HC Deb 13 April 1981 vol 3 cc124-32

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

11.8 pm

Mr. Ioan Evans (Aberdare)

On Monday 30 March I asked the Under-Secretary of State for Wales, who is to reply for the Government tonight, what are the latest percentage figures of unemployment in Aberdare, Mid-Glamorgan and Wales, respectively; and what action is proposed to improve employment prospects. He replied: The unemployment rates in Aberdare, Mid-Glamorgan and Wales on 12 March 1981 were 15.6, 14.4, and 13.6 per cent. respectively. Between May 1979 and March 1981 the level of unemployment in Mid-Glamorgan increased by 80.2 per cent. My hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands), who is here tonight, asked Did the hon. Gentleman say 80 per cent? and the Under-Secretary of State confirmed that since the general election unemployment had increased by 80.2 per cent.

I then put a supplementary question: Is that not proof that the Government's economic and industrial policies are disastrous? Unemployment is increasing by more than 1 million per year. When the Prime Minister reiterates that there are no alternative policies, will she look at the documents issued by the Wales TUC, the British TUC, the CBI, the Select Committee on Welsh Affairs and the Select Committee on the Treasury and Civil Service, because they have said that monetarist policies will not work and will have disastrous consequences? The Under-Secretary of State then replied: Some of the amalgams of those policies were put forward in a recent debate in the House by the right hon. Member for Stepney and Poplar (Mr. Shore), and the cost was analysed. That did not prove to be an attractive possibility."—[Official Report, 30 March 1981; Vol. 2, No. 78, c. 6–7.] That, I am afraid, is not a satisfactory response to the fact that since the Government have been in office, for less than two years, unemployment has increased by over 80 per cent. That is why I have the Adjournment debate this evening.

On 21 November 1980 I raised the subject of unemployment in South Wales, and I make no apology for returning to the issue again this evening. When I spoke then the October statistics showed that 2,062,866 people were unemployed in the United Kingdom. Of those, 129,144 were in Wales—that is, 11.9 per cent. of the Welsh working population.

The latest March statistics that have been confirmed by the Minister show that 2,484,712 people were unemployed in the United Kingdom, and of these 146,800 were in Wales—that is, 13.6 of the Welsh working force. In the Cynon Valley, the area that I represent, 15.6 per cent. of the working people are unemployed.

My right hon. Friend the Member for Rhondda (Mr. Jones) is here. The figures in his area are worse. The figures are also bad in the area of my hon. Friend the Member for Merthyr Tydfil. Similar figures can be mentioned for the whole of the Rhymney Valley and Taff Ely.

The school leavers have been hit worst. A total of 6,584 school leavers were unemployed in Wales in January. A further 13,761 were in the Manpower Services Commission's youth opportunities programme. For that number, only 81 vacancies were available for the under-19s. Worst hit was Mid-Glamorgan, where 5,082 youngsters were either unemployed or on the YOP scheme.

The unemployment position has greatly deteriorated since October—a deterioration that has gathered pace since the Tory Government were elected in May 1979.

The Manpower Services Commission's quarterly labour market report for Wales, for the period ending December 1980, summarises the general unemployment position in Wales as follows.

First, the number of people in employment continued to fall during the second quarter of 1980, with the loss of a further 11,000 jobs. An increase in employment in the service industries was offset by a large decrease in the numbers employed in the manufacturing and production industries.

Secondly, unemployment is rising more quickly than in previous downturns of the economy and is higher than at any time since the 1930s. In December, Wales and the North of England had the highest unemployment in Great Britain, at 12.7 per cent. Wales and the North of England also share the highest unemployment at present.

Thirdly, the stock of notified unfilled vacancies is still falling. There has been a decrease of about 1,400 at ESD offices since the September quarter. Fourthly, redundancies notified in Wales to the Department of Employment under the Employment Protection Act are at the highest level since the Act came into effect in 1975. A total of 64,833 redundancies were notified in Wales in 1980, more than double the figures of the previous year.

Unemployment is higher now than at any time since the 1930s. The official figure of 2.5 million masks the true extent of the damage. There are already well over 3 million people out of work. Many of those who become unemployed do not register and are therefore not included in the statistics.

The Government's policies have plunged the country into this misery. Our country suffers deep-seated problems. Industry is in decline. Machinery is outdated. Exports are dwindling because of the value of the pound. Much of the world is in the grip of a recession. The Government are doing nothing to solve these problems. They are making the problems far worse.

The Government claim that they have the only policies that will work. That is nonsense. It is arrogant. There is no evidence to show that the Government's policies will work. There is plenty to show that the policies are leading to economic disaster. It is sad to hear that there is trouble again tonight on the streets of Brixton. I believe that unemployment is one of the causes of the troubles.

Professor Frederick Hayek, the Prime Minister's leading economic guru, speaking about Britain's economic future, said on BBC radio on Sunday Unless there is a major change the great catastrophe is not further than something like ten years away. To say 10 years is perhaps a little optimistic. The wrecking of the economy has gone far enough. The alternatives have been spelt out in the report on employment by the Select Committee on Welsh Affairs. These were positive proposals that the Government could have implemented. The alternatives have been outlined in the Treasury Select Committee report on monetarism and in its more recent report criticising the Budget. The Budget and the Finance Bill discussed today are likely to add a further 300,000 to the massive unemployment figures.

The TUC has published "A plan for growth—the economic alternative" which states: There is an alternative—a radical and challenging plan for national economic recovery. It is a plan to channel Britain's immense resources in the North Sea, in the financial institutions and elsewhere into the biggest programme of investment the country has ever seen. The economic alternative is literally to rebuild the economy by creating the new jobs, the new industries, the new projects and the improved services that the British people desire. The Wales TUC, in its social plan, has outlined alternatives, as has the CBI in its criticism of the Government's economic and industrial policy. At least 364 leading economists recently criticised the Government's economic policies. Early-day motion 309. welcomes the statement by 364 university economists condemning the mad monetarist policies of the Government and demanding an urgent consideration of alternatives; notes their conviction that there is no basis in economic theory or supporting evidence for the Government's belief that by deflating demand they will bring inflation permanently under control and thereby induce an automatic recovery in output and employment; and further recognises that the time has come to consider alternative policies that offer a far better hope of sustained economic recovery. These leading economists—many more have added their names to the 364 since that was submitted—are saying what the Labour Opposition have been saying since the Government embarked on their mad monetarist policies.

What is the position in Mid-Glamorgan, the largest county in Wales, with the highest unemployment'? Already many manufacturing companies have collapsed. In my own area, in the Cynon valley, Helliwell, a part of Tube Investments, Cambrian Castings, in the car component industry, and Inega in the textile industries—longestablished companies—have collapsed. There is a catalogue of closures that have taken place in Mid-Glamorgan in the past two years.

Many factories are working short-time. There is a fear that unless there is a change in Government policy the workers who are now on short time will in due course join the army of the unemployed. Industrial companies complain about the high cost of borrowing, competition, restrictions imposed by the high value of sterling, and local authority rates, forced higher by Government policies, which will mean further reductions in their already thin order books.

What specific action should be taken? I believe that the Government should restore special development area status to those areas in Mid-Glamorgan, such as the Cynon valley and Merthyr, where they have taken away that status when those areas are going through a period of crisis. There should have been an expansionary Budget, and not one that adds 300,000 to the unemployment queue.

There should be a reversal of the Government's restrictive monetarist policies, which, unless they are changed, condemn Mid-Glamorgan, Wales and Britain to low growth and high unemployment throughout the 1980s. There needs to be an extension of the Government's and the Manpower Services Commission's special employment measures. In particular, there should be an expansion of the skillcentre programme, particularly in areas such as Mid-Glamorgan. There needs to be a development of special Government schemes to encourage investment in new technology, new products and new processes, using agencies such as the National Enterprise Board and the Welsh Development Agency to stimulate investment and promote employment.

Mr. Edward Rowlands (Merthyr Tydfil)

Does my hon. Friend agree that what is vital to the confidence of Mid-Glamorgan is an urgent statement on the future of the South Wales coalfield? We are still waiting for an announcement about the tripartite talks. Growing concern is expressed by miners in our areas that some pits will be closed by slow strangulation and the absence of a good statement by the Government.

Mr. Evans

I am grateful to my hon. Friend for that intervention. We hope that the action taken by the miners will solve their problems. The Government have given undertakings that they intend to meet the miners' demands. I hope that they will not renege on those promises. The coal industry is a major industry in Mid-Glamorgan. It plays a large part in my hon. Friend's constituency and in mine. The miners have shown what can be done if workers take a stand and prevent the implementation of the mad monetarist policies, the cash limits, that have been imposed on other industries.

Planned investment in our basic industries, such as coal, steel and the railways, taking account of the direct and indirect subsidies of our European competitors, should be carried out, using public sector purchasing power to create markets and jobs. For each job created in the public sector a further job is created in the private sector.

When the Prime Minister came to Swansea she said that people should be prepared to go elsewhere to look for jobs. Where else in Wales or the whole United Kingdom can they go to find jobs? Mobility is not the answer to the problem of unemployment. That is why I have raised the issue again tonight. I hope that we shall have some answers from the Minister and that the Government and the Welsh Office will take positive action to deal with the serious unemployment problems.

11.24 pm
The Under-Secretary of State for Wales (Mr. Michael Roberts)

I welcome the opportunity to respond to the debate.

The hon. Member for Aberdare (Mr. Evans) has raised on a number of occasions the unemployment problems in Mid-Glamorgan. I agree that the current levels of unemployment are too high, but the hon. Gentleman's simplistic analysis of the reasons for our present difficulties does him little credit. The hard fact is that the world recession, coupled with a lack of competitiveness in British industry, has resulted in the economic difficulties that we now face.

The high rate of unemployment in Mid-Glamorgan must be seen in that context. There is no way in which the county can be isolated from the effects of the general economic situation. It is important to Mid-Glamorgan that we tackle these fundamental problems not by short-term measures taken for political expediency but by taking firm action which holds out the hope of sustained growth in output and employment prospects. This is what our economic policies are designed to achieve.

The hon. Gentleman will know that my right hon. Friend met representatives of the Mid-Glamorgan county council and Heads of the Valleys standing conference recently. The hon. Gentleman was present at the meeting with the standing conference, and I am aware of his close association with the points made at the meeting by the standing conference representatives. We are therefore fully aware of the situation in the area.

During an Adjournment debate in the House on 21 November I made clear, in response to the hon. Member, that we are committed to the retention of valley communities, and we acknowledge that to do this we have to try to ensure that sufficient job opportunities exist to meet the needs of those who live in the valleys. We accept that the Government have a role to play in this, particularly in the provision of adequate infrastructure to help stimulate industrial development.

Much is being done. The Welsh Development Agency is actively reclaiming areas of derelict land throughout South Wales, and in Mid-Glamorgan in particular. This legacy of earlier industrial activity has been a major constraint on industrial development in the past. Apart from the adverse effects on the environment, it has meant that vast areas of South Wales have been left idle, incapable of use at a time when the amount of land available for industrial development, housing and the like has been severely limited by the topography of the region. This is slowly changing, and the WDA is now able to proceed with the provision of industrial sites and advance factories.

In Mid-Glamorgan as a whole there are 32 factory units, totalling 311,000 sq ft, currently available. In addition, the WDA has units totalling 202,000 sq ft under construction in the area and a further 17 units planned. One of the most encouraging features is that, despite the depth of the recession, 19 factories totalling 167,000 sq ft were allocated last year, and already this year eight factories totalling 204,000 sq ft have been allocated. We believe that these allocations will result in over 1,000 jobs being provided in the area.

The Government's recognition of the problems of the valleys has been consistently reflected in urban programme allocations. The scale of resources—[Interruption.] The hon. Member for Merthyr Tydfil (Mr. Rowlands) has intervened from a sedentary position several times already in a short Adjournment debate. He seeks, no doubt, to earn the reputation in South Wales of being the junior Member for Bolsover, but I should be obliged if he would allow me to continue.

The scale of resources available under the programme means that it cannot pretend to tackle all the problems experienced in the area, but it represents excellent value for money and allows funds to be channelled flexibly to localities experiencing particular difficulties. Of some £9 million expenditure approved throughout Wales in the last financial year, over 30 per cent. was for schemes undertaken by local authorities and voluntary organisations in Mid-Glamorgan and in the Blaenau Gwent, Islwyn and Torfaen areas of Gwent. The £10 million package of urban programme schemes recently announced by my right hon. Friend for 1981–82 maintains this ratio. Seventy-five per cent. of local authority expenditure under the programme is met by Government grant.

The emphasis of approvals has been on schemes which are intended to create employment opportunities. In Mid-Glamorgan, for example, we have contributed towards the cost of providing small factory units, industrial sites, and help towards placing mentally handicapped people in employment. In the Cynon valley, in which the hon. Member will be particularly interested, we have contributed towards expenditure under the urban programme by the borough council next year amounting to over £92,000.

Some hon. Members representing constituencies in the valleys seem to be preoccupied with the action that the Government have been taking to help the coastal areas, particularly in the case of the steel closure areas. As I have explained, we recognise the need to see jobs provided in the valleys themselves.

Mr. Alec Jones (Rhondda)

I am glad to welcome all the advance factories and improvements that the hon. Gentleman has listed, but one of our major problems in Mid-Glamorgan is not the hope of attracting new industries but the preservation of the jobs that we have already got, and the Government are proving disastrous in that respect.

Mr. Roberts

I shall deal with that intervention in a few minutes.

It would be naive to think that all the job requirements of the valleys can be met from within those areas. The lack of large industrial sites in the valleys means that inevitably we must look to the coastal plain and valley mouth areas to provide the sites for the bigger industrial developments. There is nothing sinister or underhand in that: it is simply an acknowledgement of the facts of the situation. The important thing surely is to see that as many jobs as possible are provided in, or within easy travelling distance of, the valley communities. If we succeed in doing that we can halt the out-migration from the valleys, especially among young people.

The situation now facing industrial South Wales is not novel. The area has, of course, experienced, and is continuing to experience, a change in the structure of employment as we move away from its dependence on the coal industry and steel industry. It ill-becomes hon. Members to lecture the Government on the need to recognise the contribution that the coal industry could make to our economy. I remind them that it was their party, and the Government whom they supported, that presided over the period during which large numbers of pits were closed in South Wales. Some 27,000 jobs were lost during the latter part of the 1960s in South Wales alone, when 39 pits closed.

I cannot accept the criticism levelled at us by the Opposition about our policies for the coal industry. It is irresponsible of hon. Members to suggest that this Government want anything other than a successful and modern industry. We are enabling the NCB to continue its massive investment programme in new capacity, and the Government fully support the aims of the Plan for Coal. But it is for the board to decide on its priorities for investment in particular schemes. All the unions accept that closures in an extractive industry are inevitable, and it is for the NCB to judge any closure under the established review procedure. As hon. Members are aware, the Government and the NCB are together reviewing the board's financial requirements and strategy, so I cannot comment on the matters of detail at this time.

However, I am sure that hon. Members will welcome the improved redundancy terms available to those men affected by closure of exhausted pits, and the announcement by the Chancellor of a scheme to aid industry to convert from oil-fired boilers to coal, for which we are committing £50 million over the next two years. Both sides of the industry accept that this country must import certain types of coal which are not available from our own mines in sufficient quantity, but the scope for replacing some imported coal forms part of the detailed discussions which are continuing and to which I have referred.

The Heads of the Valleys standing conference has made a plea for special assistance for the area. As I have already indicated, much is already being done in terms of provision of infrastructure and factories. Massive expenditure has already taken place, and is continuing to bring new jobs to the area, particularly to unemployment black spots like Blaenau Gwent. A comparison has been drawn with the special package of assistance for Llanwern and Port Talbot. But hon. Vlembers must realise that these areas did no have the advantage of an ongoing factory building programme such as that in existence in the valley areas. The job losses in steel were on a massive scale over a relatively-short space of time.

Mention has been made of assisted area status. I of course recognise the views strongly held by hon. Members about the need for SDA status for this area, but we have to consider the situation there alongside developments elsewhere in the country. The availability of Government financial assistance is only one of the many factors which industrialists take into account when deciding on future investment. The most important factor is the general economic situation at the time. The other important factor is the provision of infrastructure and factory space, and I am confident that these latter points will not inhibit investment in valleys in any way.

This is not to say that assisted area status does not have a part to play, but blanket SDA coverage is not the answer. We have tried to concentrate assistance on those areas with the greatest problems in terms of unemployment: and structural change. This is why we have retained SDA status for areas such as the Rhondda, Bargoed and Ebbw Vale. If we were to extend SDA status to other parts of South Wales with relatively less severe problems we would have to do the same for other areas of the country facing similar problems.

Mr. Ioan Evans

rose——

Mr. Rowlands

rose——

Mr. Roberts

I hope that hon. Members will excuse me for not allowing them to intervene. I have already allowed one intervention and there have been about 24 sotto voce interventions by the junior Member for Bolsover, the hon. Member for Merthyr Tydfil.

The hon. Member for Aberdare made a speech containing not one constructive thought. It was full of the same old inflationary talk, about an inflationary Budget and inflationary policies and economics which have failed before and would fail again. If the hon. Gentleman reads the report of his speech tomorrow he will realise why the Wales TUC and the Labour Party in Wales failed so abjectly to organise a rally last week. They took for that rally the Sophia Gardens, which can hold between 2,000 and 3,000 people. With such great speakers as the hon. Member for Bedwellty (Mr. Kinnock) and the right hon. Member for Rhondda (Mr. Jones), the rally attracted about 70 people.

The reason is clear. The people of South Wales anticipated the sort of speech that they would have heard—and the sort of intervention that they would have heard from the hon. Member for——

Mr. Alec Jones (Rhondda)

Will the Minister give way?

Mr. Roberts

I will not give way on this——

Mr. Jones

The Minister's speech is a disgrace.

Mr. Roberts

They have learnt——

Mr. Rowlands

Answer the debate.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

Order. It is customary for speeches on the Adjournment to be heard in silence.

Mr. Alec Jones

This rubbish should not be heard in silence.

Mr. Roberts

Such comments would be better made in the bar than in the Chamber of the House of Commons.

We have heard the usual inflationary arguments for expansion. They proved a disaster in the past in South Wales. That is why the people of South Wales reject that economic approach to their problems. They know that their problems are deep-seated and that the Government are tackling them to the best of their ability.

Question put and agreed to.

Adjourned accordingly at twenty-two minutes to Twelve o' clock.