of help to the farmers. The Aberystwyth department of agricultural economics—which is within the constituency of the hon. Member for Cardigan—has published figures showing that the real income of an average Welsh farmer is 19 per cent. lower than it was in 1974.

I hope that during the coming year or two the Secretary of State will promote the marginal land survey. It was a blot on the record of the previous Government that they took so long to initiate the land survey. It was initiated within their final few weeks of office. That is a reproach to the Opposition. It was a matter about which they had spoken for a long time. I realise that it is a complex subject, but more land in Wales is in this potential category than is the case in England. For that reason, we are looking for results from the study.

6.4 pm

Mr. Geraint Howells (Cardigan)

This time last year many Conservatives in Wales said "Let us lead you in the 1980s, and Wales will be a prosperous country in which to live." Alas, the new decade has begun badly for Wales, and we are now facing one of the gravest crises in our history. I join many of my hon. Friends today in protesting at the Government's apparent indifference. The role of the Welsh Office is being devalued, since the feelings of the vast majority of Welsh people and the plight of our industries are not being relayed to the Government. The Ministers at the Welsh Office appear to have washed their hands of any responsibility in the matter.

It has been estimated during the past few weeks that there will be about 130,000 jobless people in South Wales by the end of the year, as an indirect result of the BSC closures. It is no comfort to those laid off or to their families to be told that in some dim, distant future the British economy will improve and their fortunes with it. They will not believe it in any case. They have been promised too much, too often. They are suffering—through no fault of their own—from the failure of successive Governments to make long-term plans for industry, which failure has now resulted in short-sighted panic measures in the steel industry and will probably mean the closure of productive coal mines and the extinction of numerous ancillary industries. I hope that this time the BSC management will do its utmost to bring the present strike to an end. In my view, the management should make the first move to bring it to an amicable end.

What is needed, if it is not already too late, is thorough research into the industrial and economic options—as suggested in an excellent article in the Western Mail recently—so that Governments can base their plans on realities rather than on ideological prejudices. The Government's approach so far, based as it is on monetarist theories, spells doom for Wales.

Mr. Nicholas Edwards

The hon. Gentleman is pleading the case of economic planning. Is he encouraged by the fact that previous Governments made long-term plans about the future market for steel which proved to be disastrously and completely wrong? What encouragement is there from that experience to follow the same path?

Mr. Howells

I do not believe that either major party has been successful in its long-term planning to help the British steel industry to survive. There is an urgent need to look at the industry in its present climate.

I shall not elaborate further on the problems of the industrial areas of Wales which will, no doubt, receive attention from other hon. Members during the debate. As a Member for a rural area, I draw to the attention of the House a similar, if less dramatic, decline in the fortunes of rural Wales.

The recession now affecting rural Wales is also having repercussions on the rural economy. For example, the wickedly high rates of interest, coupled with VAT increases, are proving disastrous for small businesses, which are the backbone of the economy in rural areas. There is also concern about the recent proposals to cut down on DHSS business in post offices, which would lead to the virtual closure of thousands of village shops that coexist with sub-post offices. Apart from the economic aspect of such closures, the whole scheme will probably cause additional hardship to the old, the sick and the needy. In their desire to appear efficient, the Government are creating new and serious problems.

On the other hand, the Government are unwilling to act positively on the oil companies' decision to restrict their sales to the smaller petrol stations. Thousands of petrol stations in North, South and Mid-Wales are faced with closure because the oil companies want to maximise their profits, without a thought for the social consequences. That is what the market economy means: let big international corporations have their way, and forget about the rest.

I am interested to note that even economists of monetarist inclination have now begun to express alarm at the rigid policies of the Tory Government—and they need only look at the economic state of Wales to see their worst fears confirmed.

It is time that the Government's attitude softened. Massive incentives are needed to bring new industry to the traditional and rural areas of Wales. I was very pleased when the right hon. Member for Rhondda (Mr. Jones) mentioned the problems that we have in Dyfed, which consists of my constituency, that of the Secretary of State for Wales—Pembroke—and the constituencies of the hon. Member for Carmarthen (Dr. Thomas) and the right hon. Member for Llanelli (Mr. Davies). They are worried that the advance factories programme envisaged by the Welsh Development Agency will not be fulfilled in the next year or two years due to many other parts of Wales calling on the services of the WDA.

Alas, the Government's insensitivity to Welsh needs is reflected in ways apart from their economic policies. Despite overwhelming support for Welsh language broadcasting exclusively on the fourth television channel, and Tory promises at the election and subsequently, we are to be denied this. I wish to make yet another plea to the Secretary of State to try to persuade the Home Secretary to show some civility towards majority opinion in Wales on a very important issue.

Together with the hon. and learned Member for Denbigh (Mr. Morgan) and the hon. Member for Merioneth (Mr. Thomas), I had the privilege of leading a deputation to see the Home Secretary and the Under-Secretary of State for Wales. The Home Secretary told us that he, not the Secretary of State for Wales, was responsible for that decision. He said "I take the blame myself. "It is a great pity that today the Secretary of State for Wales should be a little puppet to the Home Secretary by saying that he is not in favour of the fourth television channel. He was during the election. He represents the Welsh people. Why will he not stand up for the will of those people against the wish of the Home Secretary, who lives at the other end of England and does not understand the problems of Wales?

Mr. Nicholas Edwards

I should make it clear to the hon. Gentleman that it was a collective decision in which I took part. I fully agreed with the decision. It was a decision taken not by the Home Secretary alone but by all the Ministers concerned, and I fully supported it.

Mr. Howells

It is a matter for the conscience of the Secretary of State for Wales. However, I am sure that the hon. and learned Member for Denbigh will agree with my earlier sentiments about the Home Secretary alone being responsible for that decision. Indeed, it has been confirmed by the hon. and learned Member for Denbigh.

I should also like to ask the Government to institute a public inquiry, before any steps are taken, to investigate areas in Mid-Wales for use for the dumping of highly dangerous nuclear waste. There is a growing militancy in this area, as in many others, about the way in which plans of this kind are made without any prior consultation with those who would be most affected.

Mr. Delwyn Williams

Does the hon. Gentleman agree that the militancy in Mid-Wales is inflamed by irresponsible statements by members of the Liberal Party—in particular, a Liberal peer who said that he believed that in Russia nuclear waste had exploded? Do not such irresponsible statements inflame public opinion?

Mr. Howells

I was not at the meeting. According to what I have read, no one made irresponsible speeches. I am sure that the hon. Member for Montgomery (Mr. Williams) will catch your eye later, Mr. Deputy Speaker. If so, and if he wants to accuse that Liberal peer, he will have the glorious opportunity of doing so on the Floor of the House. Again, it is a question of sensitivity—a virtue that the present Government have yet to show in relation to Welsh affairs in general.

Finally, I should like to mention agriculture. According to the Secretary of State and the hon. Member for Brecon and Radnor (Mr. Hooson), things are very rosy in the garden. I was surprised that the Secretary of State did not mention the ban on imports of lamb into France and the sheepmeat proposals now before the Commission in Brussels. I should like an assurance from the Under-Secretary of State later that he will pass on to the Minister of Agriculture, Fisheries and Food the fact that Welsh sheep producers are in favour of the present guarantee deficiency payments scheme. We are not unduly worried about either the French or the New Zealand markets. The Government had a glorious opportunity last August to help the sheep sector by increasing the guarantee price for lamb by 20p a kilo. That internal problem could have been solved by the Government, but they were not willing to give encouragement to the sheep industry.

Mr. Best

The hon. Gentleman has been grudging. He said that everything in agriculture seemed rosy if one listened to my right hon. Friend the Secretary of State for Wales. Does not the hon. Gentleman also listen to the president of the FUW? On 5 November last year he welcomed the strong vote of support given to agriculture by the Government which was implicit in the industry's success in surviving the Government's spending cuts. It is not only my right hon. Friend who has said that the Government have given significant aid to agriculture.

Mr. Howells

With respect, I am discussing not a statement issued by the president of the Farmers Union of Wales but the sheepmeat proposals—and there is a big difference. I am a little worried that the Secretary of State knew very little about the problems of Welsh agriculture front until today. Many Welsh farmers are expecting a lead from the Secretary of State. It may come in the years ahead, but we do not know.

No mention has been made of the co-responsibility levy about which dairy producers throughout Wales are concerned. I hope that the Under-Secretary of State will say something about that matter in winding up the debate.

Reference was rightly made by the Secretary of State to the rate support grant. The right hon. Gentleman has been given more power over local government money than any previous Secretary of State because of the proposed separate Welsh rate support grant settlement. However, the Government have set a maximum threshold of a 119p rate poundage. Authorities will be penalised financially if they spend over the odds. Seventeen local district authorities in Wales are already spending more than that. In recognition of the already existing grave difficulties in Wales, will the Secretary of State increase the threshold for Wales as has been done for London? The problems facing Wales are equally as serious as those in London. Wales has not enjoyed the preferential treatment that London and other metropolitan areas have enjoyed over the past few years.

If we are to overcome our present crisis, and if Wales is to survive as a nation, I believe that decision-making must be devolved to the people of Wales so that they in turn will be able to solve their own political and economic problems without having to rely on the whims of politicians who neither care nor worry about the future of Wales as a nation.

6.19 pm

Mr. Donald Coleman (Neath)

Debates on Welsh affairs are like mystery trips. In the past we have all enjoyed travelling up the hills and down the valleys and going all over the place. Today, however, is an exception, because Labour Members are determined to concentrate their minds on the problems of the steel and coal industries in South Wales.

I agree with the hon. Member for Cardigan (Mr. Howells) that problems will be created for people who work in sub-post offices, and I fully appreciate the difficulties that will result from petrol station closures. Such stations often provide employment for younger people in rural areas who cannot find other satisfactory employment.

There is also the important issue of the closure of the skillcentres. It is strange that the Government are suggesting the closure of skillcentres while at the same time highlighting the need to develop small factories and small industries in Wales as a means of providing employment. I do not disagree with that latter policy, but it is ludicrous that skillcentres are to be closed, since they are the means of training the people who will work in the factories and industries that the Government wish to see developed.

This debate is overshadowed by the fact that 6,883 steel workers at Port Talbot and 4,454 steel workers at Llanwern will lose their jobs if the BSC and the Government get their way. That is an undeniable fact. It is a certainty that we fear, and we also fear that those job losses will not be the end of the matter.

The coal mining industry will suffer. We have been told that at least 20 pits will close, half of them as a consequence of the closures proposed by the Government and the BSC in Wales. Those pit closures will add another 15,000 to the list of the unemployed in Wales. I use the word "unemployed", not the word redundant. Unemployment is an emotive word, but I make no apology for using it because I know what the effect of unemployment will be on the men, women and families who are afflicted by it.

The difficulties will not stop there. Unemployment in the associated service industries will add another 21,000 to the growing list of those out of work in Wales. That is the result of the so-called ripple effect. The BSC proposals will devastate whole communities and create an unemployment problem that will not be resolved for generations. The workers of Wales understand that only too well, and, understanding it, they are determined to prevent this Government—or anybody else—from perpetrating such a crime against the people of Wales. If anyone doubts that, let him recall that the feelings of the people of Wales were demonstrated last week in the great march in Cardiff, organised by the Wales TUC.

Mr. Delwyn Williams

rose—

Mr. Coleman

cannot waste my time helping the hon. Member for Montgomery (Mr. Williams) to avoid unpalatable facts. I shall not give way.

Mr. Williams

Will the hon. Gentleman give way?

Mr. Coleman

No, I will not. The hon. Member is wasting his time. He had better sit down.

Mr. Williams

rose—

Mr. Deputy Speaker (Mr. Richard Crawshaw)

Order. The hon. Gentleman is obviously not giving way. The hon. Member for Montgomery (Mr. Williams) must resume his seat.

Mr. Coleman

I have no time to waste on Tory Party Central Office handouts. The hon. Member for Montgomery can forget about attempting to intervene.

A meeting was convened on that day in Cardiff by the county and district councils of South Wales and a meeting held on Saturday in Swansea was attended by representatives of local authorities, trade unions, Members of Parliament and others. That demonstration and those meetings expressed the feelings of the Welsh people about what is happening.

Let me give some advice to both the Government and the BSC, and they had better heed it, because they have a tiger by the tail. The mood of the people of Wales is that they are not prepared for jobs in the steel industry to be sold, and they will not allow the industry to be destroyed. It has been said that the reason why the decision was taken not to do anything more at present to the steel industry in Scotland was that it would be politically unwise. Let the Government get this clear. It is equally politically unwise to proceed with the decisions announced for Wales. There is now an awareness in Wales that if this blow is struck we shall be destroyed economically and industrially.

If the Government, even now, do not understand the mood in Wales, and if they continue to stand aloof from the problem that threatens to engulf us, they will have abrogated their social responsibilities. That abrogation will be interpreted as a twin act of political vengeance and economic folly that will unite the people of Wales in their fight against the Government and the BSC.

The opposition of the people of Wales will be such that it will destroy the Government and their supporters who propose to perpetrate such a crime upon the Welsh people. Such a blow, struck at the coal and steel industries and the economic survival of Wales, will be a crime against Wales.

6.27 pm

Mr. Keith Best (Anglesey)

It was inevitable that much time in this debate would be spent in discussing the steel industry in Wales and the effect of its problems upon Wales and its economy. It is right that we should have a long debate on that aspect because, obviously, it concerns hon. Members on both sides of the House. It concerns them whichever part of Wales they represent. It does not concern merely the areas about which some hon. Members feel obliged to make constituency speeches, such as that just made by the hon. Member for Neath (Mr. Coleman), who is now disappearing from the Chamber.

I wish to look to the future of the steel industry. We should concentrate today on where future jobs will come from. It is not particularly productive to cry over spilt milk—unless we propose to learn a lesson from what has happened—nor is it particularly productive to score party points. However, I must admit that when some Labour Members make their points I find it hard to restrain myself.

In 1973 the document entitled "Steel: British Steel Corporation: Ten Year Development Strategy" outlined plans for a massive investment in the future. That investment was to be £3,000 million worth of resources over the ensuing 10 years. The document said: The strategy is not free of risk. With the benefit of hindsight, we now know that that prediction was correct, and the level of demand has not been such as was postulated when the document was published in February 1973.

The intention at that stage was to raise the corporation's capacity from 27 million tonnes to about 33 million to 35 million tonnes of liquid steel by the late 1970s and to about 36 million to 38 million tonnes during the first half of the 1980s.

That probably seems rather strange in relation to the present planned capacity of 15 million tonnes, but it was not just the last Conservative Government who thought that the future would hold a brighter prospect for British steel than has proved to be the case. Under the Labour Government, in an interim report published on 4 February 1975, Lord Beswick suggested an acceleration of the British Steel Corporation's strategy towards the upper capacity limit suggested in the earlier plan. Thus, even at that stage, although it was becoming apparent that world demand would not be in correlation with the plans adumbrated in 1973, there was still a plan for increased capacity.

Perhaps the greatest tragedy of the British steel industry is the fact that labour productivity in 1978 was no higher than it was in 1973. The failure to improve productivity has, most regrettably, allowed import penetration and increasing competition from the private sector to deprive the corporation of nearly half the British market.

It is instructive to look at the Labour Government's White Paper "British Steel Corporation: the Road to Viability", in which it was said on page 4: The Government accept that BSC should seek to negotiate closures at such plants in close consultation with the TUC Steel Committee and local workforces. Thus, the Labour Government had a sensible attitude towards the British Steel Corporation, although I suspect that some Opposition Members would prefer to forget some of the things said at that time.

Mr. D. N. Campbell-Savours (Workington)

In consultation.

Mr. Best

Indeed, in consultation. But is it not a tragedy that, unlike what happened in British Leyland, there was not a secret ballot of British Steel Corporation employees on whether they wanted to take industrial action? I suspect that we might have seen a situation very different from the present.

Mr. Ioan Evans

Does the hon. Gentleman think that a secret ballot on the first offer of 2 per cent., with inflation at 17 per cent., would have resulted in the response that he suggests? Further, as he is talking about the public sector of the industry, may I ask him to pay attention to the announcement today by the chairman of Had fields, the private sector company in Sheffield, which, because of the way this Government have mishandled the whole steel problem, is threatening not to pay taxes? That is the view in private industry.

Mr. Best

The hon. Gentleman misinterprets the situation. As I understand it, the distress being felt in the private sector is at the unreasonable attitude being taken towards it in secondary picketing by the workers in the public sector. That is the great tragedy, and the hon. Gentleman cannot get away from the certainty that that will destroy the British Steel Corporation faster than anything else.

The Labour Government said on page 8 of their White Paper: Over the last three years, BSC produced about 100 tonnes of liquid steel per man year, as compared with 1976 figures of 150 tonnes in Germany and 120 tonnes in France. The differences"— I emphasise that this comes from the last Labour Government— cannot be explained away only by differences in the pattern of plants or products. They are due more to management and manpower practices…Management, the trades unions and the local workers' representatives have a major role to play in helping to achieve this"— that is, greater productivity— and so convince the consumer that he can rely on BSC to deliver on time. The TUC Steel Committee have made it clear that they are committed to the development of the Corporation into a profitable, high-wage, high-productivity industry comparable to its major European competitors. I wonder whether the hon. Member for Aberdare (Mr. Evans) would care to comment on the question of high productivity, when the whole basis of the wage negotiation thus far has been that there must be greater productivity.

Mr. Campbell-Savours

Does not the hon. Gentleman realise that all these statistics have been totally discredited in a number of documents, and does he recognise that hon. Members on both sides are becoming increasingly sick and tired of listening to figures which people know are not true? As a Member of Parliament, does the hon. Gentleman acknowledge that he has a duty to present statistics which are accurate?

Mr. Best

I do not wish to do the hon. Gentleman a disservice—I know that he was not in the House when that White Paper was published by the Labour Government in March 1978—but I note that he will not believe any other such document that comes from his side in future. That is very wise.

The facts of the situation in the British Steel Corporation have been corroborated by a disinterested observer, Dr. J. M. Kay, who until the mid-1970s was in charge of the corporation's strip mill division capital investment programme. He was quoted in the Western Mail recently as saying: You have got a totally defeatist top management. I do not blame the Government for putting the financial screws on them—after all, in recent years they have lost some £4,000 million of taxpayers' money. It is all very well for hon. Members to talk about the situation of British steel in isolation. My right hon. Friend and his colleagues have a responsibility also to the taxpayer, and that is the point which they have endeavoured to get across during the past few days. I wish—this is where I shall leave the affairs of the British steel industry—that the Opposition would concentrate less on the closures which were contemplated by their own Government and a little more upon what might be the one valid question to investigate, namely, whether the timetable up to March this year is too early. I make no comment about it, but I suggest that they might well concentrate on that and find it more productive in the light of the timetable going to 1981 of our European competitors.

I wish to look now to the future rather than at the present and the past. In looking to the future for Wales, one has, first, to identify the nature and the incidence of unemployment, secondly, to decide what industries or enterprises will provide jobs, and, thirdly, to decide in the light of that information how best those industries and enterprises can be encouraged and how people can be equipped to exercise themselves within them.

That is the logical approach, and it calls for a lot of valuable hard work to ascertain the answers which meet those criteria. At this point, I pay particular tribute to my own borough council, the Ynys Môn borough council, for having gone to the trouble—I think that in so doing it is unique among local authorities in Wales to employ independent consultants to look at the employment and unemployment situation in Anglesey.

The consultants came to Angelsey and over quite some time amassed their evidence by questionnaire, by direct questioning and by compilation of statistics already available. They ended by producing a number of interim documents, culminating in the publication of their final document—I have it here—entitled "Employment and Unemployment in Anglesey". This is a comprehensive review and analysis of the statistics of unemployment, of its incidence and of ways by which it can best be remedied.

I suggest that that is something that other local authorities might seek to do in Wales, and perhaps it is something that my right hon. Friend and his colleagues also could consider carefully, with a view to seeing whether some good elements could be drawn from an analysis of that kind.

Mr. Anderson

How can local authorities plausibly set about that task unless they have some idea of the total Welsh dimension, which relies on their knowing what are the Welsh Office projections? How can the hon. Member justify the Welsh Office not disclosing for public debate in Wales the assumptions on which it is working in respect of unemployment?

Mr. Best

I do not know whether the hon. Member was aware of whether the previous Government published figures—

Mr. Anderson

Answer my question.

Mr. Best

I am answering the hon. Member's question. There were two parts to it. That is the answer to the second part. The first part contained a perfectly valid point, which was that a local authority cannot operate in isolation. Of course, it cannot do that. It must be part of a comprehensive review. But what a local authority can do, perhaps better than the Welsh Office, is to ascertain, on a parochial basis, the patterns of employment and unemployment within its area, and it can decide the priorities thereafter within the life of the macroeconomics of Wales as a whole. I accept that it is within that ambience. Of course, it cannot be looked at in isolation.

The disturbing fact which appears from that report—and I intend to quote some figures relating to the whole of Wales, and not just Anglesey, although the lion's share of the report appertains purely to Anglesey—is that the worrying trend is in the growth of the long-term unemployed. In January 1976, 16 per cent. of those unemployed had been so for more than 52 weeks. In January 1978, that percentage had grown to 23 per cent., and in July 1978 it had grown to over 30 per cent.

When one goes to local employment offices and talks to employment officers, one realises that there is an ever-increasing hard core of long-term unemployed. The tragedy is that these are the sort of people who, by the nature of their long-term unemployment, are less likely to be offered the jobs that will be available in the future—for a very simple reason. If someone has been unemployed for a long time, obviously his ability to work within a particular environment is impaired by the passage of that time. To a certain extent, he falls into a rut of unemployment. That means that when a firm wants to take on labour and notifies the local jobcentre, the jobcentre will almost certainly refer to the firm concerned some- one who has been unemployed for only a short time and who has in recent memory the knowledge of what it is like to be in a working environment. This is something that we must accept and examine extremely carefully from the point of view of the long-term unemployed, because they are the people who will become unemployable if we are not extremely careful.

Having said that, I come to the question of where the jobs are to be found in the future. My hon. Friend the Member for Brecon and Radnor (Mr. Hooson) mentioned tourism. Before Opposition Members leap up and say "You are not seriously suggesting that tourism is the panacea for the unemployed in Wales", let me reassure them. I am not saying that it is a panacea, but I am saying that at very low cost in public expenditure it is a good way to provide employment.

About 90,000 people are now employed in tourism in wales. The creation cost per job is only £1,800, which compares favourably with the creation of jobs in other sectors, particularly the high-cost investment manufacturing sector. The Wales Tourist Board's claim is that the present revenue—my hon. Friend quoted a figure of £425 million in 1978, and it is estimated at about £500 million for last year—can be raised to £1,000million by 1985 and create some 25,000 new jobs, over 10,000 of which would be in the valleys of South Wales. I am sure that hon. Members who represent constituencies there will take particular note of that.

Tourism is particularly important for the economic survival of Wales. The inherent natural beauty of Wales is obviously the main factor in this industry. Tourism not only creates jobs at low cost per capita but supplements the income of those who sometimes find themselves on low incomes. I am sure that the hon. Member for Cardigan (Mr. Howells), who spoke about agriculture, will accept the estimate that about 4,000 farmers in Wales supplement their income through the medium of tourism.

Mr. Hudson Davies

The hon. Member is right in saying that there is enormous tourism potential in Wales, in the valleys as much as anywhere else, but does he agree that a successful tourist industry depends on a successful economy? Does he agree also that many of the visitors to North Wales have been the steel workers of South Wales? How does he see the success of the tourist industry in Wales equating with the kind of decline that the Government would like to bring about in the basic industries of Wales and other parts of the country?

Mr. Best

It is wholly misleading and thoroughly naughty for the hon. Member to say that the Government wish to bring about an industrial decline. I do not believe that he is seriously putting forward the view that the Government would try to work towards an industrial decline in Wales. If the hon. Member is saying that, I am forced to hold his views in less respect than I have in the past.

Mr. Hudson Davies

Intentions may surely be interpreted on the basis of actions.

Mr. Best

I do not think that the hon. Member is in a particularly strong position to speak, bearing in mind the recent history of Wales and an unemployment figure of over 101,000. I quoted some figures of the number of jobs created by the previous Labour Government as compared with the number created by the previous Conservative Government. I do not think that the hon. Member is on strong ground.

Perhaps I might deal with not the farcical point that the hon. Member made but his serious one, namely, whether tourism depends upon a successful economy. To a certain extent the hon. Member is right, in so far as people who are not enjoying the benefits of a successful economy are less likely to take holidays. However I remind him—he knows this from his experience in connection with the Wales Tourist Board—that although large numbers of people who come to Wales as tourists come from the rest of the British Isles, a significant proportion come to Wales and other parts of the United Kingdom from abroad. Another reason why one should seek to stimulate the tourist industry—I am sure that the hon. Member would agree with me—is that, apart from anything else, it enhances the balance of payments. It is a very good way of bringing foreign money into this country.

I do not wish to say any more about tourism, other than that it is something that we should look at very carefully from the point of view of creating jobs. I welcomed the speech of my hon. Friend the Under-Secretary of State, the hon. Member for Conway (Mr. Roberts), at the Park hotel in Cardiff on 11 January of this year. I visited the Wales Tourist Board only a few days ago. Certainly the people to whom I spoke there were greatly heartened by the news conveyed in my hon. Friend's speech. Among many other things, he made two major points. The first was that the Government are to maintain the Wales Tourist Board's grant-in-aid in 1980–81 at the same level as in the current year. That offers great succour to those employed by the Wales Tourist Board.

The other point, of perhaps greater significance and with ramifications for the future, was the statement that the Government were considering introducing a scheme of interest relief grants under section 4 of the Development of Tourism Act 1969. That should have been brought about some time ago. For far too long tourism has not been regarded as an industry. Whereas manufacturing industry has received interest relief grants for some time, tourism and those involved in the stimulation and development of tourism have not received such help. I welcome my right hon. Friend's statement, which indicates the Government's realisation that tourism should be treated like other industries and have the same advantages and availabilities as other industries.

At the beginning of my speech I said that we must ascertain the incidence of unemployment and the sort of industries that could take the place of those in decline. It is important also to try to gauge exactly why employers move to particular areas. Unless we can gauge that, many governmental incentive schemes will be nugatory because they will point in the wrong direction. The report that was commissioned by my local authority dealt with the problem in some depth. A number of employers were interviewed. In the manufacturing firms, the reasons that they gave for siting their firms in Angelsey were, in order of frequency, first, the availability of premises, secondly, the availability of labour, thirdly, the availability of grant, fourthly, local associations of the owner, fifthly, particular geographic factors and, lastly, local demand. In the service industries, the priorities were serving the local need and the purchase of existing business.

I should like to concentrate on the manufacturing firms. The report shows that the availability of premises is extremely important. The Government should concentrate on stimulating the Welsh Development Agency to provide advance factories rather than go into the more turbulent water of investment in particular firms. I make one particular plea. The Welsh Development Agency and local authorities should consider far more the provision of premises for the smaller business man, who may require only a lock-up garage. He needs that garage to expand from the cottage industry that he may have started in his own garage or home. Local authorities and the Welsh Development Agency can be of great help in that way.

I conclude by making four points. I shall be brief because I realise that other hon. Members wish to speak and there is not sufficient time to develop those points.

Mr. Geraint Howells

I know that the hon. Gentleman has been carried away in the debate, but is he aware that he has been on his feet for nearly half an hour?

Mr. Best

I was unaware of that, and therefore I shall draw my remarks to a close succinctly.

First, I welcome what was said by my right hon. and learned Friend the Chancellor of the Exchequer about the establishment of an enterprise zone. I hope that my hon. Friend the Under-Secretary of State will deal with that matter when he winds up the debate. Secondly, I believe that it is manifest from investigations of employers that the greatest incentive is the alleviation of taxation. Thirdly, I hope that the Government will look into the question of fuel costs for industry. Fourthly, I know that my hon. Friend is aware of the need for training. My right hon. Friend the Secretary of State has said something about that, but I hope that my hon. Friend will also deal with the subject in his closing remarks.

Several Hon. Members

rose—

Mr. Deputy Speaker

Order. Before I call the next hon. Member, I should point out that another 11 hon. Members wish to speak. Long speeches do not help. Anybody who speaks for more than 12 minutes between now and 9 o'clock will prevent other hon. Members from speaking.

6.54 pm

Mr. Roy Hughes (Newport)

I assure you at the outset, Mr. Deputy Speaker, that I shall not abuse the time of the House in that respect.

There is no doubt that the life and the economy of Wales are overshadowed by the national steel dispute. As I see the problem, there are two aspects to it. First, there is the wages issue. I believe that the steel workers' claim is perfectly justified, bearing in mind the level of inflation in the economy. Steel workers' wives in Newport will continue to purchase their goods in the same supermarkets as housewives with husbands who are employed in other industries, Certainly, steel workers will not stand idly by and see their wage and living standards eroded.

The other aspect of the dispute is far more significant—the job losses in the steel industry. They will spill over into coal and other ancillary industries. I believe that BSC's proposals for Llanwern and Port Talbot are catastrophic. Over the years, I have had a fair bit to do with BSC. From the chairman down, its members have always been perfectly courteous to me. However, I would be less than frank if I did not say that many people are questioning the judgment of the executives in the BSC. It is not necessary to read the columns of Private Eye to come to that conclusion.

Not so long ago, the BSC was pressing the Government for an investment of £800 million at Port Talbot. Now, not so long after that, it has proposals to decimate the works—even one proposal to close it. In recent weeks, I have taken part in illustrating the fiasco of the limestone contract at the Llanwern works. That is a 15-year contract for which the BSC currently pays £300,000 annually for materials that the works does not require. The figure is index-linked and, presumably, it will escalate each year until the contract terminates in about 1987. I have been trying to find out how much of the limestone has been delivered to the works over the years and how much has been paid for.

I intervened in the speech of the Secretary of State to refer to the conundrum over the coal imports into Llanwern. Imports of dear German coal and cheap American coal will now be going to Redcar. The House is entitled to more explanation about these matters. Added to that, there are a charge of nepotism in the BSC and the existence of what we know to be a Yorkshire mafia who have permeated the top positions in the South Wales industry. The least that can be said is that the BSC has not come up to our expectations of public ownership.

Perhaps there will be easement of the corporation's redundancy proposals as a result of the talks going on between the unions and the corporation—particularly the redundancy proposals that will affect the two principal works in South Wales, Llanwern and Port Talbot. What we must face up to is that it is no good producing steel simply to stack it up on the mountainside. It has to go into manufactured products such as motor cars, washing machines and other consumer durables—to use that posh economic term. The case for import controls is therefore overwhelming. That is the answer to the challenge made by the Secretary of State to my right hon. Friend the Member for Rhondda (Mr. Jones). For many years I have seen the situation.

It is a pity that many of our key industries have been dragged down. I hate to say it, but it is particularly vexing to me that the Labour Government of 1974–79 took little, if any, action. Is it any wonder that we now have these so-called ideological differences in our party? The prerogative of the leadership is now being questioned on important policy issues, particularly those affecting employment in Wales.

Imports are rising so quickly that the revenues from North Sea oil cannot prevent a serious balance of payments crisis in the near future. When such a crisis arrives, it is areas such as Wales, particularly South Wales, that will suffer most, if experience is anything to go by.

Last year the United Kingdom had a trading deficit of £2 billion, despite the fact that Britain is virtually self-sufficient in oil. What other country would have allowed the import penetration of motor cars to reach 60 per cent. without taking action? Is it any wonder that our steel industry in South Wales is now suffering? The Treasury and the previous Labour Government have a case to answer.

A distinguished school of Cambridge economists has for some time courageously called for import controls. It believes that only that aspect of economic policy can prevent the de-industrialisation of our country. The Western Mail, the daily newspaper of Wales, carried a report last Friday in which The Economist Intelligence Unit came to the same conclusion, namely, that import controls are essential. The intelligence could not have been all that good, because it has taken the unit so many years to catch up with reality. The volume of imports of manufactured goods must be checked and then reduced.

If people bought British and Welsh goods, production would expand. People would be taken out of the dole queue, and unit costs would be reduced. Such a policy is tailor-made for our principal steel plants in South Wales—Llanwern and Port Talbot. Millions of pounds have been invested in those two major plants. They must be operated at full strength if they are to be economic and profitable.

In the leading article in the business supplement of The Observer yesterday, William Keegan stated that such policies are now being discussed behind closed doors. Those policies would bring the country into a certain amount of conflict with the Common Market. However, most people realise now that it is membership of that organisation that has brought us to our present plight. Wales is not part of that golden triangle that was brought into focus during the referendum debate. The leader writers of financial columns have had to eat their words and the advice that they gave to the British people at that time.

Roy Jenkins and Shirley Williams were prepared to split our party from top bottom on that issue. The people of Britain were kidded, with the full backing of the media. A week or two ago I was on the picket line at the Llanwern steelworks. One of the pickets came up to me and said: Mr. Hughes, I voted for us to stay in the Common Market, but if we could come out you could take my right hand off tomorrow. That is the extent of feeling now, and it is particularly manifest in the steel industry.

There is no doubt that EEC membership has done immense damage to the economy of Britain, and particularly to that of Wales. That view is broadly shared. We know of the appalling budgetary costs. They are apparent for all to see. Even the Prime Minister has had to make bitter complaints about our net contribution of £1 billion. It is pretty obvious that she has not been able to do much to rectify the situation.

The damage to our industry is even more significant, as we in Wales are learning from our own experience. The economy of the United Kingdom deteriorated at a more marked rate throughout the 1970s. During that time our economy was opened up to our European competitors. Soon the shutters will have to be put up. From a Welsh point of view, the sooner the better.

7.06 pm

Sir Anthony Meyer (Flint, West)

Whatever happens, this country has to live in a competitive trading world. Import controls would not make it any easier for us in such an intensely competitive world. However, I do not propose to continue along the lines of the hon. Member for Newport (Mr. Hughes) or to tread on the bitter family quarrel that he referred to earlier. It has been a sombre debate and I shall speak briefly and sombrely.

Whatever happens, unemployment in Wales will rise to a terrifying level. The underlying reason for that unemployment is that the industries which provide so high a proportion of jobs in Wales have become uncompetitive. Too much of British industry is unable to compete in world markets; too high a proportion of that uncompetitive industry is in Wales. More serious still, we have now sunk to the point where a further increase in unemployment is inexorable—either through this Government's policies of forcing those industries to become competitive or through the policies now, I believe, advocated by the Labour Party of allowing industry to become still more uncompetitive. Either way, unemployment will follow inexorably, because the rest of industry does not produce enough work to subsidise those uncompetitive industries and firms.

However, whatever the real reasons for unemployment, it will be under a Conservative Government that unemployment in Wales will reach—and may well exceed—the estimate of 130,000 that was predicted by the Wales TUC. Naturally, the Labour Party will make the fullest political capital out of that. We Conservatives cannot complain. We made political capital enough out of the fact that the Labour Government, which came to power with the slogan Back to work with Labour", doubled the number of people out of work in Wales. I hope that the Labour Party, in its understandable glee, will be as careful as I hope that we were not to promise any magic cure for the ill of unemployment.

In Wales the situation has gone well beyond charges and counter-charges of Government inefficiency and misguided policies. There is no mistaking the bitterness and fear. The nightmares of 50 years ago are recurring. It is natural that workers, faced with an erosion of their living standards or with the far worse prospect of redundancy, should turn to industrial action to safeguard their living standards or jobs.

Right hon. and hon. Members on the Labour Benches are clearly under intense pressure to support or even take the lead in industrial action. Except for the comparatively small number of extremists, the strikers are their own people—their friends, workmates and political associates. Those people are in conflict with the policies of a Conservative Government. If they so choose, hon. Gentlemen are perfectly entitled to support the call for a general strike, which is being urged by the Wales TUC to force the Government to change their policies. The right hon. Members for Cardiff, South-East (Mr. Callaghan) and for Ebbw Vale (Mr. Foot) have chosen to do so. No doubt, in urging the TUC to initiate a general strike, language such as we heard from the hon. Member for Neath (Mr. Coleman) will prove powerfully emotive.

It is perhaps futile and impertinent for me to beg the Labour Party to think again, but I have to say this. The Government have a substantial majority that will see them through this Parliament, however many by-elections they lose—and they will lose many by-elections. That majority is quite astonishingly united and resolute. We believe that, however unpalatable may be the consequences of some of the Government's policies—and those of us who accept the idea of State intervention and believe passionately in the ideal of one nation find the consequences unpalatable indeed—the alternative of putting off cruel decisions will no longer buy even a few months' reprieve for living standards or jobs. We believe that we have reached the point where a massive confrontation with the unions in Wales is less dangerous, even in the short term, than using taxpayers' money to pay wage increases unearned by higher production or postponing indefinitely the move towards competitiveness.

That being so, the unions cannot force the Government to change their basic strategy, but they can bring Wales close to total collapse. They cannot govern Wales, but they can make it ungovernable. I beg the Labour Party to think deeply and calmly before it travels down that dangerous road. The Labour Party is a great democratic party, and Labour Members are, I know, great Welsh patriots. If they encourage the Wales TUC to plunge Wales into chaos, and if they make it so unattractive to incoming industry, particularly industry from overseas, what eventual inheritance are they preparing for themselves?

The Labour Party is in a strong position. Although it cannot force the Government to change their policies, it can ensure that those policies do not succeed. What is more, I believe that the crisis facing Wales is so grave and urgent that we are entitled to ask the Labour Party for a limited but priceless degree of co-operation—that it should actively discourage the unions from political strike action.

If the Labour Party does that—and I am aware that I am asking a lot—the Government must give something in return. It cannot be pressure on the nationalised industries to concede wage increases unmatched by higher production. It cannot be a guarantee to shelter any section of the community against falling living standards. However, we can and should give an even firmer commitment than hitherto to providing jobs for the people of Wales in so far as it is within the power of the Government to do so.

We have to admit that private enterprise, which we still firmly believe is the long-term salvation for the country, is so debilitated after years of buffeting from both sides that it is not capable of providing enough jobs, or providing them soon enough, to replace the jobs being lost in the public sector. For that reason, I was particularly glad to hear what my right hon. Friend said about the direct action that the Government are taking to provide additional jobs in Wales.

We have to accept a degree of direct responsibility on the Government and the agencies of the Government to provide jobs. We may have to continue with job creation programmes that are barely cost-effective. We may have to envisage a more direct and expanded role for the Welsh Development Agency and the Development Board for Rural Wales. We may have to spread our programmes of closures, including steel closures, over a longer period than is desirable in the industry's interests. In short, we may be obliged, in the interests of what the right hon. Member for Rhondda (Mr. Jones) called social cohesion, which is now gravely threatened, to accept a slower pace of advance towards industrial competitiveness and a slower move towards those higher living standards, improved social services and decent levels of pensions that we all aim to achieve.

We must be quite clear about the concessions that we may be forced to make in order to induce the Labour Party to co-operate in urging restraint on the unions. It amounts to sharing out the available work. In a static economy, that means sharing out the available earnings. The price of cutting unemployment without raising production is lower living standards for all. I am prepared to pay that price if the Labour Party is, but we must pay it with our eyes open.

If we pay it, it must be only in part and for a time. The Government may be forced, in order to retain social cohesion, to slow down their progress towards efficiency and prosperity. What they must never do is start marching in the other direction. If that is the price that the unions and the Labour Party demand in return for not plunging Wales into temporary chaos, the answer must be "No".

7.18 pm

Mr. Ednyfed Hudson Davies (Caerphilly)

This is a time of suffering. The country is suffering from the doctrines of a Government who are bent on pursuing their monetarist policies. What is bad for Britain is always worse in an area such as Wales. In addition to cyclical economic problems, we have underlying secular economic problems.

The Secretary of State should seek to ameliorate in Wales the effect of the policy of disincentives to industry. The Government have engineered a minimum lending rate that makes it unthinkable that industry will wish to invest risk capital in Wales. There are no signs of the entrepreneurial rebirth that was to flow from cuts in higher levels of income tax.

I ask the Secretary of State whether there has been any substantial fall in the number of applications for Government aid to industry. There is no buoyancy in Wales. The right hon. Gentleman will probably claim that he has made aid to industry more selective and, therefore, more beneficial, but in fact he has reduced it. I raise the question of the criteria of applying section 7 of the Industry Act to aid. This kind of aid has become so discretionary that firms cannot calculate what they are likely to get and, therefore, cannot use it as part of their planning in areas like South Wales where cuts in public expenditure merely compound the evil effects of Government policy.

What kind of growth can possibly come from this contraction? It is rather like the silly tale of the tinker who wanted to train his donkey to live without food. Step by step he reduced the donkey's diet, until he got to a point where the donkey was living without food. Then, for reasons that the tinker could not understand, the donkey died. The Government are performing an absurd exercise on the economy of Britain as a whole and Wales in particular.

The hon. Member for Flint, West (Sir A. Meyer) talked of the possibility of further contraction. With nothing left in the end except a tiny profitable residue, everything is being sacrificed in the interests of that residue. In the meantime, the whole of the economy has died as a result. This Government, who have taken away so many supports of industry, are none the less obsessed with the notion of profitability in the steel and coal industries, regardless of the astronomic social costs of the contractions that they envisage.

Is the Secretary of State not aware of what the threatened steel closures will mean in real terms to Wales? The Government have not been given a mandate to close down the whole economy. The contraction in the steel industry will lead to contraction in the coal industry and the whole of the economy that is supported by those activities.

In my constituency I have the National Smokeless Fuel ovens at Nantgarw, and even without the cuts and steel closures Nantgarw's coking plant and the pits supplying it are being put in jeopardy by the BSC's purchase of foreign coal, which is very often subsidised at source. In the present economic climate it is nothing less than criminal for the Government to fail to intervene in the BSC's purchasing policy. We cannot have one nationalised industry pursuing a policy which is so destructive to another nationalised industry. When the BSC's commercial policies blight the coal industry, the Government should intervene.

I do not believe that industrial action should be undertaken lightly. I certainly do not believe that it should be undertaken vindictively. However, we have come to the point in Wales where the Government have so abandoned responsibility for the real needs of the economy that creative industrial action is called for. This is the only way to compensate for the Government's failure to intervene. Selective refusal to handle certain kinds of goods is becoming more and more necessary.

I have listened to my hon. Friend the Member for Newport (Mr. Hughes) talking about import controls and the need to introduce them. In the past I have been opposed to import controls, but we are now getting to the point where, in certain areas, we must think in these terms. If the Government will not intervene in the purchase of foreign coal and steel, it is the duty of the dockyard and transport workers of South Wales to carry out their responsibility for them—[HON. MEMBERS: "Disgraceful. "In the present predicament, I urge that not one tonne of foreign coal should enter South Wales. We cannot afford to sacrifice our economy in the interests of exporters in Germany, Australia or the United States.

The Secretary of State would have benefited greatly from attending the TUC rally in Cardiff a week ago. He would have seen a strength emerging from the people who, in the end, will not allow these things to happen. The dockyard and transport workers of South Wales may well do the Government's work for them in certain areas where the Government are unwilling to take action themselves.

Does not the Secretary of State comprehend the importance of a coal industry for the future? While he is prepared to allow the coal industry in South Wales to be run down as a direct effect of the kind of steel policy that he envisages, does he realise that at the same time Germany is building and subsidising a coal industry as an investment for energy needs of the future? Either we must prohibit the importation of foreign coal or we must introduce subsidies, as other countries have done, in order to make South Wales coal competitive.

We complain that our coal is uncompetitive against that of other countries when, as part of their energy policies, they are subsidising their coal industries. If we allow our coal industry to decline, we shall throw away all the work done in recent years, by investment and by other means, to increase its efficiency. We are getting to the point at which our coal industry could reach a high level of competitiveness, and if we were to subsidise it we would see the South Wales coal industry to the end of this period of improvement.

Judging by his performance, if it were left to the Secretary of State he would be happy to think of the memorial to his tenure of office as being the fact that he had presided over the decline of the steel and coal industries in South Wales.. But the people of South Wales will not allow that to happen. If he pursues these policies, he will have on his hands an indusstrial battle of his own making which he cannot hope to win. Let him take heed.

7.28 pm

Mr. Geraint Morgan (Denbigh)

I shall, of course, apply to myself that self-denying ordinance in respect of time that you have called for, Mr. Deputy Speaker.

I wish to make a few observations about one of our basic industries, agriculture, and then turn to a completely different subject which is at present highly topical but which is not often raised in Welsh debates, namely, the future of the Welsh language with particular reference to bilingual broadcasting in Wales. My right hon. Friend the Secretary of State touched briefly on that subject.

I should like to begin with agriculture. There is much on which the Government deserve congratulation, despite the remarks of the hon. Member for Cardigan (Mr. Howells). The position that the Government inherited was hardly rosy. Under the previous Government, farming income had declined steadily in real terms by no less than 11 per cent. in 1978 alone. The same sorry story was reflected in the decline of animal and poultry stocks. By June 1979, the pig herd in Wales had fallen by about one-third compared with 1973. The number of cattle had been reduced by about 100,000 and the poultry flock by upwards of 1 million in the same period. The area of total tillage fell by nearly 10,000 acres.

Against this sombre background, my right hon. Friend the Minister of Agriculture, Fisheries and Food announced, towards the end of last year, substantial increased payments for hill farmers in the form of considerably increased allowances for hill cows and hill sheep. These were especially welcome. So was, if I may quote the words of the president of the Farmers Union of Wales, the industry's success in surviving the Government's spending cuts. Not least, the industry is grateful for the three devaluations of that old ogre, the green pound, since the Government came to office—5 per cent. in June last year, 1.2 per cent. in November and 5 per cent. again in December. The former yawning gulf between the green pound and the pound sterling has largely been bridged. We now have the prospect, unbelievably distant a year or two ago, of positive MCAs being payable in the next few weeks if the strength of sterling persists.

Having said all that, I would not like Ministers to suppose that Welsh agriculture is now one big garden of total contentment. On the contrary, Welsh farmers are becoming increasingly concerned about the time being taken over the Government survey of marginal land—a very important issue in the Principality, as may be assessed from the fact that, of Wales's total hill and upland acreage used to rear sheep and cattle, no less than 30 per cent. is rough grazing. The last Government dragged their feet on the matter and failed to come to any decision. They have now been gone for the best part of a year. I was hoping, in view of the growing criticism among farmers, that this much-needed survey would be speedily completed.

The announcement by my right hon. Friend today that this will not be achieved until next year will be received with great disappointment in Welsh agricultural circles. I wonder whether something cannot yet be done to expedite this decision. I hope that my right hon. Friend will consider that possibility and discuss it with my right hon. Friend the Minister of Agriculture, Fisheries and Food.

I should like to turn to the future of the language and to broadcasting policy. The Government deserve commendation for one thing, at any rate. Despite the atmosphere of public expenditure restraint, their provision for the Welsh language has been consistently generous. I take two examples: the specific grant of £500,000 for bilingual education embodied in the Education Bill, now in Committee, and the highest grant ever—£70,000 in this financial year—made to the Mudiad Ysgolion Meithrin. In this respect, the Government have adhered loyally to the promise given in the Gracious Speech at the commencement of this Parliament.

I only wish that my judgment on the other aspect of the Government's linguistic policy, namely, broadcasting, could be as favourable. Unhappily, it cannot. There has been a violent U-turn—I must say bluntly—in total breach of the undertaking given in the Conservative Party's Welsh manifesto. I am referring, of course, to the fundamental change of policy regarding the fourth television channel. As long ago as November 1974, the Crawford committee recommended to the then Government: The fourth channel in Wales should be allotted to a separate service in which the Welsh language programmes should be given priority. The report added: This should be introduced as soon as possible without waiting for a decision on the use of the fourth channel in the rest of the United Kingdom. The then Government apparently accepted the decision in principle there and then, although I am bound to add that four and a half years and two working party reports later, when they went out of office, they had taken no positive step in this regard. However, that Government still adhered to the policy and, so far as I am aware, that is still the official standpoint of the Opposition, although I am aware that at least two non-conformists on this policy are present in the Chamber.

The political position, in short, was that until last September, when the Home Secretary suddenly announced a basic change of policy, all the parties represented in the House substantially supported the recommendations of the Crawford and Annan committees for a predominantly Welsh fourth channel, although there were differences about the means whereby this would be achieved. Moreover, this solution had gathered the support of such august bodies as the University of Wales and the Welsh Broadcasting Council.

I note that my right hon. Friend the Secretary of State told the House this afternoon that he had changed his mind. I feel bound to add that I got the clear impression a fortnight ago today, when I led a deputation to discuss this matter with the Home Secretary, that this was most definitely the Home Secretary's decision, and his alone. He said so with great clarity at the time. That is perhaps not a matter of great moment, but it is only fair that I should record it.

I am at a loss to understand why this seemingly generally accepted policy has been abruptly changed. I can fully understand the arguments for retaining and trying to improve the status quo, which, I suppose, in effect, is what the new policy is. I freely confess that at one time I was opposed to the idea of a fourth channel myself. It was only at a comparatively late stage that I became convinced that it was undoubtedly the most satisfactory solution.

It is arguable that Welsh language broadcasting benefits to some degree by Welsh programmes being left on the two majority channels, for example, from the undoubted audience that a Welsh programme such as "Heddiw" inherits from a preceding programme with countrywide popularity such as "Nationwide". It seems to me, however, that such advantage as that may be is heavily out- weighted by two important factors in particular. First, there is the divisive influence of the present arrangement upon us as a nation, creating undoubted antagonism towards the language on the part of non-Welsh speakers, both English and Welsh, caused by their being deprived of favourite English programmes at peak viewing times. This antagonism has caused many, where possible, to turn their aerials towards English stations, with the result that they avoid not only Welsh language programmes but also Wales-based English programmes with Welsh associations.

Secondly, the maintenance of the present arrangements would not allow for any meaningful expansion of the present output of Welsh language programmes. That would only increase the sense of deprivation and viewing resistance of non-Welsh viewers beyond what would be tolerable.

In short, what I might describe as the fourth channel solution would have four outstanding merits that no other solution would possess. First, it would go a long way towards satisfying an existing need among Welsh speakers in Wales. Secondly, it would be entirely fair to Welsh speakers and to non-Welsh speakers alike. Thirdly, it would release the other Welsh-based services of the BBC and HTV from having to accommodate Welsh language programmes and so enable English-speaking viewers to be recovered and their need for Wales-oriented programmes to be adequately met. Fourthly, and perhaps most important, the service would make a contribution to the survival of the Welsh language, which, if that task is to succeed, needs urgently the assistance of so powerful an influence in the home.

Mr. Delwyn Williams

Is my hon. and learned Friend not aware that 80 per cent. of the people of Wales are English-speaking? Is he aware that the people of east Montgomery shire actually oppose the Welsh channel in the strongest manner? Is he aware of the outstanding patience of English-speaking Welsh people who finance a national eisteddfod in which they are not allowed to participate, put up with signs being daubed, houses being burnt and English-speaking broadcasts being interrupted by vandalism? I assure my hon. and learned Friend that he is not speaking for the majority of the Welsh people, who, despite what I have said, want the language to survive and prosper. However, in order to prosper, the language needs the support of English-speaking Welshmen.

Mr. Morgan

Of course it does. I hope that I had made the point that the solution that I support is fair to Welsh and non-Welsh speakers alike. Of course, no hon. Member condones any of the activities that my hon. Friend rightly condemns. Indeed, I would go further in punishing such crimes than does my right hon. Friend the Home Secretary, as I have proved by my votes in the House.

The argument that I adduced just before my hon. Friend intervened is probably the strongest of all. I personally would regard it as conclusive. It is powerfully reinforced by the fact that the development of the two indigenous radio services in Wales, one English and one Welsh, has been a considerable success.

As I have said, I appreciate the strength of some of the counter-arguments, but I must add that some others are specious in the extreme, notably, for example, the one that there is public misconception about the fourth channel proposal, including, for instance, the belief that the service would be entirely in Welsh.

That may be one of the misconceptions and there may be others, but there was no such misconception on the part of the Annan and Crawford committees or on the part of the university or the broadcasting council—bodies for which I hope my hon. Friend the Member for Montgomery (Mr. Williams) has respect—which nevertheless gave their support to the project. And this argument completely overlooks the potential for expansion of Welsh programmes that such a service would afford.

We must face the brutal fact that the Welsh language is fighting for its life. The next two decades to the end of this century will be more fateful for it than any previous two centuries in its history, and the decision that we make in this respect must be the right one.

In pressing the Government to change their mind, I do not regard myself as a party rebel. I have been a party rebel in my time, but I am not on this issue. The rebels are on the Government Front Bench and have been festooned along it from time to time during the day. I ask only that the policy most clearly set out in the party's manifesto should be implemented and that, even at this late hour, this new and unsatisfactory alternative should be rejected.

7.43 pm

Mr. Barry Jones (Flint, East)

I am a witness to the long-term rebellions of the hon. and learned Member for Denbigh (Mr. Morgan) and I listened with interest to his shrewdly phrased and powerful speech.

My hon. Friend the Member for Newport (Mr. Hughes) mentioned import controls. I suspect that the Government are looking, perhaps secretly, at some form of controls, if only because £1 billion worth of foreign steel entered the United Kingdom in 1978 and nearly 900,000 motor cars were imported into Great Britain last year. If those cars had not entered Britain, the production of one extra steelworks would be needed here.

The hon. Member for Flint, West (Sir A. Meyer) mentioned the Wales TUC. I understand that it is not calling for a general strike. After the demonstration in Cardiff last Monday, it will need to say little in the near future, because that demonstration emphatically said a great deal.

A British Government practising statesmanlike policies should surely aim for the maximum fairness and the least political tension. By those criteria, the Government have failed miserably. Wales knows that it is suffering unjust policies and is clearly a tense and unhappy land.

There is no doubt that there are resentment and indignation in the coal and steel towns. The most famous coalfield in Europe is in uproar, largely because of the insensitive handling of the need for coking coal subsidies. In addition, Britain's most moderate union in heavy industry is in its sixth week of a solid national strike.

Fear stalks the valleys, much of Wales dreads the dole, and the people of the Principality sense a swift slide into mass unemployment. My home area is a good example of some of our fears, because nearly 8,000 people there will be on the dole by Easter. I have to ask how and when 8,000 new jobs will be delivered to my area at a time when there will be a demand for 50,000 new jobs throughout Wales.

To us on the Opposition Benches, the Secretary of State—I do not speak in a personal sense—appears to be a collaborator in the execution of brutal policies and he will appear as the Welsh apologist for a policy that can only toll the death knell of the coalfield and sanction an irresponsible rundown of our strategic steel industry.

In the past 150 years, southern Britain has grown sleek and rich on the backs of the miners. The pleasant environment and privileged life style of much of southern Britain contrasts grimly with the harsh realities of life in the coalfields. When our oil reserves expire we shall need miners, but I believe that the Government's approach to the coking coal problem will have created a scarcity of mining skills when that time approaches. That applies as much to North Wales as to South Wales. The steelworks in my area has consistently been supplied with coking coal from the Wrexham area.

It is a truism that steel is vital for our industrial strategy and for the hopes that we all have for industrial regeneration. It is certainly required for national defence. The BSC's losses of £300 million are infinitesimal compared with an annual defence budget of more than £8 billion. There is no defence without steel.

We could advance a case for BSC's deficit being charged to the defence budget. Which is worse, a temporary financial deficit in a cyclical demand industry or long-term and minuscule national steel capacity of a beggarly 15 million tonnes per annum, and with it potentially massive social consequences and even, as some of my hon. Friends have said, considerable political unrest in parts of our country?

I wish to abide by the rules for the second half of the debate, and shall conclude by saying that it would be a foolish, blind and arrogant Government who did not draw conclusions from what occurred in South Wales a week ago. That was a genuine expression of fear and concern by many of the communities in South Wales. Any honest observer of that mighty turnout will agree that what emerged from that march was a vivid and distressing memory of the industrial war years.

We fear greatly that there will be a return to mass unemployment. It is that which fuelled the indignation, the fury and the sense of unfairness throughout the length and breadth of Wales. The Minister must return to the Cabinet room and reopen the fight. He must argue, argue and argue again with the Secretary of State for Industry and those who support him in the Cabinet that there must be intervention to save our steel industry before it crashes to the ground and becomes irreparably damaged. The Minister has a duty to return to the Cabinet and fight again.

7.51 pm

Mr. Dafydd Wigley (Caernarvon)

It is tempting to follow the hon. and learned Member for Denbigh (Mr. Morgan) on the question of the fourth channel. It is important: to find a right solution to that problem, on which the Welsh can be united. I agree with everything that the hon. and learned Gentleman said on that issue.

We are facing an even greater crisis, namely, that of the future of the whole economy of Wales. At the end of the day, if there is no work available there will not be communities, and without communities there will be neither language nor culture.

In the few minutes that are allotted to me on the only day that we have for debating Welsh affairs, I wish to address myself to the economic crisis that is facing Wales. Some hon. Members, including the hon. Member for Flint, East (Mr. Jones), referred to the 1930s. I am not old enough to remember that period of depression, but, with my hand on my heart, I say that in all of my life I cannot remember such a feeling of anger, disillusionment and resentment in Wales as there is today. That is true not only in the coal mining valleys and the great steel towns of South Wales and Clwyd, but also in areas such as Gwynedd, because they are all dependent on each other.

Gwynedd is suffering the shock waves from Shotton. Our employment will reduce as a direct result. Not only will we lose jobs, but we will find it more difficult to attract alternative industry to replace the jobs lost. The same is true in Dyfed, where the effects of the steel industry work their way through the area of the old Carmarthenshire and into the rest of Dyfed. It is not a problem that affects a few areas only.

The only practical solution to the steel problem is one that, instinctively, does not appeal to me. It is a solution that I turn to because there is no alternative, namely, the need to limit the imports of steel and of steel-using manufactured goods.

I should prefer to have an economy that could trade with all countries and reap the best of all parts of the world for Wales. However, there comes a point in time when one has to consider the real position as it exists and ask "Can we afford what we are trying to do?" In the context of one's household, it would be nice to have the best decorator in town to paint or paper the walls, but if one cannot afford that one has to do the job oneself. That is the reality of the current position on imports, especially of manufactured goods. There is a tremendous imbalance in trading in motor cars with the EEC, Japan, Sweden and other countries.

The steel industry has faced problems for a number of years. Everyone recognises that there is a role and a place for greater productivity and greater output. However, it is unrealistic to expect to negotiate and obtain greater productivity without securing an increased share of the market. If we do not get increased production levels but achieve higher productivity, the employment in the industry will collapse. The only way in which we can realistically achieve a greater market is by substitution of steel imports. We will not be able to compete in the overseas steel market with countries such as Venezuela, Korea and others that have new steel industries.

If there is to be a greater future for steel and an opportunity for higher productivity, and therefore, greater output and higher wages—which the men deserve—it must be, and can only be, by virtue of using our capacity to meet the demand for manufactured goods that come from overseas.

Some say that that would reduce standards dramatically. From the information that I have, it is my belief that although a few years ago there were serious quality problems in home manufactured steel, they have been largely overcome. From time to time, there has been a differential in price, and that differential can be easily overstated. On my calculations, in an industry that I know well, the difference on the selling price of a washing machine would be ½ per cent. on the retail price. That is not a large price to pay for securing the future of an industry on which whole communities depend.

If the Labour Front Bench argues for another two years to sort out the problems in the industry, those two years must be used effectively to ensure that after those two years the steel industry continues on a steady basis. That basis must be on the lines that I have suggested.

There have been recent changes that are ominous. There is the change of control in the tinplate industry that may lead to the denationalisation of that profitable part of the British Steel Corporation's operation. That would be a greater justification for a more rapid rundown of the remaining part of the BSC that would appear to be more unprofitable. That is an ominous threat, and I hope that assurances will be given on the future of the tinplate industry that is so important to Wales.

I refer to steel because it is important to Wales. It is an example of what can happen when there is the botched management that there has been in recent years. The Government cannot escape the ultimate responsibility for that. They claim that they do not wish to intervene, and so far they have not intervened, but at the end of the day the responsibility in a private enterprise lies with the shareholders, and in a public enterprise it must lie with the Government.

The solidarity that has been shown by steel workers in South Wales, and in other parts of Wales, on that issue arises not only from the industrial action about a wage settlement which could well bring about a real reduction in their standard of living but because they are concerned about the future survival of their industry.

That is the reason for the solidarity that was seen in the march in Cardiff last week. It is a solidarity of those who are desperately concerned about the future of their industry and their communities.

Without political action and initiative in relation to this problem, there will be a vacuum that will be dangerous in real political terms, a vacuum that is developing in other areas in response to non-initiative from the Government.

The problems of the economy do not relate to the public sector only, although we are facing those at present. In my constituency last week there was an example of some of the worst elements of the free-for-all economy—the economy of the takeover and the asset-stripper, the economy that can close down a manufacturing plant without concern for those working in it or the communities dependent upon it.

In Caernarvon there is the Bernard Wardle company, which manufactures PVC. That company has grown largely from the efforts of the Caernarvon factory in the post-war years. It is now a large group and it is being taken over. Either as a result of this takeover or to make way for the takeover, it was announced, with no negotiation with the trade union—and without even consultation with the director in charge of the Caernarvon plant—that it would be closed at minimum notice, with 322 people put out of work.

The sting in the tail of the announcement was that anyone who wanted a job might be able to transfer to a factory which had been bought 18 months ago in Lancashire. That is the working of the free market economy—unless it is bridled. It is the responsibility of the Government, in relation to that sector as well, to take initiatives to safeguard people such as my constituents, who will be thrown on the scrapheap at a time when the Government have chosen to withdraw regional incentives from industry in the area.

These are all areas of Government responsibility. They cannot get away from it. Unless they take initiative in this whole realm of the economic problems now facing Wales, there will be such a large vacuum that something is certain to come in and fill it. I give this warning to the Secretary of State. Although I do not want to see things going in that direction, I believe that we shall move towards a greater extremism in politics, because it is not possible, apparently, to answer the problem by initiatives from the Government in whom power has been vested.

Mr. Delwyn Williams

Shame.

Mr. Wigley

I hear the hon. Member for Montgomery (Mr. Williams) shouting "Shame". I am not condoning extremism or calling for it; I am giving a warning. Surely he can read the portents that are facing us all over Wales and see the political vacuum and the depth of feeling that people have, whether it is in relation to their jobs in steel or in coal or in the manufacture of PVC and so on. Surely he can appreciate the frustration at the impossibility of securing housing and a job and all the other problems facing young people in Wales at the moment. If he cannot read these things, he is blind to what is happening. Worse still, if the Government are blind, the Government will be paying a price. I would much rather that the Government took the action that is needed to solve the problems than have to pay the price later.

8.2 pm

Mr. Delwyn Williams (Montgomery)

I take this opportunity to amplify my intervention in the speech of my hon. and learned Friend the Member for Denbigh (Mr. Morgan). The Welsh language needs every friend that it can get at this moment. I speak as one whose father speaks Welsh fluently and whose daughter is currently learning the language. The English-speaking Welshman's money and good will are vital to the language of my country, but those who claim to further that language most often unknowingly play the greatest part in its destruction. The English-speaking Welshman should be taken into cultural partnership with the Welsh-speaking people. An English-speaking day at the National Eisteddfod would be a tremendous step in the right direction. We must not be coerced. That is why, when a Welsh language programme is transmitted on one channel, there must be an alternative on another channel. That is the way to win friends and not alienate those who are most needed in one's support.

I wish to draw the attention of the House to the concern felt by the people of Mid-Wales about the proposed exploration and drilling into hard rock in North Powys, the purpose of which few people properly understand because of the lack of public information. The residents' understandable anxieties are being inflamed in the most irresponsible manner by Plaid Cymru and the Liberal Party. I wish to make it clear that there are no specific proposals to dump nuclear waste in Powys or, indeed, anywhere else in the United Kingdom. The drilling is part of the investigation of hard rock, which is part of a European Community research project, with the United Kingdom and France investigating hard rock, Germany investigating rock salt formations and Italy and Belgium investigating clay. Although it is true that Britain is also undertaking an independent study of salt and clay formations, hard rock disposal is only one of three methods being researched, the other two being the depositing of the wastes on the ocean bed or in drilled holes beneath the ocean bed. It should be noted that America, France and Australia are working on synthetic rock storage, and other forms of waste immobilisation are being researched as well.

I believe that the drilling should be allowed to go ahead as soon as possible, for it may well prove Mid-Wales to be totally unsuitable, and that would be the end of our anxiety. For the declining Liberal and Plaid Cymru Parties, it will also be the end of what they regard as a political weapon. Perhaps that is why they object so vociferously and irrationally to the drilling process.

Mr. Wigley

I am grateful to the hon. Member for giving way. I realise that he has a speech to make here tonight that he failed to make at Machynlleth on Saturday. If, on the other hand, the drilling shows that the rock is suitable, will he then welcome that as a site for dumping nuclear waste?

Mr. Williams

Certainly not, and if the hon. Gentleman will be patient I may be able to explain the reason.

It has to be remembered that both minority parties wish to suspend our nuclear energy programme. I wonder whether the hon. Gentleman realises the enormity of that policy and the effect that it will have on the lives and standards of working people. In America, the National Association for the Advancement of Coloured People supports the nuclear energy programme because it realises that it is the less-well-off who will suffer most from the lack of nuclear energy. The people who supported the hon. Gentleman at Machynlleth the other night were middle-class drop-outs who can afford the privilege of objecting to nuclear energy programmes. It is a fact of life that 451 nuclear reactors are in existence or in the course of construction in 35 different countries. They exist because nuclear energy is relatively cheap and avoids the blackmail of oil-producing countries, which are already speaking in terms of $40 a barrel.

Having said that, I accept that we have a duty to make the disposal of nuclear waste safe. If waste escapes, it can be harmful if ingested or inhaled. It cannot explode on its own, as a Liberal peer alleged in my constituency on Saturday evening. That shows the depth to which the minority parties are prepared to stoop to whip up the emotions of honest people.

Many people believe that the current options for disposal are not wide enough. It is generally accepted that the glass vitrification process will not be perfected for another 10 years, and that even then it will have to be stored in water on the surface for another 30 years before it is dumped anywhere. Surely this in itself lends force to the suggestion that nuclear waste should be stored on uninhabited islands in an artificially purpose-built environment, where it could be monitored and, indeed, where it could be immobilised as and when scientists produced the answer.

It is rather spurious for people to argue that it must be disposed of below ground because of danger from meteorites, earthquakes or even nuclear attack, for all those threats will be present for the next 40 years in any event. Mid-Wales is totally unsuitable for any form of storage, because it is a watershed for so many tributaries which serve the water needs of huge civilian populations. There are no rail facilities for transport, and it would adversely affect the tourist trade.

I believe that an international agreement could be reached whereby, in the unhappy event of nuclear war, these surface sites would be regarded as non-target areas. That is why they should be situated on the surface in non-strategic and completely uninhabited areas.

I express the hope that all Welsh Members—and, indeed, all Members of the House—will join me in pressing for a more realistic nuclear waste disposal policy at the earliest possible moment so as to allay the fears of ordinary people—whether those fears be real or imagined.

8.9 pm

Mr. Ray Powell (Ogmore)

I make no apologies for representing my constituency interest.

Part closure of the Port Talbot steelworks would mean 4,000 steel workers, who are my constituents, being thrown out of work. Coupled with that, 3,000 to 4,000 miners in my constituency would be thrown out of work. Let me say to the Secretary of State for Wales that I am not aware of what Mr. Weekes of the NCB has stated to him, but I know what he stated to me. This was only two weeks ago, when he named the four collieries in the Ogmore constituency that would close—the Wyndham Western colliery, the Faldu colliery, the St. John's colliery and the Coegnant colliery, all producing coking coal.

In addition to the effect on the steel workers and the miners in my constituency, that would create redundancies in transport and among those engaged in the supply of services to collieries and steel workers. Mr. Weekes informed me that £42 million is spent by the NCB in Wales for these services. Therefore this fight is not only for jobs but for the survival of our communities.

In May of this year, when I was elected to this House, Bridgend was considered by the electors, and by most of Wales, to be one of the growth areas. We have the Ford factory being developed in Bridgend to employ a staff of 2,500. Because of that development we were considered to be a growth area, but within nine months of the Tory Government taking office we find that we are not even a development area. In addition, I am concerned about the hundreds of millions of pounds that have been invested in Port Talbot, and the millions of pounds that have been invested and created a demand for coking coal. The collieries that I mentioned produce the best coking coal in the world.

No one can accuse the steel workers and the miners of irresponsibility. They have been party to thousands of job losses to ensure the economic and financial viability of their industries. The facts are clear. The steel closures that have been announced in Wales could mean the loss of 11,000 steel jobs by August, followed by at least 11 colliery closures and 9,000 redundancies in the mining industry. Nationally, that adds up to 50,000 steel workers' jobs, 15,000 miners' jobs and 21 colliery closures.

The domino, or ripple, effect will put out of work about a quarter of a million people. During the period May to October 1979, 80,926 people were made redundant. In October and November a further 15,000 men were made redundant at Corby and Shotton. A formidable number of firms have shed staff—25,000 workers this month alone, excluding Civil Service staff. In six months a total of 120,000 people have been made redundant.

We are given to understand by Mr. Weekes and the staff of the National Coal Board that in Wales alone we have sufficient coal to last for 300 years. We have spent millions of pounds on investment in the coal industry. We are throwing thousands of skilled workers out of work. Many communities are dependent on the coal and steel industries. I ask the Government to reconsider their actions in order to ensure the future stability of the mining industry, because I and a number of my hon. Friends have more confidence in the miners than we have in the Arabs.

Coking coal imports should be carefully examined, particularly subsidies. Other countries allow substantial subsidies. In 1978 Belgium provided a subsidy of £24 a tonne, France £15 a tonne and West Germany £12 a tonne, while the British subsidy was a meagre £1 a tonne.

Why will the Government not listen to reason? Not only the Opposition and the TUC are telling them that their policies are wrong. Even their friend, the CBI, is pleading now, yet still they turn their backs on the facts. Workers involved will not stand back and see their industry savagely raped and 50 years of work and struggle decimated in 10 months by this reactionary Government's policies.

We are all aware of what happened when the Wales TUC called a one-day strike. It was led by 15,000 workers in Wales and was one of the best demonstrations since the war. It has been referred to by many Labour Members. Next month a call will be made for a national strike. It is the responsibility of the Government to do everything possible to avoid such a catastrophe. I call upon Cabinet Ministers and the Prime Minister to convince themselves that this matter is serious and that the consequences, not only for Wales but for the whole of the country, are serious.

What is the Secretary of State for Wales doing to try to convince his Cabinet colleagues? He speaks for Wales in the Cabinet. The Secretary of State for Industry seems to favour Michael Edwardes. Why is he not reminded of the other Edwards, who needs as much support as, if not more than, British Leyland? The voice of Wales needs to be heard. If it is not, the workers in Pembroke and in the whole of Wales will remember. The Secretary of State's declaration that workers must be taught a lesson, and that pay increases must be earned by better performance should also apply to Ministers. That could mean many redundancy cheques almost immediately, especially for some Cabinet Ministers.

There has already been a U-turn on regional aid by the Secretary of State for Industry. Surely another on his break-even dictates to the BSC could easily be explained. He has made his point. Why is he not prepared to allow a breathing space?

I ask the Prime Minister to intervene, because even her so-called allies and friends are spelling out how wrong are her policies. Only weeks after eating peanut butter with the President of the United States, Mr. Carter now says how idiotic, stupid and irresponsible it is to run down the steel industry simply to pursue this ailing, failing monetarist madness. Cannot anyone change the Prime Minister's mind?

The right hon. Lady has gone to some lengths to establish that her nickname of the Iron Lady is only a cartoonist's phrase and that she is not an extremist. Her Dublin effort totally disproves anyone's claims that she is in any way an Iron Lady. The policies that she has pursued as Prime Minister prove that she is an extremist and someone with whom Britain could well do without in our modern society.

I recall the right hon. Lady's speech outside 10 Downing Street when she took office. She quoted from St. Francis of Assisi: Where there is discord, may we bring harmony. Where there is error, may we bring truth. Where there is doubt, may we bring faith. Where there is despair, may we bring hope. Will the right hon. Lady tell the 10,000 workers in my constituency who are under a threat of redundancy where is the harmony, faith, truth and the hope that she forecast?

The facts show the opposite to be true. Where harmony existed, there is discord. Where there was truth, there are now only error, lies, half-truths and blatant indifference. Where there was faith, there is now disillusion. Where there was hope, there are total despair, disappointment and dejection.

In Wales now there are disturbances, arrests, and even doubts about the fairness of British law. All this has been created by the ruling of a geriatric judge. If we were to bring back hanging, someone's neck could be stretched by such irresponsibility. Is it not high time that we set a retirement age for the judiciary?

Len Murray warned the Government about restricting the rights of trade unionists. I repeat that warning, which my right hon. Friend the Member for Rhondda (Mr. Jones) so ably emphasised. Trade unionists in the 1980s are not the trade unionists of the 1930s. They will not tolerate the aggression that workers endured in the 1920s and 1930s. If the Government want confrontation and anarchy, let them continue in their pursuit of this madness. Men devoted to the workers' cause of caring and sharing will fight them with every sinew and will win. We must win for our children and grandchildren.

The Government, prior to the election, presented the Conservative manifesto, which clearly stated their policies. I shall quote one paragraph of that document. It might be a repetition of what was stated by my right hon. Friend the Member for Rhondda, but it needs to be repeated: We shall continue to see that adequate resources are found for the public sector, particularly the productive public sector. We shall continue the modernisation of the coal and steel industries that are still so important in Wales. The Government were elected on policies which they promised the electors. I say to the House and to my trade union friends that if a Government, elected on firm manifesto commitments, abdicate their pledges, they forfeit the right to expect the usual support within a democracy.

Where is the mandate for the Government's policies? They demand trade unions to vote for or against strike action. They claim to be democrats. If they persist in pursuing policies for which they have no mandate, it is not anarchy, revolutionary or against the law to call for their resignation and for them to present their policies to the electorate. If they are prepared to do that, and if they get a mandate, they will not only be democrats but will deserve the full support of the House and the country.

8.21 pm

Mr. Tom Ellis (Wrexham)

The two hon. Members who most captured the gravity and impending seriousness of the situation were the hon. Members for Caernarvon (Mr. Wigley) and for Flint, West (Sir A. Meyer).

The hon. Member for Flint, West spoke about this sombre situation. His speech was sombre, but the House listened intently, appreciating the great seriousness with which the hon. Gentleman spoke.

I should like to explain why I think the sombreness is even more profound than the hon. Member for Flint, West realised. The hon. Member for Caernarvon, at the end of his speech, touched on the serious political situation that is slowly building up.

I should like to give some hard facts of economic life. They are facts that I have trotted out at a number of meetings recently, but I shall keep pushing them out because they deserve to be engraved on the hearts of all hon. Members, and certainly all members of both Labour and Conservative Governments. I have not been a member of a Government, so I can say what I think in this respect.

The first fact is that in 1975 there were 15 per cent. more Welshmen out of work than in 1965. The situation has deteriorated even more since then. That is a hard, stark fact of economic life, and there is no getting away from it. If one wanted to broaden the picture, one could point out that, according to a White Paper published in 1975, if the North of England, Scotland and Wales had retained the 42 per cent. of total employment of the United Kingdom that they had in 1965, in 1975 those areas would have had 370,000 more jobs than they had. It is interesting that that loss of 370,000 jobs was matched almost to the job by an increase of the same amount in the South-East and the Midlands. That is the measure of our regional policy regarding jobs.

Another simple fact of life concerns gross domestic product per capita. In Wales, GDP per capita is about 25 per cent. of what it is in England, although, surprisingly, if one takes it on persons employed, it is a fraction above the figure for England. That is another reflection on the serious unemployment position.

There is another simple fact that deserves hammering home. Wales produces about 5 per cent. of all scientists in the physical and biological sciences in the United Kingdom. At some time or other about half of those scientists carry out research, because that is the job to do. There are 99 Government research establishments in Britain employing 15,700 graduates in the physical and biological sciences. There is not one in Wales. There are 26 nationalised industry research establishments but not one of them is in Wales. Not one of the 36 industrial research establishments is in Wales. In 1977, 485 advertisements appeared in the magazines Nature and New Scientist. Not one concerned Wales.

That means that a young Welsh graduate anxious to pursue a career in research in the physical and biological sciences has to leave his country. He must emigrate. Wales is my country first and foremost. I am a Welshman—an aboriginal. This kind of problem is reflected in the infrastructure.

I told an anecdote the other day about a 100-mile journey that I took from Genoa down the leg of Italy to Lerici. After we left Genoa we travelled through wine-growing country for the whole journey. That was a wonderful road, a dual carriageway of motorway standard that went straight through a mountainous area. We went for a mile into the mountains and came to an enormous ravine which was crossed by a beautiful bridge. We came to another mountain, travelled another mile and came to another bridge. It was like that for100 miles and, despite the mountains, the road was absolutely straight and true.

At the end of that journey I told my companions that we could not have a road from Colwyn Bay to Cardiff because the mountains were in the way. We have been conned. I cannot get BBC Wales and I cannot get Harlech Television. The mountains are in the way. It is not West-minister, Whitehall or the Government that stand in the way. It is mountains; at least, that is what we are told. I believe that we have been conned for too long.

I could quote statistics stretching back 40 years to show how London government has conned the people of Wales, and I am sure that I speak for hon. Members on both sides of the House. That gave rise to a demand—which had a disastrous result—for devolution. I quote what the Secretary of the Wales TUC, Mr. George Wright, said at the time: We are seeking a Wales where we can have growth from within. We are not carrying a begging bowl into the next century. All of us agreed with him and applauded him.

The only institution in Wales that speaks for Wales with a strong political voice is the Wales TUC. It is a measure of the disaster of the referendum that the Welsh people were led by false prophets in their own country. That is the tragedy, because we certainly need a political voice now. However, the tragedy goes further. Our problem is not simply a matter of establishing a voice for Wales, because our problems are now on a United Kingdom scale.

Considering the problem from the Welsh angle, the whole point of original policy—the standard answer of Governments—is that such policy should have an objective. We were led to believe that the objective of regional policy was to achieve economic parity across the regions. But despite the grants, the depreciation allowances, the regional employment premiums and the IDCs, the poor regions have never quite caught up with the rich regions. People have subsequently asked whether the Governments were serious in their regional policies or were merely trying to keep a problem within manageable proportions.

I could catalogue the failures of regional policy, but because of the lack of time I cannot quote a host of statistics. Regional policy has not worked. A great many authoritative economists, such as Gunnar Myrdal, Hirschman, Peroux and even my hon. Friend the Member for Vauxhall (Mr. Holland), have questioned the accepted wisdom of these policies, some of them going so far as to say that rich areas need poor areas alongside them for their own sustenance. I do not have time to go into this further, though I wish that I had. I spoke at greater length on the subject at the Industry Committee, but I cannot develop the theme now.

I must emphasise the sombre nature of our present situation, and I hope that the Minister appreciates that there are those who speak with high seriousness as did his hon. Friend the Member for Flint, West and the hon. Member for Caernarvon. There are those who speak sincerely and seriously, not wanting a political catastrophe but recognising that there is something wrong in Britain—there is something rotten in the State of Denmark.

That is the truth of the matter, and what has made me so depressed is that, somehow or other, we ourselves are following the same old way as we were 30, 40 or 50 years ago, not appreciating that this very place needs looking at seriously, that the whole of our political structure calls for re-examination. I have my views on what should be done, but I do not have the time to go into that now. I shall end with a quotation.

There is a beautiful line in a Welsh book which, roughly translated, is to the effect that the novelist who is all lies captures the truth better than the historian. I shall end by quoting something from a novel of Raymond Williams published last year, "The Fight for Manod". This is how he ends, and the man speaking is a senior civil servant: The whole of public policy is an attempt to reconstitute a culture, a social system, an economic order, that have in fact reached their end, reached their limits of viability. And then I sit here and look at this double inevitability; that this imperial, exporting, divided order is ending, and that all its residual social forces, all its political formations, will fight to the end to reconstruct it, to re-establish it, moving deeper all the time through crisis after crisis in an impossible attempt to regain a familiar world. So then a double inevitability: that they will fail, and that they will try nothing else. That, I believe, is the tragedy of this Government and, indeed, of previous Governments—that they will try nothing else. There is a profound need in this country for radical change in our political structures, let alone economics—the economics will follow from the politics—and until we begin seriously to contemplate exactly what we have to do we shall carry on with our "Yah, boo"—"What is happening with steel is your fault"—"No, it is not"—without realising that both sides of the House have their responsibility. Both sides have shown irresponsibility, too. The present Government have been highly irresponsible, but we must: take our share of the blame.

It is time that the House of Commons recognised what is needed. It is not leading the British people, let alone the Welsh people. The people are looking for a political lead, and it is simply not coming from this Chamber.

8.34 pm

Mr. Tristan Garel-Jones (Watford)

I start by apologising to the House for not being here at the beginning of the debate, but I have been able to listen to eight speeches from the Opposition Benches, the majority of which—I except the hon. Member for Wrexham (Mr. Ellis)—seemed to me to be sad speeches.

I heard the hon. Member for Flint, East (Mr. Jones) talking about the demonstrations in Wales last week, saying that 250,000 people had attended and there was a sense of bitterness and unfairness. I say at once from these Benches that anyone in my party who believes that a demonstration of that magnitude can be manipulated by one or two extremists is gravely mistaken. But, equally, I say to right hon. and hon. Members on the Opposition Benches that I am a little disappointed to find that they seem to regard their role in life as fanning the flames of that feeling of unfairness and bitterness. I should prefer to see them trying to co-operate in ways which I hope to outline.

I was saddened by the speech of the hon. Member for Caerphilly (Mr. Hudson Davies), who made a grossly irresponsible call to the people of Wales to do what he chose to call their duty—to take unilateral action against the State. I do not believe that that is the way that the people of Wales should be asked to conduct themselves by any party in this House.

The hon. Member for Newport (Mr. Hughes) spoke of the magic triangle. Speaking as a Member who does not represent a Welsh seat but who regards himself first and foremost as a Welshman, and whose seat in a sense could be argued to stand at the apex of the magic triangle, I hope that, speaking from that apex, I may make a short contribution.

I would not argue that my constituents in Watford lie awake at night worrying about the fate of the people of Wales. That would be a gross exaggeration. My constituency is reputed to have the lowest rate of unemployment not only in the United Kingdom but in the whole of Western Europe. Therefore, hon. Members will appreciate that we look upon the world in a slightly different way. But I think that each and every one of my constituents, if he paused to reflect, would appreciate that the prosperity of Wales, Scotland and the other regions of the United Kingdom is linked with our own prosperity and that the industries of Watford will not survive and prosper unless areas such as Wales prosper.

In his very interesting speech, the hon. Member for Wrexham made the point that all parties in this House must take some responsibility for the situation in Wales. In debates on regional policy, I have been struck time and again by the fact that every Member who speaks in them says "This has been going on for 40 or 50 years", and reference is made to the depression of the 1920s.

I say to Opposition Members, with the greatest respect, that the Government are making an effort to change direction of economic thinking and policy. Of course, I accept that there will be many things that the Government do with which Opposition Members will disagree. But I ask them to consider whether they would not be wiser, from the point of view not only of Wales and Great Britain but of their own party political interest, to associate themselves with some areas, at any rate, where they believe that the Government might be on the right track.

After all, what are the Government aiming to do? They aim to conquer inflation and to regenerate British industry. In the meantime, of course, it is inevitable that some social spending will be cut back. But this must be seen in its perspective. I should have thought that Opposition Members would have some experience of that. I should like to give a quotation which seems to sum up the Government's approach: Our future prosperity lies in conquering the problems of inflation…This has meant action to limit the growth in public expenditure. The latter course is, of course, unwelcome to those of us who wish to improve our social fabric, but the recent limitations must be put in their right perspective. That is a quotation not from someone defending the present Government's policy but from the right hon. and learned Member for Aberavon (Mr. Morris) when he was defending the cuts of £4 billion, I think it was, made by the previous Labour Government.

The ultimate accolade for the present Government's policies came from the right hon. Member for Cardiff, South-East (Mr. Callaghan), the former Prime Minister, who once said: With regard to public expenditure, it ought to be reduced over a period as a proportion of GDP. Therefore, I hope that the people of Wales, when they read these speeches, which in many cases seem to be destined for the local "Ogmore Times" or whatever it may be, will discount a good deal of the more synthetic rage which seems to be coming from the Opposition Benches and will listen with more care to the more thoughtful speeches of the hon. Members for Caernarvon (Mr. Wigley) and for Wrexham.

It would not be right for a Member who does not represent a Welsh seat to go at any length into matters of policy in Wales. Suffice it to say that as a rather poor Welsh speaker I have been particularly gratified in the steps that the Government have taken in support of the Welsh language. My hon. and learned Friend the Member for Denbigh (Mr. Morgan) mentioned them in passing, but I do not think that he mentioned that the grant made to the National Eisteddfod of £70,000 this year and £120,000 next year is the greatest grant ever made to that body.

If you are prepared to indulge me, Mr. Deputy Speaker, I should like to transmit to my right hon. Friend the Secretary of State a message on behalf of Welsh speakers in Welsh: Os ydych chwi am gadw ac am nerthu'r iaith, bydd pob mynydd a phob bryn, bob afon a phob glyn yng Nghymru, yn canu'n iach eich moliant am byth. For the benefit of hon. bers who do not speak our language, that means that if the Secretary of State is able to nurture and preserve our language, every mountain and hill and every valley and river in Wales will sing his praises for evermore.

My hon. Friend the Member for Anglesey (Mr. Best) referred at length to the possibilities of the tourist industry in Wales. I shall not repeat in detail what he said, but it seems to me that the sort of thing that we should be looking for from Opposition Members is not carping criticism of what the Government are doing but suggestions about how Wales should meet the challenges of the future. I have not found any such thing, and I found that extremely disappointing.

I hate to quote again, but the feeling that I had in listening to the Opposition is, in the words of Alexander Pope, who, I am afraid, I have quoted before in the House: All seems infected that th' infected spy, as all looks yellow to the jaundiced eye. I am afraid to say that the Opposition seem to be infected by the failure of the Labour Government. Their opinions are jaundiced by that failure. They are not giving the sort of lead that a democratic Opposition should be giving Wales at this difficult time.

8.41 pm

Dr. Roger Thomas (Carmarthen)

I reject the temptation offered by Conservative Members to debate an issue such as the fourth television channel. It is far more important for the House to be concerned with the jobs and employment in Wales in 20 years' time than to discuss the language and television service that our young people will be watching. It is patently clear to all but the Government economic strategists that it is the expansion, training and retraining facilities that are needed in Wales rather than the closure or the threat of closure of industry.

I am disappointed with the Manpower Services Commission's rationalisation plan. It talks about rationalisation and an improvement of the skillcentre network while, in the same breath, referring to savings in public spending. The first part is totally cancelled out by the second and the second part makes total nonsense of the first.

Following upon the revised, more realistic secondary school curriculum, what we need is to equip our young workers with market skills into which up-to-date technology has permeated smoothly. Increasingly, we are faced with providing discarded experienced workers with opportunites to develop new skills. The current situation with regard to the young and old is clearly inadequate. In the past year, there has been a sharp fall in the ability of local economy to absorb school leavers.

Here in Wales the increased birth rate in the 'sixties has been translated into the significant rise in school leavers across the 'seventies. Sadly, this glut of work-searching school leavers was probably further swollen by a corresponding fall in the proportion of young people after 16 years settling down to three or more years in full-time education and ending with qualifications destined to secure for them good wages and good living standards in early adult life.

The adding of an extra 1 million married women in the United Kingdom into the labour market hardly eased the position of school leavers of either sex. Employers facing a downturn in demand and seeking to avoid compulsory redundancies have reduced their labour force by discriminating against school leavers and young workers in general. Many firms regard young workers as a marginal source of labour. We face a hard and severe recession in Wales, and there is hardly a glimmer at the end of the tunnel. Such a recession would have a disproportionately adverse effect and would keep our young people under-occupied. When they get work, they are underpaid.

As the Secretary of State knows, and, we pray, fully appreciates, huge tracts of Dyfed will be relegated to summer congestion and winter desolation. In Dyfed alone, in the next 10 years we need 30,000 jobs. This time last year new factories were on their way, but they have now vanished into thin air. Perhaps the Secretary of State will tell us whether there is a fallback in the dual carriageway. It was promised that that dual carriageway would go deep into West Wales beyond the termination of the M4. Our county plan—the Minister should react to that possessive adjective as proudly as I do—talks in terms of the need for village factories.

One must consider whether the overall policies of the Government will entice and attract private investment, so alleviating the black spots in Wales. At one time we had a wizard in Wales called Myrddin. At the moment a wizard from Leeds appears to be that legendary figure. We need new factories, warehouses and stores for just under 2,500 acres that have been set aside for development.

Large geographical tracts, such as the Teify valley, were once the centres of large textile industries, but such areas are now far removed from the main centres of economic activity in a United Kingdom and Euro context. Those areas will carry on unrecognised and poorly compensated. However, apart from illustrating on a minor scale that service jobs are destined for women rather than men, Dyfed reflects a lack of skill that is predominant in Wales. Our skilled people are moving out and we are left with a pool of ageing, unskilled labour. That pool unfortunately accepts the retirement that has come to them far too prematurely.

Forecasts and prognostications are uniformly gloomly. In the last quarter of 1979, 20 per cent. of those unemployed were under the age of 25. That proportion is expected to grow sharply. The Government must not cheapen the true value of our young people, as extra jobs are created for them, with unscrupulous employers who cash in on cheap labour.

Against a background of unexpected and callously engineered economic disasters—suffered since the summer—the problem of the over-supply of poorly qualified young people, the solution to which should be the predominant consideration of our policy-makers, has appeared less disastrous and less imperative when compared with the blows of the past six months.

Many of those aged over 55 have developed a lifetime of continuing leisure and interests, but the young unemployed have their working lives ahead of them. Over and over again it has been shown that a bad start will have serious long-term consequences. In the deep shadows of the economic hammer blows that have recently hit us, we need to develop a policy for the increasing numbers of young unemployed. Such a policy cannot be left and put on one side until better times are with us.

8.49 pm

Mr. Ioan Evans (Aberdare)

I shall be brief, as my hon. Friend the Member for Swansea, East (Mr. Anderson) also wishes to say a few words. The debate has rightly concentrated on the coal and steel industries.

The Government are unfolding a five-pronged attack on the people of Wales and the rest of Britain. They have launched a major attack on the Welfare State, local authorities, public industries—in their commitment to rolling back the frontier of public industries—the trade union movement and living standards. In the light of that fivefold attack, we are prevented from co-operating with the Government in this critical situation.

The appeal of the steel and coal workers in South Wales has fallen on deaf ears. The workers are asking, first, for an inquiry into the administration of the steel industry. In passing, let me say that I strongly object to the Government's attacks on working people. Our working people are as good as workers anywhere. Apart from an inquiry, the Government are being asked to phase redundancies over two years. In that time, I believe that they will begin to realise that they are cutting jobs in the steel industry too severely. The major closures at Port Talbot and Llanwern will mean that we cannot meet future demands. Policies will then have to be revised.

The National Union of Mineworkers and the trade union movement in Wales are right to ask the Government to stop the importation of coking coal. We have mountains of coking coal in Wales, yet the Government are allowing the BSC to import it. The excellent pits that produce high-quality coking coal will disappear for ever and we shall not be able to produce that same quality.

Mrs. Elaine Kellett-Bowman (Lancaster)

rose—

Mr. Evans

I should normally give way to the hon. Lady, but I have only a few minutes.

Mrs. Kellett-Bowman

It is an important point on coking coal.

Mr. Evans

I should also like to mention Phurnacite. In Aberavon, we have a plant that produces 18 per cent. of Britain's smokeless fuel. From the tripartite report on the coal industry in Wales, it is obvious that a Labour Government would have provided the backing for the ANCIT process. The Government have been in office since May, and no decision has yet been reached. The Government are forcing a 29 per cent. increase in the price of gas, and I believe that people will look to other fuels. Without the investment in the smokeless fuel plant at Aberavon, we shall lose 18 per cent. of our national production. We shall be in the ludicrous position of importing not only coking coal but also smokeless fuel.

I regret that the Secretary of State did not make a statement on the Government's proposals over the flooding in South Wales immediately after the Christmas Recess. We have had to wait for a Welsh debate, and now, at long last, we have had a statement.

We must look at the need for a national disaster fund. In the valleys of South Wales and in Cardiff, people were seriously affected by the recent flooding. They lost their personal possessions and had great difficulty in getting aid from social security, from which one would have expected ready and willing help to be forthcoming. We must try to avoid a recurrence of that situation by establishing some sort of national disaster fund.

It is interesting that, while the Government are so rigid, dogmatic and determined in some of their policies, when it comes to the fourth television channel they are willing to change their mind. If only they would change their mind about their monetarist policies and their nonsensical attitude to public expenditure. I hope that they will change their mind again about the fourth channel. There was all-party agreement that the fourth channel should be devoted to the Welsh language, and I hope that when the Secretary of State considers it again he will have another change of heart.

that extra funds will be given to the

We have had the announcement today Welsh Development Agency. I welcome that. The Conservatives did not agree with the Welsh Development Agency when it was set up, but now it is the only means in investing in industry in Wales, and, by God, that is what our industry needs at the moment. I hope that the Government will put aside their doctrinaire dogma of Milton Friedman and the monetarists. Their policies are not working—we can all see that they are not working. I hope that Conservative Back Benchers will tell the Government to open their eyes and change direction. The Government are heading towards a precipice and the Conservative Back Benchers are following them like lemmings. But the people of Wales will not forgive easily or forget. After the next election, there will be very few Conservative Members representing seats in Wales.

8.57 pm

Mr. Donald Anderson (Swansea, East)

What can one reasonably say in such a short time about the alarming industrial picture in Wales? A little while ago we were boasting about the diversification of our economy, but over the past few months we have had our vulnerability exposed to us.

Had the Secretary of State and his colleagues been in Cardiff last Monday, they would have seen the frustration of so many workers in Wales because they feel that they are at the receiving end of policies initiated by people who do not understand, or do not want to understand, the effect of such policies.

It was sad to hear the Secretary of State's speech 10 days ago in which he attacked public expenditure when he must know how dependent Wales is on public expenditure. While he takes that attitude, he cannot really fight the cause of Wales in the Cabinet. No reasonable person would suggest that our problems began last June, but it is not unreasonable to accept that the totality of Government policies as they affect Wales has substantially exacerbated our problems.

In our last Welsh Grand Committee discussion on 21 November, I wondered whether the Government were really aware of the crisis or of the chain effect of the decisions that they have made. They must have known, because of cash limits imposed on the nationalised industries, and particularly on the BSC, that the BSC was reaching a financial crisis. They must have known that their decisions would not bail the BSC out of the crisis but would, in fact, lead to substantial job losses. They must have known of the chain effect of that from steel to coal and rail and other services that are interdependent in the Welsh economy.

In the Welsh Grand Committee on 21 November the Secretary of State affected a mood of optimism about the Welsh economy. Yet only a day later we had 1,000 job losses at Port Talbot and a few weeks later we received the shattering news of 50,000 job losses over the country as a whole. Were not the Government aware of the effect of their policies? If not, they really need to undertake a substantial reappraisal.

Many estimates have been made, some more alarmist than others, about the extent of likely unemployment in Wales. The Government should give some indication, in order to promote public debate in Wales, of the figures on which they are working—the counties' figure, the TUC figure or any other.

To what extent are the Government prepared to allow de-industrialisation to proceed apace in Wales before even they are forced to intervene? I accept that Governments cannot wave magic wands and that there are limits to what Governments can achieve in an economy interdependent in the world. The Government can take initiatives within the EEC. We understand, however, that the Government are refusing to do so because of the public expenditure implications.

The Government can examine their own interest rates and their effect on private investment. How can the Government reasonably expect industry, despite all the talk of incentives, to invest at the current prohibitive 20 per cent. interest rates?

On public investment, Inmos is the litmus test of the seriousness with which the Government view the task of bringing jobs to areas like South Wales that desperately need them. It is said that this decision has not yet been made. The Secretary of State should use his influence in the Cabinet in favour of South Wales. It is known that no Civil Service jobs are going to South Wales. The Government are depriving themselves, by their ideology, of the only weapons that can help solve a problem largely of their own making. They are incapable of providing solutions in the Welsh Development Agency. Will they really allow these new sums which are available to the WDA to be spent on investment in new industry? Will they allow the WDA to use that money to overcome the standstill in investment in derelict land? What about a new package for any Ford-type development that may be on the horizon? Can the Government, with their current ideology, put together a package, as the previous Government did, to attract Ford to Bridgend? Will there be any attempt to promote new public works in view of the considerable number of construction workers who are unemployed?

When we approached the Department of Industry about new investment in our coking industry, the reply by the Under-Secretary of State, the hon. Member for Arundel (Mr. Marshall), was: I am sure you are aware that the Government's policy in such matters is one of non-intervention. To this end, and particularly in view of the strict financial limits within which BSC has to operate, I consider that the corporation must be allowed the commercial freedom to purchase raw materials where they judge the maximum advantage can be achieved both in terms of cost and quality. That is the financial yardstick. It will be carried out, no matter what the cost socially, industrially and politically in South Wales. May that be the epitaph of the Government. Sadly, it may be the epitaph of Wales.

9.3 pm

Mr. Alan Williams (Swansea, West)

This has been a serious debate. It has reflected the genuine concern on this side of the House for the future of those industries that have provided the basis not just for the industrialisation of Wales but for our communities in Wales. It was this fear for the communal and social structure, as well as the employment structure, of South Wales that led to the massive and impressive demonstration that most of us attended in Cardiff last Monday. The meeting was very good-natured but I was, nevertheless, disturbed at the hardening of attitude and the greater bitterness that has developed over the past few weeks.

For the Government to have induced a national strike in an industry that has not seen a national strike since the 1920s is an incredible achievement. The tragedy is that, having developed the psychology that goes with strikes, it will take the industry some time to think harmoniously and constructively again in future.

For that reason, I particularly protest at the fact that the Secretary of State for Industry is not participating in the debate. I suppose that it is yet another example of his policy of non-intervention, though during the speech of my right hon. Friend the Member for Rhondda (Mr. Jones) the right hon. Gentleman intervened several times because he thought that there were points that he ought to clarify. Surely, that is why he should have taken part in the debate. It is an affront to Welsh Members that, after our requests, he has failed to do so.

We know that the Secretary of State for Wales is the Cabinet's statutory Welsh Member. I am sure that the people of Wales look with some longing to the days, not so long ago, when Welsh Members held the positions of Prime Minister, deputy Prime Minister and Leader of the House of Commons and Secretary of State for Wales and when we had Ministers of State in key Departments such as the Home Office, the Foreign Office, the Treasury and the Department of Industry.

In our annual debate on Wales, the man most responsible for our crisis and the man whose policies on steel and the regions and regional incentives are leading to the destruction of the Welsh industrial background has not been a participant. It is less a case of Hamlet without the ghost than of Sweeney Todd without the barber.

We like the Under-Secretary who is to reply to the debate, but he does not have decision-making powers. The Secretary of State has sent in the casual labour to do the sweeping up.

I welcome you, Mr. Speaker, to our Welsh debate.

Mr. Speaker

Order. I was here at the beginning.

Mr. Williams

Then I welcome you back. I am sure that this is one of the few occasions during the year when you hanker for your previous role in the House.

We are not debating just the record of the Government in the past six months or even the next 12 months that face the people of Wales. We are debating the future of Wales for the next generation and the rest of the century.

The Government's industrial policy will have a unique impact on Wales, because we are especially dependent on public expenditure and because the policy will mean the destruction of communities. They will have their industrial and commercial hearts torn out, their young people will be driven away and the shadows of the 1930s will fall over our valleys again. The policy will have a unique impact, because in Wales, more than in other parts of the country, the fortunes of our coal and steel industries are indivisible.

Our miners provide the coking coal for our steelworks. I understand that in the event of coking coal not being needed by Scottish steelworks the Scottish electricity boards will be glad to take most of the supplies. In the North of England a substantial amount of the coking coal is imported and cutbacks in steel will therefore be reflected in cuts in imports, but the situation in Wales is different.

The halving of the output of Llanwern and Margam will cost not just 11,000 jobs in the steel industry but the closure of 11 pits and the redundancy of 7,500 coal workers. We also face the possibility—I appreciate that it is only a possibility, but we must beware of it—of a further 7,500 redundancies in the coal industry in the event of the worst predictions in relation to coking coal being fulfilled. Let us remember that the temptation of imported coking coal is a short-term price advantage and for that the Government are willing to fritter away the long-term assets of our coal resources in South Wales, at a time when the world is talking of entering an energy crisis. It is not only that we will lose up to 35,000 jobs directly in the coal and steel industries of Wales, but that those jobs are in concentrated areas. Fifty per cent. of the Margam workers live within five miles of the steelworks.

The coal industry, by the nature of our Welsh valleys, is a community industry. One cannot tear the earning power from those communities without risking the destruction of those communities. Because the industries and the employment are concentrated, the secondary impact is bound to be greater. The fear is that as many jobs again could be lost in support and service industries.

We are speaking of a scale of between 30,000 and 60,000 lost jobs. The hon. Member for Flint, West (Sir A. Meyer) admitted that unemployment could rise by 50,000 or more in Wales as a result of the Government's policies. They are to be implemented unnecessarily because the Secretary of State for Industry has decreed the impossible, namely, that, although losing £300 million a year, the BSC must—not should—break even next year. The right hon. Gentleman knows well that "must" is virtually meaningless. Despite all the cuts, there is no way in which the steel industry could break even next year.

The right hon. Gentleman has berated the steel industry for the loss of orders. It is his Government who have produced the economic framework in which we shall see a decline of 2 per cent. in economic activity over the next 12 months. It is his Government who have pushed up the minimum lending rate way above the level that we were taunted with as being the usury level when the Labour Party was in office. The record levels of minimum lending rate are forcing destocking in the steel-user industries. That is another reason why British Steel is not selling to those industries.

It is the right hon. Gentleman's Government who have produced the policy of soaring sterling. How the Conservative Party attacked us when sterling fell when we were in office! How they attacked us when sterling rose! A Labour Government can never win: whatever happens to sterling, the Conservative Party will always find that it is to someone's disadvantage.

It is universally agreed that at its present level sterling is harmful to all industry. The right hon. Gentleman had the cheek to say that there is higher import penetration into Britain. If the Government allow sterling to soar to levels where British products become uncompetitive, not only do we have to abandon the 2 million tonne market overseas but we see our domestic market eroded because we cannot compete with the cheap steel coming from the Common Market.

There he sits, in his dome at Ashdown House, a latter-day Abenaza without his magic lamp. Because no one dares to tell him that he does not have a magic lamp, he sits there wishing his little wishes, casting his little spells and dreaming his little dreams. While he is doing that, the Prime Minister sits and fiddles as the fires go out throughout the British steel industry—the private sector as well as the public sector. While they perform their disastrous duet, the way of life of people and communities is being destroyed.

Only last week, the county clerk of my authority, West Glamorgan, said that the 6,800 steel redundancies that are envisaged for Margam will cancel out all the new manufacturing industry that has come to West Glamorgan in the past 11 years. By one arbitrary, unjustifiable and unattainable whim, the right hon. Gentleman has written off a full decade of progress in this part of South Wales.

I suppose that the Secretary of State for Wales can take a certain solace from the situation created by his right hon. Friend. At least, he can now go on to Welsh platforms, hand on heart, and boast of fulfilling one election pledge—or at least one election pledge for 50,000 people. They certainly will be paying no income tax in future.

But think of what this means for those who are already in the dole queue. Only a week ago we were told that one-third of the people in the dole queue had been there for six months or more. If a further 30,000 or 50,000 people join those queues, seeking the dwindling jobs, what hope do they have? It must mean hardship for all. Without jobs, they will face higher rents and higher mortgages. They will have to meet higher electricity and gas costs. Those who are unfortunate enough to be out of work are now being threatened with lower unemployment benefits and social security benefits in real terms. This, as the hon. Member for Anglesey (Mr. Best) expected, will mean particular privation for the long- term unemployed, because they will be running out of earnings-related benefits; they will be going on the new sub-subsistence level social security system.

It is an obscene proposition that supplementary benefit, which is geared to the minimum necessary to sustain a household, should now fall in real terms so that it will not cover the cost of living increases. We were told recently by the Prime Minister that she believes in inequality. One must give her credit—what she believes in, she puts into effect. She made the rich richer in the last Budget, and she intends to make the poor poverty stricken in the next Budget.

Is it not paradoxical that Ministers should preach to us that the need in British industry is higher productivity and that workers must be willing to give up their jobs in order to make their firms more efficient? What hope do they have of persuading workers to accept redundancy when in the next Budget they intend to penalise unemployment and penalise the loss of that very same job?

There has been a lot of not very meaningful talk about the importance of productivity. I have referred to this previously in debates. The Secretary of State and I have crossed swords on this issue when we were on different sides of the House. At this stage, because investment is falling, Ministers talk about the labour role in relation to productivity, but what about the investment role? Those countries which have high productivity have higher investment. But now, as in 1970, the Government have repeated their achievement of turning back the rising tide of investment achieved under a Labour Administration. Yet, again, investment is falling.

The right hon. Gentleman has never understood the difference between unit labour costs and productivity. He does not understand that productivity can be discussed only in relation to the cost that has to be paid to get that productivity. Although our productivity is lower in this country, because our labour costs are so much lower, the loss per tonne of United Kingdom steel is actually lower than the loss per tonne on German steel. But the German Government are giving massive subsidies to enable their industry to capture the market that British Steel so desperately needs.

During his last Question Time the Secretary of State wept hypocritical crocodile tears about unemployment in Wales last winter. In typically generous fashion, there was no mention of the fivefold increase in oil prices. There was no mention of the world recession. Despite the tears and despite his breaking heart, when he was asked about the high level of unemployment he flatly refused to give an assurance that the Government would set it as their prime duty to ensure that unemployment never again reached such levels. We know that he cannot give such a promise. How he can stand at the Dispatch Box and pretend that he cares about unemployment when part of his Cabinet's strategy is an increase of one-third of a million unemployed in the next 12 months is beyond comprehension.

In fairness to the hon. Member for Flint, West, I should mention that he said that he feels that unemployment in Wales will reach terrifying levels in the near future. Most hon. Members would agree. As a result of the changes in regional policy that have been introduced by the Government, the greater part of the new unemployment will arise in the assisted areas, including Wales, while the greater part of new job creation will arise outside the assisted areas and outside Wales.

In this context it is disturbing that 70 per cent. of electronics companies are in Southern England. Wales is about to lose its employment based on the first Industrial Revolution, and it is to be denied its participation in the high technology industries of the second industrial revolution.

I particularly object to the proposition that the Inmos production unit may be sited in Bristol. When the Labour Government were in power, my right hon. Friend the Secretary of State, my fellow Ministers of State and I received categoric assurances from the National Enterprise Board that if the laboratory was sited in Bristol there was no reason why the production unit should not be sited in an assisted area, and that that was the policy of the NEB. I shall shortly lead a deputation to the Secretary of State for Industry.

I am glad that an IDC has not yet been issued and that no decision has been taken on further financing. I should like to emphasise, so that there is no misunderstanding, that Labour Members are not opposed to Inmos continuing its logical development. We ask that that logical development should be carried out in fulfilment of commitments made to the previous Administration.

At this time of crisis for Wales, the Government have virtually abandoned regional policy. They have descheduled and downgraded massive areas of Wales. They have cut the grants, so that, even where assisted area status remains, that status is of minimal value. They have effectively scrapped the industrial development certificates outside the assisted areas.

I should like to explain to hon. Members who do not know how the system works that, when an IDC application comes before a Department of Industry Minister, his officials make the regional Ministry offices aware of the IDC project, and the Secretary of State for Scotland or the Secretary of State for Wales thus have an opportunity to make bids for those projects. Now the Secretary of State for Wales will be unaware of expansion programmes and of new projects. Surely, at a time when the Secretary of State is scrapping IDCs, we need higher, not lower, inducements to encourage industry to move to Wales.

In February last year the Secretary of State, appearing on HTV, gave the people of Wales an assurance that a Tory Government would not cut regional aid. I was accused of fabricating the story—scaremongering. Yet we have the same man ruthlessly presiding over the destruction of Welsh industry.

It is no use the right hon. Gentleman quoting, as he tried to do earlier this afternoon, the new industry that is in the pipeline. When five of us went to see the Secretary of State for Industry, the Secretary of State for Wales and the Minister of State, Department of Industry—my successor in industrial location work—the Minister of State admitted that much of the development taking place in Wales now was due to the "momentum" of the previous Administration. When we see that Ford's 2,500 jobs are still to come, how can that be doubted?

The Government were crowing about getting the Japanese company Aiwa to come to Wales. I had been negotiating for 12 months, first, to get Aiwa into Britain and, secondly, on the question of which part of Britain it woud eventually settle in. The Secretary of State for Wales took over the negotiations when the company showed an interest in going to Wales as opposed to any other part of the country.

The right hon. Gentleman should not really talk about work that is possibly in the pipeline, because much of the work that is pending is due to companies rushing to beat the deadline for the ending of regional assistance later this year. We brought in what was called the accelerated project scheme. The idea was to set a deadline and to try to get a rush of applications to beat that date. That is exactly what is happening now. When that date falls—"falls" is the operative word—and it cuts into the incentives on offer, it will completely cut off the flow of new industry into Wales.

Sir Anthony Meyer

The right hon. Gentleman is arguing cogently that many of the good things that may be about to happen in Wales by way of incoming industry stem from policies of the previous Labour Government, and I do not disagree with him. However, with his customary fairness, will be admit that the decision to accept British Steel's slimming down of capacity also stems from decisions taken at least a year ago?

Mr. Williams

The hon. Gentleman is fully aware of the situation. My right hon. Friend refused to apply any absolute requirement that the steel industry should break even. He said that it was up to the steel industry to try to break even as early as possible. He did not want to impose a deadline, because he did not think that such a date was attainable. That is a fair statement of the situation.

The Secretary of State for Wales is strong on promises. We have heard about the fourth television channel today. But, as that shows, the right hon. Gentleman is lacking in performance. He said that there was no battle in the Cabinet; he just capitulated.

We have had ballyhoo about an extra £48 million that he has conjured up today for press release purposes. If anyone should doubt whether it has gone out from his press office, I have a copy.

We remember the right hon. Gentleman's grand words about Shotton. Money was going to flow so freely from the Government. What happened? We know that £2 million came from BSC Industry without its even being asked, and virtually all the remainder came from the existing budget of the Welsh Development Agency. Therefore, the Government merely took money from other parts of Wales and channelled it towards Shotton. I do not begrudge Shotton the money. It needed the finance. But the pretence that it is extra money does not bear examination. Therefore, when the Under-Secretary of State replies to the debate, we shall want to know a little more about this £48 million.

The Secretary of State, in the press handout, states; I can now tell the House that, within the reduced public expenditure programme we have been discussing, the Government are planning to make available some £48 million over the next two years for remedial measures of this kind. So they are within the existing programmes, as far as one can gather. We want to know whether that is so. [Interruption.] It is not that we were not listening. The right hon. Gentleman blabs on a lot. We listen as closely as we can, but we are not shorthand experts. That is how the right hon. Gentleman managed to sleight-of-hand his last effort through the House. We want explanations on this one, and I am sure that the Under-Secretary will provide the answer that we seek.

But even with the new cash there will be little new industry because of the 2 per cent. cut in our national output over the next 12 months. That is a 2 per cent. cut from a Government some right hon. Members of which lectured us time and again on the need for growth and on the need for the tax cuts that were to set private enterprise free to invest. Here we are with a 2 per cent. cut in output and at least a 4 per cent. cut in investment.

Already areas such as Bristol, Slough and Swindon are campaigning to grab whatever new industry there may be. In their post today some hon. Members will have received a copy of the Estates Times. Dealing with the Bristol area, it says: It is difficult to believe that Britain is wallowing in the mire of an industrial depression when agents in areas like Avon begin reeling off figures showing last year's progress. Rents were up 60 per cent.…while take up more than doubled.…Yet Avon is getting more than its fair share of imported firms and this trend is likely to continue…Perhaps the most immigrants to Avon are the microchip companies. These are the greyhounds among the firms racing for growth". While we are being starved of new industries, these areas are taking advantage of the fact that reduced incentives debar us from attracting new industry. Even if those areas miss the new industry, Corby will almost certainly get it before we do. Already there are complaints from the Midlands that Corby, because of its assisted area status, is sucking in new industry at such a rate that firms are relocating.

What does that mean in terms of Welsh opportunities for capturing firms that wish to go to assisted areas? Most insiduously, our skilled workers are being wooed by English authorities and English employers. Yet again Wales will have a young generation of workers, its skilled workers stolen, at a time when the number of elderly people in our population is increasing, on the admission of the Government, at the rate of 2 per cent. a year. Able people will have to leave Wales if they want jobs.

A recent education survey showed that Wales came out best in educational development. However, Wales is now to become the educational stud farm for English industry. By contrast—dependent as we are on small firms which are unable to train their own workers—even our skillcentres are threatened with closure.

In rural Mid-Wales, North and South-West Wales the industrial headstone has already been inscribed. It was inscribed by the right hon. Gentleman last July.

For too much of the remainder of Welsh industry, bankrupts' graves are being prepared and the murderers of our Welsh hopes are sitting on the Government Front Bench.

9.33 pm

The Under-Secretary of State for Wales (Mr. Wyn Roberts)

Welsh day debates normally range far and wide, covering a variety of subjects. Today's debate has been no exception. We have even had some words of Welsh from my hon. Friend the Member for Watford (Mr. Garel-Jones). I congratulate him on his Welsh.

Those who are called upon to answer these debates are expected to be omniscient in the affairs of the Principality. The right hon. Member for Swansea, West (Mr. Williams) referred to me as a casual sweeper called in to do the sweeping up. I hope that he is not implying that all those who spoke in the debate talked rubbish. I would not go so far as to say that, even of speeches from the Opposition Benches.

Mr. Alan Williams

rose—

Mr. Roberts

No, I will not give way. The right hon. Gentleman spoke at considerable length—rather more than he has allowed me time for—and I have noticed in these debates that he has the habit of intervening in my speeches. I hope that he will remain verbally continent for a few minutes.

The main theme of the debate has been economic, with special reference to the steel and coal industries. Although I hope to deal with other topics raised by hon. Members, I must first comment on steel and coal.

I do not think that there is anyone who would not rather have a profitable steel industry than a non-profitable one. All right. We agree on that. The same is true of coal and other productive industries. We recognise that profit—or surplus, as the Opposition may prefer to call it—is essential to prosperity, and we recognise all that that means in terms of secure employment, better social services and so on. We know also the consequences of failure to achieve that surplus. Losses have to be paid for somehow or other, and when they are recurrent and extensive the country's economy slips into decline and our standard of living is adversely affected. So there is no difference between us on our hopes for the steel industry.

On 22 May 1978, the right hon. Member for Chesterfield (Mr. Varley) said in the House that the financial objectives of the BSC should be to break even by the financial year 1979–80. I emphasise to the hon. Member for Gower (Mr. Davies) that that objective was set by his own Government, and for this year.

Mr. Alec Jones

Will the Minister give way on that?

Mr. Roberts

No; let me finish the point. It has not been achieved this year, but it still stands as an objective and it is common ground between the last Government and the present one. We cannot disagree on that. So far as I am aware, the Opposition have not reneged on that objective.

Mr. Alec Jones

There is an enormous difference between an objective which the BSC sets for itself and an objective enforced upon it by the present Government's financial policies.

Mr. Roberts

I have quoted the words of the right hon. Member for Chesterfield, the previous Secretary of State for Industry, that the financial objectives of the BSC should be to break even by the financial year 1979–80."[Official Report, 22 May 1978; Vol. 950, c. 1105.] All that we have done is follow the target set by the right hon. Gentleman, and we have required the BSC to break even during 1980–81.

Mr. Ifor Davies

Since the Under-Secretary refers to me, does he recall—I think that he was sitting there at the time—that I quoted from the document published by the BSC as recently as 1978 in which it talked about the prospects for steel? The corporation said that it would require five years before it would become self-financing. That was the BSC, and that is a fair comment coming from the corporation.

Mr. Roberts

I am not disputing what the BSC said. I am referring to what the previous Government said was Government policy.

Mr. Denzil Davies (Llanelli)

rose—

Mr. Roberts

No; I must get on.

Where we differ, I think—it has become clear in the debate—is in our views on the pace at which the break-even point and profitability can be reached. The right hon Member for Rhondda (Mr. Jones) pleaded for time, and he totally failed to answer the point put to him by my right hon. Friend the Secretary of State for Industry. Time is not on our side. It is very much against us in this matter. We have tolerated losses for far too long and delayed necessary change again and again.

Mr. Denzil Davies

rose—

Mr. Roberts

Other countries have had the will and the courage to change.

To give them their due, the previous Government accepted some necessary changes. They did not resist the closure at East Moors or of steel-making at Ebbw Vale. This is now seen to have been too little, too late. Nothing happened about overmanning generally. On all experience, Government involvement slows down and delays the process of change. That is one of the reasons why my right hon. Friend the Secretary of State for Industry has steadfastly resisted the temptation to intervene. Intervention by the Government would lead only to further costly delays and to more job losses later.

Mr. Denzil Davies

rose—

Mr. Roberts

The right hon. Gentleman has not been present for the greater part of this debate. I do not see why I should give way to him.

Of course, we recognise that politics is the art of the possible and that we must push hard at the limits of possibility or there will be worse to come. Of course, there will be social consequences if the BSC's planned rundown at Llanwern and Port Talbot takes place. As my right hon. Friend the Secretary of State for Industry said in the debate on 17 January: It is right for the Government to take action to mitigate the social consequences…The Government have shown, in the announcements made by them about Shotton and Corby, that they do not wish to avoid that obligation in any way. Of course we shall fulfil it."—[Official Report, 17 January 1980; Vol. 976, c. 1891.] My right hon. Friend the Secretary of State for Wales confirmed today that £48 million will be available over two years for remedial measures, most of it going to the Welsh Development Agency. This reflects the best estimate that the WDA has been able to make about what it can do in the next two years.

Mr. Wigley

Surely the hon. Gentleman accepts that this £48 million is an utterly bogus figure. The WDA has a pool of finance at its elbow, far in excess of £48 million, which it has not called upon. It could have used that £48 million immediately. It is bogus money.

Mr. Roberts

It is not bogus at all. The hon. Member will recognise that when I tell him squarely that this £48 million is additional money for the WDA—[HON. MEMBERS: "Where is it coming from?"]—and other agencies for industrial development. I am asked where the money comes from. It is taxpayers' money—

Hon. Members

Oh.

Mr. Alec Jones

Will the hon. Gentleman indicate whether this £48 million—and we all know that it is taxpayers' money—

Mr. Garel-Jones

Now you are getting somewhere.

Mr. Jones

If the hon. Member for Watford (Mr. Garel-Jones) had been here earlier, he would have heard that I admitted this and accepted the consequences. Will the Minister indicate whether the £48 million is additional money, additional to the Welsh Office budget, or is it coming from somewhere else within the Welsh Office?

Mr. Roberts

It is additional money coming afresh to the Welsh Office budget.

Mr. Rowlands

Is it on top of the £30 million? Will the hon. Gentleman give way?

Mr. Roberts

I am not giving way, I have said enough. I have said that it is additional money, fresh to the Welsh Office.

I shall not comment at any length on the current dispute in the steel industry when hopes of a settlement are reviving. It is essentially a dispute about an increase in pay for workers in a bankrupt industry.

The Government have not been hardhearted. About £4,000 million of taxpayers' money will have been invested in the industry by the end of this financial year, as my right hon. Friend the Secretary of State for Industry has said more than once. About £1,800 of every steel worker's average salary of £5,500 is contributed by the taxpayer.

Mr. John Morris

We have heard it all before.

Mr. Roberts

In that case, it is time that the right hon. and learned Gentleman listened to it again.

Furthermore, the taxpayer will contribute £450 million in the next financial year in addition to the £700 million in this financial year.

It is fair to ask who is being hurt by the current strike and who was hurt by the one-day strike in South Wales last Monday. Of course the economy of the United Kingdom as a whole and of Wales as a part of it has been damaged. That means that the people who work with steel products, such as the 1,000 Metal Box workers at Neath, have suffered. Although I listened to the speech of the hon. Member for Neath (Mr. Coleman), I do not believe that he referred to the Metal Box company and the 1,000 workers who have been laid off as a result of the steel strike.

No one has been hurt more than the steel workers themselves and the other participants in the strike action.

Mr. Garel-Jones

rose—

Mr. Roberts

I have a great deal to say and I hope that my hon. Friend will forgive me if I do not give way.

We must all hope that a settlement will soon be reached so that we can staunch the self-inflicted wound and get on with the job of regenerating the steel industry and the economy in Wales and the United Kingdom as a whole.

There has been mention of the losses at Llanwern and Port Talbot. Both have suffered substantial losses in the past and continue to make losses this year. It has been argued that there were encouraging signs in the first half of 1979–80 and that the rate of loss was being slowed down. However, since then the BSC has had to face a massive down-turn turn in demand. The loss rate will not slow down unless manning in both plants is substantially reduced.

The hon. Members for Newport (Mr. Hughes) and for Caerphilly (Mr. Hudson Davies), among others, referred to import controls. The imposition of import controls on steel is, to our mind, no solution. About three-fifths of our steel imports come from Common Market countries and any restriction on those would be illegal and could be overturned in court. Imports from non-Community sources are already the subject of voluntary restraint agreements between the European Community and the main sup- plying countries. The United Kingdom is exporting about half a million tonnes more than it imports. The only sure way to recapture a large share of the domestic market is to be competitive in price, quality and service—as the BSC itself recognises.

Mr. Roy Hughes

rose—

Mr. Roberts

I should like to finish this point. How can the BSC be expected to achieve that unless it has the commercial freedom to buy the quality of coal it needs at the lowest possible price? If the BSC and the NCB can reach a sensible commercial accommodation, that would be the best possible solution.

Mr. Rowlands

On a point of order, Mr. Speaker. The hon. Gentleman has referred to the quality of South Wales coking coal. Not even the BSC has used that argument.

Mr. Speaker

Order. The hon. Gentleman knows as well as I do that he has made a debating point, not a point of order.

Mr. Roberts

Quite rightly, much of the debate was concentrated upon the future of the South Wales coalfield. I shall highlight three points. First, looking at the estimates of possible threats to jobs in the industry—

Mr. Roy Hughes

rose—

Mr. Roberts

I shall not yet give way. I have announced that I shall make three points. If the hon. Gentleman—

Mr. Hughes

rose—

Mr. Speaker

Order. The Minister has indicated that he does not wish to give way. He has been called to speak and he must be allowed to do so.

Mr. Roberts

Thank you, Mr. Speaker.

Looking at the estimates of possible threats to jobs in the industry, it is wrong of the Opposition to exaggerate losses due to the downturn in demand from the BSC. Estimates range from about 8,000 to about 15,000, but they do not relate to the downturn in demand from the BSC. At best, only a small part of that loss would flow from the BSC's proposals for the future of Llanwern and Port Talbot.

Other job losses will depend upon the phasing out of high-cost pits and on the extent to which there is increasing dependence on imports from abroard. No decisions have yet been taken on those last two areas. Secondly, the same is true of new investment at Margam. That is a matter for the National Coal Board, and as yet it has expressed no view whether a new development, as originally proposed, would make economic sense.

Thirdly, my right hon. Friend the Secretary of State has already referred to the Phurnacite plant at Aberavon. He has indicated the difficulties and the importance of both the job and environmental considerations. National Smokeless Fuels is still considering its future strategy. One thing is certain. Whatever happens, there will be no overnight change.

A number of hon. Members have referred to regional—

Mr. Alec Jones

rose—

Mr. Roberts

I have already given way—

Mr. Speaker

Order. Two hon. Members cannot address the House at the same time.

Mr. Roberts

I have given way a great deal. A number of complete subjects have been debated, to which I shall not have time to refer.

We are committed to a strong regional policy—[HON. MEMBERS: "Oh."]—but it must be selective and it must concentrate on the areas of greatest need. The reduced coverage of assisted areas will benefit those remaining, particularly special development areas, as their relative attractiveness increases.

The need for new employment in Wales has been kept in mind. Of the employee population of Wales, 94 per cent. will continue to be covered by assisted area status. Proposals to downgrade assisted areas in South Wales will be reconsidered in the light of current threats to jobs in the steel and coal industries. I expect that to be done as a matter of urgency well before August, when the changes are scheduled to occur.

We are well aware of the problems of North Wales and of the constituency of the hon. Member for Caernarvon (Mr. Wigley), including the impending closure of Bernard Wardle. As my right hon. Friend said, representatives of the company today met Welsh Office officials.

Mr. Alec Jones

What happened?

Mr. Roberts

I am not in a position to say what the result will be.

My hon. Friends the Members for Barry (Sir R. Gower) and Brecon and Radnor (Mr. Hooson) mentioned the importance of small firms. There are problems for many firms, and small businesses cannot be isolated from the grim situation that much of industry faces. They cannot be exempt from the stern measures which the Government are taking to get the economy right. However, I believe that small business men take a more long-sighted view than do many hon. Gentlemen. They can see that the Government are sticking firmly to their policies to control inflation, to encourage and not penalise enterprise, to get bureaucracy off their backs and to bring about a new climate for success. I assure my hon. Friend the Member for Brecon and Radnor that the provisions for factories, finance and advice available to small firms in Wales are second to none in the United Kingdom. My right hon. Friend is giving those services a further impetus by asking the Welsh Development Agency to concentrate investment on the small firms sector.

There is a recognisable natural and all-too-human tendency on the part of those who have recently been in office to paint as gloomy a picture as they can, as soon as they can, of the deterioration that is alleged to have taken place under their successors. An essential talent in that artistry is a gift for instant amnesia. Right hon. and hon. Gentlemen are well blessed with that capacity. They came into office in 1974. In April of that year there were about 38,000 registered unemployed in Wales. During their period in government that figure rose to over 100,000. When they left office, over 84,000 were on the register, with a worsening trend becoming clearly visible. That was not the worst part of the legacy

that they left us. The worst part was the inheritance of a failed political philosophy and the failing policies that ran from it into every sector of our national life.

Mr. Alec Jones

Will the hon. Gentleman give way?

Mr. Speaker

Order.

Mr. Jones

rose—

Mr. Speaker

Order. I have said before that once I am on my feet I must say something. It is clear that the Minister is not giving way.

Mr. Roberts

The Labour Party never admitted its failure, although I see from this morning's press that it is divided on that as on so much else. The Labour Government deluded themselves with false estimates of economic growth and of what the country could afford to spend. The growth that they foresaw was never in prospect.

I am all for optimism in politics, as in life, but it must be based on a realistic appraisal of the future and not on wild dreams that will never come true. The British electorate—and I include Wales—saw through that approach and rejected the Labour Party. They voted for us and a new political approach—the right approach, personified by my right hon. Friend the Prime Minister. We do not offer an easy path. It is a hard road, but it is the right one not only for the United Kingdom as a whole but for Wales. For too long we have been dangerously over-dependent on Government support for an ailing public sector in industry. We have a new opportunity to stand on our feet. That is what the Government want and that is what the people of Wales want for themselves.

Question put, That this House do now adjourn: —

The House divided: Ayes 246, Noes 300.

Division No. 152]	AYES	[10.00 p.m.
Abse, Leo	Atkinson, Norman (H'gey, Tott'ham'	Booth, Rt Hon Albert
Adams, Allen	Bagier, Gordon A. T.	Boothroyd, Miss Betty
Allaun, Frank	Barnett, Guy (Greenwich)	Bottomley, Rt Hon Arthur (M'brough)
Alton, David	Barnett, Rt Hon Joel (Heywood)	Bradley, Tom
Anderson, Donald	Beith, A. J.	Bray, Dr Jeremy
Archer, Rt Hon Peter	Benn, Rt Hon Anthony Wedgwood	Brown, Hugh D. (Provan)
Armstrong, Rt Hon Ernest	Bennett, Andrew (Stockport N)	Brown, Robert C. (Newcastle W)
Ashton, Joe	Bidwell, Sydney	Brown, Ronald W. (Hackney S)
Brown, Ron (Edinburgh, Leith)	Hart, Rt Hon Dame Judith	Palmer, Arthur
Callaghan, Jim (Middleton & P)	Hattersley, Rt Hon Roy	Park, George
Campbell-Savours, Dale	Haynes, Frank	Parker, John
Canavan, Dennis	Healey, Rt Hon Denis	Parry, Robert
Cant, R. B.	Heffer, Eric S.	Pavitt, Laurie
Carmichael, Neil	Holland, Stuart (L'beth, Vauxhall)	Pendry, Tom
Carter-Jones, Lewis	Homewood, William	Penhaligon, David
Cartwright, John	Hooley, Frank	Powell, Raymond (Ogmore)
Clark, Or David (South Shields)	Horam, John	Prescott, John
Cocks, Rt Hon Michael (Bristol S)	Howell, Rt Hon Denis (B'ham, Sm H)	Price, Christopher (Lewisham West)
Cohen, Stanley	Howells, Geraint	Race, Reg
Coleman, Donald	Huckfield, Les	Radice, Giles
Concannon, Rt Hon J. D.	Hudson Davies, Gwilym Ednyfed	Richardson, Jo
Conlan, Bernard	Hughes, Mark (Durham)	Roberts, Allan (Bootle)
Cook, Robin F.	Hughes, Roy (Newport)	Roberts, Ernest (Hackney North)
Cowans, Harry	Janner, Hon Greville	Roberts, Gwilym (Cannock)
Cox, Tom (Wandsworth, Tooting)	Jay, Rt Hon Douglas	Robertson, George
Craigen, J. M. (Glasgow, Maryhill)	John, Brynmor	Rodgers, Rt Hon William
Crowther, J. S.	Johnson, Walter (Derby South)	Rooker, J. W.
Cryer, Bob	Jones, Rt Hon Alec(Rhondda)	Roper, John
Cunliffe, Lawrence	Jones, Barry (East Flint)	Ross, Ernest (Dundee West)
Cunningham, George (Islington S)	Jones, Dan (Burnley)	Ross, Stephen (Isle of Wight)
Cunningham, Dr John (Whitehaven)	Kaufman, Rt Hon Gerald	Rowlands, Ted
Dalyell, Tam	Kerr, Russell	Ryman, John
Davidson, Arthur	Kilroy-Silk, Robert	Sandelson, Neville
Davies, Rt Hon Denzil (Llanelll)	Kinnock, Neil	Sever, John
Davies, Ifor (Gower)	Lambie, David	Sheerman, Barry
Davis, Clinton, (Hackney Central)	Lamborn, Harry	Sheldon, Rt Hon Robert (A'ton-u-L)
Davis, Terry (B'rm'ham, Stechford)	Lamond, James	Shore, Rt Hon Peter (Step and Pop)
Deakins, Eric	Leadbitter, Ted	Short, Mrs Renée
Dean, Joseph (Leeds West)	Leighton, Ronald	Silkin, Rt Hon John (Deptford)
Dixon, Donald	Lewis, Arthur (Newham North West)	Silkin, Rt Hon S. C. (Dulwich)
Dobson, Frank	Lewis, Ron (Carlisle)	Silverman, Julius
Dormand, Jack	Litherland, Robert	Smith, Rt Hon J. (North Lanarkshire)
Douglas, Dick	Lofthouse, Geoffrey	Snape, Peter
Douglas-Mann, Bruce	Lyon, Alexander (York)	Soley, Clive
Dubs, Alfred	Lyons, Edward (Bradford West)	Spearing, Nigel
Duffy, A. E. P.	Mabon, Rt Hon Dr J. Dickson	Spriggs, Leslie
Dunn, James A. (Liverpool, Kirkdale)	McCartney, Hugh	Stallard, A. W.
Dunnett, Jack	McDonald, Dr Oonagh	Steel, Rt Hon David
Dunwoody, Mrs Gwyneth	McGuire, Michael (Ince)	Stoddart, David
Eadle, Alex	McKay, Allan (Penistone)	Stott, Roger
Eastham, Ken	McKelvey, William	Straw, Jack
Edwards, Robert (Wolv SE)	MacKenzie, Rt Hon Gregor	Taylor, Mrs Ann (Bolton West)
Ellis, Raymond (NE Derbyshire)	Maclennan, Robert	Thomas, Jeffrey (Abertillery)
Ellis, Tom (Wrexham)	McMahon, Andrew	Thomas, Mike (Newcastle East)
English, Michael	McMillan, Tom (Glasgow, Central)	Thomas, Dr Roger (Carmarthen)
Ennals, Rt Hon David	McNally, Thomas	Thorne, Stan (Preston South)
Evans, Ioan (Aberdare)	McNamara, Kevin	Tilley, John
Evans, John (Newton)	McWilliam, John	Torney, Tom
Ewing, Harry	Magee, Bryan	Varley, Rt Kon Eric G.
Field, Frank	Marks, Kenneth	Wainwright, Edwin (Dearne Valley)
Fitch, Alan	Marshall, David (Gl'sgow, Shettles'n)	Walker, Rt Hon Harold (Doncaster)
Flannery, Martin	Marshall, Dr Edmund (Goole)	Watkins, David
Fletcher, Ted (Darlington)	Marshall, Jim (Leicester South)	Weetch, Ken
Foot, Rt Hon Michael	Martin, Michael (Gl'gow, Springb'rn)	Wellbeloved, James
Ford, Ben	Mason, Rt Hon Roy	Welsh, Michael
Forrester, John	Maxton, John	White, Frank R. (Bury & Radcliffe)
Foster, Derek	Maynard, Miss Joan	Whitlock William
Foulkes, George	Meacher, Michael
Fraser, John (Lambeth, Norwood)	Mellish, Rt Hon Robert	Wigley, Dafydd
Freeson, Rt Hon Reginald	Mikardo, Ian	Willey, Rt Hon Frederick
Garrett, John (Norwich S)	Millan, Rt Hon Bruce	Williams, Rt Hon Alan (Swansea W)
Garrett, W. E. (Wallsend)	Miller, Dr M. S. (East Kibride)	Williams, Sir Thomas (Warrington)
George, Bruce	Mitchell, Austin (Grimsby)	Wilson, Rt Hon Sir Harold (Huyton)
Gilbert, Rt Hon Dr John	Mitchell, R. C. (Soton, Itchen)	Wilson, William (Coventry SE)
Ginsburg, David	Morris, Rt Hon Alfred (Wythenshawe)	Winnick, David
Golding, John	Morris, Rt Hon Charles (Openshaw)	Woodall, Alec
Gourlay, Harry	Morris, Rt Hon John (Aberavon)	Woolmer, Kenneth
Graham, Ted	Moyle, Rt Hon Roland	Wrigglesworth, Ian
Grant, George (Morpeth)	Mulley, Rt Hon Frederick	Young, David (Bolton East)
Grant, John (Islington C)	Newens, Stanley
Hamilton, James (Bothwell)	Oakes, Rt Hon Gordon	TELLERS FOR THE AYES:
Hamilton, W. W. (Central Fife)	Ogden, Eric	Mr. George Morton and Mr. James Tinn.
Hardy, Peter	O'Halloran, Michael
Harrison, Rt Hon Walter	Orme, Rt Hon Stanley
NOES
Adley, Robert	Arnold, Tom	Banks, Robert
Aitken, Jonathan	Aspinwall, Jack	Beaumont-Dark, Anthony
Alexander, Richard	Atkins, Robert (Preston North)	Bell, Sir Ronald
Alison, Michael	Atkinson, David (B'mouth East)	Bendall, Vivian
Amery, Rt Hon Julian	Baker, Kenneth (St. Marylebone)	Benyon, Thomas (Abingdon)
Ancram, Michael	Baker, Nicholas (North Dorset)	Benyon, W. (Buckingham)

Best, Keith	Gower, Sir Raymond	Moore, John
Biffen, Rt Hon John	Gray, Hamish	Morgan, Geraint
Biggs-Davison, John	Greenway, Harry	Morris, Michael (Northampton, Sth)
Blackburn, John	Grieve, Percy	Morrison, Hon Charles (Devizes)
Blaker, Peter	Griffiths, Eldon (Bury St Edmunds)	Morrison, Hon Peter (City of Chester)
Body, Richard	Griffiths, Peter (Portsmouth N)	Mudd, David
Bonsor, Sir Nicholas	Grist, Ian	Murphy, Christopher
Boscawen, Hon Robert	Grylls, Michael	Myles, David
Bottomley, Peter (Woolwich West)	Gummer, John Selwyn	Neale, Gerrard
Bowden, Andrew	Hamilton, Hon Archie (Eps'm& Ew'll)	Needham, Richard
Boyson, Dr Rhodes	Hamilton, Michael (Salisbury)	Nelson, Anthony
Braine, Sir Bernard	Hampson, Dr Keith	Neubert, Michael
Bright, Graham	Hannam, John	Newton, Tony
Brinton, Tim	Haselhurst, Alan	Normanton, Tom
Brittan, Leon	Hastings, Stephen	Onslow, Cranley
Brocklebank-Fowler, Christopher	Hawksley, Warren	Osborn, John
Brooke, Hon Peter	Hayhoe, Barney	Page, John (Harrow, West)
Brotherton, Michael	Heddle, John	Page, Rt Hon Sir R. Graham
Brown, Michael (Brigg & Sc'thorpe)	Heseltine, Rt Hon Michael	Page, Richard (SW Hertfordshire)
Browne, John (Winchester)	Hicks, Robert	Parris, Matthew
Bruce-Gardyne, John	Higgins, Rt Hon Terence L.	Patten, Christopher (Bath)
Bryan, Sir Paul	Hill, James	Patten, John (Oxford)
Buchanan-Smith, Hon Alick	Hogg, Hon Douglas (Grantham)	Pattie, Geoffrey
Buck, Antony	Holland, Philip (Carlton)	Pawsey, James
Budgen, Nick	Hooson, Tom	Percival, Sir Ian
Bulmer, Esmond	Hordern, Peter	Peyton, Rt Hon John
Burden, F. A.	Howell, Rt Hon David (Guildford)	Pink, R. Bonner
Butcher, John	Howell, Ralph (North Norfolk)	Porter, George
Butler, Hon Adam	Hunt, David (Wirral)	Prentice, Rt Hon Reg
Cadbury, Jocelyn	Hunt, John (Ravensbourne)	Price, David (Eastleigh)
Carlisle, John (Luton West)	Hurd, Hon Douglas	Prior, Rt Hon James
Carlisle, Kenneth (Lincoln)	Jenkin, Rt Hon Patrick	Proctor, K. Harvey
Carlisle, Rt Hon Mark (Runcorn)	Jessel, Toby	Pym, Rt Hon Francis
Chalker, Mrs. Lynda	Johnson Smith, Geoffrey	Raison, Timothy
Channon, Paul	Jopling, Rt Hon Michael	Rathbone, Tim
Chapman, Sydney	Joseph, Rt Hon Sir Keith	Rees, Peter (Dover and Deal)
Clark, Hon Alan (Plymouth, Sutton)	Kaberry, Sir Donald	Renton, Tim
Clark, Sir William (Croydon South)	Kellett-Bowman, Mrs Elaine	Rhodes James, Robert
Clarke, Kenneth (Rushcliffe)	Kershaw, Anthony	Rhys Williams, Sir Brandon
Cockeram, Eric	King, Rt Hon Tom	Ridley, Hon Nicholas
Colvin, Michael	Kitson, Sir Timothy	Ridsdale, Julian
Cope, John	Knight, Mrs Jill	Rifkind, Malcolm
Cormack, Patrick	Knox, David	Roberts, Wyn (Conway)
Corrie, John	Lang, Ian	Rost, Peter
Costain, A. P.	Langford-Holt, Sir John	Royle, Sir Anthony
Cranborne, Viscount	Latham, Michael	Sainsbury, Hon Timothy
Critchley, Julian	Lawrence, Ivan	St. John-Stevas, Rt Hon Norman
Crouch, David	Lawson, Nigel	Scott, Nicholas
Dean, Paul (North Somerset)	Lee, John	Shaw, Giles (Pudsey)
Dickens, Geoffrey	Lennox-Boyd, Hon Mark	Shaw, Michael (Scarborough)
Dorrell, Stephen	Lester, Jim (Beston)	Shelton, William (Streatham)
Douglas-Hamilton, Lord James	Lewis, Kenneth (Rutland)	Shepherd, Colin (Hereford)
Dover, Denshore	Lloyd, Ian (Havant & Waterloo)	Shepherd, Richard(Aldridge-Br'hills)
du Cann, Rt Hon Edward	Lloyd, Peter (Fareham)	Shersby, Michael
Dunn, Robert (Dartford)	Loveridge, John	Silvester, Fred
Durant, Tony	Luce, Richard	Sims, Roger
Eden, Rt Hon Sir John	Lyell, Nicholas	Skeet, T. H. H.
Edwards, Rt Hon N. (Pembroke)	McCrindle, Robert	Smith, Dudley (War. and Leam'ton)
Elliott, Sir William	Macfarlane, Neil	Speller, Tony
Emery, Peter	MacGregor, John	Spence, John
Eyre, Reginald	MacKay, John (Argyll)	Spicer, Jim (West Dorset)
Fairbairn, Nicholas	McNair-Wilson, Michael (Newbury)	Spicer, Michael (S Worcestershire)
Fairgrieve, Russell	McNair-Wilson, Patrick (New Forest)	Squire, Robin
Faith, Mrs Sheila	Madel, David	Stainton, Keith
Farr, John	Major, John	Stanbrook, Ivor
Fell, Anthony	Marland, Paul	Stanley, John
Fenner, Mrs Peggy	Marlow, Tony	Steen, Anthony
Finsberg, Geoffrey	Marshall, Michael (Arundel)	Stevens, Martin
Fisher, Sir Nigel	Marten, Neil (Banbury)	Stewart, Ian (Hitchin)
Fletcher, Alexander (Edinburgh N)	Mates, Michael	Stokes, John
Fletcher-Cooke, Charles	Mather, Carol	Strading Thomas, J.
Fookes, Miss Janet	Maude, Rt Hon Angus	Tapsell, Peter
Forman, Nigel	Mawby, Ray	Taylor, Robert (Croydon NW)
Fowler, Rt Hon Norman	Mawhinney, Dr Brian	Tebbit, Norman
Fox, Marcus	Maxwell-Hyslop, Robin	Temple-Morris, Peter
Fraser, Rt Hon H. (Stafford & St)	Mayhew, Patrick	Thatcher, Rt Hon Mrs Margaret
Fry, Peter	Mellor, David	Thomas, Rt Hon Peter (Hendon S)
Gardiner, George (Reigate)	Meyer, Sir Anthony	Thompson, Donald
Gardner, Edward (South Fylde)	Miller, Hal (Bromsgrove & Redditch)	Thorne, Neil (Ilford South)
Garel-Jones, Tristan	Mills, Iain (Meriden)	Thornton, Malcolm
Gilmour, Rt Hon Sir Ian	Mills, Peter (West Devon)	Townend, John (Bridlington)
Glyn, Dr Alan	Miscampbell, Norman	Townsend, Cyril D. (Bexleyheath)
Goodhart, Philip	Mitchell, David (Basingstoke)	Trippier, David
Goodhew, Victor	Moate, Roger	Trotter, Neville
Gorst, John	Monro, Hector	van Straubenzee, W. R.
Gow, Ian	Montgomery, Fergus	Viggers, Peter

Waddington, David	Warren, Kenneth	Williams, Delwyn (Montgomery)
Wakeham, John	Watson, John	Winterton, Nicholas
Waldegrave, Hon William	Wells, John (Maidstone)	Wolfson, Mark
Walker, Rt Hon Peter (Worcester)	Wells, Bowen (Hert'rd & Stev'nage)	Young, Sir George (Acton)
Walker, Bill (Perth & E Perthshire)	Wheeler, John	Younger, Rt Hon George
Walker-Smith, Rt Hon Sir Derek	Whitney, Raymond
Wall, Patrick	Wickenden, Keith	TELLERS FOR THE NOES:
Waller, Gary	Wiggin, Jerry	Mr. Spencer Le Marchant and Mr. Anthony Berry.
Walters, Dennis	Wilkinson, John	Mr. Anthony Berry.
Ward, John

question accordingly negatived