Welsh Affairs

HC Deb 25 February 1982 vol 18 cc992-1014

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

3.50 pm

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

The fourth Welsh day debate of this Parliament, back to its traditional time close to St. David's day, continues a long tradition that was interrupted only during those years when the Labour Government were chasing the unwanted elephant of constitutional change. The more modest constitutional innovation introduced in this Parliament has been the Select Committee on Welsh Affairs. The year has seen a change of Chairman. The year has also seen the publication of the Committee's admirably comprehensive and useful report on Welsh broadcasting, the last legacy of the retiring Chairman; and the opening of its inquiry into the water industry, as well as its long-running examination of the organisation of the Welsh Office. Ahead lies a major examination of the immensely important topic of the impact of EEC membership on Wales. It is already clear that the Committee has a major role to play in extracting evidence about what is going on in the Principality and in presenting information to this House and to the people of Wales.

Throughout the year the rising tide of unemployment has been of central concern to every Member. At the latest count the total number out of work in Wales stood at 174,878. The seasonally adjusted total of 162,600 represented 15 per cent. of the labour force. Hon. Members, in recent Welsh questions, have understandably drawn particular attention to two groups: the 50,000 who have been unemployed for more than a year, and the school leavers and out of work young people.

The social consequences of unemployment on this scale are very severe, and I do not in any way seek to understate the extent of the problem, which is the more serious because it has not just been a short-term consequence of recession, but a long-term cancer growing steadily and remorselessly under successive Governments. Unemployment increased from 38,000 in February 1974 to a peak of 101,000 under the Labour Government, and in February 1979 the total of nearly 92,000 was the highest February total up to that date. In that period, February 1974 to February 1979, it had increased by 139 per cent. Since then it has increased by a further 80 per cent.

Over a much longer period the accelerating cycle of inflation and unemployment has been the central feature of the British economy. The two great oil price revolutions of the last decade, with their immense impact on the world economy, have had particularly devastating consequences in this country because of our underlying lack of competitiveness, our unwillingness to make necessary changes, and our determination as a nation to pay ourselves far more than output could justify. The Opposition have every right to express their deep anxiety about these events, but their criticisms would carry greater weight if they were more ready to identify these underlying realities, to acknowledge their own responsibility, and to offer policies that provided the prospect o f a real return to competitiveness, rather than a worthless boost to the old destructive reflationary cycle.

There are two aspects of the situation that offer some real grounds for optimism. The first is that, despite the fact that we have suffered a particularly large share of the rundown of the steel industry, the relative position of Wales within the United Kingdom economy has held up well. Dreadful though the increase in unemployment has been, the deterioration has not been as sharp as in the United Kingdom as a whole. Excluding the metal manufacturing sector, where a very dramatic but once-for-all reduction in employment occurred, the decline in the number employed has been less than in the rest of the country. So often in the past the relative position of Wales, already bad, has grown worse during a recession. This time it has not done so, and later in my speech I shall explain why I believe we are poised to make a significant improvement in the relative position as we move out of recession.

The second aspect that gives grounds for optimism is that there are now signs of the move from recession. Despite the disruptions caused by weather and strikes over the last couple of months, there are clear indications of an upturn in industrial production since the second quarter of last year. Particularly encouraging is the increase in new engineering orders, which are up 18 per cent. since the second half of 1980. This upturn is export-led with export orders up 21 per cent. There has been an improvement of 10 per cent. in the country's cost competitiveness over the last 12 months, and productivity measured as output per head also rose by 10 per cent. between the end of 1980 and the third quarter of 1981.

Perhaps the most dramatic and significant change of all is in unit labour costs. Between 1975 and 1980 they doubled, while in the United States they rose by only one-third, in Germany by one-sixth and in Japan by nothing at all. In 1980 alone they soared by 23 per cent. in this country, a rate higher than in any other major industrial nation. In 1981 they have risen by 2 per cent., a rate of increase slower than in any other major industrial nation. Of course, we have not yet regained the ground lost between 1976 and 1980, let alone everything thrown away in the years before, but we have started along the road to recovery.

Mr. Tom Ellis (Wrexham)

As we are debating Welsh affairs, and not United Kingdom affairs, will the Secretary of State confirm that in recent years the GDP per person employed in Wales has consistently been higher than the United Kingdom average?

Mr. Edwards

I hesitate to confirm a statistic thrown at me across the Floor of the House. In regard to the increase in production during the year, the figures for Wales are better than for the rest of the United Kingdom. That is further modest encouragement.

The political correspondent of the Western Mail recently commented that in the last two and a half years the Welsh Office has been popping up with initiatives in a way associated with radical reforming governments". It started, he said, with my Llanrwst speech giving a totally new priority to the Welsh language and, as he reminded his readers, I had not just nudged up the amount of cash available but had trebled it.

He went on to comment on the 13 per cent. reduction in the number of staff in the Welsh Office, the introduction of a separate Welsh rate support grant system for Wales, changes in the organisation of the Health Service, and the reorganisation of the Welsh water authority. All this, he said, boils down to a remarkable act of self-assertion by the Welsh Office". Whether or not that is a proper description, what undoubtedly is true is that we have been living through a period of radical change in which the Welsh Office has been playing its full part, and that last year saw a transformation of reputation, infrastructure and organisation of very major significance. I intend to speak about each of those in turn.

Mr. D. E. Thomas (Merioneth)

Would the Secretary of State care to add the granting of planning permissions to the initiatives that he has taken at the Welsh Office?

Mr. Edwards

We have taken a great deal of action to speed up the way in which these matters are dealt with. That is of considerable importance for the economic development that we are discussing.

The reputation of Wales is very precious. It is not just precious because of our natural pride and loyalty. It is doubly precious because upon it depends our ability to transform our economic prospects and create the jobs that we so desperately need. This time last year our concern about it was a central issue in our debate and I commented that the false image was "the greatest single obstacle" that we faced to industrial recovery. I have seen it as a central task to show the world what is the reality and to publicise the immensely exciting and promising things that are happening in Wales. Surely everyone taking part in this debate today can unite and agree on one thing—that Wales is a good place in which to live and work. Too often we leave it to outsiders to tell the story for us.

Last night I had dinner with Dick Petritz and a number of his colleagues from Inmos. He has become our warmest advocate. He has found it possible, he tells me, to recruit a labour force in Wales of the highest quality, every bit as good as his team in Colorado Springs. The new plant in Newport is being completed ahead of schedule and under budget, and will be in production this year.

It was Dick Petritz who first converted me to the reality of the high technology corridor along the spine of the M4 and the 125 train service from London airport across Southern England and into South Wales, and it has been he who has, again and again, proclaimed to his contacts in advanced technology in the United States the belief that a major part of the development in that corridor will take place at the Welsh end of it. It seems to me sad that that reality is more obvious to the leaders of industry outside Britain than it appears to be to many involved in decision making in this country.

A few weeks ago The Economist, in an article on industrial development in the corridor, gave the impression that it petered out at the Severn bridge. The bridge may seem a barrier to writers in The Economist, but to investors overseas it apparently represents an opening to an ideal place for their operations.

In the corresponding debate last year I confirmed the news that Mitel, the Canadian company that is a leader in telecommunications, was to build its main European manufacturing plant in Gwent. It had the choice of the world and it chose Wales. It originally announced a requirement for 250,000 sq ft to provide 1,700 jobs by early 1986. Since then it has increased the plant to 295,000 sq ft to be completed this August and to provide 2,000 jobs. It talks of further expansion plans in future.

In the course of the year Yuasa Batteries, a Japanese company that I first visited in Tokyo a year ago tomorrow, signed a contract to establish a major plant in Blaenau Gwent. Mr. Yuasa, the president, told me in Tokyo that before coming to this decision his company had made a survey of many locations in European countries and had come to the conclusion that productivity and the quality of labour was likely to be highest in the place that it had chosen. It is the eighth Japanese company to reach the same conclusion.

Further west, a leading Spanish contractor, Dragados, is in the course of submitting an application for financial assistance towards a major construction project in Pembroke Dock. Two weeks ago the Chemical Bank, the sixth largest of the 14,000 or so banks in the United States, made the immensely important announcement that, having studied over 20 different locations, it had decided to move the whole of its backroom operation with 350 jobs to Cardiff, the first major international financial institution to take such a decision. The vice-president and deputy general manager, Mr. Howell, explaining the decision, said that the following were the crucial factors: good communications including air backup; distance from London; the relative cost of operations; the large population base with available skills; the university with which it hopes to forge strong links; the attraction of Cardiff as a place to live and work, and of course Government grants and the assistance and welcome it received from the Welsh Office and local government.

In North Wales, BICC Corning—in fibre optics—and Intermagnetics—manufacturing video equipment—are among other concerns that have decided to start operations in Clwyd. Within days the Intermagnetics group informed us of its intention to proceed with a second project in the area.

The point that I am making is that hard-headed business men coming to Europe without prejudices and preconceptions are increasingly choosing Wales as an ideal location for their operations. It is not only the international companies that have grounds for recognising what is on offer. The story of Llanwern and Port Talbot, with their dramatic improvements in productivity, which have made them about the most competitive steel plants in Europe and encouraged the chairman of BSC to speak recently of the need for further investment, has become a striking example to the whole of British industry. Others have matched their performance. Cam Gears, for example, has shown the ability to compete and win orders in the cutthroat motor manufacturing market both here and in the United States.

It would be absurd to pretend that all is perfect; even in terms of performance and competitiveness there are blots here, as elsewhere. In my constituency we have seen major delays and cost overruns on the Cracker project at Texaco, though it is welcome news indeed that despite these problems the company is to go ahead with a further £20 million contract constructing a Visbreaker. We have witnessed the sad story of Dunlop Semtex; and management and unions have been working to introduce a sense of reality at Borg Warner's plant in Kenfig. Others of course have been struggling because of market conditions despite the sterling efforts of management and workers.

Having said all that, I believe that 1981 has been a year in which there has been a dramatic change for the better in the reputation of Wales as an industrial location. When I go abroad, I tell those that I meet to speak to companies, British and foreign, that have set up plants and offices in Wales in recent years, because I know that they are more generous in their praise than I or my colleagues would ever dare to be. The Welsh Development Agency has obtained a striking and perhaps unexpected response with an advertisement that has caught the attention of television viewers throughout Britain. It is bringing home to a wider audience the successes that we have too often hidden in the past.

The change in reputation has been more than matched by the change in infrastructure. The past year has seen an extraordinary record of building. People call for capital projects. I hope that they realise that we are in the middle of what is probably the biggest capital programme ever undertaken by the Government in Wales. Let me start with the WDA's remarkable record of factory building. In the present financial year the agency expects to complete over 21/2 million sq ft of new factory space, which is more than the total space completed in the first four years of the agency's existence. In its next financial year it expects to complete another 11/2 million sq ft of advance factory space.

A year ago I think that there was some scepticism about the ability of the agency to respond quickly enough to the need for new factory space in the steel areas. Since November 1979, when I announced that about £15 million would be available over three to four years for site development in the Shotton area, the WDA has completed well over 700,000 sq ft of advance factories and it expects to complete another 250,000 sq ft there in the coming year.

In February 1980 I announced that we would be making an additional £48 million available for the steel areas of Llanwern and Port Talbot, and in the present financial year over 1 million sq ft will be completed in those programmes. By the end of the coming year that figure will have risen to about 1-8 million sq ft, with nearly 140 units for Llanwern and over 150 for Port Talbot with another 50 or so completed by the Cwmbran Development Corporation at Llantarnam.

During the last Welsh Question Time I announced the WDA's sixth factory building programme, in which it will build well over 300,000 sq ft outside the steel closure areas, concentrated in Mid-Glamorgan and in parts of Dyfed, Gwynedd and Clwyd. At the end of January the WDA had 344 factories amounting to some 2.7 million sq ft available for letting with another 218 factories covering just over 1.2 million sq ft under construction.

The really striking fact is that against that background—a factory building programme on an entirely different scale from anything attempted before—we have, despite the severity of the recession, been strikingly successful in allocating factory space. The challenge remains formidable, but I do not think that a year ago I should have dared to forecast that we would allocate nearly 300 factories in 1981, covering 1.6 million sq ft with a promise of nearly 6,500 jobs, in addition to a number of very important projects occupying purpose-built premises of which Mitel is the most important.

Allocations have continued at a very high level in January and during that period the Development Board for Rural Wales has achieved the remarkable record of filling about 20 units covering more than 116,000 sq ft. and 17 of these were entirely new or expanded projects. I find it encouraging that rural Mid-Wales is still proving to be an attractive area for small companies to establish themselves. At the end of March the DBRW will have completed its fifth year of operations and will be able to look back on a period of considerable achievement. In 1977 the board took over 104 factories, over a third of which were vacant. At 31 January this year it had 245 factories, of which only 30 were vacant, with a further 50 under construction or planned. When all those factories are completed and occupied they will provide opportunities for about 6,500 jobs.

I spoke earlier of evidence of an upturn in the economy revealed in the economic indicators. I think that the figures of factory allocations tell the same story. There was a significantly larger number of applications for selective financial assistance in 1981 than in the previous year, and, more important still, a significant increase in the number of offers accepted—112 worth over £20 million and expected to create well over 7,000 new jobs and safeguard over 4,000 existing jobs.

The same high level of interest has continued into the new year, and the number of inquiries to the small firms centre in Cardiff in January was some 70 per cent. up on the same month in 1981. Since the Government came to office the annual figures for inquiries have risen from a little over 6,000 in 1979 to not far short of 11,000 last year. More than 40 per cent. of the total inquiries received last year originated from people wishing to start up new businesses. Emphasis on business start-ups is even more evident in the 33 clinics held by the small firms service throughout Wales. A large number of interviews have been held and are taking place at the clinics.

The urban programme has played an increasingly important part both in building the infrastructure we require and in helping to deal with the social problems of recession which were referred to by the right hon. Member for the Rhondda (Mr. Jones) during Welsh questions on 15 February. As I told him then, the urban programme for 1982–83 amounting to £15.3 million is the largest yet announced and represents a 45 per cent. increase in expenditure over the previous year and more than double the amount spent in 1979–80. A particular emphasis has been placed on schemes which will encourage the creation of small business opportunities, with over £8 million being allocated for new factory units, workshops and other job-creating projects. Special attention is being given once again to areas of high unemployment, with over a quarter of the available resources going to the designated districts. Other districts with severe problems have also been given priority, with the share for Llanelli and Wrexham together amounting to around 12 per cent. of the total.

I was particularly pleased that, with the co-operation of the South and Mid-Glamorgan county councils and Cardiff city council, I have been able, through the urban programme, to provide substantial financial assistance to the industry centre at the University College, Cardiff, which is doing valuable work in developing new products. A sum of £100,000 is being made available for the scheme in 1982–83 and further financial support will be provided in the two following years. I very much hope that this stimulus will lead to the development of links between the university and industry in South Wales, particularly in the small business sector. I have also been able to provide financial support through the urban programme for Indis, the computer-based information service created by the Mid-Glamorgan county council, which I visited recently at the Polytechnic of Wales. I believe that this is an extremely important and imaginative project and I am currently holding discussions with the council and with others about the future role of Indis in the economy of Wales.

The expenditure of £15.3 million on the urban programme is part of a total capital allocation to local government of £279 million which means that local government in Wales as a whole will have some £46 million extra or about 20 per cent. more than was allocated in the year 1981–82. Among the things that this will enable local authoities to do is to undertake some important county road improvements and I attach particular importance to those that link with the trunk road schemes that are being undertaken by the Welsh Office. One example is the important Hendy link between Llanelli and the M4 motorway which has been brought forward as a result of this additional capital allocation. As we are currently spending about £81/2 million on a factory building programme in the Llanelli area, and, in the light of the very serious unemployment situation there, it is clearly important to press on with that road as quickly as possible.

The Government's motorway and trunk road programme is not only improving communications but bringing construction work at the present time to many parts of Wales. Some £13 million is being spent this year on trunk roads in Dyfed, some £15 million in Gwynedd. Following the opening of the important section of the M4 round Bridgend, we are pressing on with schemes at its western end. On the A48 and A40 route work started on the Carmarthen bypass last April, though because of the need to allow for settlement on the wet ground alongside the Towy it will not be complete until early 1984. The Pontyfenni diversion on the A40, started only last June, should be completed later this year. The Kilgetty bypass on the A477 is about to go out to tender and subject to satisfactory completion of statutory procedures we hope to start work on the A48 Crosshands—Llanddarog bypass and the A40 Carmarthen—Bancyfelin scheme within the next two years. These schemes are worth some £51 million. In South Glamorgan we hope to start the vital A4232 Culverhouse Cross—Capel Llanilltern link around the western side of Cardiff later this year.

In the north we have launched a massive programme of improvement on the A55-A5 route. We started work on the first phase of the Llanddulas-Glanconwy scheme last August and we hope to start the second phase next month. The contract for the start of work on the Hawarden bypass at the eastern end of the A55 was let last month. Preparatory work is continuing on the tunnel crossing of the Conway estuary. On the A5 work on the Bangor bypass began last September after delays due to a High Court action, and the contract for the Llanfair PG bypass, which when completed will enable full use to be made of the Britannia bridge, was let in November. In total, expenditure on the A55 is expected to be around £400 million by the end of the decade. Among other important schemes, we have recently seen the opening of the RaglanAbergavenny link and the important new road around Pontypool is well on the way to completion. All this is part of a programme that is of fundamental importance for the regeneration of the economy of Wales.

Mr. Dafydd Wigley (Caernarvon)

The right hon. Gentleman mentioned capital programmes for local authorities and their road programme. Can he say how many additional jobs the additional capital investments will create in the construction industry in the county of Gwynedd, and how that will compare with the loss of 3,000 to 4,000 jobs on existing projects?

Mr. Edwards

I cannot give a specific figure for the number of jobs arising from those projects. As the hon. Gentleman is aware, there has been a continuing rundown over the period. I am sure he will agree that completion of these vital road links is probably the most important contribution that we can make to the economy of Gwynedd. It is essential that we link the area with other parts of the United Kingdom as quickly and effectively as possible. The fact that we are giving it tremendous priority is clear evidence of our objective and concern.

Sir Anthony Meyer (Flint, West)

When the Under-Secretary winds up the debate, will he give us the latest information on the long-running saga of the Holywell bypass? It would be valuable to have an up-to-date statement.

Mr. Edwards

My hon. Friend who is to wind up the debate has a special responsibility for the road programme and he will deal with some aspects of it. Some of these roads will be vital for tourism as well as for manufacturing industry. Tourism has been going through a difficult period, but it has not been neglected during this major period of infrastructure improvement. I shall give three examples. I was present when the Prince and Princess of Wales opened the new Aberconwy centre at Llandudno, which will make a very important contribution to a traditional seaside resort.

During the year I visited the Blaenau Ffestiniog railway project, which received substantial financial support from Government agencies and the EEC and which is not only transforming the heart of Blaenau Ffestiniog but promises to be a major boost to the economy of the area. I also paid a visit during the year to St. David's hall in Cardiff, which, when completed later this year, will be among the finest concert halls and conference centres in the whole of Britain. My predecessor was able to make a central Government contribution to this important project, which has also received assistance from the European Community. Together with the very attractive private sector shopping development in the St. David's centre, all this represents a tremendous potential boost for the capital city.

The National Health Service is another area benefiting in our capital programme. When, in the Welsh Grand Committee in December 1979, we considered the programme that we had inherited, I reminded the Committee that we were spending more than 8 per cent. of the annual health budget on capital works. I undertook that we would maintain investment, despite all the gloomy talk about cutbacks and the rundown of the Health Service. I announced a number of major new projects and I told the Committee that we were investing £26 million in that financial year on new hospital buildings and extensions. It is striking evidence that we have fulfilled our pledge that this year we are spending a total of over £41 million on capital works for the National Health Service in Wales. During the year work has started on two major developments, the district general hospitals at Wrexham and Bridgend, and they should both be finished in 1985 at a cost of £32 million.

We have also started construction of a new community hospital at Mold, on upgrading St. David's hospital in Carmarthen and on an EMI unit at East Glamorgan. In addition to these projects, which I announced last March, I have also found it possible to bring forward an extension to the medical physics department at Singleton hospital, Swansea, and to give authority for tenders to be invited for advance works on the upgrading of Bryntirion hospital, Carmarthen. My Department has also been able to redirect capital funds of over £41/2 million to health authorities for other smaller capital schemes and energy saving measures and to provide £840,000 to carry out much needed improvements to the mental health services.

I believe that together all these works represent a major transformation of infrastructure and that we have made very substantial progress indeed on these essential task; in the course of the last year.

Dr. Roger Thomas (Carmarthen)

The Secretary of State is obviously intimately informed on these matters, but Bryntirion hospital is in Llanelli and not Carmarthen.

Mr. Edwards

I should have said Llanelli.

The third area of change is in organisation. First, I want to refer to the Health Service. In a speech that I made in St. David's on 5 February I said that since coming into office we had deliberately followed a policy of disengagement, leaving the health authorities to run their own affairs, with far less interference than had been the practice previously. When I took over as Secretary of State, almost every act of the health authorities was dictated from the centre and the chairman very much took the lead from regular meetings presided over by a Welsh Office Minister. All that has been abandoned and the responsibility passed firmly to the authorities, which now have a degree of independence greater that at any time, in their history, even over their capital programmes.

During the year we pressed on with the reorganisation of the service, about which we had consulted at length. Last year I approved the management units, with the exception of those for the new authorities of East Dy fed and Pembrokeshire. The decision to create a system in which far more decisions are taken as close as possible to the point at which services are actually delivered will lead to an improvement in the quality of patient care.

I attach special importance to a major initiative that I took last November to improve the services for mentally handicapped people. I brought together the interested parties, gave a firm commitment by the Welsh Office to press on with the improvement of this tremendously important sector, and set up a working party to make proposals for the development of comprehensive community facilities throughout Wales. As I understand it, the working party is making good progress in its task and will report to me in May this year. To translate the strategy into the reality of services on the ground, I have undertaken to provide £1 million of additional accumulative resources beginning in 1983–84 for an initial period of five years. This by no means implies any neglect of the need to improve facilities for those who remain in the long-stay hospitals. I have already referred to the allocation of £840,000 to schemes of upgrading and refurbishment of mental health facilities and we are now considering bids for a record level of new central funds—over £650,000—for mental health developments and joint finance schemes beginning in 1982–83.

I have spoken of disengagement in the Health Service. There is a myth that I have been following the opposite course on local government. Of course, at a time of financial constraint, when local government is responsible for such a major share of total public expenditure, it has been necessary to set firm limits to the totality of local government spending. However, within those limits I have not interfered with the right of local authorities to choose their own priorities. Those involved in local government will concede that I have given them the greatest possible freedom to make their own decisions and, because of the moderation and good sense of Welsh local government as a whole, it has been possible to avoid the need to set individual targets or impose individual penalties.

The introduction of a separate Welsh rate support grant system represents a change of fundamental importance for Welsh local government. It has enabled me, in consultation with local authority associations, to respond to the particular needs of Welsh authorities and to insulate Welsh authorities from events taking place in England and decisions of English authorities. It has enabled the Government properly to reward them for their moderation and good sense with what has been acknowledged to be a generous and fair rate support settlement and by the additional capital allocations to which I have already referred. During the debate on the rate support grant I had to warn Welsh authorities that if they exceeded the overall expenditure targets set I should be forced to take appropriate action. However, I hope that that will not happen, because I have no desire to go down the road of setting targets or interfering with the decisions which should properly be taken at local level.

A change to which I can refer to under the heading of "organisation", because it arises from legislation introduced during this Parliament, is the right that we have granted to council house tenants to buy their own houses. The response from public sector tenants in Wales during the past year has been even greater than in other parts of the country and about 39,000 tenants of local authorities alone have now applied to buy their own homes. This flood of applications has created problems for Welsh local authorities and there have been delays in carrying the sales to completion.

As the House knows, I asked local authorities last summer to ensure that, as a minimum objective, offer notices were dispatched by the end of 1981 in all cases where tenants had applied before 3 April 1981. While returns for the final quarter of 1981 have not yet been received from all authorities, the indications are that most of them either met the target or had nearly done so. Four local authorities, regrettably, missed the target by a considerable amount, but, following discussions with my Department, they have undertaken to take steps to speed up progress. I shall be keeping a close watch on how they meet those pledges.

At the end of September about 4,000 sales had occurred and since then the pace at which completions have been taking place has increased considerably. As soon as I have the figures for the last quarter I shall set a target for completion for the outstanding applications. Local authorities have a major incentive to complete, as it will help them to obtain substantial capital receipts, which will give them the opportunity greatly to enlarge their housing programmes. Next year, on the basis of the improved capital allocations that we have announced, Welsh local authorities will be able to budget for about £150 million of capital expenditure on housing in total.

I hope that local authorities will exploit to the full the opportunity which the present high level of capital receipts gives them to make a real impact on the housing needs of their areas. Most local authorities have been slow to see the opportunity, but, with the assurances that they have now been given, no similar problems need arise next year and it would seem to me totally illogical for local authorities which have sought higher capital allocations than they have received not to make the fullest use of these capital receipts.

I come now to the other main area of organisational change, that involving the Welsh water authority. When, in November, I made a statement about the change in the organisation of the water authority, the right hon. Member for Rhondda said that he could not understand what he regarded as the undue hast in connection with that reorganisation. I have to say to him that I wish I had been able to act even more swiftly. Perhaps, now that he understands the extent of the financial difficulties facing the authority and has seen the level of charges that it has had to impose, he will understand my determination to press on. I do not believe that with the existing cumbersome structure it would have been a practicable possibility to take the action that I consider necessary to improve upon the existing management organisation and to undertake the drastic pruning of costs that is required.

I believe that the present chairman has been in the unenviable position of knowing what was required while being unable to carry it into effect. I hope that the new chairman and the new board, which will inherit a formidable task, will at least have two advantages over their predecessors: first, that they will have the understanding of the House and the people of Wales about what needs to be done and therefore widespread support; and, secondly, that they will have a structure that enables them to act effectively and decisively to cure the present ills of the authority.

I shall return in a moment to what needs to be done. First, I should like to inform the House that I have appointed the new chairman, who will join the board on 1 April and take over on 1 June. For the first time we advertised the vacancy and we had more than 80 applicants. We appointed Tyzack and Partners, the management consultants, to sift applications and make recommendations. They provided us with a short list of four, two of whom were extremely well known to me. I then asked my hon. Friend the Member for Conway (Mr. Roberts) and a senior official in my Department to interview the four short-listed candidates and make recommendations. I received a unanimous recommendation, which I accepted.

The new chairman of the authority will be Mr. John Jones, who at present is seconded to the Welsh Office by his employers, Anglesey Aluminium, and is our industrial director. John Jones has had a long career in the private sector and came to the Welsh Office with the warmest commendations from his employers. Since then he has earned immense respect for the professional and determined manner in which he has set about the task of attracting new industrial development to Wales. I had a unique opportunity to get to know him extremely well, because he has accompanied me on three inward investment missions overseas. He is a Welsh-speaking Welshman, with a passionate loyalty and love for Wales. I believe that the combination of private sector management experience and involvement over the last two years with the Government well qualify him for the important task that he is undertaking. I hope to announce the names of the majority of the new board within the next couple of weeks.

Turning to the task that will confront that board, I must remind the House that only this morning members of the authority gave evidence to the Welsh Select Committee and I have been asked to appear before the Select Committee next week. In these circumstances, I think it would be right to leave most of the detail until my appearance before the Select Committee. I think, however, today I must make a few things clear.

First, whatever may be said about equalisation and about charging for transfers of water to other authorities, there are more significant and major problems that lie elsewhere. On the question of bulk transfers I cannot comment today, as I and my right hon. Friend the Secretary of State for the Environment have to adjudicate on an application that has been made to us. On equalisation, I think it should be recognised that the scheme which we abolished because it was so perverse in its effect, taking resources from some of the poorer authorities and giving them to some of the richer, would at its peak have only made a contribution of about £3 million towards the total revenues of the authority, which are in excess of £150 million. That £3 million under the arrangements that we inherited was certain to decrease over the years.

This year the authority will make a loss which, on present estimates, will exceed £8 million. The authority has decided to increase water supply charges by 19.8 per cent. and the average domestic bill for all water charges by 18.3 per cent. If equalisation had still been in effect, those water bills would have not been more than 3 per cent. lower. When I met the chairman and officers of the authority on Friday 29 January, I said that it was disconcerting to find that the authority had not apparently adequately anticipated the decline in revenue arising from the recession. I reminded the chairman that the economic conditions facing the authority were similar to those faced by other organisations in the last year or two and that it was reasonable to expect that the authority would have taken urgent counter measures.

However, as the CBI pointed out in its evidence to the Select Committee, the Welsh water authority's employment statistics indicate some disturbing trends, particularly in comparison with the performance of other authorities. The independent reports that had been obtained last year from Arthur Andersen and this year from Price Waterhouse confirm the view that significant reductions in operating costs should be possible. Certainly I am concerned that a reduction in capital programmes and a reduction in revenue from major customers has not been followed by any comparable reduction in the number of individuals employed. I have asked the authority, as a matter of urgency, to submit manpower and other costs to the most rigorous re-examination.

I have to tell the House that the financial target which I set this year was dictated by the financial circumstances in which the authority finds itself. While some legal uncertainties are still to be resolved about the statutory obligations of the authority, the fact is that any lower financial target would have resulted not only in the use of all the authority's remaining reserves, even assuming that they could properly be realised, but in an overall deficit at the end of 1982–83. In a letter to me of 10 February the chairman accepted that any action that would have placed the authority in that position would have been irresponsible and wholly unacceptable and that it was right to give the new authority a fair start.

Public comment on these events has tended to concentrate on the view that the proper way to protect users of water in Wales from excessive charges is by some pooling or equalisation of costs between authorities. However, as the chairman of the National Water Council has pointed out, such action would weaken the individual responsibility of authorities and their desire to achieve value for money. There is an overriding necessity to see that those that provide public services do so as efficiently and competitively as is possible and to go for equalisation rather than improved efficiency is simply to pass on an unnecessary burden from one group to another, either to customers of more efficient authorities elsewhere or to the taxpayer in general. I am certain that it must be my first responsibility to create an organisation and to appoint a board capable of doing what everyone in Wales knows is possible: to improve the efficiency of the Welsh wafer authority and reduce its costs.

I have one other subject to which I wish to refer under the heading of organisational change. We have published our White Paper "A New Training Initiative: A Programme for Action", which sets out the way in which we intend to move towards a comprehensive training programme. We have announced that from September 1983 all minimum age unemployed school leavers will be guaranteed a full year's traineeship. In all, we will be spending nearly £4 billion on improving training between now and 1985. It must be right that we should move as fast as we possibly can to obtain much more comprehensive training arrangements not only for the young and the unemployed but also for older people and those in jobs to enable them to equip themselves better for work.

In the meantime, for the young, the youth opportunities programme will continue to be developed with improvement in the quality of its provision. I am glad to say that for 1982–83 we will be able to provide in Wales some 8,000 of the projected 48,000 youth opportunity places on the basis of the new year-long training programme. At the same time as we are looking to radical changes in the training arrangements for the young, we are also looking at educational provision for 16 to 19-yearolds and what is done in the last year in school before young people reach the minimum school leaving age.

There has been considerable interest in the introduction of an experimental scheme in three areas in England to encourage and help unemployed people who want to let up in business with the aid of so-called enterprises allowances. I am glad to be able to announce today—the hon. Member for Flint, East (Mr. Jones) may be interested in what I have to tell him—that I have agreed with the Manpower Services Commission that we should launch an enterprise allowance scheme in Wales. The area chosen is Deeside in North-East Wales—specifically the areas of Wrexham Maelor, Alyn and Deeside and Delyn. A figure of £1/2 million has been earmarked for this.

The scheme will be administered by the Manpower Services Commission through its jobcentre network. Its aim is to evaluate whether the loss of benefit payments at the crucial initial stage of setting up a business is, as has been argued, a serious deterrent to the unemployed starting their own businesses. The MSC hopes to have the scheme in Deeside running in April: the pilot scheme will operate for three years. The small firms counsellors of the WDA will be fully involved in the experiment.

One thing will have become clear already during this debate, and that is that the responsibilities of a Secretary of State for Wales are now extremely wide. Inevitably on these occasions I am faced with an impossible dilemma—either I go on at excessive length and am criticised by hon. Members for doing so, or I am criticised for failing to comment about matters that are clearly important, and sometimes, I suspect, for both, simultaneously and probably by the same hon. Members.

It is not because I do not realise the immense importance to Wales of many other events and issues such as the position of the coal industry, the future of the steel industry and the problems that confront the agriculture industry, to take three obvious examples: it is not because I underestimate their significance that I have failed to mention them. What I have sought to do is to identify, against the background of the major economic difficulties that confront us and the high unemployemt levels the radical and important changes that have been taking place in Wales during this period.

It is very easy in the depths of recession to speak only of the setbacks and identify the problems. I hope that the House will at least begin to recognise the fundamental nature of the changes that have been taking place. As a result of the changes in organisation that I have described we are better equipped to tackle our problems. As a result of the major programme of infrastructure improvement that we have been carrying out we are preparing the ground for future recovery and prosperity. As a result of the changes in attitude that I have identified, and the high reputation that we are establishing, particularly among overseas concerns, we are already well on the way to building a stronger and more diverse economy. It has, of course, been another difficult and anxious year and on top of everything else we had the bad weather. But the improvements about which I have spoken give grounds for hope and I am confident that ahead lies a year of slow, but strong and mounting recovery.

4.43 pm

Mr. Alec Jones (Rhondda)

I understood there was a possibility, and had been some discussion, of the Welsh day debate being held on 1 March, St. David's day. Having listened to the speech of the Secretary of State for Wales, I am thankful that it was not, because Saint David would have turned in his grave if he could but see the havoc that this Government have wreaked all over Wales in the short time for which they have been responsible.

The one blessing is that the Government are more than halfway through their disastrous life, and, even if they hang on to the bitter end, their days are still numbered. Despite the rosy spectacles worn by the Secretary of State, the truth is that no part of Wales and no significant group of Welsh people have escaped the Government's incompetent administration. The Secretary of State, his ministerial henchmen and his sycophantic Back Benchers have together managed to spread discontent, distress and disaster from one end of Wales to the other. The unemployment figures announced on Tuesday—even allowing for the slight, but nevertheless welcome, fall—bear testimony to this.

The songs of praise of the Secretary of State today bear little comparison with the reality on the ground, which I see whenever I go home at the weekend. The Tory manifesto, referring to unemployment, said: the disastrous effect of Labour's economic policies on Wales is most starkly revealed by the record level of unemployment". That was in June 1979 when unemployment in Wales was 80,000. Today it is 174,878. If 80,000 was a stark revelation of disaster, what is 174,878? It is concrete evidence of the failure of this Government's policies. It is also a cruel reminder to the people of Wales that the Tory Party, like the leopard, cannot change its spots. The Tory Party is today, as it was in my youth, the party of unemployment in Wales. Under the Secretary of State's stewardship unemployment in Wales has increased by 118-5 per cent. One in six of our work force is now officially registered as unemployed, and with unemployment now standing at 16-1 per cent., Wales has the unenviable distinction of a higher percentage of people unemployed than Scotland or any region of England.

This is just the overall picture. No part of Wales has escaped the ravages of the Government's economic follies. Each month at Question Time my hon. Friends seek information from the Secretary of State about the high unemployment in their constituencies of Swansea, Aberdare, Merthyr, Neath and other areas, and the Secretary of State is always obliged to confirm the worst. But at those Welsh Question Times there is a signifacant omission. There are no questions from Welsh Conservative Members about the levels of unemployment in their constituencies. They are very coy about it, as well they might be.

Mr. Tom Hooson (Brecon and Radnor)

Is not the right hon. Gentleman himself being coy in failing to recognise that in the life of the last Government unemployment in Wales increased from 38,000 to 83,000 and was on its way to six figures?

Mr. Jones

Even conceding the accuracy of the hon. Gentleman's figures, that is an increase in unemployment of 45,000 for the whole period. Today's figures show an increase in unemployment of 94,878 in less than three years. That shows that, even on his own figure, this Government have increased unemployment to today's fantastic level in less than three years.

I understand why the hon. Gentleman intervened because Conservative Members are rather shy about having unemployment figures published for their areas. But, for the sake of greater accuracy, I have obtained figures for them. Since June 1979 unemployment has increased in Anglesey by 88 per cent., in Monmouth by 97 per cent., in Rhyl by 118 per cent., in Denbigh by 121 per cent., in Colwyn Bay by 122 per cent., in Barry by 141 per cent., and in Brecon, Llandrindod Wells and Newtown by 163 per cent. Now I understand why the hon. Member for Brecon and Radnor (Mr. Hooson) sought to intervene: there was an increase of 163 per cent. in unemployment in Brecon, Llandrindod Wells and Newtown.

Lest the Secretary of State thinks that I have forgotten Pembrokeshire, let me say that unemployment in his constituency has risen by 128 per cent. since he took over responsibility. Is that what those areas were promised at the last election?

Mr. Ian Grist (Cardiff, North)

rose——

Mr. Jones

I advise the hon. Member to be patient and listen to the truth, just as Machiavelli advised the Prince. However, I shall give way to the hon. Gentleman.

Mr. Grist

As the right hon. Gentleman is giving percentages, will he give the percentage increase in unemployment in the seat of his right hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) during the period of the Labour Government?

Mr. Jones

Certainly. Unemployment increased considerably not only in the area of my right hon. Friend the Member for Ebbw Vale (Mr. Foot), but in many other areas. However, we did much more about it. Today the Secretary of State, in his long list, referred to the great news about the Raglan and Abergavenny road link. The decision to go ahead with that link was made when we were in Government. That is when the whole scheme started.

Mr. Nicholas Edwards

I actually started the work on the scheme. The scheme began under this Government.

Mr. Jones

Surely the Secretary of State will confirm that the scheme was in the pipeline, the plans drawn up, and the agreement made for the scheme to go ahead when we were in power. He knows that that is the truth, just as he knows that it is the truth about many other items in the list that he gave today. I understand the concern of Conservative Members, because they have never asked for these figures, and they do not like to hear them now. This is the better life of the people in those areas which has resulted from the activities of the Conservative Party.

The Tory manifesto said: We shall restore the incentive to work". In practice, Tories have destroyed the opportunity to work. In June 1974, when the Labour Government took office, 992,000 people were employed in Wales. By June 1979, when we left office, the figure had risen to 1,022,000. There were 30,000 more people in work at the end of Labour's period of office than when Labour took over. By June 1981, the number of people employed had been reduced to 914,000. By September 1981, the number was down to 909,000. Today there are fewer people working in Wales than at any time during the past 30 years. One would never have believed that, listening to the speech of the Secretary of State.

When we talk about 174,878 unemployed people in Wales today, we are talking about half a million men, women and children whose lives are blighted by this scandal. The longer a person is unemployed, the more damaging is the effect on the family. In October 1981, the last date for which figures have been published, there were 87,000 Welsh men and women unemployed for more than six months—that is just over half. Of them, as the Secretary of State confirmed, 50,000, or 30 per cent., had been unemployed for more than 12 months.

The great success of the Conservative Party is that long-term unemployment in Wales doubled between October 1980 and October 1981. That is why concern has been expressed by organisations outside this place. A research group in Cardiff described how unemployment can destroy the family unit, retarding the development of teenagers, and thus passing the scars on to another generation. The research group said: For the long-term unemployed, grief shows itself in many ways; alcoholism, withdrawal from the reality of the situation, helplessness and hostility towards members of the family and people in work". The eight directors of social services of the Welsh county councils claimed in a recent report that unemployment in Wales would bring in its wake over the next five years 2,500 extra deaths, 3,195 extra admissions to psychiatric hospitals, and 695 extra prison sentences.

Dr. Roger Thomas

Is my right hon. Friend aware that there is a ward in the psychiatric hospital at Bridgend in which psycho-geriatric patients have to be sent home to accommodate the young unemployed people who are psychiatrically affected?

Mr. Jones

I am aware of that. The hospital administrator at the Glanrhyd hospital has said that there has already been a 50 per cent. increase in young people attending as psychiatric out-patients. That is why the designation of the ward was changed.

In talking about unemployment, therefore, we are talking not just about the number of people out of work, but about the social consequences and the price that individuals have to pay. It is the price that Wales is paying today for Tory economic and social policies. It is a price that will leave a scar on our society, and it will take many years to heal.

Mr. Delwyn Williams (Montgomery)

I have listened to the hon. Gentleman with some interest, but so far we have heard nothing about his policies to reverse the position. Where will he get the money, and who will pay the price of the policies that I am sure we shall be told about in the next few minutes?

Mr. Jones

The hon. Member should be patient, because I shall come to that. Had he paid more attention to what goes on in the House, he would have known that in the past month we have had a series of debates on unemployment and economic measures, in which my right hon. Friends have spelt out the details of the alternative economic policies that we believe the Government should follow. [Interruption.] It is no good the Secretary of State muttering. He was not even present at the last debate.

Let us consider the method of dealing with long-term unemployment. There has been a deliberate attempt artificially to reduce and massage downwards the numbers on the unemployment register. I shall quote from a letter that was sent to unemployed men of 60 years and over, who have received supplementary benefit for 12 months.

It says: if you decide to be taken off the register for work … you will get up to £6.35 a week more (up to £9.60 a week more if you are married) … you will not have to 'sign on' at an unemployment benefit office … you will still be able to look for work… use job centres … get credits to qualify for national insurance benefits". In the first month, 1,300 Welshmen took advantage of that scheme. They would have been fools not to do 3o. However, at the end of that time, those 1,300 people are still as unemployed as they were when they took the offer.

We now find that we are to move to voluntary registration. Presumably, the Government hope that this will bring down the number of registered unemployed.

The unemployed have to answer 18 questions, which is reminiscent of the means tests of the 1930s. At the end there is a beautiful question: Why did you leave your last job? The truth is that most of the people who are unemployed in Wales today did not leave their jobs; their jobs left them, as a consequence of the Government's action.

The Government say how generous they have been to people who are in special need. The Secretary of State referred to the consequences of the weather. The Welsh Office issued a notice for the Department of Health and Social Security which told how the unemployed, the sick, the disabled and pensioners could benefit from extra help towards their heating costs. In that document, this was the type of question that those people were asked: In order for me to calculate any benefit payable to you for extra heating, would you please state, if you had not bought extra fuel, what would you have spent the money on instead? What a stupid question. It is all part of what The Guardian described on 17 February as Thatcher sets sights on 'workshy' jobless. The vast majority of the unemployed in Wales are not workshy but are job hungry.

I shall give an example from my constituency. The local authority wanted two young clerical officers. It normally sets down that such officers should have a standard of education of three O-levels. For those two jobs, the local authority received 233 applications. Some of the applicants had 10 O-levels, and also A-levels, and others had degrees in subjects such as metallurgy and economics. It is no wonder that the chairman of the committee said to me "How on earth do you start short-listing that lot, when almost every one of them is capable of doing the job?" They are not workshy but job hungry.

Perhaps that is a follow-up to the sort of advice given by the Prime Minister to the unemployed of Swansea two years ago. She told them to "increase their mobility". The unemployed of Wales know more about mobility than almost any other people in the United Kingdom. I recall the Secretary of State for Employment's fatuous remark at the Tory conference about getting on a bike. Let us picture the scene. Three million unemployed cyclists whizzing around from John o'Groats to Land's End looking for work. Where on earth could that work be found? It could not be found anywhere in Wales. Wales has 16.1 per cent. unemployment. It could not be found in the North—unemployment there is 16 per cent. In Scotland it is 15.2 per cent. In the West Midlands, which was often the hope of many people, unemployment is 15.1 per cent. The truth is that the Government have put their dirty hand on all areas of the country.

I turn to the constituency of the Secretary of State for Wales. Let us imagine that the unemployed in Pembrokeshire were to take the advice of the Secretary of State for Employment. The 470 unemployed of Fishguard would get on their bikes and cycle to Haverfordwest. The 1,600 unemployed of Haverfordwest would get on their bikes and cycle to Milford Haven. The 1,600 unemployed of Milford Haven would get on their bikes and cycle to Pembroke Dock. The 1,267 unemployed in Pembroke Dock would get on their bikes and cycle to Tenby. Presumably, the 900 unemployed in Tenby would cycle back to Fishguard and thus complete the circle. However, at the end of those journeys there would be still 5,840 unemployed in Pembrokeshire. The very idea would border on the laughable or the ridiculous were it not so tragic for the unemployed and their families. They are paying the heaviest price, although we are all paying.

The estimated cost to the Exchequer of 3 million unemployed is £12 billion a year. On that basis, the extra cost of the increase in unemployment in Wales since the Government came to power is £380 million a year. The total cost to the Exchequer of today's unemployment in Wales is about £700 million. While we are paying that price for today's unemployment, we have thousands of skilled workers in the dole queue and, at the same time, our people are desperately in need of the goods and services that those skilled workers could provide.

Nowhere is that more evident than in the construction industry. The index of industrial production for the Welsh construction industry was 16 per cent. lower in the third quarter of 1981 than in the third quarter of 1980. Consequently, unemployment among building workers had soared by 40 per cent. by the end of last year. At the same time as those skilled building workers were on the dole, fewer houses were started in Wales in the public sector last year than in any year since the Second World War. In 1980, 2,831 houses were started and in 1981 the figure is likely to be less than 2,000. The private sector performed little better.

Mr. Donald Anderson (Swansea, East)

My right hon. Friend is being too modest. The figures are already available for public sector starts in Wales in 1981. They are at an all-time low of 1,130.

Mr. Jones

My hon. Friend knows how kind I am to the Conservative Party, but I am grateful to him for updating my figures. I did not dream that the figure would be as miserably low as that.

In the private sector only about 5,027 houses were started in 1980. We must go back 23 years before we find a lower figure. In no year since the Second World War has house building been at such a low ebb. I hope that the Secretary of State for Wales will keep a close watch on the sale of council houses and an even closer watch on the need for house building in Wales.

Mr. Nicholas Edwards

I am keeping a close watch on the substantial underspend and the money that is available for local authorities to spend on housing if they so wish.

Mr. Jones

I hope that the right hon. Gentleman is keeping an eye on underspend. I have some personal experience of it and I recall the laughter that came from Conservatives Members when I mentioned underspend at the time that I had some responsibility in this area. I urge all local authorities in Wales to spend up to the hilt on building houses that are needed. The present unemploy- ment in the construction industry, coupled with the miserable record of house building, is an indictment of the Government. The Government's own Welsh housing and dwelling survey published in 1981 showed that the average waiting list for council houses was about 25,000.

A recent inquiry carried out by the National Federation of Building Trades Employers, after mentioning the 40 per cent. unemployment among building workers, stated that South Wales also had the highest percentage of contractors working at half or less than half capacity—55 per cent. in December 1981 as against 28 per cent. nationally. The president of the South Wales region, Mr. Edwards, said If 1982 is not to be a more disastrous year for South Wales builders than last year with more firms forced out of business there is an urgent need for Government action before it is too late.

Mr. Hooson

While the right hon. Gentleman is updating his statistics, he may be grateful for the first detailed results of the 1981 census, which show that for the six counties covered—all the populous counties of Wales—an average of 4.4 per cent. of the housing stock was unoccupied. Does that not show clearly that the housing priority is no longer the construction of new dwellings but the improvement of existing ones? Does the right hon. Gentleman support the Government's efforts to encourage improvements?

Mr. Jones

The hon. Gentleman's intervention shows how little experience he has of dealing with the housing problem in Wales. No one has advocated an extension of the improvement grant system more than I, but it is folly to believe that one can improve more houses and at the same time reduce the amount of money that is available for doing the job.

Today young people lobbied hon. Members. I believe that they were right to do so. A nation that denies its young people not only work but hope is taking a dangerous gamble with its future. Nearly 68,000—that is about 39 per cent.—young Welsh people under 25 are unemployed and 13,000 of those young people have been unemployed for more than 12 months.

In my constituency of Rhondda 712 16 and 17-yearolds are unemployed and 572 are on various forms of youth opportunities programmes. There are 1,916 aged 18 to 24 in the dole queue, which means that in Rhondda alone 3,200 young people under the age of 25 are seeking work. If those young people, who are the backbone of any community, are forced away from Wales, once again we shall face the massive depopulation problems and population drain that decimated not only the valleys of South Wales but many parts of rural Wales in the 1930s.

In January last year the present Secretary of State for Transport was quoted in The Sunday Times as saying that the economic recovery would be dramatic. That was a year ago and we are still waiting for that recovery. The Minister went on to say that the recovery would bypass the worn out areas and that it would bring heavy social consequences, bewilderment and frustration.

We see the heavy social consequences in Wales today. We see the bewilderment and frustration. However, there must be no question of Wales being one of those worn out areas to be bypassed. That was why, when we were in Government, we created organisations such as the Welsh Development Agency and the Development Board for Rural Wales.

The Secretary of State for Wales referred again to the achievements of the WDA, which is a bit of a cheek because if the Conservatives had had their way they would have strangled it at birth. I confirm what he said, that Wales is a good place for industry to move to. We have a work force and we have communications, thanks not only to the Government, as suggested by the Secretary of State today, but to the far-sightedness of my right hon. and learned Friend the Member for Aberavon (Mr. Morris) in pushing ahead with the M4.

In the main, every announcement made by the Secretary of State today was a repetition of what we have heard before. However, every time he can announce to the House a new factory building, we shall cheer. Every time he talks of factories being taken over by tenants, we shall applaud that. Every time we hear of new derelict land schemes, we shall welcome them. We welcome schemes carried out by the WDA and DBRW, neither of which would have seen the light of day had it not been for a Labour Government and my right hon. and learned Friend the Member for Aberavon.

I am grateful for the work that has been done by the WDA and the DBRW, but despite that work neither of those bodies can fulfil their roles. They cannot measure up to the scale of the problem without a change in Government policies. If we were to add up all the jobs created in the last two years and jobs in the pipeline, the total would measure up to the number of jobs lost—113,000 fewer people are employed in Wales than when the Government took office.

The Government say that there are no alternatives. That can no longer hold water. A whole range of alternatives has been spelt out in the House by many hon. Members on both sides of the House. They were spelt out by the right hon. Member for Chesham and Amersham (Sir I. Gilmour) who was at it again today in The Guardian. They were spelt out by the right hon. Member for Sidcup (Mr. Heath). Even the hon. Member for Flint, West (Sir A. Meyer) gave a few words of warning some time ago when he said that unless the Government did something about unemployment without clobbering the unemployed they would lose the next election.

The alternatives were spelt out on 28 January by my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) when he called for a plan for expansion led by public investment. If public investment means increased borrowing, we accept the responsibility and consequences.

Even the CBI has put forward a mini-alternative. In the last week or so a detailed alternative was spelt out by the Trades Union Congress in its document "Programme for Recovery." Therefore, when Conservative Members say that there is no alternative they are wrong. A variety of alternatives has been put forward. It is only the blindest of the members of the Government who will not accept any of them.

Unless some such alternative is speedily adopted, the young people of Wales will continue to live not only without a job but without hope. Particularly hard hit will be the school leavers. Despite YOP and other such measures, the number of school leavers in the dole queue has risen from 2,742 in February 1980 to 5.750 in February 1981 to 8,041 in February 1982.

On 18 January the Under-Secretary confirmed that some 25.1 per cent. of Welsh school leavers left school with no formal certification—neither CSEs nor 0 levels. The comparable figure for England is 12 per cent. Surely that is one defect in our present education system.

The HMI report last year drew attention to the fact that the continuation of present expenditure policies must have substantial adverse effects on some schools … there are signs in many schools of arrested curriculum development, and the preoccupation of the system with short-term survival augurs ill for the future, especially if further cuts are imposed. Further cuts have been imposed since that report v' as made.

My education authority in Mid-Glamorgan has been forced to cut teaching staff, administrative staff, ancillary staff, capitation grants and even youth service by 25 per cent.

The Under-Secretary of State for WalesMr.Michael Roberts)

Will the right hon. Gentleman confirm that the pupil-teacher ratio in Mid-Glamorgan is at a best ever level?

Mr. Jones

If the Minister will be patient, I shall give him the figures for Mid-Glamorgan. He was coy about them when he trotted out the pupil-teacher ratio at Welsh Question Time about a week ago. That was in my mind when I delved further into the matter, as he will see.

Among the cuts, there is a cut in youth service. It is a savage blow for a local education authority, when youth unemployment is so high, to be forced to cut youth service. In-service teacher training and discretionary awards will also have to be cut.

The Minister mentioned a good pupil-teacher ratio. He told my hon. Friend the Member for Neath (Mr. Coleman) that we were ignoring the implications of falling rolls. In the last two years Mid-Glamorgan county council has shed 165 teachers because of falling rolls. It was forced to shed another 282 teachers as a direct result of Government cuts.

The problem for higher education is the same. By 1983–84 there will be 1,200 fewer student places in Welsh universities. By then, we shall have young men and women leaving schools in Wales with all the necessary qualifications for university entry but with no place to go. I speak as an ex-teacher. What sort of encouragement will that be to students who are anxious to further their education, or to teachers who have generally sought to guide their pupils along the right path?

We should not add trained and qualified teachers and lecturers to the dole queue when we can see the defects of the existing education system. The expertise of those teachers and lecturers is needed if our young people are to be educated and trained for the needs of the future.

The Secretary of State talked about real optimism. I do not find evidence of that optimism among organisations in Wales. Perhaps he finds it somewhere in the depths of the Welsh Office. A recent Welsh CBI survey of industrial trends said that in the past four months 68 per cent. of manufacturing firms had reduced employment, and only 8 per cent. had taken on more employees. It continued: This points to sharply falling employment and on a more extensive basis that is suggested by the preceding two surveys". The Government have now talked for a year about economic recovery. In June last year, the Secretary of State assured his party faithful that recovery was absolutely certain. Today, he talked of real optimism. The unemployment figures do not confirm that. The question that the 175,000 unemployed in Wales are now asking is how long will it be before they can go back to work and provide for themselves, for their families and for their people.

There can be no real improvement in unemployment, housing, educational services, social services or a whole range of other services which have been adversely affected by the Government without a change in Government policy for the whole of Britain. Opposition Members, certainly Labour Members, and the trade union movement are seeking such a change and have spelt out what the change should be, what it will cost and how the costs will be met.

Despite the Secretary of State's words, unemployment remains the greatest social evil of our time. The Government have failed Wales, the Secretary of State has failed Wales and Conservative Back Benchers, by their meek acquiescence, have compounded that failure.