§ [Relevant documents: First Report from the Committee on Welsh Affairs, Session 1979–80, on the Role of the Welsh Office and Associated Bodies in Developing Employment Opportunities in Wales (House of Commons Paper No. 731) and Government Observations upon that Report (Cmnd. 8085)].
§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Brooke.]4.28 pm
§ The Secretary of State for Wales (Mr. Nicholas Edwards)
It was with a certain sense of surprise that I heard that the hon. Member for Pontypool (Mr. Abse), who is Chairman of the Select Committee on Welsh Affairs, would wind up the debate from the Opposition Front Bench. It is not the custom, and conflicts with the tradition that Front Bench spokesmen should not be members of Select Committees. It is a regrettable decision. It means that the hon. Gentleman will not speak with the authority that he has as Chairman of the Select Committee. All hon. Members will know that he has come here because he prefers to deliver a partisan polemic. What he does today will be judged on that basis.
This is the third Welsh day debate to be held since the general election. It is inevitable and right that it should concentrate upon the economy, unemployment and the report on these topics of the Select Committee on Welsh Affairs. I intend to devote most of my speech to those subjects, but there are some important events which I think deserve mention. I shall not say anything about two topics simply because they have been debated in the very recent past—the extremely important rate support grant settlement, which was the first since the transfer of these responsibilities to the Welsh Office, and housing, which we discussed in the Grand Committee and which I was questioned about following my statement in the House.
In two fields of my responsibility, despite the economic climate, I have thought it right to increase expenditure in order to achieve important objectives. At Llanrwst, in April, I spelt out my firm commitment to support the priceless heritage of the Welsh language. That commitment has actually been transformed into reality by the expenditure of about £1.2 million in 1980–81, an amount greater than that provided by any previous Administration, which includes over £500,000 in grants to support Welsh language education. In the coming financial year, subject to the approval of Parliament, I shall be authorising total expenditure in the region of £2 million, something like three times the largest amount spent by any of my predecessors.
I do not intend to reopen the heated debate about the new fourth channel, not least because the subject of broadcasting in Wales is currently under detailed examination by the Select Committee. However, I want to dispel the mistaken idea that the Government, having put the Act on the statute book, are now resting on their laurels. In fact, a great deal of detailed work is going on to ensure the successful launching of this important new venture; and I am pleased to be able to tell the House that my right hon. Friend the Home Secretary is announcing today that a very eminent Welshman, Sir Goronwy Daniel, has accepted his invitation to serve as chairman of the Welsh Fourth Channel Authority. I am sure that he will carry out his task with drive, judgment and enthusiasm, 441 and I know that his appointment will be widely supported in Wales. The BBC's national governor for Wales, Mr. Alwyn Roberts, the IBA's national member for Wales, Professor Huw Morris Jones, Dr. Glyn Tegai Hughes and Mr. D. Ken Jones, who is Managing Director of Takiron Ltd., have also been invited to serve as members of the authority and I am glad to say have agreed to do so.
§ Mr. Ioan Evans (Aberdare)
Before we leave the subject of the fourth channel, may I say that anxiety was expressed by some of the trade union representatives who gave evidence to the Select Committee? They said that the Welsh programmes on the fourth channel may well be delayed, and that the fourth channel for the whole of the United Kingdom might start first. Can the right hon. Gentleman assure us that the Welsh programme is not falling behind and that it will start as soon as possible?
§ Mr. Edwards
It is still the Government's firm hope that the fourth channel will start in the autumn of 1982, and we are asking the newly appointed members to seek to achieve that objective.
The other area to which I referred, where there has been increased support, is to important sections of the agricultural industry. In Wales the recently announced increases in hill livestock compensatory allowance rates, the further increase in milk prices, the introduction of the suckler cow premium and the implementation of the sheepmeat regime will contribute greatly to the stability of the livestock sector on which Welsh agriculture depends. Taken together, these measures will inject something like £20 million to £25 million into the farming economy in Wales, and will add greatly to the well-being of hill farmers.
Nobody knows better than I the very real difficulties faced by the farmers in the marginal land areas. It is a pity that the last Government did not respond sooner to the problem. When we came into office we had to start almost from square one, and it is only now that the end of the essential survey work is in sight. When it is completed—later this year—we will put any case for an extension to the less favoured area to the EEC Commission. All these measures show our determination to safeguard the position of the industry.
Nowhere is the proper allocation of financial resources more important than in our road programme, which is so vital for the future of the Welsh economy.
I have to say that there was a certain air of unreality about the plans we inherited they included far more schemes than there was provision for money to finance them, and were over-optimistic in many cases about the speed with which the planning obstacles could be overcome. Of course, there has to be preparation of more schemes than there is likely to be money available to allow for unexpected setbacks in the planning procedures, but I have tried to inject a greater element of realism and to indicate on a more prudent basis the likely timing of major developments in the programme.
It would be unrealistic to imagine that the road programme, which is dependent entirely on public funds, could be insulated completely from the need to reduce public expenditure, but it has proved possible to maintain expenditure on the trunk road programme broadly at the high level of recent years, and the highest priority has been given to the strategic routes and especially the A55 in the north. Unfortunately, legal challenges have delayed the 442 start this year of the Hawarden and Bangor bypasses, but subject to their resolution I hope that their construction will start within the next 12 months. Preliminary work on the first phase of the A55 Colcon scheme, the Llanddulas—Glan Conwy improvement in the Colwyn Bay area, has already started, and the main work will start later this year. Preparatory work on the remaining stages, including the Conwy crossing, is being given the highest priority. I also expect work to start on the A5 Llanfair. PG bypass later this year, and in South Wales I hope to see a start very soon to the Carmarthen southern bypass and the A470 Abercynon—Pentrebach improvement.
§ Mr. Donald Coleman (Neath)
Can the right hon. Gentleman assure the House and the people concerned that the A465, which was given a very high priority by the previous Government and which would have brought about the completion of the Heads of the Valley road as far as Swansea, has not slipped back in the programme?
§ Mr. Edwards
If the hon. Gentleman looks at the programme, he will see that that the A465 is not in the first phase of the building programme. However, we are naturally anxious to press on with it as quickly as possible. It will be recognised that in recent years we have given South Wales enormous priority. In my view, there was an urgent need to get on with the A55 in the north. Difficult choices have had to be made, bearing in mind that decision.
In two fields of my responsibility major consultation exercises are being undertaken—in education, on the nature of the curriculum and the place of the Welsh language in the curriculum, and in health, on the reorganisation of the National Health Service. A large number of representations have been received about reorganisation, and these I am now considering. No decisions have yet been taken. My hon. Friend the Under-Secretary of State, in winding up, will say a word about the major capital building programme that is proceeding.
Inevitably, the great majority of the major decisions that I have referred to so far involve difficult choices about priorities and the use of scarce resources. That brings me back to the economic difficulties that confront us.
Since this debate last year there has been a further substantial rise in the level of unemployment in Wales, and it must be a matter of grave concern to every Member in the House that this trend continues, and is likely to continue for some time to come, even if it seems increasingly probable that we shall see the first signs of industrial recovery this year. That is one desperately depressing aspect of the situation in which we find ourselves. Right hon. and hon. Members opposite will, during the course of this debate, emphasise this all too obviously shocking fact. I do not criticise them for that. What I do criticise them for is the shameless manner in which they seek to exploit that fact, regardless of their own record, their own share of responsibility, and their total failure to produce even the semblance of an economic policy to provide a remedy.
Lack of competitiveness lies at the heart of our present difficulties and it is sadly characteristic that in our last debate the right hon. Member for Rhondda (Mr. Jones) proffered the cruel deception that the agony of Wales could be reduced by a two-year delay on any steel closure programme. If that advice had been followed, huge overmanning, enormous over-capacity and losses on a 443 staggering scale would have guaranteed the closure of major steel making in Wales. Always short-sighted, his colleagues offered every incitement to the work force to resist the corporate plan.
Fortunately, those engaged in the industry showed far greater realism and good sense, and the achievement of "slimline" has now given Llanwern and Port Talbot the chance to live. In a year, they have put themselves among the most competitive steel making plants in Europe. It is too early yet to know whether an adequate market can yet be carved out. The success of the "slimline" exercise so far and the support of BSC's corporate plan by the majority of its employees points the way forward to our industrial recovery. The BSC experience is matched by firms right across the industrial sector which report not only that they are now competitively manned but that they have rid themselves of many of the most destructive industrial practices of the past and are now negotiating far more realistic wage settlements than we have seen in recent years.
That return to competitiveness and the lack of industrial disruption, matched by the continuing fall in inflation, has to be set against the rising unemployment level in considering the record of the last 12 months and the prospects for the future. That returning competitiveness gives increasing grounds for confidence that this country can recover a larger share of markets in this country and abroad as they begin to recover.
For eight months in a row, the retail price index has risen by less than 1 per cent. Thus, in the last six months, prices have risen by only 3.7 per cent. That is an annual rate of well under 10 per cent. One understands why a number of commentators believe that the RPI will be down to single figures on an annual basis this summer. If that happened, it would have hopeful implications for a reduction in the minimum lending rate.
§ Mr. Donald Anderson (Swansea, East)
The Secretary of State must surely appreciate that that compression of retail prices is the direct result of the recession and nothing to do with Government policies.
§ Mr. Edwards
I have just read an article by Sam Brittan in the Financial Times. I prefer him as an economic adviser rather than the hon. Member for Swansea, East (Mr. Anderson). The two views are precisely opposite to each other. Our firms are becoming more competitive and thus there is a greater chance of economic and industrial recovery.
These improvements are coming at a time when the destocking process is nearing an end, when there are signs that the level of output is bottoming out and in a period when business creation and inward investment has held up better than we might have dared to hope considering the severity of the recession. What we have to do now is to ensure that the improvements in productivity are maintained as we move into a period of recovery, and that necessary economies in public spending are achieved so that increasingly resources can be switched to productive industry. At the same time, we must continue, as we have done in the past year, to devote adequate Government funding to assist the process of change and to ease the position of the unemployed, particularly the young unemployed.
444 Last year in a similar debate I announced a substantial package of measures. Good progress has been achieved in carrying that programme into effect. I announced details on 1 April 1980. They consisted of the immediate building by the Welsh Development Agency of 1¼ million sq. ft. of advance factory space, the immediate acquisition and development of 500 acres of industrial land and the reclamation of another 325 acres of derelict land in the Port Talbot area for future industrial development. In addition, the Cwmbran development corporation was to build a further 250,000 sq. ft. of advance factory space on the Llantarnam site.
On 30 June I approved a further package of industrial development by the agency, including an additional 47,000 sq ft for the Newport district and 50,000 sq ft for Blaenau Gwent. That package gave the go-ahead for a further 220,000 sq ft in the Shotton travel-to-work area, bringing the total planned construction at Shotton up to 98 units, totalling 708,000 sq ft of new advance factory space started in a single financial year.
At the end of July the WDA announced an agreement with Norwich Union to fund at a cost of £5 million a 240,000 sq. ft. programme for the Bridgend area, and an agreement in principle with Wimpey Ltd, for a package deal worth £4 million to build at Newport the first phase of 184,000 sq. ft. of factory space. In addition to all this, the Secretary of State for Industry announced on 19 June that the Port Talbot travel-to-work area would be upgraded to SDA status and the whole of the Newport travel-to-work area and Cwmbran employment office area would become development areas.
Alongside these considerable measures for structural improvement, my right hon. Friend the Secretary of State for Employment has announced a major expansion of the special employment measures, and particularly the youth opportunities programme, That programme has been expanded threefold since 1978–79. A total of £208 million was spent on it in 1981–82. It has expanded from 162,000 places in the first year to 300,000 this year and 440,000 next year. In Wales it has been expanded from 27,000 in the current year to about 43,000 in 1981–82. Over £400 million a year is being spent on the temporary short-time working compensation scheme which is aiding over 500,000 people—nearly 53,000 of them in Wales. My right hon. friend the Secretary of State for Employment was justified when he told the House:That does not look to me like a Government who do not care about unemployment and young people."—[Official Report, 15 January 1981; Vol. 996, c. 1620.]I deliberately quote the United Kingdom figures for the special employment measures, and present the programme on a United Kingdom basis as I turn now to the report of the Select Committee on Welsh Affairs because my central criticism of that report and the principal reason why the Government could not accept some of its recommendations is that it failed to put them in the United Kingdom context or measure them in total United Kingdom impact and cost.
The fact that we have felt bound to reject some of the Select Committee's proposals has provoked a number of comments about the work of the Select Committee which seemed to me to be based on a misunderstanding of its role. I believe that the setting up of that Committee was an important event and that it can make a very valuable contribution to better government. For that reason, I advocated its introduction during the devolution debates. 445 It was presented then not as an alternative to devolved government as some commentators have suggested but as a means of imposing parliamentary government which remains the true alternative and which the Welsh people chose.
A Select Committee's role is to advocate, to argue, to probe, to examine and expose, and by those techniques to improve; but not itself to govern. The responsibility for the actual decisions taken has to remain with the Executive who are answerable to Parliament. It is natural, perhaps inevitable as my hon. Friend the Member for Flint, West (Sir A. Meyer) has pointed out, that the Welsh Affairs Select Committee should seek to obtain the maximum possible for Wales, that it should present a shopping list; but it remains the job of Government to balance the interests of the whole United Kingdom and to assess the consequences of acting in one part on all the others for which they are responsible.
I have to say to members of the Select Committee, including my hon. Friends, that while I understand why they pitched their bids so high, they must acknowledge that the measures could not possibly be taken in isolation but have to be matched in other parts of the United Kingdom with similar problems and that any Government would be bound to consider the overall impact of what is proposed upon their economic policies generally.
Of course, the Select Committee may seek to overturn a particular economic policy, but it must not be entirely surprised if its advice is rejected, for at the end of the day it has to be for the Government to accept responsibility for what is done, to respond to the criticisms made and then to seek approval from this House of Commons for its decisions. That is exactly what I am doing this afternoon in seeking the support of my right hon. and hon. Friends for the Government's policies in the light of our response to the Select Committee proposals.
§ Mr. Ioan Evans
The right hon. Gentleman will realise that six Conservatives serve on the Committee, outnumbering the Opposition parties. The Committee took evidence from all responsible organisations in Wales, and as a result of that evidence from industry, local government and all the bodies before it, the Committee said that there was a jobs chasm. It warned the Government that they had to change their present policies in order to deal with the problem of unemployment in Wales.
§ Mr. Edwards
It is often a mistake to give way. That contribution has added nothing to the discussion. It will be for my hon. Friends to decide whether the response that the Government have made and the explanations that they have given convince them to support the Government.
§ Sir Anthony Meyer (Fint, West)
Does my right hon. Friend agree that the nature of this Select Committee, in which members from all parties work together in the interests of the House of Commons and in the interests of Wales, imposes no restriction on it to tailor its demands to the national capabilities? The one thing which brings us together is the demand for more for Wales. We are united in demanding that, but we cannot be united in demanding that the Government should meet what are self-evidently almost impossible requirements in many cases.
§ Mr. Edwards
I have given way a number of times. There are many detailed points in the Select Committee response on which I wish to speak. I must press on.
§ Mr. Edwards
Perhaps my hon. Friend could make his point later. I wish to deal with many detailed points and I may deal with the point he wishes to raise. One of the difficulties about giving way early in a debate is that inevitably one discovers that matters raised will be referred to later in the debate.
There is one more general point I wish to make. A singular myth was created by a journalist whose newspaper published a summary of the report before it was published which has been taken up by others who I suppose never read it all. The myth is that the Government rejected all but two of the Committee's conclusions or recommendations. It is untrue. I have done a quick count and the reality is that the Government have accepted or agreed with about a third of what the Committee recommended or concluded, and in some cases what it pressed for has already come to pass.
There is a great deal more common ground between the Government and the Committee than has been acknowledged and I welcome much of the analysis that has been made in this worthwhile report. As we said in our response, the Governmentsees it as a central objective to assist the process of change and to ease the very painful social consequences that often flow from it. It will therefore continue to provide substantial financial support to enable the nationalised industries to modernise, to improve the infrastructure and encourage the creation and development of new industries and to help those who are unemployed, particularly the young unemployed".We believe that we are carrying out those undertakings, and I have very firmly to reject the suggestion that the advance factory building programme that I have described is an inadequate response to the situation that we face. There is absolutely no evidence that site development preparations and factory building on a larger scale in the past year would have led to faster inward investment or the provision of new jobs in manufacturing industry.
The reality has been that land and factories have been available throughout the period for any potential investor. I believe it would do no service to Wales simply to have standing vacant very large numbers of factories for long periods. The truth is that we face a formidable challenge in the coming year to fill the factories that are nearing completion.
There is another important consideration, too. If we are to carry forward and sustain over a long period the programme of change and industrial regeneration that has to be set in train, it is vitally important that we should stimulate and encourage an increasing quantity of private sector investment in the factory building programme. That would not be possible if we swamped the market.
The progress so far has been encouraging. The £5 million deal already announced with Norwich Union is now at the construction stage, and good progress is being made with detailed negotiations on the £3 million deal agreed in principle with the National Coal Board pension fund. The agency is about to take new initiatives to raise money from the private sector through the sale of some of its existing tenanted factory stock. In all, the agency is looking to secure up to £15 million of private sector funds next year. If this can be achieved, expenditure on site 447 development and factory building expenditure will be up to 25 per cent. higher than would otherwise have been possible.
The need to arrange this increasingly important private sector property investment on a co-ordinated basis also provides one good answer to the criticism made by the Select Committee that we would have done better if we had not concentrated the remedial programme on the Welsh Development Agency. There are other reasons as well. The fact is that the agency' was established by the previous Government precisely to undertake this sort of task, and it is extremely doubtful whether we could have carried out such a massive programme so effectively by allocating the resources to a variety of organisations.
The programme was announced on 9 April. At this stage, only some nine months after the announcement, work is under way on site on about 200 factory units totalling over 1 million sq. ft. The remaining contracts to be let under the programme, including about another 80 factory units totalling an additional ½ million sq. ft., will be placed either on or ahead of schedule over the next few months. The first factory units from this crash programme will become available for occupation in May and the extensive site development work that has been carried out means that there will be ample prepared sites for further factory building in the years ahead. Incidentally, more than 3,000 people are employed in Wales, in one way or another, on this programme.
The other major area of disagreement is over the Committee's comments on the possibility of serious social disorder in Wales, in particular the emphasis given to that point by the Chairman in his press conference. Little evidence was put forward at the time to support the suggestion, and in the event the great mass of the Welsh people have shown far more good sense and judgment than they were given credit for.
Unfortunately, the suggestion has been used by some as an excuse for militancy, and the threat has been seen as a weapon to change Government policy. Those who claim—I believe that the hon. Member for Pontypool is among them—that the statement and the threat led to the decision to retain Llanwern are not only wrong, but are making a claim that can only be regarded as further encouragement to social disorder. The truth is that the proposal to continue steel making at Llanwern has been made by the British Steel Corporation not because of threats of disorder, but, on the contrary, because of the success of "slimline" and the absence of disruption. The one thing that could guarantee the failure of any plant in the present condition of the market is for social disorder and disruption to occur there.
I also have to say that the suggestion has significantly added to the difficulty of attracting new industry to revitalise the Welsh economy. In all my discussions on the Inmos project and over other possible developments from within the United Kingdom, as well as in my visit to the United States, I have been left in no doubt at all that the greatest single obstacle we face to industrial recovery in Wales is the entirely false image of Wales held by some—[Interruption.]
§ Mr. Edwards
I repeat that statement with all the emphasis that I can command—that this entirely false 448 image is damaging Wales, the false image that it is the home of disorder, an area of decay and dereliction, and a place where outsiders will be made unwelcome or their houses burnt down.
The reality is entirely different. There are those who by their words and actions, including Labour Members, reinforce that myth and do incalculable damage to the people of Wales.
Having expressed disagreement on the major issues, I shall refer now to a number of areas where there is much common ground. The Committee believes that Wales should remain a major producer of basic steel. Clearly I welcome the fact that the British Steel Corporation sees a continuing role for the major plants at Llanwern and Port Talbot, and the Government are currently considering its proposals. At the present stage, I cannot comment further on the details of the BSC corporate plan, but it is quite clear that that plan will involve further substantial funding by the taxpayer and our decisions on these matters and on the requests for funding by other nationalised industries obviously take account, as the Committee suggests, of the repercussions on other nationalised industries and on the economic base of whole regions. I welcome the fact that, after the Select Committee had reported, agreement was reached between the British Steel Corporation and the National Coal Board on the continued supply of indigenous coking coal beyond 1980.
The Committee emphased that, in addition to the threat to its market for coking coal, wider problems confronted the National Coal Board. If the board is to achieve its long-term strategic objective and maintain its major capital development programme, it must clearly re-examine the drain on resources at present taken by some of the older uneconomic pits.
We have to face the fact, as the previous Government had to face it on a large scale, that over the next three or four years we may see further closures of loss-making pits. However, I believe that the NCB will find opportunity for additional investment to strengthen the position of many pits in Wales and to increase job opportunities within them. The Government have, of course, made a massive commitment of taxpayers' money to the coal industry—a commitment of over £800 million in capital investment this year. That figure, incidentally, fits in exactly with "Plan for Coal".
Much speculation in the past has been exaggerated, as I believe much of it is today. Last year for example the right hon. Member for the Rhondda told the House that 15,000 jobs in coal were at immediate risk in Wales out of a total of 28,000. I have no reason to think that the National Coal Board is contemplating cuts either as large as that or on that timescale.
Of course I understand very well that any further closures will add to our difficulties, just as I clearly recognise that the latest proposals of the British Steel Corporation will have a further impact on employment prospects in parts of Wales, at Ebbw Vale, Shotton and West Glamorgan particularly. In the light of these proposals and of the serious increase in unemployment that has taken place, the Government will need to consider the implications for assisted area status and the need for further remedial measures. At a time when decisions about British Steel Corporation's corporate plan have yet to be taken, it is obviously premature for me to say anything at this time.
§ Mr. Edwards
The hon. Member was the only Labour Member who took the trouble to attend yesterday's energy debate. No Welsh Member spoke in that debate, but I know that he was present and listened carefully to the debate. There is nothing that I can add to what was said about coal yesterday. My right hon. Friend the Secretary of State for Energy made the position quite clear.
Since the Committee has reported and recommended that the Inmos project should be located in Wales, the announcement has of course been made that the production plant is to be built at Duffryn, Newport, and energetic measures are now being taken to ensure the success of this project. I am holding a conference before the end of this month with representatives of industry and other organisations to consider what further steps can be taken to improve the training facilities that are required in this new high technology area.
There are other encouraging developments in this field. I can confirm press reports that a firm decision is expected shortly from MITEL, the fast-growing Canadian telecommunications company, about a plan to establish an important production plant in South Wales this year. All the initial negotiations have been concluded and the company has stated publicly that the plant will initially provide about 1,300 new jobs increasing to 1,700 over the next two or three years and to 3,000 by 1990. It also tells me that perhaps as many as half as many jobs again may be created in companies to whom they will sub-contract. Obviously I very much hope that the board will confirm the decision to go ahead with this project.
It was not my original intention to say anything about MITEL's plans in this debate and I would certainly not have done so if the company had not itself confirmed its interest in a Welsh location. The company was of course responding to press speculation. I have in recent days read with mounting concern and dismay a number of newspaper reports about this or that development said to be in prospect for various localities in Wales and the role being played by this or that body in encouraging it. In my view, the time for publicity is when negotiations have been successfully concluded and it has been agreed with the company that an announcement should be made. Until that time, everyone should keep quiet. No purpose is served—except perhaps to gratify some people's egos—by premature disclosure, hints and half-promises.
More than this, advance disclosure that a company may be considering a particular location can do untold damage. For a whole variety of reasons—marketing strategy, its competitive position, the interests and attitudes of its existing employees or its financial position—a company needs to handle any significant expansion with care and delicacy. Loose, irresponsible talk could easily result in the loss of the development. I and my Department will continue to observe the most scrupulous care to maintain confidentiality about the information given to us. I strongly deplore any other approach.
§ Mr. Edwards
The hon. Member says "Red herring," but I must tell him that the Labour leader of one major 450 council in South Wales, talking to me on the telephone not two or three hours ago, confirmed his grave anxiety about what has been happening in the last week or two.
§ Mr. Edwards
It is a sad judgment on the hon. Member that he thinks that that matter, which could threaten the arrival in South Wales of hundreds or thousands of new jobs, is not a matter to be commented on in the House.
While speaking about these major new projects, Inmos and MITEL, both of immense potential importance for South Wales, I must emphasise the critical importance to both of them of our membership of the European Economic Community. I have spoken about the false image of Wales being an obstacle to inward investment. Another obstacle at present is the fear that Britain might withdraw from the Community. If that came to be seriously believed by overseas industrialists, it would be a catastrophe for the Welsh people, and indeed for the United Kingdom economy.
During my visit to the United States last autumn, I was left in no doubt at all that virtually every company considering establishing a new factory in Britain was doing so because we were a member of the Community and would immediately abandon its plans if the threat of withdrawal became a reality. Those who advocate that course therefore gravely threaten the possibility of industrial regeneration in Wales. I regard such talk as being wildly irresponsible, particularly at the moment when our trade balance with Europe has moved into credit for the first time. I must also emphasise the immensely important contribution that EEC financial assistance has made to this task of attracting new industry and creating new jobs.
There is a whole range of comments and proposals by the Select Committee which the Government either accept or on which there is a considerable measure of agreement. For example, in connection with criteria for regional selective assistance, we believe that those criteria are not discouraging applications and measures have been taken to increase the flexibility of the scheme, particularly for small firms. The Government accept the need for greater publicity, and measures to that end are being taken.
The Committee pressed for further assistance to employers with short-term difficulties and for an expansion of the STEP scheme. We have taken action to implement those recommendations. The Committee made recommendations about the investment activities of the Welsh Development Agency in relation to small businesses. We agree substantially with what the Committee said on that point. Our policies and, indeed, the approach of the Welsh Development Agency are in line with that.
The Committee emphasised the importance of the financial assistance provided to assist with transitional and settling-in costs of employers moving into the development areas. I think they failed fully to understand the scale of assistance now available under section 7 of the Industry Act and the assistance available towards the cost of training the new work force. I discovered in the United States that this is regarded as of particular importance for potential investors
We were urged by the Committee to pay particular attention to the development of co-operatives as a means 451 of creating employment. I had this very much in mind when I announced on 15 December my intention of making a grant of £40,000 available to the Wales TUC as a contribution towards the cost of its research study into the feasibility of setting up a resource centre. I regard the proposal for this study as a promising initiative which deserves every encouragement. In the light of the unemployment problems and prospects in Wales, I decided it was important to get the study under way without delay. Therefore, pending parliamentary approval of my Supplementary Estimate for the Regional and Industrial Development (Wales) Vote, necessary expenditure will be met by repayable advances from the Contingencies Fund.
§ Mr. Edwards
I would prefer to press on, if I may.
The Committee rightly emphasised the importance of tourism to the Welsh economy. We have already taken measures to make more effective use of the resources available to tourism. I know that the chairman of the Wales Tourist Board is grateful for the scale of support that we have been able to give.
The Committee was absolutely right to emphasise the importance of close co-operation between the Welsh Office and the Manpower Services Commission. The new chairman of the commission's Manpower Services Committee for Wales, Sir Melvyn Rosser, is playing a detailed part in discussions that are going on to achieve that important objective.
Finally, in this review of common ground between the Committee and the Government, I would refer to the recommendation that the Welsh Office industry department should be designated the body to which all inquiries should be directed, and that the division of responsibility over the selection of tenants for factories should be clarified. There is no doubt about the last point. Under the guidelines, the responsibility rests clearly with the Welsh Development Agency. As to the first point, the Government accept this recommendation and we are taking steps to ensure that the Welsh Office industry department plays the key role, not only in seeing that inquiries relating to assistance are directed to it, but that it ensures the effective follow-up of all potential investment inquiries until they are brought to a firm conclusion.
There is another batch of recommendations which we have been unable to accept in whole or in part. I know that some of my hon. Friends were particularly disappointed that we were unable to agree to the phasing out of the four-month deferment of the payment of approved claims for regional development grant. I certainly share their view that it would be desirable to achieve this objective.
We have taken the view that the overriding priority is the need to cut public expenditure and, therefore, to get interest rates down. The House should appreciate that a 3 per cent. reduction in interest rates, which has already taken place, is, on the estimate of the CBI, already worth £¾ billion to the company sector. The biggest single contribution that we can make is to achieve further reductions.
452 We also felt unable to accept the recommendation about IDCs. I understand the arguments, but the evidence shows that, in recent years, the system has had little effect. It would be hard to justify a reintroduction of it at this time.
The Committee wished that the area for which the Development Board for Rural Wales is responsible should be extended. This was a point that I carefully considered both before and after the Committee met. I concluded that the board should continue at present to concentrate its existing resources on the area allocated to it by the previous Labour Government.
I have today given approval to the board's construction programme for 1981–82 outside Newtown. This provides for a start on the construction of 24 new factories and two factory extensions with a total floor space of 73,000 sq ft. When the factories in the current and newly approved programmes have been completed and fully occupied, the board will have a total of 283 factories providing over 7,000 jobs.
At the same time, I have approved extensions to the key worker housing scheme. There will be additional developments as well in Newtown. A press release today will provide all the details.
The House would expect me to say a little about my decision not to accept the Select Committee's recommendation that there should be an independent review of overseas investment promotion work and the suggestion that careful consideration should be given to the proposal that the overseas promotional work of the Development Corporation for Wales should be taken over by the Welsh Development Agency. I have set out the reasons for my decision in some detail in the White Paper response to the Select Committee. I do not believe that an independent report would have added very much to the knowledge available to us, and particularly to the very detailed assessment that I and my officials were able to make during the course of our extensive United States tour.
It would have been a great mistake to divert the attentions and energies of those engaged in their task at a time when they are having encouraging results. I also remain unconvinced that the agency, with its varied responsibilities, would carry out the task more effectively. I value particularly the fact that the corporation has a substantial industrial membership and commands support from local authorities in Wales.
I am not for one moment arguing that in this, as in other areas, there is not room for improvement. I believe that the Select Committee was absolutely right to call attention to the need for more effective public accountability and improved financial control. Steps have been taken to strengthen the link between the corporation and the agency and to improve accountability. Improvements have also been made in the relationships with the consular posts overseas.
I came to two principal conclusions about the work of the development corporation. The first is that it is effectively developing a wide range of contacts and creating extensive interest overseas. Everything that I saw in the United States confirmed that view. Secondly, the central role in the follow-up process can be carried out only by a Government Department, the Welsh Office, and the follow-up is a key task in the job of successful development.
I was greatly encouraged that during our visit to America, despite the severity of the recession, there was such widespread interest in what we had to offer in Wales. 453 I have never sought to underestimate the scale of the immediate problem that we face. When, however, during a time of recession, American companies are considering setting up here, we can take encouragement from the fact. A great many American companies, already established in Wales, spoke up far more effectively about the reasons for coming here than many Opposition Members, with their gloomy prognostications. If the board of MITEL approves the decision to go ahead with the project in Wales, it will be an event of great significance. Not only is it a fast-growing sector, but it will show that a company free to go to any part of the world has selected to come to Britain and to Wales because it believes it is the best place.
We are seeing encouraging activity in this country in filling our advance factories and in the number of inquiries. In a period of deepening recession, we formally allocated in 1980 131 Government advance factories, virtually matching the all-time record of 140 in 1979. I well remember the enthusiasm of Opposition Members when the Labour Government made 100 allocations in 1978. Within the Welsh Office industry department this year we have handled over 500 inquiries and more than 300 visits. Those figures are down on 1979 when there were 700 inquiries and 500 visits. However, they do not include the large number of inquiries for small units that are now handled by the WDA. The WDA itself this year has allocated about 1 million sq ft of factory space. It is a remarkable achievement.
All that confirms my judgment that, far from being an area condemned to industrial decline, Wales is an area of enormous potential. I share the judgment of the chairman of the Welsh Development Agency that the industrial belts of South and North-East Wales could be two of the growth centres of Europe over the next decade.
The problem that we face is enormous. The Select Committee referred to it as a jobs chasm. The fact that so much activity is taking place during the recession means that there must be a strong chance of rapid recovery as we move out of the recession and that we should be able to take advantage of our improved competitive position. Improved competitiveness is the key to recovery. Because the ordinary men and women in Wales, as in the remainder of Britain, have rejected the siren cry of those who call for the postponement of necessary action, or, worse, industrial disruption and social disorder, and have instead buckled down to the task of rescuing their companies, their jobs and their country, I confidently believe that our recovery is assured. [HON. GENTLEMEN: "Resign."] If the Opposition do not sell Wales short, we shall come through.
§ Mr. Deputy Speaker (Mr. Bernard Weatherill)
I have no authority to control the length of speeches, but 18 hon. Members have indicated their wish to speak in this important debate. Perhaps Front-Bench and Back-Bench Members will bear that in mind.
§ Mr. Alec Jones (Rhondda)
Before beginning the speech that I have prepared I should like to comment on the appointment of the chairman and members of the Welsh Fourth Channel Authority. They face a difficult and desperately important task. The Opposition wish them well and trust that they will be able to meet the deadline 454 date of November 1982. It would be a tragedy if Wales were behind England in the provision of the fourth channel.
When I listened to the Secretary of State, it did not appear that he lived in the same Wales that I live in. He seemed to wish to claim credit—to scrape it from whatever corner he could—but to deny any responsibility for the level of unemployment, the fall in industrial production, or the other calamities that face us.
I express my gratitude to the Leader of the House, although he is absent from the Chamber, for at least not shunting this important debate into the Welsh Grand Committee, which had been the intention of his predecessor. I do not intend to be disparaging to the Welsh Grand Committee, but the report is of great importance. My gratitude will end there if this debate is regarded as the one annual Welsh-day debate instead of an extra day to deal specifically with the Select Committee's report and the Government's response.
I am more than disappointed, and regard it almost as sharp practice, that we are having to debate a procedural motion on the Adjournment of the House rather than a definitive motion that would have been capable of amendment and would have enabled us more easily to show by voice and vote our total dissatisfaction with the Government's inadequate and miserable response to the report. However, I suspect that had a motion been tabled some Government Members might have been embarrassed.
In their response the Government say that they welcome the report, although the warmth of the welcome is more than chilled by the iciness of their response. It is an excellent report. I congratulate all members of the Committee, on both sides, for producing it. It is based on sound evidence and makes a proposal that could have been a blueprint for action. However, the Government have turned their back on it. I hope that those six Conservative Members who formed the majority on the Committee will not abandon this, their first legitimate child, and run away from the action to which their recommendations clearly point, but I fear that they will, as the back-pedalling has already begun.
Reluctantly, we can compare most unfavourably the encouraging response that the report received from all over Wales—the press, television, county and district councils and the Wales TUC, and even the Wales CBI was mildly encouraging—with the bitter disappointment when the Government's response was published. The report offered hope and pointed a way forward; the response offers nothing save a continuation of the disastrous policies that have brought us to our present plight.
The Secretary of State and some of his hon. Friends may say that I am merely showing my prejudice. I do not deny my Tory prejudices. I learnt them in a hard school, at a young age. However, I shall quote the Western Mail editorial on 2 December. It is a paper that I greatly admire, but I quote it because in South Wales circles it is never regarded as a keen supporter of the Labour Party. It states:The Government's long-awaited reply to the report on unemloyment in the Principality by the Parliamentary Select Committee on Welsh Affairs is a bitter disappointment. Its point-by-point rejection of every main recommendation is a slap in the face for the all-party group of MPs with its majority of Conservative members. If any group in Westminster knows the plight of Wales, then surely it must be the Select Committee, and their report was constructive and well-researched. It makes the Government's blindness to their views all the more baffling.455 My only criticism is that "baffling" is putting it mildly. Unless the report's major recommendations are speedily implemented on coal, steel, development status, and so on, not only will Wales continue with its present big unemployment and suffering, but we shall be incapable of benefiting from any upturn in the economy should that come about, although it is getting more and more nearly impossible to contemplate any upturn under this Government.
There is another reason for being baffled. When the Select Committee was set up there was a flourish of trumpets. However, the Secretary of State did not seem so keen on it today. I can understand that. At the time that the Committee was set up, it was suggested that it was probably the best thing that had happened to Wales since the discovery of lava bread, but not now, since the Secretary of State has seen the first report. The first report, which was unanimous, has been virtually torn up. No wonder the people in Wales are asking what is the use of such a report, and even going on to ask what is the use of such a Committee. What is their use, under such a Secretary of State?
When some of us first heard hints of a Cabinet reshuffle we hoped that Wales would be lucky. However, we realised that our choice was between another of the Prime Minister's pet poodles and one of those brave bull terriers from the Back Benches, willing to bark but afraid to bite.
Despite the rosy picture that the Secretary of State seemed to be painting of Wales—it is not one that I recognise—the Government's response needed to be even more radical than the report. The situation has deteriorated rapidly since the report was produced.
Early last year some Labour Members predicted an increase of 50,000 in unemployment in Wales. They predicted that not with pleasure but with alarm and concern, because the unemployed, in the main; are our families, friends and neighbours in the areas in which we live. At that time—as he has again today—the Secretary of State castigated us for being too pessimistic and for painting too black a picture. He said that we were performing a disservice to Wales. He is an expert on disservice to Wales. The Welsh Office, in its evidence to the Select Committee on 10 March, said:I think if you pressed me on a figure here … then our senior economist would say, and I have discussed it with him, that a figure of around 125,000 was certainly well within the bounds of possibility. I said to you earlier that I am disposed to be more optimistic than that.That 125,000 has come and gone. The unemployment figure in Wales for December was 138,000—12.7 per cent.—compared with 80,000 when the Secretary of State took office. That is an increase of 58,000. It is the sum total of his achievements.
Earlier this week the Secretary of State for Employment forecast a possible rise to 2.6 million unemployment in Britain. Based on our past experience, the Welsh share of that increased misery will be about 6.5 per cent. I think that the Secretary of State himself used that figure in Committee. That means that Wales can expect an additional 18,000 unemployed. Wales could end up this month with an unemployment figure of 150,000. If we reach that figure, will the Secretary of State still think that the Select Committee pitched its bids too high?
§ Mr. Anderson
My right hon. Friend must be aware that we cannot rely on the old relationship, because the proportion between Wales and the United Kingdom will increase—first, because of our dependence on steel and, secondly, because of demographic factors. My right hon. Froend is being too modest.
§ Mr. Jones
I accept that point. I simply used those figures to illustrate the fact that we could be faced with an additional 18,000 unemployed this month, which would push us over 150,000. I hope that that figure is not reached. If, when the figures are announced next Tuesday, the movement for Wales is in the opposite direction, no one will be more pleased than I. But if we reach that figure, I trust that the optimistic approach that was prevalent in the Welsh Office on 10 March will be replaced by a more realistic approach and by a determination on the part of the Government to do something about it. As a start, they could at least reconsider their response to the Select Committee.
The number of registered unemployed does not tell the full story. In many parts of Wales, certainly where females are employed—such as chlorine workers in my constituency—all the unemployed do not sign the register. The comparable figures show that that is the case. In the 12 months prior to June 1980 32,000 job losses were recorded in Wales, yet in that same period only 19,100 joined the dole queue. The number of redundancies notified to the Department of Employment in 1979 was 39,022. The number notified in 1980 was 118,966. That is an average increase of 10,000 a month.
I accept that the notified redundancies will include some that are later withdrawn, but they will also exclude redundancies affecting fewer than 10 people. The figure of 118,966 notified redundancies in 1980 is a clear indication of the scale of the problem and a valid reason to expect a better response from the Government.
I recall that when the Labour Party was in Government the Secretary of State was never keen on the temporary employment measures. He derided the Labour Government for them. There are now 71,220 workers in Wales covered or protected in some way by special employment training schemes. I welcome that. About 59,000 are covered by the temporary short-time working compensation scheme. However, it is another case of the Government's giving with their left hand and taking back with their right. They extended to nine months the period of support under the short-time working compensation scheme but reduced the rate of payment from 75 per cent. to 50 per cent. I have discussed the matter with some employers and have reached the opinion that the lower level of 50 per cent. will not be sufficient to enable them to make the same use of the scheme as they have in the past.
I wish to draw attention to one aspect of the youth opportunities programme. I welcome any increase in that programme, because one of the great tragedies is the number of Welsh youngsters out of work. The weekly allowance paid to the youngsters is £23.50. It was last increased in November 1979. It is probably the only allowance, pay equivalent or pension equivalent, that has not been increased in that period.
§ Mr. Garel-Jones
I am listening with great care to the right hon. Gentleman's introductory remarks. Will he say whether at some time he will feel that he and the Opposition party are obliged to give some idea of the alternative policies they wish to put forward?
§ Mr. Alec Jones
I came prepared for that. I have a copy of the speech made by my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) from this Dispatch Box last week, in which he spelt out exactly the Labour Party's policy. If the hon. Gentleman had attended that debate his education would have been furthered apace.
I wish to deal specifically with the rate of the allowance. I shall quote from a letter from the community opportunities scheme at Gilfach Goch. It employs 13 adults and 70 youngsters. The letter states:These young people work a full working day from 8 am to 4.15 pm in a setting that we believe will best equip them for the world of work, they undertake valuable work within the Community as well as industrial sub-contracting … We have a situation in Gilfach Goch where for example a young person on our scheme is now worse off by attending the scheme than by remaining unemployed. The training allowance is £2.85 more than unemployment benefit … However the daily bus fare is 36p—10 trips costing £3.60. Therefore such a trainee is 75p a week out of pocket for doing a full day's work.
§ Mr. Coleman
I wish to confirm my right hon. Friend's remarks. Only this morning I received a similar letter from the clerk of the Neath borough council which runs a similar scheme. It expressed exactly the same point as that which is mentioned in my right hon. Friend's letter. I wish to press for something to be done about uprating the allowance.
§ Mr. Jones
I quoted the letter from Gilfach Goch, but other people have written to me along similar lines. If youngsters are to be encouraged to take part in the schemes, the allowance needs uprating. I have tried to analyse how I see the level of unemployment developing in Wales.
I have referred to the inclusion of a high percentage of young people, but there are two other problems. First, in many parts of Wales unemployment has been long-lasting. That leads to the greatest individual hardship. Secondly, we have particular black spots that are partly obscured by official statistics. I use my constituency as the best example. My constituency's figures are officially published and merged as part of the Pontypridd travel-to-work area. However, the planning officer of the Rhondda borough council has computed figures for Rhondda, and the result is an average unemployment rate of 19.6 per cent.—female unemployment of 15.5 per cent. and male unemployment of 23.1 per cent. If, in addition, we had to face pit closures, it would be a disaster.
It is against that background, and not the rosy background painted by the Secretary of State, that we have to judge the Government's response. In my view the right hon. Gentleman was found lacking in his response.
§ Mr. Garel-Jones
I suppose that the right hon. Gentleman is saying that if we do as well as the Labour Government did we shall be all right.
§ Mr. Alec Jones
I do not propose to give way again. I have given way to the hon. Gentleman once, and if he intervenes from a sedentary position he cannot expect me to observe the courtesy of giving way.
I want to refer specifically to the part of the report relating to steel and coal, which are both vital in Wales. Having accepted, as the steel workers and the steel industry did—the Secretary of State paid tribute to this—the closure of Shotton, the slim-down at Port Talbot and Llanwern, and the loss of thousands of associated jobs last year, as well as changes and improvements in working patterns, to which the right hon. Gentleman also paid tribute, the steel industry in Wales is now facing further redundancies. It seems that there will be 400 at Shotton, 1,000 at Velindre and 400 at Ebbw Vale, and a continuation of the slim-down in other plants.
The Government's response quite rightly was that it was premature for them to comment further before the proposals of the British Steel Corporation were known. They are known now. I hope that in the discussions that are to take place—I hope that the right hon. Gentleman will be playing a part in them—the Government will seek to ensure that the corporation enjoys the same advantages as its competitors in Europe.
For example, if the BSC had the same level of subsidy on coking coal as the industry in Western Germany, it would be about £35 million a year better off. If Britain had the same transport aid as other EEC countries, the BSC would be about £10 million a year better off. The higher energy prices in the United Kingdom penalise the corporation to the extent of between £50 million and £70 million. Those are not BSC management matters; they come within the province and responsibility of the Government, and that is why the future of the steel industry in Wales will depend on the Government's willingness to accept their responsibility.
As I said, Velindre will lose about 1,000 jobs. According to my information, it is traditionally a profitable plant. It has achieved international manning levels and has a good record of customer service. I understand that representations have been made to the Department. I hope that when he replies the Minister will indicate his view on Velindre.
We all know that the coal industry is linked in many ways with the steel industry. The coal industry received nothing but a rebuff in the Government's response. For example, there is to be no Government financial assistance for the much-needed Ancit replacement plant at Abercwmboi. There will be little assistance to maximise the use of indigenous coking coal.
Coal imports rose to 7½ million tonnes last year. I do not understand the logic of importing to that level when in the same year we stocked 38 million tonnes of our own coal on the ground. No one denies that cost is a factor. I have no doubt that at present it would be cheaper to import all our coal. However,that is a dangerous, unworthy and foolish argument. It would make us totally dependent on imports for our very life blood, which in the event of hostilities, would bring us to our knees in a week, expose us to grave danger in the event of a sudden political crisis or an earthquake in some foreign country, and would cast away our principal asset, namely, our huge energy reserves."—[Official Report, 24 November 1980.]I would not have said it as elegantly as that. I am sure that the hon. Member for Flint, West (Sir A. Meyer) recognises the contribution that he made in the coal 459 liquefaction debate. He was pointing out the folly of relying on other countries for scarce and essential energy supplies, and with that I agree.
The South Wales coalfield, in management and men, has made a tremendous effort in the past year. It has accepted the halting of recruitment, although there is a real risk in doing so for too long. If that happens, the supply of future generations of miners will begin to dry up. Contractors have been removed from the pits and the purchasing of new equipment has been delayed. In nine months there has been a 5 per cent. increase in productivity, with an extra 204,000 tonnes on the ground.
We had a debate on the coal industry when the Coal Industry Bill came before the House on 24 July. During the debate the Under-Secretary of State for Energy said:this is not a closure programme".—(Official Report, 24 July 1980, Vol. 989, c. 898.]He added that the programme was based on the assumption that the closure pattern would be the same as for the past year. The content of his speech suggested that it was linked with the document entitled "Plan for Coal". Is that still valid? As was said yesterday during the energy debate, we have all seen press reports that 25 pits in the United Kingdom are to be closed. Those of us who represent South Wales areas fear that some of the 25 will be located in those areas. We need to know the Government's view. Is "Plan for Coal" still valid, or is it out of date? On 24 July it was receiving the Government's backing and support.
It is obvious from what the right hon. Gentleman said this afternoon that he has been having discussions with the NCB. I hope that he has had better discussions on recent occasions than the ones that took place some time ago. I hope that when the Minister replies he will tell us more about the discussions that seem to be taking place between the Welsh Office and the NCB, and certainly more about the consequences for the South Wales coalfield. I remind the Secretary of State that during the election campaign those Conservative Members who now represent Welsh seats fought the election on the promise thatWe will continue modernisation of the coal and steel industries.The modernisation of the steel industry has had disastrous results so far. I trust that we shall not see similar modernisation in the coal industry.
The right hon. Gentleman mentioned the request by the Select Committee for the upgrading of certain areas for regional development status. He said that the Government had responded by upgrading Port Talbot, Newport and Cwmbran. Those upgradings are welcome, but the Government could not do much less in areas such as Port Talbot, Newport and Cwmbran. The Government state in their response that there was no justification for any change in Swansea, Newport, Aberdare or Llanelli, or the areas covered by the Development Board for Rural Wales. They said of the DBRW that the numbers involved were relatively small and that the trend towards rural depopulation had been checked. Unless regional aid is restored to Mid-Wales, I am frightened that, given the present economic climate, the progress of the DBRW, on which the Secretary of State commented, and which he praised earlier, could be halted. That is not just my view, it is the view of many people working in that area. I have 460 a quotation from the Western Mail in which the chairman and managing director of a company in Newtown said that thewithdrawal of regional aid for Mid-Wales could halt the progress made by the board. My concern is that the new Government policy for Wales is going to undo what has been achieved".Therefore I ask the Secretary of State to look at the question of development area status as it affects Mid-Wales.
If one cannot justify the upgrading of those areas covered by the DBRW because of the relatively small numbers of unemployed people there, that cannot be the argument for Swansea, Neath, Aberdare and Llanelli. In Swansea 13,000 are unemployed—12.1 per cent of the population; in Neath the figure is 3,700, or 13.7 per cent.; in Aberdare it is 3,400, or 15.4 per cent.; and in Llanelli it is 5,019, or 13.5 per cent. Even those figures are a month out of date. If one takes a sounding one finds that Llanelli is likely to be upgraded because, according to a press report this week, the Secretary of State well understands that a serious situation is developing in Llanelli. However, with 5,019 unemployed, or 13.5 per cent., a serious situation is not developing; it already exists.
If the loss of the 1,000 jobs at Velindre takes place, the Secretary of State may find that restoring development area status to Llanelli—which shows how foolish he was to take it away—may not be sufficient, and he may need to grant special development area status. If Llanelli is to get that, what about Swansea, Neath and Aberdare? Will those three towns have to wait for further blows before their needs are recognised? On the Government's published unemployment figures the Select Committee's request for those areas should be met. I could have mentioned other areas, but I have dealt only with those recommended by the Select Committee.
The Select Committee produced a number of other proposals, some of which have been mentioned. I do not propose to go into those, because my hon. Friends will pick them up later. I saw the report as a package of proposals that could have helped close this job chasm—whatever the Secretary of State for Wales cares to say about it. The unemployment figures will be published next Tuesday and we shall see how wide that chasm is. If those proposals had been implemented they would have brought hope to Wales. There is not much hope in many parts of Wales today. Instead, we have had a response from a Secretary of State who is so out of tune with life in Wales that he has produced a mouse of a report, offering nothing but despair. In my view he has failed to fulfil his obligations to Wales and has earned the contempt of the people of Wales. For that reason we shall vote against him, his response and his Government.
§ Mr. Speaker
Order. I must tell the House that I realise that I shall not be able to call some hon. Members who wish to take part in the debate. It is 5.55 pm and I have not yet called a Back Bencher. There remain about three hours for Back Benchers. Unless there are 10-minute speeches we shall be very unfortunate.
§ Sir Raymond Gower (Barry)
We are holding today's debate against a background of certain facts and factors 461 that could be widely agreed. For a long time, Britain's economic and industrial performance has been extremely disappointing and quite inadequate. For 15 years or more, with only occasional intervals, inflation has been excessively high and for most of the past decade, with few interruptions, there has been a steady growth in unemployment. As stated in Cmnd. 8085The Government fully shares the concern"—which was expressed in our first report from the Welsh Select Committee—about the large increase that has taken place in unemployment levels in … recent years and the present upward trend.I am sure that all of us will echo that deep concern. We must also reiterate our concern for the causes of this unemployment, which include inflation, the shortcomings of British industry and the mistakes that have been made by successive Governments in the past.
The House should note paragraph 3 of the Cmnd. Paper:As the Committee notes, Wales' current difficulties have been long in the making. They cannot be put right overnight.I do not know whether the right hon. Member for Rhondda (Mr. Jones) will accept that. That was our feeling on the Select Committee and it was accepted by the Government. I accept the assertion in paragraph 5 that:The economy of Wales is an integral part of the economy of the United Kingdom".Listening to some of the remarks that we have heard today one might have thought that that was not so. Only a section of nationalists would disagree with that assertion there may be some divergence of opinion among us, and perhaps among members of the Select Committee, on the remainder of paragraph 5, which states:In considering the proposals of the Select Committee, the Government is bound to consider how they relate to its central strategy on which the economic recovery of the whole country depends, and to their effect on other parts of the United Kingdom.The right hon. Gentleman said that that was inadequate for Wales, but he must surely understand and agree that while our remit in the Select Committee was Wales, the Government's remit at all times is the whole of the United Kingdom. For that reason there is bound to be some divergence with any Government or Select Committee. If one has a remit for a part of the United Kingdom and the other has responsibility for the whole, there will clearly be some divergence. I accept the general validity of that statement. The responsibility of the Government was and is the United Kingdom, and by definition the responsibility of the Select Committee was limited to Wales.
§ Mr. Rowlands
I have been following the hon. Gentleman's argument. In the light of his comments, will he explain what is the remit or role of the Secretary of State for Wales?
§ Sir Raymond Gower
The remit of the Secretary of State is primarily, as a member of the Cabinet, for all the United Kingdom. [HON. MEMBERS: "Oh, no."] Oh, yes. Each Minister in the Cabinet is responsible for the whole United Kingdom.
§ Sir Raymond Gower
Each Minister has a particular responsibility, I agree, after that, and subsidiary to that.
§ Sir Raymond Gower
Yes, subsidiary, because the responsibility of a Member of Parliament is for the whole 462 country before his own constituency. I hope that the right hon. Gentleman understands the British constitution. He will appreciate that a Government have to recognise that while the problems of Wales are serious and valid, and deserve our earnest consideration, there are other parts of the United Kingdom—even Northern Ireland—which have worse and more serious problems.
§ Sir Raymond Gower
I cannot give way for the moment.
I find that some divergence is inevitable. I do not want to stretch this too far. I have a few provisos to that general statement. I do not want to overstate the case. If we are satisfied that the Principality's undue dependence on the old industries of iron, steel and coal remains, a case for special consideration may be substantiated. If we are persuaded—to a large degree, I am persuaded—that Wales has had to bear a somewhat disproportionate share of the cutting down of the steel industry and the crippling loss of jobs in the main industries, there is an enhanced case for special treatment in this respect.
I accept that in considering this matter the Government have to consider the background in the United Kingdom, but I find it inevitable that in dealing with the problems of the whole of the United Kingdom the Government must recognise these special reasons, which have subsisted for some time and still subsist in the Principality.
I mention another recommendation in the first report. It is that Wales should remain a major producer of steel, however small the British Steel Corporation may become. There are limits to what can be achieved if it becomes very small. The Government have noted this recommendation; they have accepted the importance to Wales of the location of steelmaking; and they have commented, as the right hon. Member for Rhondda pointed out, that further comment before the strategy was announced appeared premature. The right hon. Gentleman did not go on to comment on that, as I thought he might, because, with a few exceptions, in the event surely the strategy was less injurious and frightening to Wales than many had feared. I think that that is a fair comment.
Further significant loss of employment in iron, steel and tinplate must be more injurious, however, in the context of Wales than it probably is to any other part of the United Kingdom. In other words, bearing in mind the size of the Principality and the amount of iron and steel work, and particularly tinplate making, that has gone on in Wales, it is evident that the loss is more injurious than in probably any other part of the United Kingdom.
As a Select Committee, we reported that the unemployment rate might approach 20 per cent.—I think that that was the figure in our report—and that unless there were a substantial commitment to provide new jobs the projected increase in the labour supply in Wales would result not only in outward migration but in increased unemployment. As we were an interrogatory, inquiring Committee, it is obvious that these estimates had to be based on the evidence given to us by witnesses. Clearly, that is not an exact science. It is not surprising that the figures may diverge, as the right hon. Gentleman pointed out.
The Government's response to this, on page 6 of the Command Paper, has been attacked by the right hon. Gentleman. For my part, I welcome the £141 million spent 463 or committed for advance factories, to which my right hon. Friend referred, and for other construction. The Welsh Development Agency, in particular, is doing a remarkable job in this respect. I am glad, too, that similar work was reported by my right hon. Friend, by the Development Board for Rural Wales. I presume that there has been some such work by the Cwmbran development corporation. I also welcome the estimate of up to 10,000 new jobs that could thereby be provided, although again I recognise that this cannot be an exact figure.
There is surely some encouragement to hon. Members on both sides of the House in the regional selective assistance of £23 million for projects likely to create about 12,000 new jobs. Again, we should like these figures to be larger, but they are considerable and significant. There must surely be good wishes—this was not mentioned by the right hon. Member for Rhondda when referring to Swansea—for the success of the new enterprise zone there. It will surely make a significant contribution to the economy of that area. This concept has its critics as well as its supporters, but it is imaginative and it should make available special opportunities that have not hitherto been available in Wales. That four factories totalling 70,000 sq ft have already been let in that area is excellent and very encouraging news.
§ Mr. Anderson
The hon. Member should also know that by cutting down the money available to the city council the Government are hobbling that scheme from the start.
§ Sir Raymond Gower
I can only reiterate that it is surely encouraging that so soon after that project was allocated to the Swansea area—the hon. Gentleman's constituency—70,000 sq ft have been let in the new area. Likewise, there is a welcome for the Inmos project. It will surely bring some benefit to the constituency of Newport.
I turn to our Select Committee's recommendation that the four-month deferment of the payment of approved claims for regional development grant should be phased out over the next 12 months. That appears in paragraph 39. Here I am at odds with the Government. After acknowledging the effect of this deferment on cash flow, the Government's view, in the report, is that the phasing out should be rejected because of substantial public expenditure considerations.
Like other Members of the Committee, I was very impressed by the evidence of witnesses on this subject, particularly on not only the effect on cash flow but the fact that in many cases this was aggravated by administrative delays. This must surely have a restrictive effect on the production of companies whose production is needed to sustain the public sector. It seems a most undesirable way of containing public expenditure thus to penalise productive companies. That is why I disagree with the Government's decision on this question of the payment of a subsidy which has already been approved and whose merit has been established, thus interfering with the cash flow of the companies in question and otherwise damaging the effect of the benefit which was supposed to accrue to them.
I have considered the Government's answers to our recommendations concerning the rundown of employment in the Port Talbot and Newport areas. On the whole, I accept the validity of the arguments in this respect.
464 I am probably more critical of the Government's energy policy than of any other of their policies. Several major industrialists in Wales have expressed their anxiety about the price of energy used in industry. I can cite an example in my constituency. The important company of Dow Corning, silicone manufacturers in Barry, has written to me as follows within the last few days:The whole field of energy presents us with one of our major problems. In particular, the resolution of gas supplies and prices to bring us into line with our European competitors is key to us, and indeed to British industry generally.BP Chemicals Ltd, which has a large undertaking in my constituency at Sully, wrote in very similar terms about energy supplies for industry. It said:The excise duty of £8 a tonne on heavy fuel oil is considerably higher than applies to the rest of the European Economic Community; it represents a direct additional charge on manufacturing industry which distorts their economics.The company also advised me thatelectricity tariffs for large scale continuous users in the United Kingdom are frequently not competitive with those of our Continental counterparts.In relation to gas, BP Chemicals points out:The use by the British Gas Corporation of a gas oil price standard, for industrial gas users' continuous supply, puts UK industry at a significant disadvantage compared with the Continent.Those are two very important large-scale companies, providing excellent employment, and they are both highly critical of the whole energy policy in which we are persisting. I hope that the Government will look at this matter again. It is not limited to Wales; it extends over the United Kingdom.
BP Chemicals has also expressed a good deal of dissatisfaction about the efficacy of the EEC methods of dealing with unfair trading practices by countries outside the EEC. No doubt my right hon. Friend is aware of that. It is hoped that the Government will press for more resources and personnel to deal with the many applications that our industrialists have to put forward complaining of dumping and other unfair practices.
I hope that neither side of the House will be unduly pessimistic about the prospects of the Welsh economy. At the same time, we must be realistic and we must recognise the formidable tasks that we face. I hope that there will also be a recognition of the desirability of expanding—even beyond the proposals that have already been announced—the retraining programme. There is a manifest shortage of suitable apprenticeship schemes in Wales. That has become worse in recent years. Some years ago, an excellent scheme was run by Sir Alfred Nicholas on the part of a company in Gwent. Some hon. Members may remember that. Similarly, there were marvellous schemes in other industries. At present we lack those schemes—
§ Mr. Roy Hughes (Newport)
On a point of order, Mr. Speaker. When you recently returned to the Chair you pointed out that little time was left for this debate. You called for short speeches, and you mentioned a time of 10 minutes. May I point out respectfully that the Secretary of State took no no less than 53 minutes for his opening speech? The hon. Member for Barry (Sir R. Gower) has now been on his feet for 17 minutes. Would it not seem that there is some sort of filibuster on the part of Conservative Members in order to prevent Labour Members from making a contribution?
§ Mr. Speaker
Order. If the hon. Member for Barry (Sir R. Gower) will allow me, I made my appeal to the House because I realised the anxiety of many hon. Members who wanted to take part in the debate.
§ Sir R. Gower
I shall certainly abbreviate what I intended to say. I make one further point, which relates to the frequent references in the Welsh press about cuts in educational standards. That is also related to our economic problems. I should like an assurance from my hon. Friend when he replies to the debate that any reductions in the number of teachers that have taken place in the last few years have not led to a serious change in the pupil-teacher ratio. It is asking a lot for him to have those figures ready, but I hope that he may be able to produce them by the time he replies.
§ Dr. Ifor Davies (Gower)
I welcome the opportunity to congratulate the Select Committee on its sense of priorities in choosing the question of employment opportunities in Wales as the first matter to be investigated. I also pay tribute to its chairman, my hon. Friend the Member for Pontypool (Mr. Abse) for his effective work. It is a matter of satisfaction to us that this is the first report from the Select Committees that were appointed last year to appear before the House for examination.
There is no difference of opinion regarding the seriousness of unemployment. Many different adjectives have already been used to describe the position. The Secretary of State for Employment has described the situation as appalling. He has gone even further, and has forecast a figure of over 2½ million unemployed in the near future. The situation in Wales is not merely appalling, but disastrous and extremely grave. We have suffered as much as, if not more than, most areas of the country because our manufacturing industries—particularly steel—have been so grievously affected by the recession.
In our special development areas the latest figure for unemployed males stands at 16.5 per cent., and for women at 13.4 per cent. Those are some of the highest figures ever to be recorded. In total, over 138,000 people are unemployed in the Principality. Referring to the high level of unemployment, the Secretary of State for Employment said on 15 January thatwe must do all we can for those areas and those groups that are hardest hit"—[Official Report, 15 January 1981.]"All we can"—those were the right hon. Gentleman's words. I suggest to the Minister and the Secretary of State that action speaks louder than words, and the action that the Government can take immediately is to reverse their policy of downgrading the special development areas.
That is also a recommendation of the Select Committee. This is a matter of great urgency, particularly in West Glamorgan. I readily acknowledge that the recent delegation that met the Secretary of State for Industry and the Secretary of State for Wales received a sympathetic hearing and a promise of further consideration, but the Government still said in their observations on the Select Committee report:A change is not at present justified.I wish to challenge that comment. Time is not on our side, and unemployment gets worse day by day. When the Secretary of State for Industry cut one-third of the planned expenditure on regional assistance, the effect on Wales was to downgrade from special development area status to 466 a lower status, thus qualifying for less aid, a total of 21 employment exchange areas, of which at least 12 are seriously affected by the new BSC proposals. As a direct consequence there has been a dramatic reduction in specific incentives for the region. But next year the value in real terms of regional assistance is likely to be half what it was in the mid-1970s.
A strong regional policy is essential for Wales. I acknowledge that the phrase "regional policy" involves a distinction between the worst affected and the less badly affected areas. The whole point of regional policy is a redistribution from the country as a whole to the areas that are considered to be in most economic need. That was the philosophy that inspired earlier Acts of Parliament, which were pioneered by my right hon. Friend the Member for Battersea, North (Mr. Jay) during his earlier days at the Department of Trade. One such Act was the Distribution of Industry Act 1945.
A belief in regional policy is not confined to politicians. Industrialists are also in favour of it. I was glad to note the comments of the CBI in its evidence to the Select Committee. It emphasised its strong support for regional policy and its conviction that such a policy had succeeded in widening the industrial base and the creation of new jobs. The CBI also stressed that stability in regional policy was crucial, if companies were to be encouraged to invest and expand.
That leads me back to Government action, and particularly to the situation in West Glamorgan. I referred earlier to the loss of incentives suffered by this county by the downgrading of development area status. The claim of West Glamorgan for reconsideration of its development area status is all the greater because of the additional body blow that it has suffered as a result of the BSC plan affecting the Velindre works.
I take note of your appeal for short speeches, Mr. Speaker, and I shall follow your advice. However, I am sure that the House will permit me a few minutes to deal with this serious issue. That plant, which is in my constituency and in the centre of West Glamorgan is faced with a redundancy of two-thirds of its workforce in consequence of the proposed survival plan. I emphasise the word "proposed", because the matter is now in the hands of the Government, together with its financial implications. Therefore, the Government still have a heavy responsibility in connection with the matter. I should fully support further financial help to the BSC in order to sustain and maintain the steel industry.
On the other hand, I make this earnest appeal to the Government. Before they give their support to the plan—I know that time is running out—they should examine very closely the proposals for Velindre. I am obliged to my right hon. Friend the Member for Rhondda (Mr. Jones) for the support that he gave me when he mentioned Velindre. I can strengthen his case by saying that the number of people likely to be redundant is not 1,000 but 1,500, yet this is one of the most efficient plants within the tinplate group.
Velindre Tinplate has won a proud place in the export market. It has an outstanding record of good industrial relations. It has a proud record of efficiency in productivity. Equally important, it has operated at a profit over lengthy periods. So my constituents ask the natural question: "Why Velindre?" Recession in trade is given as one of the answers, and that is fully understood, but one effective and sensible way of dealing with the problem is 467 to have a system of work sharing within the tinplate group as a whole. That proposition has been submitted by the Velindre works council. It would considerably reduce the number of redundancies. It would also ensure that this efficient plant could continue its key role as part of the tinplate industry.
The remarkable fact is that, during the past 12 months, work sharing has been operated within the tinplate group by the BSC as a matter of policy. Indeed, it has been a traditional feature of the industry. Why cannot the BSC continue this policy and prevent so much unemployment? In these circumstances, I deplore the fact that the BSC did not include in its plan a continuation of the work sharing policy within the tinplate group, instead of leaving the burden of dealing with the issue to Velindre alone.
Velindre has emphasised that it has not adopted any attitude of opposition to any other plant, but is fighting for the future of the tinplate industry as a whole by facing competition more effectively, with the co-operation of the three units in Wales all working together.
The specialised nature of the market for tinplate, and its close relationship with the canning industry, can change very rapidly, due to the sensitive nature of the trade. The need, therefore, is to keep the tinplate group in a state of competitive readiness to meet the increased demand that is bound to occur. I am glad to say that there are already signs that the market is improving.
It is clear that the destruction of Velindre and the great loss of so much skilled labour will do irreparable harm to the whole industry. The entire work force at the plant realises that the essential basis of good industrial relations is a spirit of co-operation and good will, and that it has provided in good measure. That is why Velindre has been desribed as the jewel in the crown of the BSC by none other than Mr. Peter Allen, the managing director of the Welsh division.
I urge the Secretary of State and the Industry Minister in particular to investigate closely the position at Velindre before they give their blessing to the survival plan.
§ Mr. Tom Hooson (Brecon and Radnor)
Time is not available for me to comment, I should hope constructively, on a number of subjects arising from the Select Committee's report and also from the Government's admirable 10-year policy statement "Roads in Wales 1980". It is regrettable that I have to limit my time on the subjects on which I can touch, because I feel an urgent need to eradicate three widespread myths about the Select Committee's report. My right hon. Friend the Secretary of State was quite right to use the term "myth" in this connection.
Myth No. 1—and the most outrageous—is that the Select Committee's main message was allegedly that riots in the streets were the coming thing in Wales. There was no basis in the report for that impression. There was merely an expression of opinion by the Wales TUC. It was most unfortunate that at the press conference there was a totally personal statement by the hon. Member for Pontypool (Mr. Abse), because that was the basis for the widespread impression that appeared in the press. It became the main news story in usually reliable newspapers such as The Times and The Daily Telegraph, demonstrating conclusively that the journalists could not 468 have read the Select Committee's report. The hon. Member thus opened last summer's silly season in the press.
The suggestion originated in evidence from the Wales TUC, and the Committee's only comment—which was too polite a response to an ill-thought-out assertion—was to say that it wasimpressed by the conviction of our witnesseson this matter.
Anyone can play the game of making selective quotations from what he regards as the core of the report, and if the hon. Member for Pontypool is entitled to do so, so am I. I prefer to quote as the fundamental and representative framework of our report the opening sentences of paragraphs 6 and 7.
Paragraph 6 states:The employment problems facing Wales stem from several main causes, of which the dominant factor is the depressed level of economic activity in the United Kingdom as a whole. This is dependent, inter alia, on the economic policy being pursued by the Government of the day, and the present Government have made it clear on many occasions that their overriding priority is the control of inflation, which they regard as the precondition to the return of full employment.Paragraph 7 states:We accept that there may be sound reasons, on a national basis, why a particular economic policy should be pursued by the Government.The really pertinent comment in the paragraph commenting on the TUC's unsupported expression of opinion was:Some of us believe that in the long run the prevailing general Government economic policy will succeed and bring relief;, others of us have no such convictions.Myth No. 2 is the impression that any Select Committee is entitled or competent to assess total public expenditure. Our terms of reference are far more modest. They areto examinemerely to examine—the expenditure, administration and policy of the Welsh Office and associated public bodies".We are free from budgetary responsibility, but the Government are not. All that we have discussed in the report could not possibly happen overnight or even in a few years. Incidentally, the unlamented Welsh Assembly would have had powers that were comparable to the Select Committee's powers to examine the activities of the Welsh Office.
Myth No. 3 results from a particular style of Select Committees which emphasises compromise in writing—
§ Mr. Hooson
I shall not give way. I have a great deal to say and I have been asked to limit my remarks to 10 minutes. The hon. Member will undoubtedly have an opportunity to speak later.
Myth No. 3 results from a particular style of Select Committees which emphasises compromise in writing, and which traditionally leads to attempts to exploit the result in half-baked propaganda. This is a familiar style which has arisen historically with Select Committees. The truth about every Select Committee is that it is and should be a biased pressure group, pressing for more funds for its own subject—more than can be afforded. There is no reason why Welsh Conservative Members should not 469 vigorously demand—such demands have so far been successful—that Wales should not suffer disproportionately in the slimming down of the steel industry.
I shall focus constructively on certain subjects in the report of the Select Committee. As a mid-Wales Member I have a keen interest in paragraphs 35 and 59 of the report. I draw attention to the recommendation about the criteria of the Industry Act on the qualifications—particularly as regards Wales—other than those of employment. It refers to expected unemployment and to the problem of depopulation. Paragraph 59 states:We are concerned that the proposed changes in assisted area status may have serious diversionary consequences for the internal distribution of industry.The combination of intermediate status for grant-aid and the remarkable performance of the Development Board for Rural Wales has proved successful. We were promised that there would be a review of the situation before any loss of intermediate status. I hope that my hon. Friend the Minister will tell us that my right hon. Friend the Secretary of State will be just as deeply involved in that review as is the Secretary of State for Industry. I hope that a timetable for the representations that some of us wish to make to both my right hon. Friends will be put forward this evening or in the near future.
§ Mr. Hooson
I am happy to hear that assurance from my right hon. Friend. The region's problems are distinctive. It is true that the number of unemployed is relatively small compared with the immense problems facing the industrial parts of Wales. The only comparable body to the Development Board for Rural Wales is the Highlands and Islands Development Board. I hope that we shall find some way of meeting the needs of mid-Wales. Perhaps we should consider increasing the powers of the development board, because there is considerable evidence to show that it is effective.
I was delighted to see a press statement from the chairman of the board, Mr. Emrys Roberts. He said:In difficult economic times I am glad to say that, with 53 factories let in the past 10 months, the Development Board for Rural Wales has already surpassed its highest annual level of lettings … In 1980–81 the Board will be building 75 factories totalling 293,500 sq. ft. Thirty-four of these are already under construction. Today we announce a further programme of 41 factories.The factories are spread widely throughout mid-Wales. Within my constituency six towns benefit from the programme, namely, Brecon, Builth Wells, Ystradgynlais, Llandrindod Wells, Rhayader and Presteigne.
I wish that the report had concentrated more on tourism. It touched on the fascinating point that there might be a high return on investment in tourist facilities. When the Select Committee chooses its third subject, I hope that a spotlight will be trained on that area.
In the interests of time I shall refer to only one of the subjects that I had wished to mention, namely, training policy. A great deal of pertinent information has been brought to light. I was glad that my right hon. Friend recognised the need for improved liaison between the Welsh Office and the Manpower Services Commission. There has been a gap in communications.
It is alarming that, despite the high unemployment figures, there are a number of job vacancies for skilled 470 people in Wales. In addition, Wales has one of the lowest percentages of apprentices in Great Britain. I stress that the evidence shows that the Government, the commission and employers face a challenge. In addition, the trade unions should adopt a more enlightened attitude.
§ Mr. Barry Jones (Flint, East)
The Select Committee's first report on employment opportunities in Wales has become a central feature of the debate. Like my hon. Friend the Member for Gower (Dr. Davies), I congratulate my hon. Friend the Member for Pontypool (Mr. Abse), who is an able Chairman of that Committee, on a statesmanlike report. The report points to some of the ways in which the Welsh economy could be rescued.
No one would deny that Wales took a terrible social and economic beating between the wars. Many citizens endured great indignity and humiliation. Many of them left Wales to find work elsewhere, but the memory of those years lingers on. Among ordinary people there is a deep-seated fear that something similar is about to happen. When Ministers appear before the House, they seem uncertain. Some of us have the impression that they know that the Government's monetarist policy of an over-valued pound and high interest rates is deeply injurious to Welsh manufacturing industry.
Some of us have come to the conclusion that Ministers—at least those in the Welsh Office—are the policy prisoners of Whitehall's monetarist cage. They are the pawns of the Treasury and of Downing Street. My constituency's problems illustrate the destructive nature of the Government's policy. Last year 7,000 jobs were lost at British Steel's Shotton works. It is proposed that another 1,000 jobs should soon be lost. The over-valued pound has partly destroyed the export potential of steel.
Hundreds of textile jobs have been lost and jobs in other mills teeter on the brink. High interest rates and lack of protection from unfair overseas competition have thrust the man-made fibre mills in my constituency deeper into a depression. About 500 jobs are involved in our paper mills at Flint and Greenfield. If those mills do not receive some form of energy subsidy, they may soon be in desperate trouble. The car workers employed at Vauxhall in Clwyd are to be sacked because the over-valued pound has destroyed the plant's export potential.
Last July the Secretary of State told me that 1,700 new jobs were in the pipeline for 1983–84. By December he had revised that figure to 1,000 new jobs. But there is a record number of 8,200 citizens seeking work. In the near future, another 1,000 steel workers and about 500 car workers will join the queues of those seeking work. My constituents say that Ministers are not delivering the jobs. Worse still, they are supporting policies that are destroying jobs in manufacturing industry. I remind the Government that in the town of Flint—a town of considerable size—male unemployment still exceeds 30 per cent. That is a grave indictment of Government policy.
In my view, Wales needs a massive investment in a public works programme. It needs a new deal, something on the American scale that Franklin Roosevelt brought in before the Second World War. Moreover, the National Enterprise Board should have a massive increase of funds, and the Welsh Development Agency should have its scope to participate in industry considerably enlarged. The railway system in Wales is crying out for more investment, enlargement and, in some cases, electrification. The 471 existing road programme, which was once perhaps described as ambitious, should be expanded immediately. The construction industry, with its frightening unemployment levels, should be rescued from the depths of depression by the launching of a major crash programme in public housing. Investment in the coalfields should be boosted, and we should not allow the remaining productive capacity in steel to drop even by one tonne.
It is morally wrong for an oil-rich State to tolerate mass unemployment and to permit it to rocket upwards month by month. That is foolish in economic terms, and it is dangerous in social terms. There is no doubt that mass unemployment can demoralise whole communities. Certainly it demoralises individual citizens. It encourages those who have a vested interest in disaffection, even disorder. Mass unemployment makes for uncertain relationships between senior pupils and teachers in our high schools. In the home, it can easily take away self-esteem and self-confidence. It can quickly rot away any warmth and spontaneity in family life.
We have suffered this before in Wales. Last time Southern England was relatively unscathed. Labour Members want no more of the grim consequences of mass unemployment. I believe that the Government are morally obliged to alter their monetarist policies. The Tory Party is undoubtedly and recognisably a party of unemployment.
§ Mr. Geraint Howells (Cardigan)
Perhaps we should congratulate the Secretary of State for Wales on the number of times that we have had debates on Welsh affairs over the past year or so. I have lost count of the number of hours spent discussing this or that problem, both in the Chamber and in Committee, going over again and again the desperate problems that are besetting the Welsh economy, and the future, if any, of Welsh industry.
Despite that, I am rather dubious about the right hon. Gentleman's motives in promoting these debates. Perhaps he is using them to camouflage the lack of any action on his part or on the part of the Government. Is he seeking to disguise the lack of any effective power of the Welsh Grand Committee? Or does he believe that talking about it will make up in any way for the almost complete rejection by the Tory Government of the serious recommendations made by the Welsh Select Committee last summer—recommendations that were endorsed by the Tory Members of that Committee? This will not do. The time is surely here to take action and refute the accusation that is often made against the Welsh, namely, that we can only talk and not act.
I shall take heed of what Mr. Speaker said earlier, that we should confine our speeches to 10 minutes.
Since the report of the Select Committee was produced in July of last year the Welsh economy has deteriorated even faster than we then thought, and the unemployment figures have exceeded our worst fears. Sir Hywel Evans, the permanent secretary at the Welsh Office, in his evidence to the Committee last summer, said that a figure of 125,000 unemployed in Wales by March of this year was well within the bounds of possibility. In fact the most recent figures show that at 11 December 1980 the number of umemployed stood at 138,003, or 12.7 per cent. of the 472 working population. To judge from the nervous Government statements that have been made recently, a far worse figure is expected shortly.
In my constituency of Ceredigion the unemployment figure in December was 18.7 per cent. In the industrial area of Gwent the figure was 17.5 per cent. In rural Anglesey the figure was 17.1 per cent. That compares with a United Kingdom average of 9.3 per cent. I must ask the Secretary of State, as he watches the Welsh crisis deepening and the unemployment figures rising, when he and the Government will be moved to implement some of the main recommendations in the Select Committee report? Will it be this year? Will it be next year? Or will they wait until the economy and the industrial base are finally destroyed beyond repair in Wales?
Even the most obstinate monetarist must now admit that Wales is not the place for the Government to come to carry out their bizarre experiments. There is now a desperate need for considerable Government investment in Wales in order to get the economy moving again and to prevent massive unemployment from becoming a permanent feature of Welsh life, undermining the confidence of a nation and destroying whole communities.
As the Member for a largely rural constituency, I want to underline the dangers of rural deprivation. The actual numbers of people may be fewer, but the area is no less important for that. Communities in Mid-Wales are under threat, with the danger that its young people will, through necessity, have to leave to find work, perhaps never to return. A whole way of life is in danger.
In my view it is essential that industry is given the maximum encouragement to come to Mid-Wales. The Welsh Office decision to downgrade the development area status of Mid-Wales is greatly to be deplored, as is its refusal to consider extending the area of the Development Board for Rural Wales beyond its present boundaries.
The Government, in their reply to the Welsh Committee report, insist that it is their aim to improve the infrastructure in Wales, but in practice they are failing miserably. Roads are not being improved, because of a lack of funds. British Rail, because of the tight cash limits imposed upon it, is threatening cuts on vital routes through North and Mid-Wales. I urge the Secretary of State to take positive steps to encourage British Rail to put money into these routes, including the Cambrian coast-line route, as they are socially and economically necessary.
One of the main industries of Mid-Wales is agriculture, which is also going through a bad time. I should like to hear more encouraging words from the Secretary of State on that subject. Farm incomes fell by 24 per cent. in real terms in 1980. It is calculated that for hill and upland farms in Wales the figure is nearer 58 per cent. That is unsatisfactory and bodes ill for the rural economy as a whole, dependent as it is upon agriculture.
A further blow to farming interests in Mid-Wales came with yesterday's announcement that 25 key posts will be lost to the Ministry of Agriculture establishment in Aberystwyth. They are to be transferred to Cardiff. That serves no useful purpose. It represents a centralisation of administration, which goes against the recommendations of the Select Committee on Welsh Affairs. It is another blow to employment prospects in the area.
In addition, Aberystwyth has for a long time been regarded as the agricultural capital of Wales. The plant breeding station, the Trawscoed experimental establishment, a highly regarded university agriculture department 473 and the Welsh college of agriculture are in Aberystwyth. The headquarters of the Forestry Commission and the Meat and Livestock Commission are also there. Yesterday's decision by the Government is a great shame. It is seen by all concerned as a retrograde step which should be rescinded at all costs.
I ask the Secretary of State for an assurance that he will visit Aberystwyth and talk to the unions which represent the staff at the Ministry of Agriculture and to representatives of the Farmers Union of Wales and the National Farmers Union, who have expressed their concern. For 60 years excellent service has been given by all the people employed at the headquarters in Aberystwyth. It is a pity to undermine the stability and continuity there.
I endorse the sentiments expressed by many hon. Members. On behalf of the Liberals in Wales, I wish Sir Goronwy Daniel and his colleagues the best of fortunes in safeguarding the interests of the Welsh people in relation to broadcasting in Wales. I am sure that the majority of hon. Members on both sides of the House will agree that a Select Committee will never solve the problems. The sooner we devolve power to the people of Wales, the better. We demand our own Parliament in order to solve the problems.
§ Mr. Delwyn Williams (Montgomery)
I am a new Member and was proud to become a member of the new Select Committee on Welsh Affairs when it was launched last year. We held our first meeting in Cardiff. We were a pretty mixed hunch. If we had been a football team, one might have said that we were a subtle blend of youth and experience. We were chaired, or managed, by a man of tremendous parliamentary experience, a gifted lawyer, the hon. Member for Pontypool (Mr. Abse). If we had been a football team, we should have been looking for promotion. On many occasions the chairman of the Select Committee has stick up for minorities and respect for law in the House.
Our report is not universally accepted, but it is not universally rejected. Let us examine exactly what the Government said in response to it. According to the Western Mail there was a point-by-point rejection by the Government. The Western Mail got devolution wrong, it got my election result wrong and it gets most racing results wrong, so we need not take too much stock of its opinion.
The Government agreed to the supply of coking coal by the National Coal Board to the British Steel Corporation, the substantial commitment to providing more jobs in Wales, and the extension of STEP at a critical time. They agreed that the employment prospects for women were bleak. They agreed that the Welsh Development Agency should not reduce its activities in Wales outside the steel closure areas. They agreed that the Welsh Development Agency should assist small businesses. They said that that was completely in accordance with the Government's views.
One cannot call that a point-by-point rejection. The Government said that BSC (Industry) Ltd. should extend its development of new small businesses. They agreed that we should pay attention to the development of co-operatives and that we should attract more serious industry and jobs from London. They agreed that we should review the scope and content of skillcentres. They agreed that the Welsh Office should evaluate Mid-Glamorgan's Inmos 474 system. They agreed that the Welsh Office industry committee should be designated as the main source of contact for financial assistance. They agreed that there should be closer co-operation between the Welsh Office and the Manpower Services Commission.
If one adds to that the survival that we recommended of Llanwern and Port Talbot, one finds that the press allegations of a point-by-point rejection are ludicrous. But then, who are we in Wales, on the Tory side of the House, to dare to criticise the bias of the Welsh media?
There is more than the Government's acceptance of our report. The evidence to the Committee was invaluable to me as a Welshman. I come from Mid-Wales, where knowledge of the South tends to be sketchy. Anybody who has read the evidence to the Committee is now a more involved and informed person. The knowledge of the whole of Welsh industry is at our fingertips. The report was not unanimous, but much of it was accepted.
I turn to what my hon. Friend the Member for Brecon and Radnor (Mr. Hooson) said about paragraph 28 of the report, which has been blown up out of all proportion. That paragraph referred to the threat of social disorder if unemployment rose, especially among young people. I am a lawyer, and I have to agree that that was said in evidence. However, a lawyer must look at the weight of the evidence. I do not attach much weight to that evidence. I have been proved to be correct. The secretary of the Wales TUC, Mr. George Wright, a main witness—and this is what all the fuss is about—said:There are very real possibilities of disorder in this country unless we get some sense of gentleness into the manner in which we effect change.Let us remember that phrase.
On 28 November, in the Western Mail, Mr. Wright showed precisely what he meant by "sense of gentleness". In a report in that paper he claimed that plans were being drawn up by the Wales TUC to harness a community explosion of protest. He said that hundreds were prepared to go to prison. That is the sensible and gentle approach of the Wales TUC. He said that targets would include roads and Government Departments.
That statement about disorder was prompted by the chairman of the Select Committee, who said that some hon. Members had been brought up in a Wales of unemployment and a remarkable degree of acquiescence and reverence for authority. I was saddened to see, in the same edition of the Western Mail, that my chairman hinted that he could agree with the TUC's sentiments. He hinted that such a campaign might, in the last resort, win his backing. So much for his reverence of authority in Wales. The hon. Member for Pontypool confessed that he had been arrested for political activities when he was in the Armed Forces. That saddened me. I have always had a tremendous affection for my chairman, but he stands with the Opposition tonight and must bear the brunt for his words published in the Western Mail. It saddens me that he should support Mr. Wright's unseemly conduct in Welsh matters.
§ Mr. Williams
The hon. Gentleman will have his chance in a moment.
It is against the background that I have outlined that we should listen to the hon. Member for Pontypool when he sums up. In Wales we now need unity. Language and cultural issues divide us, but there are two things that 475 cannot be taken away from any Welshman—his Welsh blood and his Welsh countryside, which all Welshmen love.
Some of us may have to migrate. I hope not, but it has happened before. In 1912 and 1914 Welshmen went away from Wales. They went away in the 1930s. But we are born leaders—we are innovators, entrepreneurs, gifted artists, and we have nothing to fear from competition from across the border. We have much to give this country. It is regrettable that, although there are now 400,000 job vacancies, people must travel to fill them. We must get that message across to some of those who are now out of work.
Labour Members should not tell me that today is like the 1930s. In the 1930s there were not so many women at work, and there were 8 million more women in the population, so one cannot compare the situation now with the 1930s.
In Wales we have the highest standards of education in the United Kingdom. We have old traditions and old skills and the backbone to get out of this recession. We ask the Government to create the conditions to allow us to get out of this mess on our own. We do not want handouts. For 50 years, in South Wales in particular, we have been given handouts, but South Wales is still a depressed area. The North-East, which has also had subsidies, is still a depressed area. Subsidies do not make jobs; employers create jobs. Employers should not be crippled. If the Government give employers the right conditions, we will create jobs for the people in this country.
I sound one note of warning to the Government. In Mid-Wales agriculture is in trouble. Mid-Wales has survived the recession so far because of the farming community and the service industries that depend upon it. I ask my right hon. Friend the Secretary of State to use his powers to impress it upon the Government that the marginal farming review must come quickly. Incomes are down by 24 per cent., costs are going up, bank borrowing is rising, and land values are falling. That is a recipe for imminent disaster. When the Secretary of State upgrades our status I hope that he will take on board that valid point.
§ 7.3 pm
§ Mr. Dafydd Wigley (Caernarvon)
I am glad to speak after the hon. Member for Montgomery (Mr. Williams) because I have rarely heard such an incredible speech in a debate of this Magnitude.
The hon. Gentleman said that if the Government gave Wales the right conditions more employment would suddenly arise. I thought that the report to which he added his name, along with the other members of the Select Committee, was about creating such conditions. As the Secretary of State admitted, he had, for various reasons, to turn down two out of every three recommendations made by the Select Committee. The hon. Gentleman said that we do not want grants in Wales, for developing jobs. I wonder whether the farmers in his constituency would agree with that.
We also heard a remarkable attack on the Wales TUC and the representations made by Mr. George Wright on 30 April 1980. I ask the hon. Member whether he was present at the meeting of the Select Committee on 30 April when Mr. George Wright gave his evidence. The minutes, as he will remember, show that he was not, any more than he 476 at was present for more than eight out of the 16 sittings of the Committee. Thus, to give such a homily tonight is unacceptable. It is no more acceptable than the fact that two Conservative Members on that Committee have not deigned to turn up for this important debate.
§ Mr. Nicholas Edwards
The hon. Gentleman should know that my hon. Friend the Member for Anglesey (Mr. Best) is abroad and could not get back in time for the debate.
§ Mr. Wigley
I can understand why the hon. and learned Member for Denbigh (Mr. Morgan) is not here—he is ill—but it is a matter for the hon. Member for Anglesey to decide his priorities.
Tonight's debate is the last chapter of the charade that we have seen since 1 March 1979. The Select Committee has not reflected the balance of opinion in Wales. The party political complexion of that Committee clearly shows that imbalance. Six out of its 11 members were Conservative Members, when the overwhelming proportion of the Welsh electorate rejected the Conservatives. My party was in the invidious position of having no voice on that Committee—we would certainly have turned up for more than half its meetings—and both of us are present tonight.
I commend the hon. Member for Pontypool (Mr. Abse), who has brought forward a generally good report, although it contains some inadequacies. The attitude of the Government to that report has been the final explosion of the myth that the Select Committee could take the place of the proposed Assembly.
Tonight's arrangements are unsatisfactory. We have a debate on a motion for the Adjournment. We do not have a substantive motion and therefore cannot propose amendments. It is rubbish for the hon. Member for Brecon and Radnor (Mr. Hooson) to say that the Select Committee and the Assembly would have identical powers. I assume that the Assembly would at least have been able to debate a substantive motion in respect of its decisions. As the hon. Gentleman knows, the Assembly would have had executive powers and would have been able to carry them out.
§ Mr. Wigley
I shall not give way to the hon. Gentleman. He did not give way to me.
I am sure that the Assembly would have carried much more clout than being a mere pressure group, which is the clout that the Select Committee can use on the Welsh Office in this matter. If it was a condemnation of the Assembly that it was in danger of being a talking shop, how much more true is that of the Select Committee?
The Secretary of State said that he had to turn down a number of recommendations in the report because they had to be considered in the context of the United Kingdom. He could not take decisions relevant to the needs of Wales, because Wales is constrained by United Kingdom considerations. Thus, we see unemployment rising from 80,000 when the Government came into office to 140,000 now, and projections being made of unemployment of 25 to 30 per cent.
§ Mr. Nicholas Edwards
Was not the whole Select Committee report little more than a bid for substantial financial support from England? Does the hon. Gentleman suggest that separating Wales from the English economy would help?
§ Mr. Wigley
We should not be going down at the present rate if we had the powers which are so necessary for our people.
§ Mr. Wigley
I shall not give way to the hon. Gentleman. He did not give way to me.
I now turn to the individual points not recommended by the Select Committee. As hon. Members know, I feel that there is a need for an economic plan for Wales. We worked out a forecast for the increase in unemployment of 177,000. That figure looks much more realistic today than the 125,000 accepted in the evidence given to the Select Committee at the meeting earlier in 1980.
We should like to see democratic accountability. We were disappointed to note that the Select Committee did not emphasise that. It was proposed in the evidence from the Wales TUC. There is a need to sustain a higher level of public expenditure in Wales. We realise that there was a difficulty caused by the imbalance of power in the Select Committee, with the preponderence of Conservative Members.
We were disappointed that the Select Committee did not call for direct evidence from the EEC or compare what had happened with the IDA in Ireland and the Scottish Development Agency. Those avenues have been worth approaching, but were not followed up.
Equally, there are other serious points which were made by the Select Committee and have not been accepted by the Government, such as the question of structural changes and the broadening of the DBRW boundaries and the structure of the development corporation. Those matters are necessary. Surely we need a proper hub for inquiries for industrial development in Wales. Those matters could have been undertaken without causing any embarrassment to other parts of the United Kingdom, if that is a dominant consideration of the Welsh Office. The Government should take those points on board in deciding these matters.
The question of development area status must also be considered. We have seen that in Gwynedd. I accept the needs of Llanelli, Swansea, Aberdare and Neath, but the Arfon and Dwyfor area has, according to recent figures, a higher male unemployment rate than those four areas. There is an overwhelming case for those areas to retain special development area status.
The BSC is now being further emasculated, but the Government have given no response. Only in recent weeks we have heard of the tragic prospect for Velindre, one of the best plants in Wales.
The recommendations in paragraph 53 for a selective temporary employment subsidy have been rejected by the Government. That would have been a first-class tool to sustain employment over this temporary recession—if it is temporary. If it is permanent, there are problems, but if the Government believe what they say, that it is temporary, such a tool would be ideal to sustain industry over this difficult period. As the Secretary of State knows, there is a predominance of branch factories in Wales. The danger is that it is the branch factories that are closed while the head offices remain. When the economy picks up again and the head offices want to expand, they will not reopen factories which have been closed once and for all. The suggestion in paragraph 17 of the report, that the limit of 50,000 sq ft on exemption certificates should be brought down, could have been taken on board.
478 If the policies recommended by the Select Committee when it drew up its report in June, when unemployment was 99,000, were needed then, how much more are they needed now, when unemployment has increased by 40 per cent., to 144,000? The steel industry faces a shattering prospect at the moment—a pound that is too high and a Government who are taking no action against the unfair competition on manufactured imports. The coal industry's labour force is now down to about 26,000 compared with 253,000 in 1923. The danger is that on 10 February we shall hear that six or seven more pits in Wales are to be closed.
The cost of production—the competitiveness as the Secretary of State described it—of coal in Wales compares well with other countries which are sending coal to the United Kingdom. The cost of production of a tonne of coal in Belgium in 1979 was £58;in France, £45; in Wales,£43; in West Germany, £41. The difference comes in subsidy. In Belgium, it is £34 a tonne, in France £18 and in West Germany £15. That is why we miss out, why we lose our markets.
Perhaps even more serious than the danger of closing pits—that is a serious loss when pits with workable deposits are being closed—is the decision to put on ice the investment in Margam and the new coal possibility there. A £200 million investment in Margam would have provided 1,000 jobs directly for at least 50 years and probably 75, with a return on investment that meets the criteri laid down for the NCB. I regretted that the Select Committee did not have the opportunity to go in greater detail into the Margam question when its members met the representatives of the NCB, but that is certainly something to which the Government must respond.
That leads me or to the question of energy costs for industry generally. In my area, the county of Gwynedd, we have industries that are critically dependent on energy costs. An example is Rio Tinto in Anglesey. The Secretary of State is aware of the representations which are being made for some electricity agreement to be reached so that the company can consider expansion based on cheaper electricity. Since there are two nuclear power stations in Gwynedd and one pump storage system in operation, with another about to come into operation, it is not unreasonable to look for cheaper electricity for industry in Gwynedd.
But it is not only cheaper electricity that is important. The cost of energy to industry in the development areas and special development areas should be considered one of the legitimate tools for developing industry. There should be cheaper gas for companies such as Ferodo, in Caernarvon, which is considering 350 redundancies spread among three plants. That would not cut across international agreements. Other countries subsidise their industry with cheaper energy, and we should do the same. That should be one element of regional policy in the United Kingdom and it should be applicable in a county such as Gwynedd.
I was disappointed that the Secretary of State gave so little attention today to the needs of my county. I appreciate that there will be some investment on the A55, but already the schedule has slipped back 12 months, from mid-1987 to mid-1988, and I bet that it will be closer to 1990 before it is completed.
We need special development area status returned to Arfon, Dwyfor and Meirionnydd. The DBRW area should be changed to include the Dwyfor district. We need to fill 479 the empty advance factories, because it is no use building them if they are to stand empty, as has been our experience in Gwynedd for many years.
We have seen the deindustrialisation of Gwynedd with numerous factory closures and we see no action by the Government to reverse it. The road programme should be speeded up, not slowed down, and we need an employment subsidy to keep us ticking over until times are better.
We need a much more positive and aggressive attitude by the Welsh Development Agency. In only the last three or four weeks, I have had separate complaints from small companies in my constituency about the way in which their cases have been treated by the WDA. I know that the agency gives its main attention to Deeside, Glamorgan and Gwent, where there are major closures, but it has the responsibility for my constituency at the moment. I should be happy if it all went over to the DBRW—it could get on with it—but if it is with the WDA, let us have some action from the WDA.
There are some opportunities—for example, at Holyhead, there is an excellent opportunity for a ferry link with Belfast. I should like the Government to explore the possibility, which has not been explored much in recent years, of turning a port such as Holyhead into a free port. That would give the opportunity to develop industry in Anglesey and would therefore benefit the whole of Gwynedd. Railway links are important. There could be a coast line and the North Wales line could be electrified
Many of these things were touched on by the Select Committee, which made important recommendations, but sadly the Government were not in a position to accept, in part even, more than a third of them, and in total even less than that. That is the condemnation of the system within which we are working, and that is why the people of Wales are facing their present problems.
§ Sir Anthony Meyer (Flint, West)
I can understand the difficulties of the hon. Member for Caernarvon (Mr. Wigley), who is a well-known moderate, in trying to prove the impeccability of his revolutionary credentials to a party that is rapidly disappearing off the edge of the political spectrum. I can understand them, but not respect them.
I am concerned and saddened by the appearance of the distinguished chairman of our Select Committee, the hon. Member for Pontypool (Mr. Abse) on the Opposition Front Bench. He has made a great mistake in appearing there, as by doing so he has diminished the impact of the Select Committee's Report. He has raised doubts in some people's minds—not in mine, I add—about his suitability for the chairmanship. Those doubts were inevitably fed by the gloss that he put on the report that we had agreed, in which he placed that quite unwarranted emphasis on the risks of social disorder. I have great respect for the vigour with which the hon. Member led us, but those doubts now subsist.
I hope that the hon. Gentleman's appearance on the Front Bench casts no slur on the hon. Member for Carmarthen (Dr. Thomas), who is widely admired and liked on both sides of the House, and who is now deprived of the opportunity of delivering another of his onslaughts from the Front Bench on this occasion.
480 The Secretary of State has fought magnificently for the interests of Wales and has succeeded to a remarkable extent in sheltering Wales from the worst effects of the recession and the side effects of the necessarily harsh medicine that the Government are making us swallow. What he cannot do, and what no one can expect him to do, is protect the living standards of the people of Wales in the present recession. What we asked him to do, and what, to a startling extent, he is succeeding in doing, is to protect investment in the future of Wales.
My only criticism is the same as that voiced by my hon. Friend the Member for Barry (Sir. R. Gower)—that my right hon. Friend did not find it possible to do away with the four months' delay in the payment of investment grants. That is a serious handicap to investment.
I should be grateful if my hon. Friend the Under-Secretary of State would reiterate the commitment to proceed with the dualling of the A55, which is the lifeline of North Wales.
I raise one point of real importance to my constituents in the Mold area, who have made heroic efforts to raise funds for the badly needed community hospital in Mold, with a pledge from the Government that work on it would begin in 1981. Can my hon. Friend repeat that pledge tonight?
I make my next point with some apprehension. There is a project for the construction of a plant at the Point of Air for the extraction of oil from coal. That is a vital technological project. I know the difficulties and disadvantages, but there are reports that the Government are having second thoughts about it. I beg them not to. There is always some good reason why this country should not exploit the latest technology or opt out of one thing or another. We shall finish up as a nation selling bootlaces on the street corner if that becomes our national attitude.
To my mind, almost the key recommendation of the Select Committee's report is contained in paragraph 12, in which we state that whatever the extent of the reductions that have to be made in steel-making capacity in the United Kingdom,we believe that Wales should remain a major producer of basic steel".As if in answer to our prayer, the strategy evolved by Mr. Ian MacGregor provides for precisely that. It is now up to us in Wales to ensure that that strategy succeeds.
The Labour Party has a key role to play in this. It must do what the principal union in the steel industry has so lamentably failed to do. That union, illustrating that moderation does not equal good sense, has consistently given bad advice to its members over the past two years and is now urging them not to work this recovery plan. If Labour Members could raise their sights just a little higher and see the long-term interests of the people of Wales, I am sure that they would urge their supporters to go against the advice of the union and to make this scheme work if they possibly can.
§ Sir Anthony Meyer
I shall not give way, as I intend to keep to my 10 minutes.
The Labour Party is full of criticism, but it has nothing to offer by way of a policy for reverting to full employment. Its extreme Left wing, which appears to be in the ascendant, offers a solution on Polish lines. We have 481 seen that that does not work. It remains to be seen whether whatever may emerge in the centre of British politics offers something better.
The Liberal Party has some admirable long-term principles. I have no difficulty in subscribing to nearly all of the 10 points put forward for discussion by the Leader of the Liberal Party but, on the evidence so far, I do not believe that they answer the principal question that must be faced: how do we make British industry competitive again? The only people who are offering answers to that vital question are my right hon. Friends. They are not agreeable answers, but they are the only ones.
It is a mistake to suppose that the picture before us is all gloom. Very good news has come from British Aerospace at Broughton, for example, where work on the European airbus is expanding at a tremendous rate, and more workers are having to be taken on and jobs are being created. That project was turned down by the Labour Governments of 1964–70, and it is purely because Hawker Siddeley, then a private firm, decided to risk its own money that we are in that venture at all. That is a sobering lesson for those who say that only State enterprise will provide jobs. It also points to the vital necessity for this country to remain within the European Community.
Quite apart from our reputation for fixity of purpose, the number of jobs at stake if idle threats about withdrawal are uttered should cause people to stop playing cheap party politics with this issue.
§ Sir Anthony Meyer
I have said before, and I say again, that for me unemployment is the supreme peacetime evil. It is far worse than a fall in living standards—I say this frankly—even for those near the bottom of the heap. No one wants unemployment, and no one has a monopoly of concern about it. If the Labour Party claims any such monopoly, it damages the credibility of parliamentary democracy. If the Conservative Party leaves unemployment at the back of the queue of the problems that are jostling so urgently for our attention, we in turn might inflict a deep and lasting wound on our democracy.
An article that I read on holiday—I believe that it was in The Sunday Times—suggested that according to some reports the Prime Minister hoped to win the next election, despite very high unemployment figures, because by 1984 those still in work would have a sharply rising standard of living. Frankly, I do not believe a word of that report. But if it were true, I sshould regard that as incompatible with my idea of one nation and I could not agree with it.
I believe, on the contrary, that the Government's policies are designed to restore full employment and will indeed do so. If we as a people will swallow the extremely nasty medicine being proffered to us we shall get back to full employment. But if we expect the people of our country to swallow that very nasty medicine, Ministers must offer more in the way of hope than many of them do.
I exclude my right hon. Friend the Secretary of State from these strictures. He has balanced hope and realism very well, but some of my right hon. Friends seem to take a positive delight in telling us of the horrors that face us and spend very little time showing us what could happen if, as a nation, we were prepared to go through with it for the next couple of years. We need that glimpse of the sunlit uplands that Harold Macmillan was so skilful in offering to us.
482 If we can use our manufacturing base to produce the vast wealth of which modern technology offers the possibility, that wealth can be used, not just to line everybody's pockets, not just to import hundreds of thousands of Japanese transistors, but to provide this country with the kind of education, health and social services and the kind of environment that an educated democracy justly expects in the world today.
§ Mr. Donald Coleman (Neath)
The pettiness with which the hon. Member for Flint, West (Sir A. Meyer) began his remarks in his references to my hon. Friend the Member for Pontypool (Mr. Abse) and to my own trade union show up the paucity of his argument and the manner in which he has swallowed what has been handed down to him from the Government Front Bench.
This is clearly a debate in which great concern and worry will be expressed. In the opening words of its report the Select Committee set the backcloth for this debate when it said:For many years, unemployment rates in Wales have significantly exceeded those for Great Britain as a whole.There is, therefore, no doubt about the justification for the fear of unemployment in Wales that is being shown and felt by people in all walks of life and of all political persuasions to a greater degree now than at any time since the depressions of the 1930s.
One is saddened that the Welsh Office, for which there was long agitation in the political history of Wales, should have failed to respond and should have taken little or no account of the views expressed by the Select Committee. It is incredible that the Secretary of State should have acted as he has. Did he not, with a great flourish, commend the setting up of the Select Committee as a great step forward in the democracy of Wales, and was not that device in fact the means by which he covered his nakedness and the opportunist stance that he showed over devolution?
Having poured scorn on the Secretary of State, the Government and the Welsh Office for their shabby rejection of most of the report, let me say that I am grateful to my hon. Friends and to Conservative Members—even though they tried to run away from what they had done—for the work that they performed in the Select Committee. Their report is a valuable contribution towards understanding the problem of unemployment in Wales—a problem that afflicts us so sorely today. It also provides suggestions that make for the solution of this problem. Because of that, the people of Wales should take heart in the Select Committee and give it their support, which is more than is due to the Government or the Secretary of State.
Paragraph 36 of the report deals with the development status of South Wales. It states:we recommend that the whole of the Swansea travel-to-work area and the whole of the Llanelli travel-to-work area, should become development areasand the status ofthe Aberdare travel-to-work area and the Neath travel-to-work areabe reviewedwith a view to making them special development areas.That view has been pressed on the Government by deputations of right hon. and hon. Members, members of local authorities, trade unions and employers' organisations. We have seen the necessity for this. We have told of the distress that has been caused because of the 483 Government's refusal to accede to this suggestion. Now we have a Select Committee, composed of members of all parties, saying exactly the same thing. Does not the Secretary of State, even at this late stage, think that he ought to question his attitude, and move away from his isolation from all these other voices which have arrived at the same opinion on what the policy should be for Wales and for those parts of Wales mentioned in the Select Committee's report?
I repeat again—I cannot repeat too often—the situation that the Neath travel-to-work area is now experiencing. There is 13.5 per cent. male unemployment, 14.3 per cent. female unemployment, and total unemployment of 13.7 per cent. I remind the Under-Secretary that when he and his colleagues came into office the level of unemployment in Neath was 7 per cent. Since that time it has risen, and I suspect that the next set of figures that come from the Department will show that it is continuing to rise.
There are several other points that I wish to make. The first concerns the youth opportunities programme, to which reference has already been made. I re-emphasise what my right hon. Friend the Member for Rhondda (Mr. Jones) said by quoting from a letter from the chief executive of Neath borough council to the Secretary of State for Employment. It states:Neath borough council are sponsors of a community service agency in their area. I have been instructed to write to yourself with regard to the present rate of payment being made to youngsters who work on the scheme. At the present time there are 80 youngsters employed on the scheme, and it is hoped to increase this to at least 110 from the commencement of the next financial year. However, the authority would like to register its disappointment that the payment to trainees was not increased in line with other increases in social benefit payments in the last review.It would seem to the authority that the position of these youngsters has been adversely affected by the decision that there should be no increase in the sum paid to them. That means that while they remain on £23.50, a person who remains at home and does not make the effort to join a scheme of this nature is entitled to £19.50 a week, as I understand the position. That means that youngsters on the scheme, who must pay large sums in travelling expenses—which is now the norm—earn only as much as a youngster who stays at home, and in certain cases less than such a youngster. That destroys any inducement to participate in such a scheme. I hope that the Government will take this matter on board in order to encourage young people to take advantage of the scheme.
Another point has come to my notice concerning the exploitation of young people who have joined these schemes. It has been said, particularly in the distributive trades, that firms are in the habit of laying off, or putting on short time, regular employees while at the same time taking on young people under the youth opportunities scheme. That was never the intention of the Government or of Parliament. I sincerely hope that the Secretary of State will look into such cases.
Incidentally, while talking of the distributive trades, and referring back to what the Secretary of State said about competition, I recently read in the Western Mail that the Asda hypermarket, which is in the constituency of my hon. Friend the Member for Swansea, East (Mr. Anderson) and 484 on the boundary of my constituency, has 300 jobs on offer. There were 8,000 applications. Is that the kind of competition about which the Secretary of State is talking?
I should also like to refer to overseas investment in this country. During the Christmas period—here I join the right hon. Gentleman in condemning the media for the manner in which they treat negotiations aimed at securing investment in Wales—I heard and saw references to Japanese investment in Wales. Frankly, the impact of those references was most dismaying. A great deal of effort has gone into securing investment; it continually does so. That investment is warmly welcomed in Wales. There is no doubting the benefits that it will bring both to the investor and to working people. I should point out clearly that every support will be given to investment in Wales from wherever it comes, because unless that is done the people of Wales will be a lost people.
§ Mr. Roy Hughes (Newport)
No sensible person would dispute the fact that Britain is at present in deep economic trouble. Wales is very much a part of the United Kingdom, and it is perhaps suffering worse than most regions at present.
Some of us have said for quite a long time that the Government are making a difficult situation even worse. I noticed a report in the business columns of the Western Mail on Monday. It stated that the Thatcher economic experiment was doomed to failure. It indicated that by 1985 unemployment would be 1 million higher than it is today. Bearing in mind the Secretary of State for Employment's prediction that unemployment will shortly be in the region of 2.5 million, this forecast presumably means that by 1985 there will be 3.5 million out of work.
The report stated that by the same date inflation would be running well into double figures, with the balance of payments showing a massive deficit. Industrial production would be 10 per cent. down on the 1979 figures. The report finally accused the Government of wasting North Sea oil #revenues to finance a recession. This would seem a formidable indictment of the Government. The report did not come from a member of the Shadow Cabinet. It did not come from any trade union leader. It did not even come from my right hon. Friend the Member for Bristol, South-East (Mr. Benn). It came from a firm of international repute, the stockbrokers and economic forecasters Phillips and Drew.
There are many more reports of a similar vein at the present time. It is known that many Conservative Party supporters and sympathisers are also expressing their concern. A week or two ago there was the dramatic intervention by the former Prime Minister, the right hon. Member for Sidcup (Mr. Heath), who pointed out that the Government were pursuing socially divisive policies which, in his view, could only lead to economic disaster.
We know all too well that there is no separate Welsh economy. We are just about the most depressed part of the Uniited Kingdom. When there is a recession in the United Kingdom, Wales really takes a hiding. In No. 10 Downing Street the so-called "Iron Lady" seems to be impervious to criticism and unconcerned about the devastation she is causing to the economy and our people. She is carrying through her policies with all the single-mindedness of a zombie.
We are witnessing in Wales, in particular, mass unemployment on a scale unknown since the 1930s, with 485 all the despair that goes with such a situation. We see what has happened to our steel industry, the cornerstone of our economy in Wales. It has been nearly destroyed. Capacity has been reduced to a puny 14 million tons annually, and even that figure is in jeopardy. According to figures that I noticed last week, Soviet Russia produced 152 million tons of steel in 1980. I am not preaching Communism; far be it from me to do so. I would only say that Britain claims to be a major industrial power. Soviet Russia, also a major industrial power, is producing 152 millon tons of steel while we have capacity for only 14 million tons. That is a ridiculous situation.
I have witnessed what has happened to the Llanwern steelworks in my area. I have recently seen 5,000 jobs go—5,000 households affected. I recall also the speech a few months ago in Swansea by the Prime Minister. The gist of her message was to tell the people of Wales "If you cannot find a job down here, pack up and go." It would seem that this message is being taken literally by some firms. An ideal example is the Plessey company in Newport. It proposes to close the machine shop. Hon. Members will not need reminding that the machine shop in a factory is essentially where the skill exists. Plessey has a proposal to pack up the equipment in the machine shop and take it to Ilford, in Essex. It has invited the people working in the shop to transfer to Ilford. This is an insult to our people. It is the reality of the message that the Prime Minister preaches and what she spelt out decisivly in Swansea a few months ago.
There is no doubt that many of the electors of Britain, particularly in Wales, realise the terrible mistake that they made in 1979. Britain, above all, at this time needs a Labour Government who are pledged to policies to tackle the essential crisis of capitalism. It needs policies designed to secure a massive expansion of the public sector. This means a complete reversal of present Government strategy.
My argument is based on the premise that unemployment, in economic terms, is like a tap turned on and left running. It is simply waste. We need, as we in Wales know too well, massive new road schemes. We need investment and not the rundown of our railway network. We need many new hospitals and schools. Above all, we need many houses. There would be no better way to secure a stimulation of the economy at present than a boost to the building and construction industry. In housing, we are rapidly going back to the "lodgers" situation, so characteristic of the 1930s, of young couples living with their in-laws.
I have received today an answer from the Secretary of State for Energy about the Severn barrage scheme. The Minister indicates to me that the Severn barrage committee has concluded its report and expects to report to the Minister shortly. If such a scheme were given the go-ahead, it would create a new confidence in the business community and give heart to many people in these desperate times.
In advocating this massive expansion of public expenditure, I bear in mind that Keynes is back in vogue. Those who have studied his economic theories will be aware that our economy is suffering from lack of effective demand. We know, too, that the equation of investment and saving ultimately balances.
In order to bring about the recovery, particularly for Wales, as well as massively expanding the public sector, the next Labour Government must free us from the 486 shackles of the Common Market. Our membership has done untold harm, as some of us always forecast that it would. We need to be free once again to buy our food in the markets of the world. With a strong pound because of North Sea oil, it would be an immense bonus to the British economy and particularly to the British housewife.
We should then be able to protect our essential basic industries. In the early 1930s, Franklin Delano Roosevelt, when he was elected President of America, called for a new deal for the American people. The people of Britain need a new deal. It can be obtained only by getting rid of this disastrous Government and returning a Labour Government.
§ Mr. Tristan Garel-Jones (Watford)
Tempting though it is, I hope that the hon. Member for Newport (Mr. Hughes) will forgive me if I do not take up his comments.
No sooner was I on my feet than the hon. Member for Aberdare (Mr. Evans) chose to say that I represented an English seat. I do not intend to indulge in "Taffier than thou" contests with the hon. Gentleman or any other hon. Member. I am proud to have been born Welsh. I do not feel a need to wear my Welshness on my sleeve. I am happy to carry it in my heart.
My constituency of Watford is a long way removed from many of the difficult problems that have been mentioned tonight. I learnt this morning from the jobcentre in Watford that we are suffering an unemployment rate of 3 per cent.—and in my area we regard that as suffering. The figure includes the elderly who are not seeking employment and a considerable number of disabled people.
As my right hon. Friend the Secretary of State said, the Select Committee report is a bid—and I regard it as a perfectly proper bid—by Welsh Members for English funds.
§ Mr. Garel-Jones
In the six years that I have been associated with my constituency, I have heard no one in my constituency raise that as an issue. Wales is rightly regarded by my constituents as an integral part of the United Kingdom. I make that point because I wish to underline my undisputed right to take part in the debate as a Member representing an English seat. That right was underlined by the referendum in Wales before the last election. I make no apology for being here.
In the referendum the Labour Party took the wrong view. With some honourable exceptions, the view that ultimately turned out to be the view of the people of Wales, to the extent that it was represented by any political party, was more represented by the Conservative Party. I repeat That the outcome of the referendum underlines the unity of the nation and the integral part of Wales.
I represent a constituency that could well be described as the apex of the golden triangle that is the South of England. We feel nothing but concern about the problems faced in Wales. I repeat that never has any constituent of mine baulked at the assistance that is properly given to the Principality.
My right hon. Friend referred to the expenditure and the actions that the Government have taken over the Welsh language, youth employment, road schemes, advance factories and so on. No Opposition ever accept that the 487 Government are doing enough. It is right and proper that the Opposition should always press for a little more. However, the extreme rhetoric and hyperbole that we have heard tonight from the Opposition is not helpful.
The hon. Member for Merthyr Tydfil (Mr. Rowlands) was earlier jumping up and down and shouting about pit closures. I hope that this Government will not feel it necessary to close 39 pits, as the Labour Government of 1964 to 1970 did, or even 13 pits, as the Labour Government from 1974 to 1979 did, putting 3,000 people out of work.
§ Mr. Garel-Jones
I was not a Member at the time, but I hope that my hon. Friends were not unduly and unnecessarily critical of the harsh decisions that the Labour Government had to take.
§ Mr. Rowlands
I want to get the facts right. If the Secretary of State has better figures, I shall be happy if he intervenes. Between 1970 and 1980, a period in which we had one Conservative Government and one Labour Government, only 11 pits were closed in Wales. I believe that the figure was seven between 1974 and 1979. Will the hon. Gentleman check his figures? To talk of 3,000 jobs being lost is nonsense. Until this moment every pit worker has been able to be redeployed to neighbouring pits. The hon. Gentleman should withdraw his remarks.
§ Mr. Garel-Jones
I shall not withdraw them. My right hon. Friend nods to confirm that my statistics are correct. I was merely wishing to emphasise the Opposition's partisan approach. I hope that the Conservative Opposition showed some understanding of the difficult decisions that the Labour Government had to take to close down pits in Wales.
In a speech to the Welsh CBI in Cardiff just before Christmas the Prime Minister said:our third rule, Mr. Chairman, is what I call constructive intervention. I say constructive because I mean stimulating industries which do have a future, rather than shoring up lost causes—helping to create tomorrow's world, rather than to preserve yesterday's.One example is the National Enterprise Board's stake in the new biotechnology company in Cambridge. This will develop products and know-how based on the excellent research in biotechnology which is being carried out there.Another example is the Government's backing for the Inmos microchip project.I wish to concentrate my remarks on an important subject, namely, constructive intervention. I agree with the Prime Minister that that is a good description. Intervention must be not only constructive, but well thought out. We must know why we are intervening, where we are intervening, and how we intend to intervene. I draw the attention of the House to some studies by the Massachusetts Institute of Technology on what it calls the long wave theory. The business cycle is thought to move up and down in a relatively regular pattern. The economists at the institute say that overlying that pattern is a long wave which is dragged along by one central technology. The clearest example of that during the last century was the railway system, which was the central thrusting technology that dragged everything else behind it. The development of the steel and coal industries was brought about by the railways.
488 That group of economists is saying that the most difficult and tense time for any free economy is when it reaches the end of a long wave, enters a deeper recession, and has to transfer almost into a new world. That is a difficult and painful process. It is my contention that Britain—indeed the Western world—is reaching the end of a long wave. There is a duty on the Government to make imaginative and constructive interventions in the economy to help Britain into the new wave of technology.
One example of the non-dogmatic approach of the Conservative Party was the grant of £40,000 to the Wales TUC. It was later given an additional £5,000. the purpose of the grant was for the TUC to study co-operativism and its potential in the Principality. That illustrates that there is virtually nothing to which the Conservative Party is opposed on dogmatic grounds. If it concludes that co-operativism has a future in South Wales. I have no doubt that my right hon. Friend the Secretary of State and the Government will give it every support.
When the TUC goes to Spain and visits Mondragon, I hope that it will take careful note of the hours of work in that co-operative, the lack of restrictive practices, and the strictness with which time-keeping is adhered to. All those factors are part of the reason for the success of the Mondragon co-operative.
Britain is possibly the only Western industrialised nation that has not built up an adequate and sensible set of mechanisms for that sort of intervention in the market. We have not done so because the party political controversy in the House—the sort of hyperbole that we have heard frm the hon. Member for Newport—is not conducive to a climate in which it is possible for two parties to talk sensibly and arrive at a certain amount of common ground. The Opposition seem to believe that the only way to return to office is by riding on the back of their opponents' failure. They overlook the fact that the ultimate success of this nation, and certainly of the Principality, depends on this Government succeeding. The Labour Party has a stake in ensuring that the Government succeed. I am confident that if the Labour Party were to choose areas of common ground and work with the Government and were to attack them in other areas a great deal of the credit for that success would redound to the Labour Party.
I shall mention only two of our competitors in the Western world. It is naive to think that when great British industries compete abroad for contracts they are competing in a free market. There is no such thing as a free market when GEC bids to build an electrical plant. The United States has a defence budget and a space budget. Their object is to put a man on the moon and to defend the territorial integrity of the United States. But there is a secondary object—to ensure that great American corporations such as IBM and GEC are kept in business. The American Government place orders with those companies which demand that research should be carried out. They fund that research. In West Germany one Ministry is entirely devoted to research and technology and to seeking out those areas in which the private sector, for one reason or another, has either not spied the opportunities or is not able to take them up. It supports and nurtures the private sector while encouraging it to enter those areas.
For a number of social and historic reasons, I regret to say that Britain has not devised the sort of mechanism and common ground that exist in the United States, Germany and France.
§ Dr. Roger Thomas (Carmarthen)
How does the hon. Gentleman explain the present difficulties in West Germany, and the prediction of mounting difficulties there, even the break-up of the coalition?
§ Mr. Garel-Jones
No one in the House would say that a free democracy in the social market economy in which we live could be without difficulties. Of course there are difficulties and periods of transition. My point is that those countries have devised a mechanism for sensible Government intervention which is common ground between the trade union movement, industrialists and what I refer to as the mainstream political forces. We have failed to do that.
Some work has been done. The previous Labour Government established the extremely useful sector working parties which began to identify some areas where such things could take place. That is why I was delighted to hear the Prime Minister in Wales referring to "constructive intervention". I hope that it will not be done only on a one-off basis, such as the Inmos decision. That was a courageous decision by the Opposition. In order to make that investment, they had to include in their calculations the possibility that three or four individuals might make a great deal of money. They had to accept that. They had to undertake to make an investment of £50 million which, if the project is successful—and I hope that it will be—will make one or two individuals very rich men indeed. No doubt those who believe in the curious dogmas that are hawked about in the Labour Party opposed that decision.
I am not ashamed to admit that my party also had to bite the bullet when deciding to grant a further tranche of £25 million, which has ensured the continuation of the project. I do not wish to detain the House by arguing whether Inmos will be successful, or whether it is a sound investment. But the principle must be right. The principle of that sort of investment involves the Labour Party accepting that individuals, entrepreneurs and the market place are important factors in the whole mix. It must accept that. For our part, we must accept in a more general way than we do that there is a role for constructive Government intervention. The Conservative Party has begun to move in that direction. There are many examples of the Conservative Party moving towards constructive intervention. There is not sufficient coherence about it yet-, but I think that we are moving in that direction. There is a genuine role for the Opposition to play in all these matters. It is a constructive role and one that involves the Opposition recognising the stake that they have in the success of the Government.
That is why I have found this debate somewhat depressing. I listened to the remarks of the right hon. Member for Rhondda (Mr. Jones), who opened the debate on behalf of the Opposition. His speech consisted of reading out a long list of statistics and failures. There was not one constructive suggestion. There was not one ounce of feeling that the Opposition were identified with the success of the Government or in trying to help the Government to succeed, which is what they should be doing. He paraphrased Alexander Pope when he talked about the Government Back Benchers being willing to bark and yet afraid to bite. I reply in the words of Alexander Pope which I think that I have quoted once before:Let such teach others as themselves excel,And censure freely who have written well.
§ Mr. Ednyfed Hudson Davies (Caerphilly)
Several hon. Members have made comparisons with the 1930s. I was interested to note that the hon. Member for Montgomery (Mr. Williams) said that in his view things did not compare in any way with the 1930s. There is one sense in which things are very much worse than they ever were in the 1930s. In the 1930s we were faced with ill-understood economic forces, whereas our predicament these days is, to a considerable extent, caused by shortsighted Government policies.
I start with a quotation:We all simply have to reduce dependence on oil, particularly OPEC oil, a source which is accident prone, crisis prone and finite. We must turn to alternative major sources like coal, gas and nuclear.Those are the words not of a coal board spokesman but of Sir David Steel, the chairman of BP, in Cardiff on 12 January.
What will happen when the chairman of the National Coal Board meets the union on 14 February? We were given no information last night by the Secretary of State for Energy. How much does the Secretary of state for Wales know? There are bad omens. There is talk of 25 pit closures. What will be happening in Wales? Will Wales once again bear the brunt of the load that is to be carried? Last night the Under-Secretary of State for Energy blandly said:It is for the management of the NCB to decide about closure of individual pits.However, it is this Government who set a financial scene that made necessary the closure of pits. They cannot pass on the responsibility to the National Coal Board. It is they who demanded profitability in 1983–4, an impossible task in a recession that has been considerably brought about by their own policies.
It is the Government who have brought restrictions of investment within the coal industry. In the face of a decline in domestic demand and in the face of foreign competition, it is left to the NCB to prune the industry and to abandon investment programmes at the very time when we should be investing in the future of the industry.
Do not the Government understand that we cannot turn coal production on and off like a tap? Let us consider investment over the past nine years. In 1972–3 investment in the coal industry was about £7 million. It grew to £35 million in 1976, and it has continued at about that figure every year since then. This is the last year in which the expenditure committed by the policies of the previous Labour Government are running through. We now see the imminence of an enonnous drop in investment. This may happen at precisely the time when investment is being dramatically translated into improved productivity.
It is nonsense to talk of cutting investment at a time when we can afford investment in the coal industry. We cannot afford not to invest for the future. It is axiomatic, to use the phrase of the tripartite agreement, that restructuring in the coal industry means new investtment as well as discarding uneconomic production.
Do we need a viable coal industry in the future? If so, we cannot afford to jeopardise it in the interests of short-term considerations. If we allow a contraction, we cannot immediately step up production. It is nonsense to bring major restructuring investment within the restriction of cash limits and the public borrowing requirement. Margam has already been mentioned by the hon. Member for 491 Caernarvon (Mr. Wigley). The development of the Margam field would have started this year, but it is to be postponed indefinitely. It would have had a lead time of eight years. We are now unlikely to see anything happening at the Margam field until well into the 1990s. It would have been an investment for the future. However, the Government say that the demand has gone. However, at the Margam steel works no coal has been used other than imported American coal for the past 12 months. That is because of a price differential of about £6 or £7 a tonne.
The BSC at Margam is taking betwen 800,000 and 1 million tonnes a year. That means that the corporation is saving about £5 million or £6 million a year, which is a frightening figure compared with the subsidy for coal in many other countries. The Welsh coalfield is losing a market that is the equivalent of three conventional pits. That is putting into jeopardy the equivalent of 2,000 jobs. Let us translate those 2,000 jobs into the redundancy payments that would be involved, the unemployment benefits that would have to be paid, the death of local economies and the death of corner shops. In the long run, it is not a cost-saving exercise. It will amount to a massive national loss.
Our coal industry is in desperate straits and yet we are importing 7½ million tonnes and stockpiling our own coal. Do we need to plan for the future, or do we give way to short-term economic considerations? In replying to the debate last night the Under-Secretary of State for Energy, when referring to some Labour Members, said:one wonders whether they are aware of the world beyond this country, whether news has reached them of the revolution in Iran or the war between Iran and Iraq. While that war continues, the danger is that vital supplies of oil will be interrupted and that the world will face another price explosion.Even after the world returns to calm on the world markets, we shall still be using our supplies faster than we discover new ones."—[Official Report, 21 January 1981; Vol. 997, c. 334–338.]Does the hon. Gentleman realise, and does the Secretary of State for Wales realise, that the implication of that comment—it is a valid one—is that we need a viable coal industry?
As I have said, American coal is still being used at Margam. It is being bought by the BSC for three short-term considerations. One is the artificially low cost of freight transport across the Atlantic at a time of depression. But if we had, as we easily could have, a massive sale by the United States of grain to the Soviet Union, there would be an immediate soaring of Atlantic freight charges.
Secondly, we have the high value of the pound giving an artificial advantage to American exporters.
Thirdly, the Americans extract cheaply and they find it to their advantage to get into this market. But there is no guarantee that the American price will stay low when we lose the alternative domestic producing capacity, and the present Government are in danger of allowing that to happen in Britain.
Therefore, we are putting aside considerations of the future for the sake of the immediate present.
The result of this is that the valleys of Wales are heading into a time of desperate difficulty. There is a widespread feeling of resentment. Concentration is, understandably, being given to seeking new employment and to tackling the problems in areas in which there have 492 been dramatic steel closures. But there is great concern also over the slow, less dramatic deterioration in the coal industry and the implications of this for the life of the valleys of Wales. After all, over 60 years the labour force of the coal industry has declined to one-tenth of what it was. That decline is continuing.
§ Mr. Nicholas Edwards
The hon. Gentleman said that we were abandoning considerations of the future for short-term considerations. The Government are making available £800 million for investment in the current year, which is fully in line with "Plan for Coal". What the hon. Gentleman has been doing throughout his speech is advocating that that money should be put into uneconomic pits at the expanse of the long-term investment in the pits for the future, which will guarantee that long-term considerations will be fully taken into account.
§ Mr. Hudson Davies
That is not so. I am not advocating uneconomic pits, but I am advocating two things. First, the Margam coalfield should have been developed. Until that happens we shall have a problem of employment in the pits of South Wales. But there will come a time when it will be far more viable and proper to run down many pits of low production level, if one has an alternative such as Margam to absorb the employment. But a development for the future has been put to one side. In the words of Mr. Emlyn Williams, of the National Union of Mineworkers, it has not just been put on ice; it has been put on deep ice. That is very sad news for the people of Wales.
The situation in the valleys of Wales is one of an existing severe state of depression, which is being exacerbated. What will be done? How do the Government and the Secretary of State feel about the valleys? Does the Secretary of State belong, like his Prime Minister, to the group of people who feel that perhaps the days of economic viability of the valleys are over? The Prime Minister says that if people want jobs they should go to find them. I do not know where they can go these days for jobs. The moral is that the valleys are finished. Does the Secretary of State subscribe to that view?
I spend a lot of my time talking to old-age pensioners in small communities. I find there that there are elderly people who know each other and who belong to each other, and who will never know the meaning of loneliness in old age. That is the essence of a real community. It is something that one cannot give to people if they start moving around and breaking up their communities.
Where does the right hon. Gentleman stand on this matter? What does he really believe, in his heart? I hope that the Welsh Office view will be given later in the debate.
§ Mr. Nicholas Edwards
I was asked a question and I shall answer it, although I answered it in my speech earlier. I said that I believed that the South Wales industrial strip would be one of the great growth areas in Europe, and that it would provide plenty of opportunities within the travel-to-work distance of the valley communities.
§ Mr. Hudson Davies
There is great concern in the valleys about what is happening—for instance, in the kind of development that will occur on the coastal strip—and that what we shall see is outward movement from the 493 valleys. That is happening already. I have heard nothing from the Secretary of State that indicates that he has any serious intention of doing anything about it.
Representations have been made to the Secretary of State. I was present on one such occasion. That was when the Heads of the Valleys Standing Conference presented the case for the valleys as a matter of urgency. Representations have been made to the right hon. Gentleman also by the Standing Conference on Economic Policy. The three Glamorgans and Gwent have argued, correctly, that on the usual criteria of social deprivation—matters such as the level of unemployment, the state of housing, the lack of indoor sanitation, pre-1880 schools and so on—the valleys would have as strong a claim as would, say, Northern Ireland, on many of the criteria, to be treated as an integrated operation zone for EEC assistance.
Representation has been made to the Secretary of State on these grounds. I should be glad of an indication before the end of the debate as to what is happening. Is the Secretary of State making progress in Brussels? Is he pursuing this cause? If so, will he indicate what hope he has of success?
I make two brief comments in closing. The local authorities in my area—the Rhymney Valley district council among them, along with Mid-Glamorgan county council—are discussing with British Rail, with some misgivings, the British Rail proposals for the valleys. In the context of the Welsh need, does not the Secretary of State agree that it is nonsense that the Government's passenger support grant is made as a block grant to British Rail? If he has any strategy in mind for revitalising the valleys, would it not make sense for there to be directions from the Ministry of Transport on the use that British Rail makes of the grant and, further, that British Rail should declare publicly how it makes use of it?
Lastly, we hear a great deal from Conservative Members of their proud boast and their satisfaction in connection with youth opportunities and special temporary employment projects being carried out through the Manpower Services Commission, but is the Secretary of State aware that many local authorities are finding it more and more difficult to act as sponsors, because they receive their financial reimbursement as sponsors quarterly in arrears? They have put up the funds first, under the Treasury office of accounts rules. Therefore, will the Secretary of State discuss with his right hon. Friends in the Treasury and the Department of Employment ways of removing this nonsensical hurdle to youth employment projects?
The valleys are dying. That is not a debating point, but a plea on behalf of hundreds of thousands of people. I ask the Secretary of State not to treat this as a vague political problem to be deflected, but to do something urgently, before it is too late. That is his responsibility as Secretary of State for Wales. Even if it puts him in conflict with his Government, will he accept that responsibility on behalf of the people of Wales?
§ Mr. Ioan Evans (Aberdare)
This is a debate on Welsh affairs, but we have rightly concentrated on the report of the Select Committee. There is no doubt that, by considering employment opportunities in Wales, the Select Committee has established itself in the Principality.
494 It has been suggested that other bodies should have been invited to give evidence, but when it is remembered that the Welsh Office, the Welsh Development Agency, the Development Corporation for Wales, the Wales TUC, the Manpower Services Commission, the Development Board for Rural Wales, the Council for the Principality, the Welsh Counties Committee, the NCB, the CBI, the BSC and the Secretaries of State for Wales and Industry gave evidence to the Select Committee, it can be seen that there were a variety of witnesses.
The Committee felt that it was better to report before the recess, because even as the witnesses were giving evidence the information was becoming outdated due to the fact that the economic situation was deteriorating. I am surprised at the Conservative Members who served on that Committee. As members of Select Committees we do not attend wearing our political hats; we attend to review the evidence.
The Chairman of the Committee has done an excellent job. The Secretary of State spoke for over 50 minutes in this debate, and I am glad that the Chairman of the Committee will be allowed more than the 10 minutes that Back Benchers have been allowed to make his comments.
On the question of the cause and effect of unemployment in Wales, all members of the Committee unanimously agreed that witnesses had expressed their concern about the dangers and social tensions that would arise if the responses to our unemployment problems were inadequate. That was said not only by the TUC, but by the CBI and representatives of local authorities.
§ Mr. Evans
I am sorry, but I do not have time to give way. The hon. Member for Brecon and Radnor (Mr. Hooson) has put forward his case in this debate, but he has not had the courage today to stand by the conviction that he expressed in the Select Committee. That is why I quarrel with Conservative Members. This is not really an Adjournment debate. I wish that it were. It would have been far better to have put before the House the question, That this House accepts the report of the Select Committee. That would have been a real test for Conservative Members. They should abstain when we vote tonight.
As the report rightly assessed, there is not a jobs gap in Wales; there is a jobs chasm. I should like to mention one or two constituency matters, because certain items in the report would have helped the employment situation in Wales in every constituency, even in that of the Secretary of State for Wales. His problem is that he has to be loyal to his Cabinet and, presumably, to his party. He must recognise that the time will come when he will have to go to the people of Pembroke. If the report had been implemented in full, the people of Pembroke and other Welsh constituencies would have benefited.
With regard to Aberdare, the Committee considered that the capital investment that was sought by the NCB for the Phurnacite plant at Abercwmboi should be made. That was overtaken by events, because the Department of Energy turned it down. Cash limits have now been imposed on the coal industry, as they have been on the steel industry. We have seen the effect on the steel industry, and we can imagine the effect on the coal industry.
My right hon. Friend the Member for Rhondda (Mr. Jones) referred to special development area status, and I 495 and my hon. Friend the Member for Neath (Mr. Coleman) recommended that that status should be restored. If all Governments say that that status is beneficial, it must be recognised that if that status is taken away the result is damaging. That is why I condemn the Government. This Parliament has failed Wales. At a time of growing unemployment, local authorities have had to face an added difficulty because of the withdrawal of that status.
Evidence was given to the Select Committee on that issue. Sir Howard Evans from the Welsh Office gave evidence. There are optimists and pessimists in the Welsh Office, and we struggled to get a figure. To deal with unemployment we must know what the problem will be. The figure looked pessimistic at the time. It was said that 125,000 people would be unemployed by 1982–83, and other figures were put forward.
When the Wales TUC gave an estimate of 140,000 by 1983, it was accused of scaremongering and told not to sell Wales short. When we try to get the Government to face reality, to face the facts and the results of their actions, we are told not to sell Wales short. Before the end of last year the unemployment figure was 138,000. When we get the next figure we may well find that it is not far short of 150,000, not 140,000. We have already heard from the Secretary of State for Employment that the next figures will be shocking. Unemployment in Wales is higher than in any other region in Britain. That is the position that we face. [Interruption.] I am sure that our figures equal those of the North-East region, if they do not surpass them. After the changes in the coal industry, we have had massive changes in the steel industry.
There is a decline in the total number of male employees in employment, and a steady increase in the number of females seeking employment. The Welsh Office figures show that despite the existing unemployment and the effect of the Government's policies, which are producing a massive increase in unemployment, there is an expectation that the labour force will rise by 179,000 in the period from 1976 to 1991.
Even without the present Government's policies there would have been an employment problem in Wales—I concede that—but the implications of the Select Committee's report are that the Government's policies are worsening the position. What is the Government's attitude to regional policy? We were fortunate in having before us the Secretary of State for Industry—the guru himself. He is the man who, more than anyone else, is advising the Prime Minister on monetarist policy. The right hon. Lady has also sent for Professor Walters—at £50,000 a year—to tell her whether the Secretary of State for Industry is giving her good advice.
The Secretary of State for Industry told us about his three concepts in reviewing regional policy. The first was that the Government wished to maintain an effective regional policy within a lower public spending total expressed as a proportion of national revenue. That is a nice way of saying that the Government intend to spend less. We have seen the way in which the Government have spent less in Wales. That concept is wrong. If the need for regional policy is seen to be greater at a time of recession, surely there must be greater public spending to meet the greater need. The Government are cutting regional aid when they should be greatly increasing it, so that concept of the Secretary of State for Industry is wrong.
496 The right hon. Gentleman went on to say that regional policy does not cost less; that the money that is spent on regional policy comes from somewhere. Of course it comes from somewhere. The implication is that if there is a saving on regional spending, there is a total saving by the Government. The fact that the Government have withdrawn help from small industries has meant that the industries concerned have failed and the people in them have joined the unemployment queues. As a result, the unemployment benefit that has had to be paid is far greater. The abandonment of regional policy is more expensive and contributes to unemployment and the consequent cost of unemployment benefits.
The right hon. Gentleman said that the transfer of resources meant that jobs achieved in the regions tended to be at the expense of jobs somewhere else in the economy. He wanted to argue that if Wales was to have jobs, jobs would be lost in London and elsewhere. He believes that the answer to all our problems is competition. Monetarism is the financial method. He argues that to intervene in Wales and to encourage industry to go to Wales is against the interests of competition. He fails to recognise that there is competition beyond this island's shores. If industry is not encouraged to set up in Wales, the North-East and the North-West, those areas will suffer from competition.
The concepts that the Secretary of State for Industry holds are wrong. Unfortunately, the Secretary of State for Wales has to agree with those policies. The Select Committee's report should be borne in mind for the future. It was accepted by the Committee. It is a compromise document. All the contents, including references to a fear about social tension, were agreed unanimously by the Committee. I should want to go further. I should like more radical Socialist policies to deal with the problems that have accumulated.
Kenneth Galbraith condemned the previous Tory Government and the "You never had it so good" philosophy that they followed. In his book "The Affluent Society" he coined the phrase "private affluence and public squalor". That is not the policy that the Government are pursuing. The Tories have created a deprived society. There is public squalor, but there is also private deprivation.
The Prime Minister has told people that they should leave Wales and find employment elsewhere. People have had to leave my area in order to go to a resettlement camp in Henley-in-Arden. Because an individual refused to go, his benefits were stopped. Although he has no income, he has to live on the benefits that his mother receives. As a result of the Government's instructions to the DHSS, he is expected to pay part of the rent of his mother's house although he has no income. Earlier today, I had a phone call from the citizens advice bureau. The mother has been threatened with eviction. Such people suffer deprivation as a result of the Government's policies.
The Select Committee on Employment is tackling the problem, but if Conservative Members agree with the Government's policy, I predict that not many of them will come back to the next Parliament.
§ Sir Brandon Rhys Williams (Kensington)
Some hon. Members may wonder why the hon. Member for Kensington wishes to speak in a debate on Welsh affairs. However, I would like to declare that I and my family have 497 substantial property interests in Glamorgan and we certainly have a stake in the upturn of the Welsh economy. It is not inappropriate that Members with non-Welsh constituences should take part in the debate, because the problems of the Welsh economy are not peculiar to Wales or to Britain.
Setbacks face mixed economies all over the world as a result of the high price of oil and the breakdown of the old Bretton Woods system. In a world in which the population is rising quickly, in which terrible poverty exists and in which there is such great scope for development, it is wrong that we should be cutting not only our production of food, textiles and steel but our ability to produce those highly necessary items. So there is certainly scope for fresh thinking.
I remind the House of the wisdom of the remark that a nation is the wrong-sized instrument to intervene in the economy. It is too large to intervene in industry, and it is too small to run its own paper currency. The increasing uncertainty about the future, as judged in terms of national paper currencies, is causing the setback in investment and the decline in investors' confidence throughout the Western world.
The post-Smithsonian experiment of depending on national paper currencies as a substitute for the gold standard has failed. We thought that it might initiate a new era in which floating exchange rates could be managed by the central banks and there would be a civilised approach to long-term economic planning, taking note of the changes taking place in various regions of the world. We have now seen enough to know that this experiment with ethnic paper currencies is not a success, and that we must move on to something else.
No long-term project at present can be embarked upon with confidence by private business unless it has some form of State guarantee. The problem is not just a British one. On the Continent and in North America and, indeed, in the Far East, the State is increasingly required to intervene, without being confident of how to do so successfully. That is a problem in the Welsh Office, just as it is for Finance Ministries, central banks and central planning departments throughout the world.
Another anomaly in the British economy is obvious if one looks at the advertisements in the national press for imported Japanese equipment and luxuries: there is still too much consumption for the amount of investment. Of course, increasingly large elements in society are no longer able to enjoy the consumption boom. But as a community, we are living on capital, and we are not creating new wealth, as we must do to maintain our standards. This cannot go on.
How should the Welsh Office seek to encourage investment in Wales? One proposal that I noted in the report of the Select Committee on Welsh Affairs—an admirable document, which has already shown that it is standing the test of time—is the recommendation that the exchange risk guarantee scheme for European Investment Bank loans should be extended. That is essential if we are to take advantage of the low interest rate facilities that are available to investors through the EIB. I hope that the Government will commit themselves firmly to continue that form of State intervention.
There has been much debate today about the different forms of grants that are available and the ways in which they should be applied. I shall say no more on that subject. But I feel that we should give a rather guarded welcome 498 to the idea of enterprise zones. They are only another form of subsidy with a very broad aim. Whether it will prove successful in the long run, only experiment will show.
One matter that I particularly commend is my right hon. Friend's highly imaginative gesture in giving a subsidy, albeit a small one, to study the further development of co-operatives. If I had time I should like to develop some of the hopes that I have for a new climate in industry—it has to come—in which we drop the "two sides" mentality and stop playing the destructive game of money barons against wage slaves. Those concepts are obsolete and damaging in today's industrial context. But I am sorry to say that there are people in Wales who want to keep those games alive, and to promote the prejudices that frighten off foreign investors and damage productivity, trust and satisfaction in work.
I want to mention something that I hope to have the opportunity to develop in the debates that we shall have this Session on company law reform. We have to consider the possibility of creating a new class of share for both private and public companies, half-way between a debenture and an equity. I am increasingly worried about firms that are heavily in debt to the banks and yet are not sufficiently confident of their profit record over a short span of time, perhaps of a few years, to go confidently to the market and raise funds in the normal way by an issue of equity shares. We must see whether such firms can change the class of their indebtedness to bring down the interest rates that they have to pay and yet give guarantees to shareholders so that they can be confident of their investment plans.
Many firms are not at present working profitably or are discovering through the introduction of inflation accounting that they are not profitable but are basically sound and necessary for the economy. We must find a method of allowing them to make a charge on their future value added so that whatever happens to their profit record the investment is reasonably secure and the shareholders have a stake in the business.
I hope that the Chancellor of the Exchequer will note my next suggestion, particularly at this season. We need a tax change to allow a commitment by a company, based on its value added, to rank as a prior charge like a bank loan or a debenture.
I would like now to emphasise the argument in favour of a project that is the most vital of all the really long-term projects in view to assist the Welsh economy. I refer to the proposal for a Severn barrage. Many people believe it to be so futuristic and imaginative that it will never change the economic scene in their lifetime. I remember the campaign for a Severn bridge and the mockery that used to be expressed at the idea that such an ambitious scheme should ever be launched. Yet today the scheme seems not ambitious enough.
The Bondi Committee on the Severn barrage project is about to issue its final report. I understand that we can confidently expect its report in the next few weeks. I hope that the Welsh Office will respond to the report as favourably as possible. I hope that it will take the lead in promoting the next stage—the move towards a large-scale pilot project.
It is difficult to make cost comparisons between energy derived from oil, coal hydroelectric schemes and nuclear energy. However, some considerations in connection with the Severn barrage are overriding. First, there is the strategic advantage of having a large alternative source of 499 power ready for the time when the oil runs out, or if anything should happen to our oil investment. I shudder to think how much damage to our industrial base could be done by one Russian submarine loose in the North Sea. The strategic advantage of having an alternative source of energy is a major consideration.
We must remember, too, that whereas some forms of energy can be generated with relatively low capital investment, the Severn barrage would be an ultra-long-term investment—an asset lasting far into the next century. That is an important consideration when we are so short of capital. We should also add up the secondary considerations. I refer to a deep water port, a new crossing of the estuary, and the engineering know-how generated by producing such an imaginative and enormous project.
Most important, we must also consider the social impact. In the West of England and South Wales, such a project would give employment to the very many people who do not have the skills to enter the small factories such as the Inmos works where they can develop highly paid skills, but only in small numbers. In South Wales large numbers of people want work but do not have the skills to compete with young people with specialist training. We should give them hope for their future and a project they can fasten upon which will give them confidence in the future of their country.
§ Mr. Donald Anderson (Swansea, East)
The hon. Member for Kensington (Sir B. Rhys Williams) shares one characteristic with Dr. Billy Graham—he has many texts but one sermon.
The Welsh people were tremendously disappointed at the Government's negative response to the Select Committee's recommendations.
We started work in high hopes as a result of the failure of the devolution proposals in the referendum. We worked hard as a non-partisan Committee, produced our report in August, and the response of the Government was negative, arrogant and dismissive, characteristic of much of the tone of this Government. The debate has also been characterised by the cacophony of Conservative Members seeking to deny paternity of that report to which in July, they were willing to add their signatures.
The situation which we described began in March last year, with the estimate by Sir Hywel Evans of a peak of 125,000 people unemployed in Wales. The situation worsened during our discussions until our conclusions in July, and has worsened ever since.
The estimates given by our advisers, Moore and Rhodes, who are used by the Welsh Office, varied according to the methodology and assumptions, from a low of 144,000 to a high of 172,000, at a time when the Welsh Office thought that the peak would be 125,000. It based the assumptions of the Manpower Services Commission on that inadequate estimate of the gravity of the crisis faced by Wales.
We know that 1980 was the worst year in Wales for redundancies, which were more than 64,000. The county which was worst affected was West Glamorgan, with 15,550. The leader of the West Glamorgan council has written to the Department of Industry in these terms:I begin to despair of making any impact at all in the Department's understanding of the grave problems in South Wales.500 The Government's policy is one of bankruptcy and the dole queues, and they refuse to adjust to changes in unemployment. That applies particularly to the spiralling decline in the county of West Glamorgan, which will be made much worse by the anticipated fall in Velindre with, directly, well over 1,000 people unemployed, and consequential knock-on effects in excess of 3,000. Yet the Welsh Office refuses to face up to the new situation in that county.
I ask the Secretary of State carefully to consider the Velindre problem and the proposals on work sharing that have been suggested by the work force. They were shocked by the news of the effects on their company of the new corporate plan produced in December. The workers were not at fault; they were not inefficient and undisciplined. They had worked hard and their quality of work was good. It would have done the Secretary of State good to meet those men face to face, the victims of the policy of this Government.
I hope that the Secretary of State will reconsider the work-sharing proposals and not automatically accept the corporate plan which has been put forward by the British Steel Corporation. The crisis is grave and demands a change of policy now. If we are to meet that crisis in Wales, we need all those tools which the Government are ideologically committed to refuse. Anything which the Government are prepared to accept will help us in no wise.
From where does the Secretary of State seriously expect new investment to come which is so desperately needed by the people of Wales? Will it come from the public sector? Hardly, because of the cuts brought about by the Government's basic economic programme—the cuts in local authority expenditure and in central Government expenditure, and the revision of the guidelines of the Welsh Development Agency.
The WDA was extremely coy about using its powers to invest in industry. Less than 6 per cent. of its total budget for the financial year 1979–80 was used for investment, and that will probably be cut by the new guidelines imposed on it by the Government.
The £48 million that the Government have given to areas most affected by steel closures is hopelessly inadequate, as the Secretary of State knows. It is estimated that it costs about £30,000 of public funds to create one job.
§ Mr. Anderson
The Secretary of State shakes his head. I ask him to look at the report by Mrs. Marquand, commissioned by the Government. Her conclusion was that, at 1979 prices, it cost about £27,000 to create one job. The estimate of Moore and Rhodes is £30,000 per job. On those estimates, the £48 million which the Government have given to the steel crisis areas would produce 1,600 jobs, at a time when we already have 138,000 unemployed—and, as the right hon. Gentleman knows, the figure will go substantially higher.
We shall clearly get no help from the public sector for the increased investment we need. What about the private sector? Are there serious hopes of any increased private investment in South Wales? Those who go to the major investment analysts for advice on where to put their money will have been told that they will get the best return from investing in property in the South-East of England. There is little hope for South Wales in that context, so the investment will not be coming.
501 The job gap is widening all the time and it is getting worse for Wales, for demographic reasons and because of our dependence on steel. The future is frightening indeed. Even the modest proposals of the Select Committee have been rejected out of hand by the Secretary of State and his advisers.
The Bank for International Settlements has said that we in Britain are subject to a "laboratory experiment". The Secretary of State for Industry said that the Government had wasted their first year. If there is a laboratory experiment, we in Britain, and particularly in Wales, are its victims.
When I first became active in politics in the late 1950s and early 1960s, we young Welsh people were inclined to scoff at the descriptions by our fathers of conditions and their suffering in the 1930s. My own father had to leave Wales for Plymouth and was unemployed for much of the 1930s. We scoffed at the tales of our fathers, but a new generation of Welshmen are now learning the hard way that, as the right hon. Member for Sidcup (Mr. Health) has recently said, the Conservative Party is still the party of unemployment.
§ 9.3 pm
§ Mr. Ray Powell (Ogmore)
There is little time left to go over the difficulties experienced in my constituency. I should first like to congratulate the Chairman of the Select Committee on an excellent Report.
At Question Time today the Prime Minister referred to her right hon. Friend the Minister for Unemployment. [HON. MEMBERS: "No."] Yes—she referred to him as the Minister for Unemployment. That is what we have today. If anybody has created unemployment it is the present Minister, ably assisted by the Secretary of State for Wales, who has been one of the worst tragedies that the Principality has ever had to endure.
I want to refer particularly to my constituency. When the Government were elected, in May 1979 ours was considered to be the growth area of Wales. The Ford factory was being built there. We had a minimum of unemployment. Factories were working flat out. There were full order books and excellent trade union relations. Banks and businesses were all flourishing. Families were moving into the area from all parts of the country, and even from other countries.
Then calamity struck the Ogmore constituency and Wales. The Tory Government were elected by greedy, avaricious, selfish electors. Bribed by Tory promises of tax cuts, swayed by Saatchi and Saatchi propaganda and cheated by fraud and deception, they elected this disastrous bunch of mad monetarists, hell-bent on destroying the industrial base of this country. Wales, the bastion of the Socialist cause, is destined to suffer more than anywhere else.
We fully appreciate the reasons. The Government decided upon steel de-manning. That is undoubtedly the main cause, with a ripple effect on smaller industries. With over-valuation of the pound imposing a 40 per cent. tax on exports and a 30 per cent. subsidy on imports, over an 18-month period British industry suffered an unprecedented loss of competitiveness. The consequences of the Government's economic policies on British Steel, British Leyland, ICI, Courtaulds and many other leading companies are plain to see, but the damage to smaller firms and the long-term penetration of markets has yet to emerge.
502 What is the Government's answer? They have decided that 24 small units will be established on the Bridgend industrial estate, which over the next three years will employ as many as 500 people. Set that against the further de-manning at Port Talbot by 700 jobs, and the prospects look disastrously bleak for my area. It is not enough to build advance factories. The major change that is needed is a Government policy to retain existing factories. In the past 12 months, 10 well-established factories in my constituency have closed. They wished to provide protection for existing jobs. Further WDA developments could absorb the high percentage of unemployment. Let us spend less on defence and destruction and use some of the £9,753 million on economic and industrial recovery.
What else can we do? The Secretary of State seems to be losing his grip on matters affecting Wales. Unless he asserts the needs of Wales and strives to get at least as much for Wales as other regions, Whitehall will soon take over. There is evidence that that is already happening.
Secondly, there must be a plan for the development of employment in Wales—a planning framework with clear targets and with responsibility placed in departments in the Welsh Office and other agencies in Wales. There must be a positive plan for the reconstruction and regeneration of the economy of Wales. Without an agreed plan, the Welsh Office, the WDA and others will continue to flounder along and get nowhere.
What else can we do? We could introduce a selective temporary employment subsidy for firms with short-term difficulties, but with a sound base and good prospects. We could give intermediate area status to the areas covered by the Development Board for Rural Wales. We could encourage the development of co-operatives to create employment. We could improve apprenticeship and training schemes. Wales is still the least favoured area in the country with regard to apprenticeships. We could improve the methods within Wales of attracting and encouraging inward investment. The Secretary of State should consider again paragraph 97 of the report.
Finally, I refer to the difficulties experienced by local authorities and councillors in implementing the cuts that are being imposed. County and district authorities are having to cut all services to the bone—services for the elderly, the handicapped and the disabled and social services in all their aspects. Those cuts in themselves add to the number without jobs.
Local authorities must carry out policies that have been dictated by the Secretary of State for the Environment. In many quarters it is referred to as Tarzan's trap to tranquillise, trip and truncate the councillors and to demote them to rubber-stamp the policies that he dictates. He expects them to sit on councils, unable to fulfil promises that they made to their electors.
Labour will fight these cuts and will win the county elections in May. In so doing it will denounce the Government's policies with enthusiasm and sincere conviction.
§ Mr. Leo Abse (Pontypool)
When he commenced his speech, with the churlishness that is characteristic of him, the Secretary of State indicated his surprise and disapproval, if not despair, at the fact that I would be making a speech from the Opposition Front Bench. I share his surprise, and I understand his dismay.
503 He proceeded to tell us that he wanted to indicate the duties of people who served on a Select Committee, the Chairman in particular. We do not need sententious lectures from the Secretary of State for Wales on how we should observe the proprieties and conventions of this House. We act as parliamentarians in the Select Committee. There, we seek a consensus. There, our allegiance is not to party Whips, but rather to the House to which we report. When we come here we do so as party politicians, glad indeed to vitalise the institution of Parliament by the blessings and boons of party politics. Therefore, let not the Secretary, of State begin to give us lectures.
When we come here tonight, we know that we are engaging in a debate that is not on the Select Committee report. If that were so, I should be sitting on the Back Benches. However, in order to save his Back Benchers from the consequences of their own action and signatures, the Secretary of State has ensured that today we are indulging in an Adjournment debate on a general issue. He would have been well advised not to incite his hon. Friends who sat on the Select Committee to take up a stance that does them little credit, because it means that they have been compelled to resile from their original positions. Wales will notice how they run like rabbits from the consequences of their own commendations.
Despite the valuable contributions that have come from both sides of the House on the matters contained in the Select Committee report, the House has not had its attention specifically directed to some of the major issues that arose in the report. I understand the Secretary of State's studiously and carefully avoiding drawing the attention of the House to those issues in respect of which he felt most hurt.
When, during the first sitting of the Select Committee, Sir Hywel Evans, the recently retired, distinguished head of the Welsh Office appeared before us, I must admit that I did him a grave injustice. Happily, it was an injustice that I did privately and not publicly. His reply to what was almost my final question to him—it was almost his last public comment as a civil servant—was, I thought, a little bizarre. I had asked him:Could you tell us what your feeling is on how you could improve upon the leverage which you think you now have with Whitehall?A little wistfully, I thought, he replied:I would like to see a map of Wales hanging in the rooms of all senior officials in the Department of Industry.He then added boldly, and perhaps encouraged by the imminence of his approaching retirement:The ideal condition would be that before anything was formulated at all we—meaning the Welsh Office—were fully associated with it. We are a lot of the time now but I would be misleading the Committee, and I do not think that you would believe me, sir, if I said it happened always … I think the situation would be improved by ensuring that right from the very word go, from square one, the Department was fully associated with the formulation of overall policies.It was many sessions later, following painstaking investigations, that the full significance of that comment, founded so evidently on long and painful experience, was appreciated by the Select Committee. The truth is that Whitehall treats the Welsh Office with contempt.
§ Mr. Abse
I do not want a running commentary by the Secretary of State from a sedentary position. I shall come to him in a moment. Perhaps if he wants to speak, he will rise to his feet.
The Select Committee, including all my Conservative colleagues, concluded, as the Secretary of State knows, that there were profound defects in the arrangements within the Government for disseminating information on matters of vital importance for Wales. The whole Committee, every member of it, explicitly declared that the Secretary of State—I am referring to the report for Wales—fared no better himself. The Secretary of State and the Welsh Office were left in ignorance about major matters vital to Wales. That was the opinion expressed by the six Conservative Members on the Select Committee.
§ Mr. Nicholas Edwards
That conclusion was reached on one piece of evidence. One official of a nationalised industry, who later apologised, had failed to provide one piece of information on one occasion to the Secretary of State. That was the quality of the report that the hon. Gentleman produced on this matter.
§ Mr. Abse
The Secretary of State is easily wounded. He does an injustice to his colleagues to imagine that they would come to conclusion of that kind—so significant a conclusion as it is—on one piece of evidence. It is true. What the right hon. Gentleman says did occur. Misleadingly, we observed that he had come to the Grand Committee and that there he had made it clear that he did not know—or, if he knew, he was misleading the Grand Committee—of the arrangements being made inside the industry about major redundancies then taking place.
It was not the only piece of evidence. My colleagues are not so jejune or naive as to rest an opinion on one major blunder of that kind suggesting that the whole links of the Secretary of State for Wales and the relevant Departments and the nationalised industries in Wales are either, as all of us said, illusory or are operated in an incompetent fashion. Of course they did not come to those conclusions alone on that basis. Other instances were being brought to our attention.
There was the whole question of the communications that went on between the chairman, as he then was, of the BSC and the Secretary of State for Industry, in which it was made clear that the whole industry could be liquidated, or would have to be liquidated, if £400 million was not provided to the steel industry. Did the Secretary of State, when he came before the Select Committee, tell us of it? Did he know of it? It was abundantly clear that he was in ignorance of it. I do him the justice of knowing that he would not deliberately have attempted to mislead the Select Committee. The Select Committee was profoundly affected and disturbed by the fact that the right hon. Gentleman was kept in ignorance. If the Secretary of State wants another example, let me give him one.
Is there anyone in Wales who believes that when the speech was delivered with such exquisite tact in Cambridge by the Home Secretary, telling Wales that the Conservative Government were reneging on their policy concerning the fourth channel, the Secretary of State for Wales was privy to that decision?
§ Mr. Nicholas Edwards
The hon. Gentleman has made three consecutive statements that are totally and completely untrue, and that one is also untrue. That decision, like all other important decisions affecting 505 Wales, was taken collectively by the Government. The Welsh Office and I, as I have always made clear, were involved fully with my right hon. Friend in that decision.
§ Mr. Abse
I presume, therefore, that the right hon. Gentleman has also been privy to the somersaults that have taken place since. I presume, further, that he assumes full responsibility for the gymnastics over the television world in Wales. However, we know that the relationship between the Departments was that described by Sir Hywel Evans, who clearly had known for a long time that there was a need for Wales to be able to be represented more effectively when the decision-making was taking place. The fact that Whitehall is treating the Welsh Office and the Secretary of State as dogsbodies is not a light matter. Never in the post war years, now that we have a worldwide recession, has there been a greater need for a tough Secretary of State and an emboldened Welsh Office able to fight its corner.
The goal of the Department, declared in the memorandum submitted to the Select Committee and repeated in the Government's response, was to bring the rate of unemployment in Wales close to the average rate throughout Britain as a whole and to stem migration from the Principality. All that is as naught if the Secretary of State is pushed into an anteroom away from the corridors of power. After all, to achieve the declared goal, the Secretary of State and the Welsh Office have to begin a fight with the Prime Minister, as my hon. Friend the Member for Newport (Mr. Hughes) made abundantly clear.
Swansea and the Principality will never forget the right hon. Lady's mocking advice to the unemployed, to which again I presume the Secretary of State was privy. She would have turned us into gipsies. Romany, not Wales, is the promised land. She gave the workers of the Principality a message that will never be forgotten. Given the folly of the zealots, wholly committed as they are to illusions of monetarism, founded upon the restriction of the spending and respending of borrowed money desperately needed to restructure our industries, the Secretary of State would need to fight for every penny of public money that is so parsimoniously being given by the Treasury. Not only is the right hon. Gentleman compromised by his monetarist belief that idle plant capacity and increased unemployment are the only ways which to arrest inflation, but evident acceptance, in the view of the committee, of a subordinate role in the Government makes him easy prey to his tougher-minded colleagues. They are proceeding on their way without him.
There are many instances in which we are concerned about his lack of fight. My hon. Friend the Member for Caerphilly (Mr. Hudson Davies), in a notable speech, brought home the dangers to the coal industry in Wales. We noted that the Secretary of State in his speech yet again treated the coal industry of Wales almost as an aside. My right hon. Friend the Shadow Secretary of State has pressed him, and I press him again.
We know that there is a need to fight for Wales to ensure that reduced Government assistance to the coal industry does not mean that Welsh coalfields will be wiped out. It is clear that the recession, compounded by the folly and failure of the Government's monetarist policies, has effectively destroyed the Coal Board's always slim chances of meeting the well-nigh impossible targets that the Government set the industry last year.
506 When the Coal Industry Act 1980 was passed, what caveats did the Secretary of State for Industry receive from the Secretary of State for Wales? Given the notorious vulnerability of our geologically difficult pits, what contingency plans did the Secretary of State formulate—knowing the catastrophe that would befall Wales if the stringent targets laid down by the financial restrictions of the Government were not met? And they will not now be met. Is he supinely waiting for another fait accompli, with the clear danger that when the Coal Board meets the Secretary of State for Industry and the National Union of Mineworkers next month it may be forced to say that the financial parsimony of the Government compels large-scale redundancies?
We want to know what, if anything—and before it is too late—the Secretary of State is doing to ward off that fearsome threat. We want to know that tonight. Is he, or anybody from the Welsh Office, attending the meeting on Monday between the Secretary of State for Industry and the Coal Board? Does he even know about the meeting? I want to give the Secretary of State a warning—though he takes unkindly to warnings, preferring always to insulate himself in a cocoon from the harsh realities. As many hon. Members have stressed, he scoffed at the warnings of impending mounting unemployment figures, recklessly accusing those of us with more prescience of extravagance, of dangerous rhetoric and of provoking difficulties for Wales. He prefers, Micawber-like, to come to the House as he has today, and declare the success of his policies and how he can look to the future with optimism, when he has attained the remarkable achievement of allowing unemployment in Wales to rise from 80,000 when he took office to a level which, unhappily, will probably reach 150,000 within a matter of days.
I understand that the right hon. Gentleman is not prepared to accept the warnings of the right hon. Member for Sidcup (Mr. Heath) that the Tory Party will be stigmatised as the party of unemployment. Doubtless he shrugs off the admonitions of Harold Macmillan. Nevertheless, I warn him that he and his Government are playing with dangerously combustible material. There appears to be a suggestion that the six months reprieve for Port Talbot and Llanwern is not permanent. There were ominous tones in his 53-minute speech, which included a chilly suggestion that if the market did not meet the required standards once again Llanwern and Port Talbot could be at risk. If that is what he meant, and if that is how it was intended to be interpreted—if the reprieve is not permanent, and if there is a failure by the Government to assist the Coal Board, with the consequences that we have stressed to our coalfields—we warn him that he will find that his failure to practise the politics of prevention—not the politics of provocation and confrontation, which is his habit—that were urged by the Select Committee, will bring about the real risk of social disorder, of which the whole Committee spoke.
I have observed, as the whole House has observed, the comments that have been made by the hon. Members for Montgomery (Mr. Williams), Brecon and Radnor (Mr. Hooson) and Flint, West (Sir A. Meyer) in joining forces with or acting as an echo for the Secretary of State for Wales, who decided that in some way he would try to wash his hands of the conclusions that we had reached.
The hon. Member for Flint, West, oscillates a great deal. He oscillates from spirited independence, which he 507 shows fitfully, to extraordinary obsequious acts of reparative guilt. The hon. Member has had to suffer a great deal. The Secretary of State, as the media told us, sent him to Coventry as the leading member of the Select Committee after the report appeared. That is a deprivation that I could endure easily. However, the hon. Gentleman evidently does not have that sort of toughness. For the six months since the report came out—almost from the first day—he has been building his fences and bridges in order once again to be the blue-eyed boy of the Secretary of State.
The hon. Member for Brecon and Radnor decided that it would be his day and that he would make it clear that all that had happened was that he and his colleagues had heard a response from a leading trade unionist from South Wales. The statement concluded with Mr. Wright saying:There are very real possibilities of disorder in this country unless we get some sense and gentleness into the manner in which we effect change.The hon. Members for Flint, West and Brecon and Radnor, among others, then went on in our report to make the following comment:It is an assessment we reluctantly share.
§ Mr. Abse
I will read on. That was a view that we all shared. We continued to talk about how impressed we were by the conviction of some of our witnesses. We went on to say that there were risks in existence, and we underlined them. We said, speaking of the risks of serious social disorder,When such real risks abound.The hon. Membersfor Montgomery, who made an ebullient speech that could hardly be taken seriously, showed me considerable solicitude in case I became arrested. Let me assure him that I would never go to him to ask him to defend me. He and the hon. Members for Brecon and Radnor and Flint, West said:When such real risks abound.Do they now claim that all they did was to register passively a view that was impressive when coming from someone else? They said that the risks were real.
§ Mr. Abse
No, I will not give way now. They are running away from it. At that time, with the witnesses in front of them and feeling the impact of hearing and testing the evidence, they understood that there were grave dangers, as there are. I want to tell them and the House something else. I shall tell them why the risks are much greater than they used to be. It was the Committee's conclusion that the prevailing threshold of tolerance is low in the face of reducing or declining standards, and that Wales is in no mood to respond to chronic unemployment with apathy. It pointed out that we are not living in the 1930s and I wish to tell the House that there is a new phenomenon.
I am pleased that the Prime Minister has entered the Chamber at this moment. I was saying that there is a new phenomenon that will guarantee that the men and women of Wales will not regard the mounting unemployment as inevitable, as predetermined, as irrevocable, or as beyond the wit and intelligence of Governments to mitigate. Like the right hon. Member for Sidcup, I am old enough to recall the days when such doctrines were reluctantly 508 accepted. I tell the Secretary of State and the Prime Minister that one of the main reasons for acceptance in those times—it was a tragic acceptance—was the stoicism of our womenfolk.
The survival of community life in the valleys of Wales when I was a lad was largely due to the sacrifice of the mams at home, who heroically battled, made so much personal sacrifice to eke out the miserable, means-tested public assistance of those days. They provided the anchorage that stabilised the community, which otherwise would have totally exploded or would have meant that the whole community sank demoralised into a listless despair.
Today, things are different. Half the people of Wales—that is the womenfolk—are in a different mood. The angry young women who come to our surgeries, because they have suddenly found themselves redundant, are not prepared to allow a woman Prime Minister, boasting of a capacity to be a parliamentarian, mother, wife and housekeeper, to compel them to revert to the roles that they have long since rejected. The swaggering of "I am all right, Margaret" is a provocation to our womenfolk who are jobless, or unable to obtain a post when they first come into the labour market. The opportunities in recent years for the Welsh women were long delayed, and still lag behind those in the rest of Great Britain. As the report stresses, large numbers of women, however, exercise their option to work outside the house in a way that enables them to enrich the lives of their families by bringing back to their homes an elan becoming to modern women, so many of whom feel crimped if they are compelled to be housebound. It cannot be acceptable to them or to those who value the benefits of the contemporary democratic family system, where the wife has the self-esteem of some financial independence, that lack of jobs should compel them to feel demeaned.
But what response have the Government given to the bleak prognosis spelt out in detail by the Select Committee, desperately anxious that an attempt be made to prevent women being forced back and the clock to be put back? The answer of the Thatcherite Government to the unemployed and jobless women in Wales is bleak and brutal. They have made it clear in blunt terms—
§ Mr. Abse
I shall give Way in a moment. In their report the Government have corroborated what we have said about the position of our womenfolk, but they offer no aid. It is part of the responsibility of Labour Members to give leadership and to increase the production in steelworks, factory and mine, but it is no part of our duty to reconcile our womenfolk and our men to the inevitability of unemployment.
We are a rich country, blessed with oil, gas and coal in such plenitude that we are the envy of all industrialised nations. Our pound, made embarrassingly and unnecessarily stronger by the madness of the puffed-up interest rate, reflects the evaluation of our strength made to the world. To tell our people that this country cannot afford to ease the required structural changes to keep them at work and to bring them back to work is unalterable selfishness. That is what the Government are saying.
Finally, let me say this to the House. [Interruption.] Let me apologise to the Under-Secretary. I am encouraged by the fact that, in future, should I ever be on the Front Bench again, I really must make longer speeches and follow the Secretary of State's example.
509 In the meantine, let me give a warning. The warning is that if the Government are not prepared to respond to the Select Committee's rather small, compromising proposals, and unless they are prepared to change their policies to give the public investment which Wales so desperately needs, so that we can really restructure our industry and do again what we did in 1945, and revive South Wales yet again, in a short while the Tory Party will be swept away like chaff in the wind.
§ The Under-Secretary of State for Wales (Mr. Michael Roberts)
In a Welsh day debate we are never short of passion, rhetoric and colourful imagery. I think it is part of the Celtic character. I suppose that we were a bit worried today, and so the hon. Member for Pontypool (Mr. Abse) was invited to make sure that we had our proper share of it. But I want to tell him one thing. He cannot lecture me about South Wales and its people. I have lived there all my life. I know South Wales particularly well. I am not prepared to take that sort of nonsense from anyone from the London Welsh or from anywhere else.
Alas, from listening to Opposition Members it would seem that they have a preoccupation with, and almost a dedication to, a picture of gloom and doom. Political hyperbole is, admittedly, part of their stock in trade. Today no one has quite got down to the ludicrous level of the official Opposition spokesman on Welsh affairs, the hon. Member for Carmarthen (Dr. Thomas), who said only a few days ago, when speaking about housing conditions in Wales, that things had not changed very much since Cronin wrote about conditions in Wales 50 years ago. That sort of talk does not help a bit to get jobs into South Wales or into any other part of the Principality.
In the Principality, the sort of speech we have heard about the Welsh women or about Welsh houses does not matter very much, because we know that it is nonsense. Unfortunately, however, outside the Principality, and particularly among overseas investors, this folly may be taken at its face value.
No one went quite that far today, but the general tone of despair and overstatement of difficulties, and the lack of even a reference to the opportunities and hope for the future, characterised the speeches of Opposition Members on both the Front Bench and the Back Benches. They consistently sell Wales short.
I take just one example because some of my time has been taken by the hon. Member for Pontypool, although I am not complaining too much about that. The hon. Member for Caerphilly (Mr. Hudson Davies), whose speech was referred to as being memorable, said that the Welsh valleys are dying. That is the sort of Celtic death wish that does not get us anywhere. If they are dying, they did not start dying 18 months ago. If the hon. Member wants to do something about it, he should not make rhetorical speeches here but should do something about it in Caerphilly.
I should like to illustrate this point, because I feel it sincerely and it is very important. At the invitation of Swansea city council, I recently saw a film produced to promote its enterprise zone, for which it has shown such commendable enthusiasm to overcome all possible difficulties. I welcome its enterprise in its publicity, but as I watched the film I felt that I was seeing only the first reel. About half was devoted to the past dereliction and pollution—the effects of 100 years of acrid industrial 510 smog—and then there were five minutes showing Swansea council's legitimate magnificent effort over many years to battle against that problem. At the end, there was a brief reference to the advantages of enterprise zones in general. I looked forward to the second reel, but, alas, there was none.
§ Mr. Roberts
Yes; I suggested that a second reel should be made. I suggested what should be done. The reel to which I looked forward but that had not then been made should have referred to the traditional excellent work force of Swansea, its magnificent urban amenities, its music and culture and its football and sporting prowess—everything to attract people to live, invest and work in Swansea. The second reel was-not made. That reflects the attitude of Labour Members.
Every Labour Member has been quick to say that there is no silver lining in anything that happened in 1980. Let me give an example. In April 1980 there was a "slimline" process in Llanwern and Port Talbot. There was a massive loss of jobs. I shall give the figures of those job losses in a moment. Labour Members are completely lacking in any vision.
Fortunately, the steel workers—for instance, John Foley of Llanwern—took a different view. Mr. Foley knew about the personal hardships and the problems. He knew about them better than many Labour Members, but he said that out of the troubles, changes and shock of 1980 there had come something good for Llanwern. There had come a reduction in the cost of steel from £186 per ton to £149 per tonne. In 1980 there was a reduction in the labour force from 9,300 to 4,900 that resulted in the reduction from eight man hours per tonne to six man hours per tonne. The situation is similar in Port Talbot.
There are still difficult decisions for the future, but now both those great works can go into 1981 competitive. John Foley said that they could be competitive, and they have become competitive only because of the "slimline" that took place in April 1980.
I wish to refer briefly to one or two of the questions that were posed before I comment directly on the matters that were raised by the hon. Member for Pontypool. He and the hon. Member for Newport (Mr. Hughes) share a splendid distinction. They illustrate the points that I have been making, in that they cannot see a sign of hope when it is at the bottom of their garden. The hon. and learned Member for Aberavon (Mr. Morris) can see an elephant only when it is outside his door. It takes him a long time to see anything.
The hon. Members for Pontypool and for Newport made speeches without making a single reference to what the Cwmbran Development Corporation is doing. They did not refer to the job opportunities of Inmos and the high technology that is coming to Gwent. They managed to ignore totally the fact that we are creating in Llantarnam park a great industrial site. Leading to it there is a magnificent road that will end the congestion, and people will now be able to move smoothly from the industrial park to the M4. All that was totally ignored because they do not wish to recognise any good sign. They parade their gloom and doom for partisan reasons and for no other reasons whatever.
§ Mr. Roberts
The right hon. and learned Member for Aberavon has been in the Chamber for only a very short time, and I have already been deprived of much of my opportunity to reply because the hon. Member for Pontypool spoke for a considerable time. I shall not give way.
I want to reply very briefly to at least one of the points made by the hon. Member for Cardigan (Mr. Howells) about the agriculture department. I shall return very soon to the question of the Select Committee. He must appreciate that this is a management proposal. I give him the guarantee that the transfer of the work to Cardiff will take place in stages, and that there will be the fullest consultation with the trade union side and with individual members of staff affected by the proposals. I must say in support of the proposal that it will shorten lines of communication and facilitate the formulation and presentation of advice to Ministers.
The hon. Member for Cardigan said that at all costs the proposal had to be resisted. That is expressing the matter in quite an extreme way. We have to look fairly not only at what it will cost in terms of finance but also at what it will mean in terms of efficiency. I repeat that the people concerned will be fully consulted.
I have a series of points that I wish to make in reply to various hon. Members. I am afraid, however, that I shall have to write to a large number of Members because I have very little time left.
I want to say something about the Select Committee. Some Labour Members—the hon. Member for Pontypool was one of them—suggested that the debate should have been in its entirety about the Select Committee. Let me tell the right hon. Member for Rhondda (Mr. Jones) and everyone else—I hope the media will take note—that the Select Committee is not and never was a Tory alternative to the proposed Welsh Assembly. The Tory answer to the Welsh Assembly was the Welsh people's answer. It was an outright rejection in every county in the Principality—an overwhelming "No". Yet the Welsh media have constantly accorded to the Select Committee the status and newsworthiness that they were prepared to give to the proposed Welsh Assembly.
The role of the Select Committee is to investigate, to put forward suggestions, to stimulate debate and discussion, but not to govern, not to legislate, and not to dictate to the Executive. Its 11 Members, however eminent, however unaminious on anything, are not to be regarded as more important or more significant than the other 25 remaining Members for the Principality or the United Kingdom Parliament as a whole
Very great emphasis has been placed on the fact that the members of the Select Committee were unanimous, but I should like to tell the hon. Member for Pontypool that that unanimity had largely disappeared by the end of the first press conference. The Chairman, by his subsequent partisanship, by his irresponsible development of the fears of social disorder expressed by some witnesses, and by his apparent preparedness to take to the streets like the Chartists of old, has divided his Committee, damaged his reputation, and done nothing to improve the economic prospects of Wales.
Viewed from Cardiff the pretensions of militancy often appear bizarre and ludicrous, but they are not entirely a laughing matter. When men in responsible positions irresponsibly predict social disorder, there is always a risk that their forecasts will become self-fulfilling. The raising 512 of the question of violence and social disorder is not new to the political tradition of South Wales, as the hon. Member for Pontypool knows better than anyone. In 1976, his right hon. Friend, the Leader of the Opposition, said of Wales:If we do not proceed to set up a Welsh Assembly there might be Ulster-type violence in Wales.Some of us at the time thought that the right hon. Gentleman was, as usual, hopelessly wrong. We also thought that he was disgracefully irresponsible. The hon. Member for Pontypool is as wrong and as irresponsible today as the right hon. Gentleman was then.
There is only one explanation for the reckless folly of the hon. Member for Pontypool: reselection doth make militants of them all, or at least most of them. Once again, the party games of Labour Members are of little importance. What is said in the Western Mail does not really matter too much. In South Wales, we know how to assess their opinions. It is when an article appears in the Washington Post and international investors begin to shy off Wales that the damage is done.
Not to be outdone in their determination to make party points—albeit to the detriment of the economic and social fabric of Wales—the three Labour Members of the European Parliament tabled a warning ofserious social disorder in Waleswhich was a direct disincentive to European investors. Whatever the consequences, they were determined to carry any bad news, however false, to Brussels and beyond.
How did the Labour Party get itself hooked on this course? The reason is well known, at least in South Wales. That interesting and in many ways good man, George Wright, who has done so much for the handicapped, for careers, for the young and for those at work, and who is a good trade unionist, is always wrong on the major issues. That is his mistake. He predicted that there would be violence. However militant he may now sound, he dragged the hon. Member for Pontypool by the nose.
I have time for one short and kind word for Plaid Cymru. It has now committed itself to taking to the streets and to direct action. The people of Merioneth have put up with the Marxist views of their representative for long enough. They will not be so charitable when he adopts the classic Fascist tactic of getting the people out on the streets.
Because the Opposition have been purely negative, I call on my right hon. and hon. Friends to support me in the Lobby.
§ Question, That the Question be now put, put and agreed to.
§ Question put accordingly, That this House do now adjourn:—
§ The House divide: Ayes 246, Noes 296.
|Division No. 51]||[9.59 pm|
|Abse, Leo||Archer, Rt Hon Peter|
|Adams, Allen||Armstrong, Rt Hon Ernest|
|Allaun, Frank||Ashley, Rt Hon Jack|
|Alton, David||Ashton, Joe|
|Anderson, Donald||Atkinson, N. (H'gey,)|
|Bagier, Gordon A.T.||Hardy, Peter|
|Barnett, Guy (Greenwich)||Harrison, Rt Hon Walter|
|Barnett, Rt Hon Joel (H'wd)||Hart, Rt Hon Dame Judith|
|Bidwell, Sydney||Hattersley, Rt Hon Roy|
|Booth, Rt Hon Albert||Haynes, Frank|
|Boothroyd, Miss Betty||Healey, Rt Hon Denis|
|Bottomley, Rt Hon A. (M'b'ro)||Heffer, Eric S.|
|Bray, Dr Jeremy||Hogg, N. (EDunb't'nshire)|
|Brown, Hugh D. (Provan)||Holland, S. (L'b'th, Vauxh'll)|
|Brown, R. C. (N'castle W)||Home Robertson, John|
|Brown, Ron (E'burgh, Leith)||Homewood, William|
|Brown, Ronald W. (H'ckn'y S)||Hooley, Frank|
|Buchan, Norman||Horam, John|
|Callaghan, Jim (Midd't'n & P)||Howell, Rt Hon D.|
|Campbell, Ian||Howells, Geraint|
|Canavan, Dennis||Huckfield, Les|
|Cant, R. B.||Hudson Davies, Gwilym E.|
|Carmichael, Neil||Hughes, Mark (Durham)|
|Carter-Jones, Lewis||Hughes, Robert (Aberdeen N)|
|Cartwright, John||Hughes, Roy (Newport)|
|Clark, Dr David (S Shields)||Jay, Rt Hon Douglas|
|Cocks, Rt Hon M. (B'stol S)||John, Brynmor|
|Cohen, Stanley||Johnson, James (Hull West)|
|Concannon, Rt Hon J. D.||Johnson, Walter (Derby S)|
|Conlan, Bernard||Jones, Rt Hon Alec (Rh'dda)|
|Cook, Robin F.||Jones, Barry (East Flint)|
|Cowans, Harry||Jones, Dan (Burnley)|
|Cox, T. (W'dsw'th, Toot'g)||Kaufman, Rt Hon Gerald|
|Craigen, J. M.||Kerr, Russell|
|Crowther, J. S.||Kilfedder, James A.|
|Cryer, Bob||Kilroy-Silk, Robert|
|Cunliffe, Lawrence||Kinnock, Neil|
|Cunningham, G. (Islington S)||Lamborn, Harry|
|Cunningham, Dr J. (W'h'n)||Lamond, James|
|Davidson, Arthur||Leadbitter, Ted|
|Davies, Rt Hon Denzil (L'lli)||Leighton, Ronald|
|Davies, Ifor (Gower)||Lestor, Miss Joan|
|Davis, Clinton (Hackney C)||Lewis, Arthur (N'ham NW)|
|Davis, T. (B'ham, Stechf'd)||Lewis, Ron (Carlisle)|
|Deakins, Eric||Litherland, Robert|
|Dewar, Donald||Lofthouse, Geoffrey|
|Dixon, Donald||Lyon, Alexander (York)|
|Dobson, Frank||Mabon, Rt Hon Dr J. Dickson|
|Dormand, Jack||McCartney, Hugh|
|Douglas, Dick||McDonald, Dr Oonagh|
|Dubs, Alfred||McElhone, Frank|
|Dunn, James A.||McGuire, Michael (Ince)|
|Dunnett, Jack||McKay, Allen (Penistone)|
|Eadie, Alex||McKelvey, William|
|Eastham, Ken||Maclennan, Robert|
|Edwards, R. (W'hampt'n S E)||McNally, Thomas|
|Ellis, Tom (Wrexham)||McNamara, Kevin|
|English, Michael||McTaggart, Robert|
|Ennals, Rt Hon David||McWilliam, John|
|Evans, Ioan (Aberdare)||Magee, Bryan|
|Evans, John (Newton)||Marks, Kenneth|
|Ewing, Harry||Marshall, Dr Edmund (Goole)|
|Field, Frank||Martin, M (G'gow S'burn)|
|Fitch, Alan||Mason, Rt Hon Roy|
|Fitt, Gerard||Maxton, John|
|Flannery, Martin||Maynard, Miss Joan|
|Fletcher, Raymond (Ilkeston)||Meacher, Michael|
|Fletcher, Ted (Darlington)||Mellish, Rt Hon Robert|
|Foot, Rt Hon Michael||Mikardo, Ian|
|Ford, Ben||Millan, Rt Hon Bruce|
|Forrester, John||Miller, Dr M. S. (E Kilbride)|
|Foster, Derek||Mitchell, Austin (Grimsby)|
|Foulkes, George||Mitchell, R. C. (Soton Itchen)|
|Fraser, J. (Lamb'th, N'w'd)||Morris, Rt Hon A. (W'shawe)|
|Freeson, Rt Hon Reginald||Morris, Rt Hon C. (O'shaw)|
|Garrett, John (Norwich S)||Morris, Rt Hon J. (Aberavon)|
|Garrett, W. E. (Wallsend)||Morton, George|
|George, Bruce||Moyle, Rt Hon Roland|
|Gilbert, Rt Hon Dr John||Mulley, Rt Hon Frederick|
|Ginsburg, David||Newens, Stanley|
|Golding, John||Oakes, Rt Hon Gordon|
|Gourlay, Harry||Ogden, Eric|
|Grant, George (Morpeth)||O'Halloran, Michael|
|Grant, John (Islington C)||O'Neill, Martin|
|Hamilton, W. W. (C'tral Fife)||Orme, Rt Hon Stanley|
|Owen, Rt Hon Dr David||Stoddart, David|
|Palmer, Arthur||Stott, Roger|
|Park, George||Strang, Gavin|
|Parker, John||Straw, Jack|
|Parry, Robert||Summerskill, Hon Dr Shirley|
|Pavitt, Laurie||Taylor, Mrs Ann (Bolton W)|
|Pendry, Tom||Thomas, Dafydd (Merioneth)|
|Powell, Raymond (Ogmore)||Thomas, Jeffrey (Abertillery)|
|Prescott, John||Thomas, Mike (Newcastle E)|
|Price, C. (Lewisham W)||Thomas, Dr R. (Carmarthen)|
|Race, Reg||Thorne, Stan (Preston South)|
|Radice, Giles||Tilley, John|
|Richardson, Jo||Tinn, James|
|Roberts, Allan (Bootle)||Torney, Tom|
|Roberts, Ernest (Hackney N)||Urwin, Rt Hon Tom|
|Roberts, Gwilym (Cannock)||Varley, Rt Hon Eric G.|
|Robertson, George||Wainwright, E. (Dearne V)|
|Robinson, G. (Coventry NW)||Walker, Rt Hon H. (D'caster)|
|Rooker, J. W.||Watkins, David|
|Roper, John||Weetch, Ken|
|Ross, Ernest (Dundee West)||Welsh, Michael|
|Ross, Stephen (Isle of Wight)||White, Frank R.|
|Rowlands, Ted||White, J. (G'gow Pollok)|
|Ryman, John||Whitehead, Phillip|
|Sandelson, Neville||Whitlock, William|
|Sever, John||Wigley, Dafydd|
|Sheerman, Barry||Willey, Rt Hon Frederick|
|Sheldon, Rt Hon R.||Williams, Rt Hon A. (S'sea W)|
|Shore, Rt Hon Peter||Williams, Sir T. (W'ton)|
|Silkin, Rt Hon J. (Deptford)||Wilson, Gordon (Dundee E)|
|Silkin, Rt Hon S. C. (Dulwich)||Wilson, Rt Hon Sir H. (H'ton)|
|Silverman, Julius||Wilson, William (C'try SE)|
|Skinner, Dennis||Winnick, David|
|Smith, Rt Hon J. (N Lanark)||Woodall, Alec|
|Snape, Peter||Woolmer, Kenneth|
|Soley, Clive||Young, David (Bolton E)|
|Spriggs, Leslie||Tellers for the Ayes:|
|Stallard, A. W.||Mr. Donald Coleman and|
|Steel, Rt Hon David||Mr. James Hamilton|
|Adley, Robert||Buck, Antony|
|Aitken, Jonathan||Budgen, Nick|
|Alexander, Richard||Bulmer, Esmond|
|Alison, Michael||Burden, Sir Frederick|
|Amery, Rt Hon Julian||Butcher, John|
|Ancram, Michael||Carlisle, John (Luton West)|
|Arnold, Tom||Carlisle, Kenneth (Lincoln)|
|Atkins, Rt Hon H. (S'thorne)||Channon, Rt. Hon. Paul|
|Atkins, Robert (Preston N)||Chapman, Sydney|
|Atkinson, David (B'm'th, E)||Churchill, W.S.|
|Baker, Kenneth (St. M'bone)||Clark, Hon A. (Plym'th, S'n)|
|Baker, Nicholas (N Dorset)||Clark, Sir W. (Croydon S)|
|Bell, Sir Ronald||Clarke, Kenneth (Rushcliffe)|
|Bendall, Vivian||Clegg, Sir Walter|
|Bennett, Sir Frederic (T'bay)||Cockeram, Eric|
|Benyon, Thomas (A'don)||Colvin, Michael|
|Benyon, W. (Buckingham)||Cope, John|
|Bevan, David Gilroy||Cormack, Patrick|
|Biggs-Davison, John||Corrie, John|
|Blackburn, John||Costain, Sir Albert|
|Blaker, Peter||Cranborne, Viscount|
|Body, Richard||Critchley, Julian|
|Bonsor, Sir Nicholas||Crouch, David|
|Boscawen, Hon Robert||Dean, Paul (North Somerset)|
|Bottomley, Peter (W'wich W)||Dickens, Geoffrey|
|Bowden, Andrew||Dorrell, Stephen|
|Boyson, Dr Rhodes||Dover, Denshore|
|Braine, Sir Bernard||du Cann, Rt Hon Edward|
|Bright, Graham||Dunn, Robert (Dartford)|
|Brinton, Tim||Durant, Tony|
|Brittan, Leon||Dykes, Hugh|
|Brooke, Hon Peter||Eden, Rt Hon Sir John|
|Brotherton, Michael||Edwards, Rt Hon N. (P'broke)|
|Brown, M. (Brigg and Scun)||Eggar, Tim|
|Browne, John (Winchester)||Elliott, Sir William|
|Bruce-Gardyne, John||Emery, Peter|
|Bryan, Sir Paul||Fairgrieve, Russell|
|Buchanan-Smith, Hon Alick||Faith, Mrs Sheila|
|Farr, John||McCrindle, Robert|
|Fell, Anthony||Macfarlane, Neil|
|Fenner, Mrs Peggy||MacKay, John (Argyll)|
|Finsberg, Geoffrey||Macmillan, Rt Hon M.|
|Fisher, Sir Nigel||McNair-Wilson, M. (N'bury)|
|Fletcher, A. (Ed'nb'gh N)||McNair-Wilson, P. (New F'st)|
|Fletcher-Cooke, Charles||McQuarrie, Albert|
|Fookes, Miss Janet||Madel, David|
|Fowler, Rt Hon Norman||Major, John|
|Fox, Marcus||Marland, Paul|
|Fraser, Rt Hon Sir Hugh||Marlow, Tony|
|Fraser, Peter (South Angus)||Marshall Michael (Arundel)|
|Fry, Peter||Mates, Michael|
|Galbraith, Hon T. G. D.||Mather, Carol|
|Gardiner, George (Reigate)||Maude, Rt Hon Angus|
|Gardner, Edward (S Fylde)||Mawby, Ray|
|Garel-Jones, Tristan||Mawhinney, Dr Brian|
|Gilmour, Rt Hon Sir Ian||Mayhew, Patrick|
|Glyn, Dr Alan||Meyer, Sir Anthony|
|Goodhart, Philip||Miller, Hal (B'grove)|
|Goodlad, Alastair||Mills, Iain (Meriden)|
|Gorst, John||Mills, Peter (West Devon)|
|Gow, Ian||Miscampbell, Norman|
|Gower, Sir Raymond||Mitchell, David (Basingstoke)|
|Greenway, Harry||Moate, Roger|
|Grieve, Percy||Monro, Hector|
|Griffiths, E. (B'y St. Edm'ds)||Montgomery, Fergus|
|Griffiths, Peter Portsm'th N)||Moore, John|
|Grist, Ian||Morgan, Geraint|
|Grylls, Michael||Morris, M. (N'hampton S)|
|Gummer, John Selwyn||Morrison, Hon C. (Devizes)|
|Hamilton, Hon A.||Mudd, David|
|Hamilton, Michael (Salisbury)||Murphy, Christopher|
|Hampson, Dr Keith||Myles, David|
|Hannam, John||Neale, Gerrard|
|Haselhurst, Alan||Needham, Richard|
|Hastings, Stephen||Nelson, Anthony|
|Havers, Rt Hon Sir Michael||Neubert, Michael|
|Hawkins, Paul||Newton, Tony|
|Hawksley, Warren||Nott, Rt Hon John|
|Hayhoe, Barney||Onslow, Cranley|
|Heddle, John||Oppenheim, Rt Hon Mrs S.|
|Henderson, Barry||Osborn, John|
|Heseltine, Rt Hon Michael||Page, John (Harrow, West)|
|Hicks, Robert||Page, Rt Hon Sir G. (Crosby)|
|Higgins, Rt Hon Terence L.||Parkinson, Cecil|
|Hill, James||Parris, Matthew|
|Holland, Philip (Carlton)||Patten, Christopher (Bath)|
|Hooson, Tom||Patten, John (Oxford)|
|Hordern, Peter||Pattie, Geoffrey|
|Howe, Rt Hon Sir Geoffrey||Pawsey, James|
|Howell, Rt Hon D. (G'ldf'd)||Percival, Sir Ian|
|Howell, Ralph (N Norfolk)||Pink, R. Bonner|
|Hunt, David (Wirral)||Porter, Barry|
|Hunt, John (Ravensbourne)||Prentice, Rt Hon Reg|
|Hurd, Hon Douglas||Price, Sir David (Eastleigh)|
|Irving, Charles (Cheltenham)||Prior, Rt Hon James|
|Jenkin, Rt Hon Patrick||Proctor, K. Harvey|
|Jessel, Toby||Pym, Rt Hon Francis|
|Johnson Smith, Geoffrey||Raison, Timothy|
|Jopling, Rt Hon Michael||Rathbone, Tim|
|Kaberry, Sir Donald||Rees, Peter (Dover and Deal)|
|Kellett-Bowman, Mrs Elaine||Rees-Davies, W. R.|
|Kershaw, Anthony||Renton, Tim|
|Kimball, Marcus||Rhodes James, Robert|
|King, Rt Hon Tom||Rhys Williams, Sir Brandon|
|Knight, Mrs Jill||Ridsdale, Julian|
|Knox, David||Rifkind, Malcolm|
|Lamont, Norman||Roberts, M. (Cardiff NW)|
|Lang, Ian||Roberts, Wyn (Conway)|
|Langford-Holt, Sir John||Rossi, Hugh|
|Latham, Michael||Rost, Peter|
|Lawson, Nigel||Royle, Sir Anthony|
|Lennox-Boyd, Hon Mark||Sainsbury, Hon Timothy|
|Lester Jim (Beeston)||Scott, Nicholas|
|Lloyd, Ian (Havant & W'loo)||Shaw, Giles (Pudsey)|
|Lloyd, Peter (Fareham)||Shaw, Michael (Scarborough)|
|Loveridge, John||Shelton, William (Streatham)|
|Luce, Richard||Shepherd, Colin (Hereford)|
|Lyell, Nicholas||Shepherd, Richard|
|Shersby, Michael||Trotter, Neville|
|Silvester, Fred||van Straubenzee, W. R.|
|Sims, Roger||Vaughan, Dr Gerard|
|Skeet, T. H. H.||Viggers, Peter|
|Smith, Dudley||Waddington, David|
|Speed, Keith||Wakeham, John|
|Spence, John||Waldegrave, Hon William|
|Spicer, Jim (West Dorset)||Walker, Rt Hon P. (W'cester)|
|Spicer, Michael (S Worcs)||Walker, B. (Perth)|
|Sproat, Ian||Walker-Smith, Rt Hon Sir D.|
|Squire, Robin||Waller, Gary|
|Stainton, Keith||Ward, John|
|Stanbrook, Ivor||Warren, Kenneth|
|Stanley, John||Watson, John|
|Steen, Anthony||Wells, John (Maidstone)|
|Stevens, Martin||Wells, Bowen|
|Stewart, Ian (Hitchin)||Wheeler, John|
|Stewart, A. (E Renfrewshire)||Whitelaw, Rt Hon William|
|Stokes, John||Whitney, Raymond|
|Stradling Thomas, J.||Wickenden, Keith|
|Taylor, Teddy (S'end E)||Wiggin, Jerry|
|Tebbit, Norman||Wilkinson, John|
|Temple-Morris, Peter||Williams, D. (Montgomery)|
|Thatcher, Rt Hon Mrs M.||Winterton, Nicholas|
|Thomas, Rt Hon Peter||Wolfson, Mark|
|Thompson, Donald||Young, Sir George (Acton)|
|Thorne, Neil (Ilford South)||Younger, Rt Hon George|
|Townend, John (Bridlington)||Tellers for the Noes:|
|Townsend, Cyril D, (B'heath)||Mr. Spencer Le Marchant and|
|Trippier, David||Mr. Anthony Berry.|
§ Question accordingly negatived.