§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Budgen.]3.55 pm
§ Mr. Alec Jones (Rhondda)
I make no apologies for seeking this debate on Welsh affairs today, despite the fact that we recently had a Welsh day. That is because the problems of Wales remain unsolved and, even in the short time which has elapsed, have considerably worsened in many respects.
In Wales today we see widespread feelings of hopelessness and fear. There is fear among the diminishing band of those who are still lucky enough to be in employment that their jobs may well be the next to disappear. There is hopelessness among the unemployed as their standards of living continue to fall, with the consequences for their family life. There is hopelessness as the duration of their unemployment grows longer, and hopelessness because of their despair of ever finding another job. It gives me no pleasure to say this and I wish, indeed, that it were otherwise, but merely to pretend that it were otherwise—as the Secretary of State frequently does when he wears his rose-tinted glasses at Welsh Question Time—is a disservice to Wales, for hopelessness and fear are extremely unhealthy ingredients for any democratic society.
The Secretary of State may refute my views, but I believe that they are confirmed by the experiences reported to me by my hon. Friends and by the detailed survey of Newport carried out by the Community Projects Foundation. The report of that survey shows that, in an area where unemployment was about 13 per cent. on 20 April, it is now 15 per cent. That detailed survey findsa growing disparity between those in work and those out of work, assesses the economic impact of unemployment on local businesses, and points to increased levels of poor health.The survey concluded:What is so sad and telling is the widespread feeling of hopelessness in ordinary people. They do not believe that anything can be done locally and they feel impotent personally.How can such a society be healthy when those views prevail and when the evidence upon which they are based is proven fact?
The fact remains that 171,000 Welsh men and women are unemployed. With a rate of 16.1 per cent., one in six is on the dole queue, and neither in Scotland nor in any of the regions of England is unemployment at a higher level.
The figures include two particularly disadvantaged groups—the young and the long-term unemployed. The number of unemployed school leavers totals 7,973, with an additional 12,791 on YOP courses who will soon need permanent jobs. There has been a 73 per cent. increase in unemployment among school leavers in the past few years, and the figures will undoubtedly increase when the July school leavers join the register.
Many, if not all, of those young people need every encouragement that we can give them and the best training 292 facilities. Above all, they need hope, but if they seek to improve their skills and employment prospects by voluntarily attending a college of further education or a similar educational institution for more than 21 hours a week, including lunch breaks and time for private study, they lose their supplementary benefit. We are talking not about scroungers or the work-shy, but about young people who want to improve their employment prospects.
The irony is that next year a similar young person will either have to accept a place on a Government youth training scheme or lose his supplementary benefit. It is a Catch-22 situation. This year, young people who are sufficiently motivated to seek training and education will lose their supplementary benefit if they attend a course. Next year, they will lose their supplementary benefit unless they attend a course.
It is no wonder that those matters are under review. I trust that the Secretary of State for Wales will tell us that he intends to add his weight to the calls for a review of the ridiculous 21-hour rule and to making sure that next year's scheme will be truly voluntary and will include a more realistic payment than is currently proposed.
We were all surprised to read in today's papers that the Secretary of State for Employment is apparently adamant that it must be a compulsory scheme and must involve the non-payment of supplementary benefit. If the Secretary of State for Wales opposes his right hon. Friend, he will be in good company. He will have with him the TUC and CBI members of the MSC and, for good luck, the Wales TUC.
§ Mr. Edward Rowlands (Merthyr Tydfil)
Is my right hon. Friend aware that in the past 18 months my community has witnessed the closure of the apprentice schemes at Hoover and at BSC Dowlais? Every apprenticeship scheme in Thorn's has also gone. Inside-industry training has been destroyed structurally, which means that the future, as well as the present, is being destroyed.
§ Mr. Jones
I agree with my hon. Friend. One of the tragedies of the loss of job opportunities in the public and the private sectors is the loss of training opportunities, particularly for apprentices.
In concerning ourselves with the problems of unemployed school leavers, we ought not to forget the other unemployed young people—those under 25. In the past two years there has been a 26 per cent. increase, from 52,600 to 66,383, in the number of young people under 25 in Wales who are unemployed.
The forced unemployment of those young people must not compel that age group either to migrate to other areas of the United Kingdom or to emigrate to other countries. They must also not be exploited by unscrupulous employers. I have with me a job card issued at Towyn advertising for an arcade mechanic aged 25. The hours of work are to be arranged and applicants must be semi-skilled. The rate of pay is 75p to 80p an hour. The foolish 25-year-old man or woman who took that job would take home the princely gross sum of £32 for a 40-week. If he or she worked 80 hours a week the gross pay would still be only £64. Instead of fiddling around with jobcentres, reducing the number and moving them to back streets, the Government could give them the additional role of ensuring that the unemployed are not exploited for personal greed by unscrupulous employers.
Of course, long-term unemployment causes the greatest stress and tension among the unemployed and their 293 families. Increasing poverty, ill health, family stress and social unrest are the curses of the unemployment that the Government have inflicted on our people. We have 94,000 long-term unemployed—those who have been out of work for more than six months—with 56,000 having been unemployed for more than 12 months. The greatest tragedy is that they see no job prospects. As redundancies continue and closures take place all around them, their feeling of hopelessness grows.
Conservative Members constantly remind us of the levels of unemployment under the previous Labour Government. I have never sought to deny that they were far too high, but when Labour left office in 1979 there were 30,000 more Welsh men and women in employment than when we took office in 1974. Under the present Government, the reverse is the case. The number at work in Wales has fallen by 127,000.
Even the most enthusiastic supporters of regional policies would not claim that they had created more than about 6,000 jobs a year. If that figure is accurate, it means that in three years the Government have wiped out the hard work and benefits of 21 years of regional policies. That is a measure of the disaster that the Secretary of State for Wales and his colleagues have inflicted on Wales.
If the unemployed are to be offered hope and the possibility of a job, we must ask whether the Secretary of State is satisfied that the Government's policies can lead, if not to full employment, at least to a return to the 1979 levels. If he believes that, what time scale does he have in mind? He does not have to tie it down in great detail, but simply to give us some idea of his thoughts on the matter and, above all, evidence upon which he bases either his optimism or the truth.
If the Secretary of State fails and we cannot return either to full employment or to the 1979 levels, what changes in policy does he propose, or is he blinded by the belief that unrestrained private enterprise can solve the unemployment problems in Wales? I know of no scrap of evidence either pre- or post-war, under either Labour or Tory Governments, that would support that proposition.
The only real hope of jobs for the unemployed in Wales is Labour's alternative economic strategy. It is a plan for sustained economic growth over five years, to bring unemployment in Wales down by at least 100,000. It means the boosting of spending power through public investment projects, major construction programmes, better public services and improved social benefits.
§ Mr. Tom Hooson (Brecon and Radnor)
Does the right hon. Gentleman recognise that one fundamental reason for the serious unemployment figures in the country today is the irresponsible performance of the Labour Government in allowing a deterioration in the cost competitiveness of manufacturers, which meant that we were shipping jobs out every year to Germany, France and Japan?
§ Sir Anthony Meyer (Flint, West)
§ Mr. Jones
The hon. Member for Flint, West (Sir A. Meyer) will have to wait until I answer the previous question. The queue is getting longer and time is going on, but I have no objection.
If the hon. Member for Brecon and Radnor (Mr. Hooson) is correct, why have more jobs been lost while the Conservative Government have been pursuing their policies than were lost when the Labour Government were pursuing theirs?
§ Sir Anthony Meyer
Will the right hon. Gentleman assure the House that in the next stage of his speech he will tell us what The Guardian had to say about Labour's alternative policy, and the results when it was fed into the Treasury model?
§ Mr. Jones
The hon. Gentleman must wait for the rest of my speech. I have no wish to comment on The Guardian I regard it no longer as a newspaper, but inertly as a propaganda leaflet for the SDP.
We cannot expect the sort of policies that are necessary to reduce unemployment from the present Secretary of State or the Government. Like the leopard, the Tory Party never changes its spots. However, even pursuing his own political philosophy, there are some things that we can and do expect from the Secretary of State.
We need an up-to-date balance sheet of jobs lost and created in Wales. We need to know whether the jobs gap is widening or narrowing, and by how much. It is much easier to find the figures for job losses than it is to ascertain the true position on the number of jobs created by the Welsh Development Agency through its advance factory programme, bespoke factories and investment policies, through the Development Board for Rural Wales and through other elements of Government assistance.
It is true that we can pick up the odd pieces of information from parliamentary answers, particularly when the Secretary of State has a few goodies to offer. We can also pick up from the annual reports of the agencies other figures. However, there is no overall, up-to-date picture easily available.
I shall give a few illustrations of the difficulties. I am not criticising the Welsh Development Agency. However, in its annual report it suggests that in the year ended March 1980, from advance factories it hoped to create 5,000 jobs and from extensions and bespoke factories a further 4,500—all over a three to four-year time scale—and, by March 1981, 3,100 jobs from advance factories, about 1,300 from extensions, and so on.
In a parliamentary answer given by the Secretary of State in March 1982, we have the information that, over a certain time scale, we are likely to have 4,700 jobs created in Welsh Development Agency advance factories. When I looked at the Welsh Development Agency report from March 1980, I read of the custom-built premises, and three names leapt out.
The report referred to a new factory for Webb Son and Company Ltd. at Ferndale. That factory has already closed and all those who were employed there are on the dole queue. The report goes on speak of the 52,850 sq. ft. factory that was built for Automotive Engineering Ltd. at Wattstown, Rhondda. That has closed, all who were employed in it are on the dole queue, and the expansion that was expected from it has ceased. The third example is that of the 21,000 sq. ft. factory at Llwynypia, Rhondda, for J. J. Plating and Engineering Ltd., which has closed with a loss of 42 jobs. The point is that, by the time these documents are printed, the facts that they contain are so out of date that it is extremely difficult for us to ascertain the true picture.
Someone told me that it is three years to the day since the Secretary of State took office. I must say it seems more like an eternity.
§ Mr. Rowlands
It seems like a nightmare.
§ Mr. Jones
It must seem like that to the Secretary of State, too.
The Secretary of State might consider celebrating his third birthday by sending the equivalent of a birthday card to the rest of the House in the form of a jobs balance sheet so that at least the House and the people of Wales can see the full picture.
In our debate on the Welsh Development Agency on 15 July 1981, the Secretary of State referred to the lack of investment activity by the agency in the previous year. He expressed the hope that the agency would be prepared to take risks and asked the chairman to undertake a review of the agency's investment policy.
I understand that the review has been carried out. I urge the Secretary of State to publish it and the decisions that flow from it. He will have the opportunity later today to tell us at least some of the changes that we hope will flow from the discussions that he has had with the chairman.
The House—certainly Welsh Members—ought to be provided with the fullest information on the situation if we are to judge the need for, and the value of, any changes that the Secretary of State proposes. I want to be satisfied that the agency is both willing and able to give much needed support to existing firms because, as redundancies and closures are still being announced almost daily, the preservation of existing jobs is the key to Welsh survival.
The Development Board for Rural Wales and its future was raised by the hon. Member for Brecon and Radnor last night in an Adjournment debate. The downgrading in terms of development area status of the area covered by the board is bound to make the board's task more difficult. No one can deny that. It will also be a serious handicap in attracting new firms to Mid-Wales.
The Government are great ones for reviews. One is apparently taking place that will give us some splendid or dreadful news later. However, I wish to press the Government to restore, if not development area status, at least intermediate area status to the area covered by the development board. The Government should also withdraw their decision not to accept claims for selective financial assistance after 30 April.
A month ago I went to the DBRW exhibition on the train at Marylebone station. It was an imaginative and enterprising effort. It showed the advantages to firms and business people of coming to Mid-Wales. There was an attractive slogan "Where else can you rent a house and a factory for as little as £30 a week?" A large number of inquiries were made during the exhibition. The Under-Secretary confirmed that there were 132 inquiries as a consequence of the exhibition. The tragedy is that those inquirers will have to be told that many of the terms that they discussed on that train no longer apply.
During the Adjournment debate yesterday the Under-Secretary of State said:In principle, it is open to the Department to accept applications up until the very last day".I cannot understand why, if it is up to the Department to accept applications up until the very last day, it will not do so. If there is no objection in principle, we should find a way around it. The Under-Secretary went on to say:more than a year ago we said that we would continue to accept applications right up to 1 August".What on earth is the purpose of accepting applications if there is no grant to go with them? Those are meaningless words.
296 The Under-Secretary said that the letter sent to the firms in rural Wales, which I have not seen, stated that it wouldbe most advisable for any applications to be sent to the Welsh Office no later than 31 March 1982".There is a big difference between saying "it would be most advisable" and saying that there is an absolute cut-off point. I draw those points to the Secretary of State's attention and urge him to reconsider this matter.
§ Mr. Hooson
I have two reasons to be grateful to the right hon. Gentleman. First, I am grateful that he has allowed me to interupt him a second time and, secondly, I am grateful for his moral support on this issue. Does he agree that, considering the great importance of giving all-party support to this admirable body, the DBRW, it would be appropriate for my right hon. Friend the Secretary of State to announce, preferably today, that the order refusing further applications has been rescinded and that business remains as it was before, rather than having this uncertain period, which seems particularly unfortunate when a train was sent all over the country and has now been derailed when the orders have been received?
§ Mr. Jones
I agree with the hon. Gentleman. All I am hoping is that the DBRW will not die the death because of the plea that I am making. The DBRW was the brainchild of my right hon. and learned Friend the Member for Aberavon (Mr. Morris), but I played a role in setting it up. It has an important role to play in Mid-Wales. It cannot fulfil that role if the downgrading goes through. Above all, it means not only that all the effort that the board made in sending that train round the country is money down the drain, but that it cannot fulfil the undertakings that it gave to the inquirers. If that downgrading continues, it will be a mean, miserable and squalid trick that need not and should not be applied to the DBRW or to the people of Mid-Wales.
The Government should consider modifying and changing the way in which they pay out regional development grants. The Secretary of State for Industry, in a parliamentary answer, stated that the regional grant office in Cardiff took between seven and eight weeks to approve grant applications. I am not criticising that amount of time, but, if it can be speeded up, all the better. Some of the applications are complex and must be sent back and the payment of the approved grant is deferred for four months.
It is beyond me why industrialists, particularly in assisted areas, who have done precisely what the Government asked and wanted them to do, which was to invest, should be penalised for doing so to the extent that they are kept waiting for their grants and pay interest charges on the money borrowed, which is the equivalent of the overdue grants. The Government are lavish in their words of praise to small firms. Many firms, particularly small firms, would benefit considerably from the abolition of the four-month moratorium on the payment of regional development grants.
I hope that the Secretary of State will keep a close watch on developments affecting the coal industry in South Wales. Many of us, particularly those who come from coal mining backgrounds or areas, were alarmed to read in the South Wales Echo on Monday night—although some of us had heard whispers of the news earlier—of the threat of the closure of the Aberthaw power station. Such a closure would involve the loss of 400 jobs at the plant. There would be a further loss of jobs in the mining industry 297 because that power station consumes 20 per cent. of the coal production of the South Wales coalfield. In addition, there would be further job losses in British Rail, which conveys that coal to powers stations.
I understand that there is no question of the closure threat being imminent, but I believe that it is better to accept the motto: to be forewarned is to be forearmed. The CEGB and the unions in that industry are co-operating as far as possible to save the plant. The National Coal Board and the NUM are also involved. I hope that the Secretary of State and his Department will not stand aloof, but will give the fullest support to efforts to ensure successful continuation of the efforts and energies of that power station. Its closure would have serious consequences not only for power station workers, railway men and others, but for miners and the South Wales coalfield.
§ Mr. Ian Grist (Cardiff, North)
The right hon. Gentleman has touched on a difficult point, which concerns hon. Members representing South Wales. I am sure that he will take on board that the same report stated that South Wales coal sent to the Aberthaw power station was 5 per cent. more expensive than the coal sent to other power stations and that we are burdening our industry with heavy generating costs by not importing cheaper coal from abroad. Other firms in South Wales—for example, paper mills in the constituency of the hon. Member for Ogmore (Mr. Powell) —have had considerable difficulties because of fuel prices. Is it not important for the NUM and the NCB to keep down their costs so that jobs can be saved in other firms that must pay high electricity costs?
§ Mr. Jones
I did not go into detail on the price argument, because the relative prices of South Wales coal and coal from other fields in the United Kingdom has been discussed by the NCB, the unions and the CEGB. There is the right amount of co-operation between the CEGB and its workers and the NCB and its workers. I urge the Government to ensure that such co-operation continues so that we may save the power station and the jobs of the miners and the other workers involved.
One further area in which I am particularly anxious that the Government should act fairly speedily is the development of co-operative enterprises. There have been in Wales in the past year or so, often as a result of sudden closures and redundancies and workers feeling that they could carry on the job and wanting to use their redundancy payments, spontaneous action by redundant workers either to form their own businesses or to establish worker co-operatives.
The Wales TUC has been most active and, as the House knows, has carried out a feasibility study in connection with this matter. I thank the Secretary of State for the support that he gave to the financing of that feasibility study. I think that £40,000 came from the Welsh Office, £5,000 from the WDA and the cost to the Wales TUC was about £7,000. The study has now been published. Those who have read it will, I am sure, agree that it is well written and well documented and that it makes a well-argued and strong case for moving further in this area.
The study makes two main recommendations. First, it recommends the establishment of a technical resource centre and, secondly, an independent investment fund. I understand that the Wales TUC has submitted proposals to the Secretary of State for the funding of such a resource centre, and I believe its name has been changed to co-operative research and development centre.
298 There certainly have been many attempts to get worker co-operatives off the ground in Wales. Some have failed; others have succeeded. Indeed, only last Saturday I bought a shirt from the Bargoed blouse co-operative. That is one example.
The interesting thing is that in little over a year this small co-operative, which has been supported by the Wales TUC, local authorities and a whole range of people, as well as by the efforts and energies of the people working there, has increased its work force from 17 to 30. That compares favourably with some of the small units led by the WDA and the DBRW.
We have had failures and we have had successes, but, whether they have failed or succeeded, all have been desperately in need of the right sort of technical assistance and advice at the beginning. That is why I believe that both successes and failures show the need for the establishment of this research and development centre. Therefore, I urge the Secretary of State to keep up the good work and to give his full backing to the establishment of that centre.
I have listed about six steps which I believe even this Government could take, even if they continue—heaven forbid! —their general economic and monetary policies. Whatever signs and omens the Government might read and use to support the more optimistic view of the economy that Ministers are from time to time prone to exaggerate, the most consistent view is that, whatever some of the indicators say, unemployment will continue to rise, even if more slowly. Of course, if that is the position, it is no help at all to the 171,000 who are already unemployed in Wales.
The director of the Wales CBI has said:I think it would be wrong to herald any false dawns … There aren't any real signs of a strong recovery in the near future.I must say that I see no signs of a dawn or, indeed, of any hope under this Government. The curing of unemployment and the creation of the requisite number of new jobs in Wales will not happen by accident; they will have to be planned. People in Wales certainly know now, even if some of them faltered and doubted it three years ago, that only be economic planning under a Labour Government can they be provided with the opportunities to work for themselves, for their families and for their communities.
§ The Secretary of State for Wales (Mr. Nicholas Edwards)
The right hon. Member for Rhondda (Mr. Jones), in opening this debate, referred to a number of specific matters. I shall have a word to say later about some of them —for example, Aberthaw and the Development Board for Rural Wales.
On deferment of grant, which he mentioned, I understand, of course, the case for doing away with the deferment. It was one of a number of options that Ministers considered before the Budget to help and stimulate industry, and, of course, it is one of the things we could have done. We had to decide within the funds available what the priorities were and what would be most helpful, and we thought that the things that were announced by the Chancellor as a package would be more effective in stimulating industrial recovery than that particular measure.
So we cut the Labour Government's job tax by £¾ billion in a full year, we gave £160 million of help with 299 energy prices, £240 million for the construction industry, £80 million in a full year for a package of measures to help small companies and stimulate enterprise, £130 million over three years to boost technology and £150 million more for guaranteed loans to small firms. So I do not think that the right hon. Gentleman can make a very good case on that.
The right hon. Gentleman also referred to the TUC proposals on co-operatives. Of course I am looking sympathetically at the proposals that have been put to me. As he said, we helped to finance the research project, and I discussed these proposals the last time I met the TUC. But they are an important package of measures. We have to consider them carefully. I have to discuss them with my colleagues because, of course, they all have implications for other parts of the United Kingdom. That careful consideration is going on, and as soon as I am in a position to make an announcement I shall of course do so.
Before the right hon. Gentleman got on to the specific points that he had to make he made the predictable attack upon the Government's economic policy and he referred to what he described as a state of widespread hopelessness and fear. He asked me what changes I proposed, but his proposals were confined to a three or four sentence reference to Labour's alternative economic strategy. Having chosen this subject for debate, having described this appalling situation, he could have been expected, speaking from the Opposition Front Bench, to try to spell out what the alternative strategy might be.
§ Mr. John Morris (Aberavon)
§ Mr. Edwards
I will give way when I have finished this point.
All he had to say, however, was that a Labour Government would introduce their alternative economic strategy. That was the single phrase that was supposed to remove hopelessness and fear.
§ Mr. John Morris
This must be the most unhappy birthday of the right hon. Gentleman's three years in office. It is incumbent on the Government to prove their case. The right hon. Gentleman prays in aid the Chancellor's Budget. Does he believe that a year from now it will have increased or decreased unemployment in Wales, and by how much?
§ Mr. Edwards
I have never been prepared to forecast unemployment.
It is incumbent on anyone to prove his case. The right hon. Member for Rhondda said that Labour's alternative economic strategy would do the trick, but my hon. Friend the Member for Flint, West (Sir A. Meyer) posed the awkward question. He asked about the article in The Guardian. The right hon. Gentleman dismisses The Guardian as an SDP propaganda leaflet. That does not dispose of its arguments. Whether or not one likes what it says, I believe that we all regard it as a responsible newspaper. We should take on the arguments.
The Guardian took a close look at the alternative economic strategy that is supposed to reduce unemployment from 3 million to below 1 million within five years. As it stated, "there is a snag". It was revealed in tests commissioned by The Guardian on the Treasury's computer model of the economy. The blunt declaration from Christopher Huhne in The Guardian on 20 April is: 300Labour's published proposals would not work.
§ Mr. Donald Anderson (Swansea, East)
Will the right hon. Gentleman give way?
§ Mr. Edwards
No. Labour Members do not like their policies to be examined in detail, but that is what I propose to do. They should take note of that blunt statement made after tests run through the Treasury's computer model.
Mr Huhne suggests that to make the alternative economic strategy workMr. Shore added a mystery ingredient to the published Labour package, namely a workable incomes policy over the whole five years".But there is a problem about that. I read that Welsh trade unionists voted decisively at the weekend against an incomes policy being introduced by a future Labour Government. Perhaps the right hon. Gentleman's cure for hopelessness and fear is to tell the TUC where to get off; perhaps he was trying to persuade the House that the Labour Party would implement an incomes policy; perhaps he was trying to persuade the House that the right hon. Member for Bristol, South-East (Mr. Benn) and others who think like him would not get their way; or was he telling us that it would all depend on the "national economic assessment" which the Leader of the Opposition has described as "a new social contract"—the latest version of "Solomon Binding"? The Guardian reminds its readers that in the first two years of the previous social contract earnings increases doubled to 26 per cent.
§ Mr. Rowlands
The right hon. Gentleman should put his case, not that of The Guardian.
§ Mr. Edwards
The Guardian's case is powerful. It is a responsible journal. I am sorry that Labour Members dislike the analysis so much.
The Guardian computer and Mr. Huhne reveal that without an incomes policy the benefits claimed by Labour comeonly at the cost of a wage explosionandinflationary horrors".According to the analysis, the rise in wages and salaries would double to 18.9 per cent. in 1984, with inflation averaging 18.5 per cent. during 1986 and still accelerating into the next election year.
According to Mr. Huhne, the outlook predicted by the model without an incomes policy is achieved only by making "some heroically favourable assumptions". We have to assume, for example, that interest rates would fall from 11 per cent. in 1982 to 8 per cent. in 1986, despite the extra borrowing and increased inflation.
Commenting on those wildly unrealistic assumptions, Mr. Huhne states:It is not hard to see why Mr. Shore added his mystery ingredient.If an incomes policy is the mystery ingredient we are entitled to be told about it—[Interruption.]
§ Mr. Deputy Speaker (Mr. Bernard Weatherill)
Order. The Secretary of State deserves a reasonable hearing.
§ Mr. Edwards
Whenever Labour Members do not like what is said, they shout from a sedentary position in the belief that that is an effective answer to the argument.
We are being criticised for our policies and the central feature of the Opposition's alternative is hidden from us.Two words they dare not speak301 is the heading that The Guardian gives a leading article on the subject—[Interruption.] Among all the interruptions, I challenge the official Opposition to tell us whether it is Labour's intention to introduce a realistic incomes policy in defiance of the Wales TUC, the TUC generally and a large part of its Back-Bench opinion.
§ Mr. Anderson
Will the right hon. Gentleman give way?
§ Mr. Edwards
Perhaps the hon. Member for Swansea, East (Mr. Anderson) can tell us whether Labour is to have an incomes policy.
§ Mr. Anderson
The right hon. Gentleman has enjoyed the demolition job he has been doing with The Guardian article. Is he content that in Wales over 170,000 people are unemployed? What cheer or news does he have for them about reducing the figure?
§ Mr. Edwards
The right hon. Member for Rhondda said that the Labour policy would cure the problem and remove those people from the unemployment register. I am entitled to see whether that is a valid argument or as spurious as everything else that comes from the Opposition.
Mr. Huhne has a good deal more to tell us:The size of Mr. Shore's give away budgets would be breathtaking by any historic standards … This cornucopia … this cocktail … leaves total public expenditure nearly £11 billion higher in the fifth year. The effect on the money supply is `electrifying'.The effect in other areas is equally devastating. We are told that the pound "would drop like a stone". I suppose that the Opposition do not care about that. The article concludes:even the most ardent Keynesians can recognise too much of a good thing when they see it".
§ Mr. Ray Powell (Ogmore)
On a point of order, Mr. Deputy Speaker. Are we debating employment prospects, opportunities and the economy in Wales or have I come to the wrong debate?
§ Mr. Deputy Speaker
Order. The Secretary of State is entirely in order. We must all listen to things with which we do not agree. The Secretary of State is entitled to a fair hearing.
§ Mr. Edwards
Opposition Members have attempted to intervene, apparently on bogus points of order, only to silence me. At least the Shadow Chancellor issued a statement in which he attempted to rebut the charges that have been made. A leader in The Guardian says that the statement makes "sad reading" and that, if anything,the assumptions made were favourable to Mr. Shore's position.[Interruption.] I see that Opposition Members do not like that. They never like the truth. I shall put them out of their misery and move on.
Two matters must be made clear. First, we are entitled to know where the Labour Party stands on the mystery ingredient—pay policy. It is absolutely critical to the policy that it advocates. Secondly, whether or not the Labour Party believes in the arguments of that analysis, history provides us with convincing confirmation. Every time that Governments have tried to deal with the upward trend of unemployment by spending and borrowing more, the result has been higher inflation. Each time that has been done there has been a smaller impact on jobs and output.
302 Why should anyone imagine that a Labour Party that witnessed unemployment in Wales rise by 139 per cent. during its last period in office has now found a magic way of creating at least 2½ million jobs in five years? There is nothing new in what the Opposition advocate except that they intend to do it on an even more profligate scale than before. There is even more critical dependence on the price and exchange controls, which failed last time round.
§ Mr. Rowlands
What has the right hon. Gentleman succeeded in doing?
§ Mr. Edwards
As a result of that recipe, the Labour Government achieved 27 per cent. inflation and 30 per cent. wage increases, steadily rising unemployment and then a rescue operation by the IMF. [Interruption.] The Opposition cannot even remember their history. When they put forward that policy, those were the facts. There was steadily rising unemployment and they were then rescued by the IMF. Only after the IMF had intervened and the Labour Government had abandoned that policy was there any check in the upward surge of unemployment. The right hon. Member for Rhondda knows that that is true.
§ Mr. Alec Jones
Will the right hon. Gentleman confirm that unemployment fell in each of the last five months of the Labour Government?
§ Mr. Edwards
Precisely—after the IMF had rescued the Labour Government and forced them to abandon the policy that the Labour Party now says is the solution to all our difficulties.
§ Mr. Rowlands
Bring back the IMF.
§ Mr. Deputy Speaker
Order. Our debates are not enhanced by constant interruptions from a sedentary position.
§ Mr. Ray Powell
On a point of order, Mr. Deputy Speaker. After more thought, you must agree that the Secretary of State is not addressing himself to the subject of the debate.
§ Mr. Deputy Speaker
The Secretary of State takes responsibility for his own speech. He is in order. I know that we do not always agree with what is said from either side but the Secretary of State is entitled to a fair hearing.
§ Mr. Edwards
The hon. Member for Ogmore (Mr. Powell) says that I am treating the House with contempt. I am only treating the Opposition's arguments with contempt. [Interruption.]
§ Mr. Roy Hughes (Newport)
The Secretary of State is a disgrace to Wales.
§ Mr. Edwards
If we went down the road that the Opposition advocate we would throw away the real gains in competitive performance that have been achieved in the past three years. There are other improvements. In the six months to March, the retail price index, excluding seasonal foodstuffs, rose at an annual rate of only 7½ per cent. The annual inflation rate is not quite in single figures but earlier this week Sam Brittan wrote in the Financial Times——
§ Mr. Roy Hughes
We are not satisfied with what the Secretary of State is saying. He is out of order.
§ Mr. Edwards
The hon. Gentleman advocates a marvellous new intellectual argument. Just because he is not satisfied with what I am saying I am deemed to be out 303 of order. [Interruption.] If that is his way of conducting a democracy, he should go to South America and find his place there.
§ Mr. Deputy Speaker
Order. The debate takes place on an Adjournment motion. The hon. Member for Newport (Mr. Hughes) is an experienced parliamentary hand. He knows that this is a wide debate on the economic and employment prospects in Wales. The Secretary of State is addressing himself to that subject.
§ Mr. Edwards
Writing in the Financial Times earlier this week——
§ Mr. Anderson
It is no longer The Guardian.
§ Mr. Edwards
—Mr. Sam Brittan commented that, allowing for distortions and special influences, inflation is already in single figures. It is encouraging that interest rates have so far stood up so well to the Falklands crisis. The evidence is that output is gradually rising. If that is so, we are doing better than the OECD, which has just reduced its 1982 gross forecast for the whole area to zero.
There has been a substantial upturn in house building. [Interruption.] I note that that is a matter for ridicule among Opposition Members. I should have thought that it would have been welcomed. Opposition Members called for an upturn in house building and a recovery in the construction industry all last year. I should have thought that they would have welcomed the fact that in the first three months of this year house building in Wales is 48 per cent. up on the same period last year.
§ Mr. Rowlands
From zero to 48 per cent.
§ Mr. Edwards
There is an improvement of more than 10 per cent. in cost competitiveness since the first quarter of 1981. There has also been an improvement of 10 per cent. in productivity during the same period. Although unit wage costs almost doubled in the five years to 1980, recently they have been rising much more slowly—3½ per cent. in the three months to February this year as compared with the year before.
One of the most encouraging features that has now revealed itself is that, despite the severity of the recession, private investment is increasing. An increase in the period between 1979 and 1981 is not exactly what the pessimists would have had us expect. No doubt it is being stimulated by the opportunities seen in the new technologies and by the sharp increase in company profits. The downward pressure on interest rates has been greatly helped by the fact that Government borrowing is now firmly under control and will be reinforced still further if American interest rates fall, as the City expects, later in the year.
It is against that background of a steadily improving economic position that we have to consider the prospects for the Welsh economy and the way in which it is adapting to the very substantial change in industrial structure. The effect of the recession and the move away from the previous overdependence on the old basic industries has, of course, been painful.
§ Mr. Rowlands
What about Dupont?
§ Mr. Anderson
Will the Minister give way?
§ Mr. Edwards
No. I was merely pausing to allow a break in the flow of sedentary abuse from the hon. Member for Merthyr Tydfil (Mr. Rowlands), who believes that that provides a substitute for argument.
§ Mr. Roy Hughes
It cannot be a substitute. The Minister has not produced any argument.
§ Mr. Edwards
Of course, this major structural change, coming on top of the rising trend of unemployment that we inherited from our predecessors, and which has continued for a number of years under successive Governments, has a very severe social impact on individuals and communities. I in no way question the genuineness of the concern expressed by the right hon. Member for Rhondda about this. It is shared by the whole House. Where we differ is about the causes and the remedies, not about the ailment and its pain. The Opposition have apparently not been prepared today to examine seriously their own remedy and the criticisms that have been made of it. Nevertheless, it must be a matter of some relief that, despite the substantial restructuring that has taken place in basic industries, which were previously of such exceptional importance in Wales, the increase in unemployment in Wales since 1979 has still not been so great as that in the country as a whole and has been very considerably less than in some other regions, such as the West Midlands.
The right hon. Gentleman referred to recent redundancies. They emphasise that change is still taking place, but the level has dropped. In the first six months of 1981, the average was 3,700 redundancies per month. That is now down to 2,200. I must make it absolutely clear that redundancies will continue. I warn again today, as I did in a speech last week, that in the coming months there will be cases involving closure and rationalisation that will cause severe problems for particular localities. Equally, however, I am confident that there will be major new expansion projects in the same period. The right hon. Gentleman spelt out some of the difficulties in achieving a balance, but we always hear from the Opposition long lists of closures but very little about the new businesses opening up. Those new businesses are important, and not just for the number of jobs that they will provide. It is the nature of those industries that is so important and significant to the future of the Welsh economy.
§ Mr. Rowlands
§ Mr. Edwards
I have been asked to name some of them. Among the expansion projects and new projects announced since the Government came to power are ITT in electronic capital goods, Matsushita in hi-fi equipment, Hotpoint in washing machines and electrical appliances——
§ Mr. Edwards
—Sony in radio and electronic components, Ferranti Computer Systems in computers, Golden Ltd in toiletries and cosmetics, Davison Field in ladies' wear——
§ Mr. Edwards
—Daniel Doncaster in aircraft components, John Dunster in television cabinets, Alfred Teves in motor vehicle components——
§ Mr. Edwards
—Aiwa in sound reproduction, Yuasa in batteries, Control Data in electronic components, Merryweather in fire-fighting equipment, Plessey in electronic equipment——
§ Mr. Deputy Speaker
Order. I must ask the hon. Member for Merthyr Tydfil (Mr. Rowlands) please to desist from making comments of that kind from a sedentary position.
§ Mr. Edwards
The hon. Gentleman does not like to hear good news being given to the House.
§ Mr. Rowlands
Will the Minister give way?
§ Mr. Edwards
No, I shall not give way.
§ Mr. Rowlands
You have told me, Mr. Deputy Speaker, that I must not intervene from a sedentary position. I am now in a standing position. Will the Minister give way?
§ Mr. Edwards
After 20 minutes of interruption from a sedentary position, I do not see why I should give way to the hon. Gentleman.
§ Mr. Rowlands
§ Mr. Edwards
The hon. Gentleman has asked for numbers. Mitel has provided 2,000 jobs in telephone switching products. There is also Smiths Industries, providing instruments for the motor industry, Inmos, in silicon chips and microprocessors, which has just taken over its factory on time, IMT Titanium, producing titanium sponge metal, BICC Corning, optical fibres, Kimberley Clark, paper tissue, Abingdon Carpets, carpet manufacturing, Thomas Lloyd and Universal Furniture, furniture manufacture, Tetrapac, packaging, Texaco, refining, Intermagnetics, video tapes and Chemical Bank, banking.
§ Mr. Alec Jones
§ Mr. Edwards
No, I have given way quite enough.
That is by no means a comprehensive list, but it tells a story far removed from the picture of dereliction and decay and an industrial structure entirely dependent on coal and metal manufacture.
§ Mr. Alec Jones
Will the Minister give way?
§ Mr. Edwards
No, I want to press on. I have more to say.
§ Mr. Barry Jones (Flint, East)
The Minister has referred to businesses that have come to Wales. Does he intend to refer to the proposed Nissan project? He knows how many people in Wales are interested in that. Has he any news to give us?
§ Mr. Edwards
The hon. Gentleman knows perfectly well that if I had any news to give about Nissan I should be delighted to do so. We have no news about Nissan's decision. No decision has been notified to the Government.
Fortunately, the fact that this change is taking place, and that the character of the Welsh economy has already altered in this way, despite the words of gloom that flow from the Opposition, is becoming ever clearer to those in business and industry outside Wales.
§ Mr. Alec Jones
The Secretary of State read a list of all the new factories that have come to Wales. If the list were longer, I should be more pleased. But hon. Members 306 on either side could read an equally long list of closures. [HON. MEMBERS: "Longer."] Will he at least consider my suggestion that he publish a balance sheet so that we may genuinely assess job loss and job creation?
§ Mr. Edwards
I have said that I will certainly consider the right hon. Gentleman's point. He said that people read long lists. My point is that the Opposition always read the list of closures but never the list of new plants. It is worth taking those into account as well because this creates a different picture of Wales, and one that is actually encouraging and helps to stimulate the new business and investment that we all want.
The Scottish head of one of Britain's greatest industrial enterprises, with important subsidiaries in Wales, said to me two or three weeks ago "The point that you have got to get over is that in Wales you do not suffer from the English disease". That is a good point. The Welsh reputation for good industrial relations and productive performance is beginning to spread around. It is one reason why Yuasa, after detailed analysis of possible locations throughout Europe, decided to go to Wales, and one of the reasons why the Canadian company, Mitel, chose Wales as a location. No group of workers has played a greater part in the past couple of years in strengthening that reputation than those at Llanwern and Port Talbot, who have now made those plants among the most competitive in Europe. There is also a wide and growing understanding that, in addition to this record of good labour relations, we now have an industrial infrastructure as good as, if not better than, anywhere else in the United Kingdom.
Despite the need to control public expenditure, the Government have successfully carried into effect the largest capital programme of infrastructure improvement ever undertaken in the Principality. There are major road improvements in South Wales: the extension of the M4 route westward, the vastly improved network around Abergavenny and Pontypool, and the start of two other major projects—the A470 Abercynon-Pentrebach scheme and the Culverhouse Cross-Capel Llanilltern scheme, both of which we shall expect to start this year. In addition, Gwent county council has a major programme of works on the A467 linking the M4 at the Heads of the Valleys. In South Glamorgan, the council is doing a great deal to improve access to the dockland area, and in Dyfed work is under way on the links between Llanelli and the M4.
In north Wales, the last financial year has seen the letting of what are, in financial terms, two of the largest road construction projects ever awarded in the United Kingdom on the A55. In total, last year, work started in north Wales on contracts worth about £160 million. That represents a tremendous investment in the infrastructure of north Wales. It is investment of critical importance for the whole economy of the area. Later this year, we shall expect to lay before Parliament a Bill that will enable us to proceed with the tunnel crossing of the Conwy estuary.
At Welsh questions in recent months I have given the House details of our programme of factory building and factory letting. In the Welsh Grand Committee on 28 June 1978 my Labour predecessor, the right hon. and learned Member for Aberavon (Mr. Morris), boasted of the area of factory space formally or provisionally let. He saidThat is the yardstick by which we should be judged".—[Official Report, Welsh Grand Committee, 28 June 1978; c. 12.]
307 I am happy to use that yardstick. Of the 836 advance factories completed by the WDA since its inception in January 1976, 684 have been completed since May 1979. Three times as much factory space has been built since May 1979 as in the whole period from January 1976 to May 1979. Last year, our allocation of Government factory space in Wales and the number of factories let—1.6 million sq ft and 295 units respectively—was an all-time record. The WDA has allocated in the 12 months ending this March well over 1 million sq ft and 186 factories.
This year alone, the agency will build 1½ million sq ft which was more than anything achieved by the previous Government, and that comes after a year in which the agency built nearly 2½ million sq ft and 456 units, which is nearly twice as much factory space as was completed in the years 1976 to 1979.
As I made clear, the achievement is not just one of construction, but of successful letting. It is because our current priority must be to let the factories that we have built that I have authorised an increase in the grant from the Welsh Development Agency to the development corporation from £644,000 to £1,102,000 a year and given the assurance that this level of support can be expected to continue for a number of years.
Even before we see the results of this promotional effort, I can report that activity is running at record levels. I repeat that last year was a record in terms of factory allocation, and yet already in the first quarter of this year we have let more than double the number and in excess of 40 per cent. more space than in the same period last year. That news should be welcome to Opposition Members.
In March this year, SFA applications reached their highest monthly figure yet, and, indeed, applications in the first quarter of 1982, in terms of number, value and number of new jobs, stand at substantially higher figures than in the first quarter of 1981. Inquiries to our small firms centre are 67 per cent. up on last year. In March we had 1,845 inquiries, which was 80 per cent. more than in March a year ago. The right hon. Member for Llanelli (Mr. Davies), whenever he is given good news, record figures, information that people are taking an interest in Wales or that new jobs are coming to Wales, seems to consider it a matter for laughter. I think that it should be a matter for some satisfaction that in the depths of recession we have achieved infinitely more than was ever achieved by the Government of which he was a member, when economic conditions on a world-wide scale were a great deal easier.
§ Mr. Denzil Davies (Llanelli)
Does the right hon. Gentleman know that, when he came to office, the unemployment rate in Llanelli was 5 per cent. and that it is now close to 18 per cent? Will he name one factory that has come into Llanelli during his two and a half years in office?
§ Mr. Edwards
Surely to goodness, the right hon. Gentleman, if he complains and shows understandable concern about unemployment, should not be laughing when I give good news about job creation in Wales.
§ Mr. Davies
§ Mr. Deputy Speaker
Order. It is clear that the Secretary of State is not giving way.
§ Mr. Davies
Will the right hon. Gentleman answer the question?
§ Mr. Edwards
The right hon. Gentleman is correct in saying that the problems of Llanelli are particularly severe. I understand that. I find it hard to believe, however, that, faced with the problems of his own constituency, the right hon. Gentleman thinks it a laughing matter that jobs, new factories and new plant are coming into Wales at a record level, that we have built more factories and that we have succeeded in getting more factories occupied, in a harsh recession, than the Labour Government. All these applications, inquiries and allocations are indications of a growing recognition of the attractions of Wales as an industrial location.
There are signs, too, of the recovery that is beginning in the economy. I have referred to SFA applications. I was asked by the right hon. Member for Rhondda about the decision of the Government to announce a firm date of 30 April by which application for selective financial assistance had to be submitted in those areas including Mid-Wales, where it was announced that intermediate or higher status would be lost from 1 August this year.
I must make it absolutely clear, as my hon. Friend the Under-Secretary of State did in the Adjournment debate last night, that no decision has been taken about downgradings following the review which we promised. Indeed, that review is not yet complete and the issues have yet to be considered collectively by Ministers. The announcement about applications does not prejudge the decision. The fact is that, under the provisions of the Industry Act 1972, offers of assistance cannot be made in an area which has ceased to have intermediate or higher status.
While, therefore, in principle—the right hon. Gentleman quoted the remark—it is open to the Department to accept applications up to the very last day, in practice, as he knows perfectly well—he had to deal with these matters in the Welsh Office—this would be impossible, because all applications have to be carefully examined. They are applications for grants of public money. We have to look at each application and judge its merits.
Clearly, if one allowed applications to come in right to the final date, there is no possibility of those applications being reviewed or submitted to the Welsh Industrial Development Advisory Board or going through procedures that are necessary in looking after public money. To suggest that it would be possible to deal with those applications within the legal framework in which we operate would be misleading to those concerned.
The right hon. Gentleman asked about the letter. We warned the DBRW and all the principal companies operating in Mid-Wales over a year ago that, for this very reason, applications should be in not later than 31 March. We have extended that by a month. We have done our best to meet the point and to cover the concern expressed by the right hon. Gentleman.
§ Mr. D. E. Thomas (Merioneth)
Can the right hon. Gentleman now tell the House and the development board when he expects the result of the review by his right hon. Friend in the Department of Industry and himself will be published? The implication is, surely, that the Secretary of State is downgrading de facto by this decision and that this will be detrimental to current applications.
§ Mr. Edwards
I understand the need to get an early decision, but we face the final flood of representations. 309 We must get the balance right in listening to those representations, giving the fullest consideration to the cases being made and announcing firm decisions. There are some major issues to be decided in the review.
§ Mr. Hooson
§ Mr. Edwards
I shall give way in a moment. I was about to refer to my hon. Friend the Member for Brecon and Radnor (Mr. Hooson), but, before doing so, I repeat that the administrative arrangements that we announced do not prejudice the further review. I was about to observe that my hon. Friends the Members for Brecon and Radnor and for Montgomery (Mr. Williams) have constantly pressed me and my colleagues on this point. They have left me in no doubt about the importance that they and those they represent attach to the continuation of assisted area status and to the need to have an effective package of financial inducements.
§ Mr. Hooson
I hope to expand my own comments on that matter later in the debate, but some confusion seems to be arising between the Welsh Office and the DBRW. None of us wish to see bad blood between those two organisations. I understand that on 1 April 1981 the Welsh Office sent a letter to companies in Wales and to the board, stating:If the proposal to downgrade is confirmed we would continue to accept applications for assistance up until the 1 August cut-off date.That has never been countermanded.
§ Mr. Edwards
The letter that was sent, of which Dr. Skewis has a copy, states that it would be advisable for any such applications to be sent to the Welsh Office not later than 31 March 1982.
We sent a letter in those terms to the DBRW, and we have extended that period by a month. To suggest that in making any offers during the exhibition that the right hon. Gentleman described, which I visited, the DBRW was under any misapprehension is to ignore the clear warning that was given.
§ Mr. D. E. Thomas
Does the Minister accept that there is a difference between writing a letter that says that it would be advisable for project applications to be submitted and preventing officials of his Department from talking to officials of the board and representatives of companies moving into the area?
§ Mr. Edwards
If applications are put in after the deadline, it will be impossible to process all of them. To tell companies that they may expect grants and then not be able to make them, because we cannot complete the procedures and because of the legal provisions of the Act, would be misleading and irresponsible. We are absolutely right to spell out the legal position.
I have referred to the representations that have been made, and I emphasise that we are taking account of all of them, not just for Mid-Wales. I have taken particular and careful note of the representations that have been made from Llanelli. We have not announced the results of the review, but, in giving an undertaking to the right hon. Member for Llanelli that we are currently considering those representations, he should be slightly more gracious, if he is capable of it. I assure the House that officials are preparing a thorough analysis of the representations and that all will be taken into account.
We are undertaking a special programme of factory building in Llanelli. I warmly welcome the decision of the 310 Manpower Services Commission to continue with the Llanelli skillcentre. I do not underestimate in any way the importance of training. The right hon. Gentleman raised a number of points about that aspect. My hon. Friend the Under-Secretary of State will say something about the subject when he replies to the debate. However, as it is intended to have a debate on the subject shortly in the Welsh Grand Committee, I do not propose to deal with it now.
Referring to the work of the DBRW, I spoke of the need for an effective package of financial inducements, and the board has made very clear the importance that it attaches to tourism grants. Tourism makes a substantial contribution to the economy of Wales, and it is estimated that the equivalent of about 90,000 full-time jobs are provided directly or indirectly by the industry. In the last three financial years the tourist board has received £12½ million. In the current year it has an allocation of £5.6 million, about £2 million of which is for its scheme of assistance to individual tourism projects. I have asked the chairman to carry out a review of policy and to let me have his suggestions for the future operations of the board
In talking of the achievements of the tourist board arid of the DBRW and the WDA, I would not wish to give any impression that I saw them as the sole or perhaps even, in the longer term, the principal organs for Welsh economic recovery. I believe that they have an essential part to play in partnership—partnership increasingly with industrial trusts, with private industrial developments, such as those by the Abbey National, whose recent involvements I greatly welcome, and with enterprises such as Mercury, which, quite apart from the service that it proposes to offer, is already stimulating British Telecom into an entirely new spirit of enterprise. I recently met the senior management of Mercury, and we discussed the possibility of an early link-up of Welsh industrial areas with their new system. The importance of telecommunications links of this kind has been brought home to all of us by the decision of the Chemical Bank to move its European backroom operations to Cardiff and the emphasis that it has placed on the need for effective communication links. I welcome the fact that it has found that those links can be provided in Cardiff and that, after the most careful study, it was decided that Cardiff was by far the best location for its operations.
The partnership will also involve local government and the universities. In these debates I have on previous occasions referred to INDIS—the computer-based information service for industry that is being provided at present by the Mid-Glamorgan county council. I have indicated to the council my support for this operation, and discussions are currently taking place with a view to its extension to other parts of Wales and to its support by other local authorities.
The House will also know of the support that I have given to the industry unit at the University College at Cardiff. In the weeks ahead I shall be holding further discussions with representatives from industry, local government, the university, the private sector and the trade union movement about further co-operative ventures. We have already referred to one proposal in the debate.
As I said, I speak of a partnership in which the private sector should have an increasing role. I have emphasised the job of the WDA to act as a catalyst and I have asked the agency to give very careful thought to its long-term strategy in this rapidly changing situation. I recently 311 discussed a working paper with the board. The right hon. Gentleman put questions to me about that. I discussed the working paper in which it began to develop its ideas. Further work is continuing, and I have arranged to meet the board later in the summer to discuss its developing plans.
Following my comments on the subject in the Welsh Grand Committee last July, the WDA has been re-examining its investment function. It believes that there is room for further development here and that there are new ways in which it can help in the provision of investment for small and growing firms. I have given approval to the agency to set up a new subsidiary company which will offer mainly equity finance to small businesses. Full details will be announced next month, but I can say now that the intention of the new subsidiary will be to offer a readily identifiable package of investments in a fairly standardised form, together with a simplified procedure for application and assessment.
The agency has experienced considerable succes since the autumn with its new low-interest loan service for small firms operated in co-operation with the European Coal and Steel Community. I am glad to say that a similar scheme is now being introduced, funded by the European Investment Bank, which will cover all parts of Wales.
These various initiatives are expected to lead to an increase in the level of WDA investment and at this stage funds are available for about £5 million of investment in the present financial year, compared with about £3 million in 1981–82. There is no intention to redirect the efforts of the agency or to operate it as a holding for a significant proportion of Welsh industry, but I believe that the time is right for it to seek a shift of emphasis towards direct encouragement and stimulation of business growth. The agency is making considerable efforts to build up venture capital links with the City.
The emphasis that I have placed on the diversification of the Welsh economy and the establishment of new industry does not mean that the old basic industries will not have a key role to play and the ability to make an immense contribution to the area. I have already spoken of the striking improvement in performance at the major strip mills and other parts of the BSC operation. At Llanwern work is going ahead on relining the No. 3 blast furnace at a cost of £11 million. The decision to refurbish the plant's coke oven will provide increased coke-making capacity. The success of those plants is important for the coal industry.
I have been asked about the Aberthaw power station. The discussions that are taking place are not with a view to avoiding immediate closure. That is not the issue. Aberthaw A is one of the older power stations. The object of the discussions is to extend the life of the power station for as long as possible.
The right hon. Member for Rhondda talked about cooperation. The National Coal Board and the Central Electricity Generating Board have a clear understanding of the need to reduce operating costs, which is the key. Incidentally, the CEGB expects coalburn at Aberthaw B this year to come close to last year's record level.
Agriculture is the other basic industry. Together with fishing and forestry, it provides direct employment for over 67,000—an increase of nearly 1 per cent. in the year. During three years of great financial difficulty the 312 Government have done a great deal to support the industry. We should not forget that when the Labour Government were in office British farmers were working at a 20 per cent. to 40 per cent. disadvantage with their competitors because of the policy pursued by that Government. They now have a 9 per cent. advantage over their competitors.
We have negotiated a series of measures to support the industry. The sheepmeat regime has provided a welcome boost. It has been worth £28 million to Welsh farmers so far. The beef premium scheme has helped our recovery in that sector.
§ Mr. Leo Abse (Pontypool)
On a point of order, Mr. Deputy Speaker. In view of the length of the right hon. Gentleman's speech, may we have an interval? The right hon. Gentleman's rambling and incoherent speech is degrading the House.
§ Mr. Edwards
That sort of comment is characteristic of the hon. Gentleman. I shall not take up his comment about degrading the House, but that sort of comment certainly harms his reputation. The right hon. Member for Rhondda, who opened the debate on behalf of the Opposition, spoke for about 40 minutes. I have been noisily interrupted and asked to give way on numerous occasions. Labour Members may not wish me to respond to the right hon. Gentleman. However, if I fail to do so, I shall be attacked for discourtesy. I shall remember never to give way to the hon. Member for Pontypool for risk of prolonging the business of the House.
§ Dr. Roger Thomas (Carmarthen)
§ Mr. Edwards
The state of the agriculture industry is very good, despite the recession. The Government's record contrasts with the threats posed by the Labour Party, which is again threatening land nationalisation. A few weeks ago the hon. Member for Liverpool, Walton (Mr. Heffer) said that the green pound should be revalued by at least 4 per cent. and that a number of commodity prices should be frozen, including milk prices. Something called the Common Market Safeguard Committee of the Labour Party has saidthat there is no particular merit in having an agriculture industry".Farmers can reach their own conclusions.
§ Mr. Rowlands
When will the right hon. Gentleman reach a conclusion?
§ Dr. Roger Thomas
Will the Minister give way? I wish to intervene to put to him the contents of an article that appeared in The Guardian today.
§ Mr. Edwards
I shall come to a conclusion.
§ Mr. Rowlands
§ Mr. Edwards
I shall do so by referring to a matter which is vital to the future of the Welsh economy and which was not taken up by the right hon. Member for Rhondda. I suppose that he was careful to try to cover up this issue, as he does everything else that is important within his policies. I refer to the right hon. Gentleman's approach to Europe. I have no doubt that at some stage we shall be told that all our problems are the fault of the European Community. Certainly that is the view of the hon. Member for Newport. The principal case that is usually advanced against the Community by anti-Marketeers is based on the United Kingdom's deficit with the Community in manufactured goods. However, the fact 313 that the deficit is a function of the lack of competitiveness of British industry rather than of Community membership is proved by the evidence that Britain's performance has held up much better in the Community than it has in other major industrial markets.
The real threat provided by the Labour Party to industrial recovery in Wales especially is the threat to inward investment which is critical to the creation of new jobs. Many companies have made it clear that they have decided to set up plants in this country because Britain is a member of the Community.
The Japanese have established the majority of their plants in Britain not elsewhere in Europe. Eight of those plants have come to Wales. The latest company to make a statement on the subject is the American organisation, Dow Corning. It has said that it has come to this country to go ahead with a major capital project that will create many new jobs in Barry, solely because of Britain's membership of the Community. I cannot think of a much greater catastrophe for the long-term economic prospects of the people of Wales and for the creation of new jobs than our withdrawal from Europe, though even now the possibility that the Labour Party might take us out must be acting as a disincentive to new investment.
The Government can point to major achievements in the modernisation of the Welsh economy over the past three years against a background of immense difficulty. Those achievements are being increasingly recognised outside Wales. Companies are beginning to realise that Wales is an attractive location for industrial and commercial development. The Opposition's alternative, such as it is, to the policies that we are pursuing is an economic programme that has been dismissed by those who have analysed it seriously. The Opposition's European policy would be wholly destructive. Fortunately, they will never have the opportunity to put it to the test.
§ Mr. John Morris (Aberavon)
I fear that most of us heard the peroration of the Secretary of State with relief. The first part of his speech was a parody. I say with all humility that no Secretary of State since 1964 would like to be remembered for the sort of speech that the right hon. Gentleman has delivered today. It was worthy of a weak Assistant Postmaster-General in a lean year. The right hon. Gentleman made a grotesque speech. I appreciate that he has served a miserable period of office. He must be a miserable man when he considers the face of Wales today. If we have his birthday offering to Wales and the House, I sympathise with him for the record of his stewardship.
The right hon. Gentleman's speech was remarkable only because it contained so few references to the 171,000 who are unemployed in Wales. The occasional tears were all very well when it was mentioned, and I am sure that they were not crocodile tears, but I should have thought that unemployment in Wales today would have dominated the right hon. Gentleman's speech. If unemployment in Wales does not dominate his thoughts, perhaps unemployment in Milford Haven, Haverfordwest, Pembroke Dock and Tenby will dominate his thoughts. In Milford Haven and Haverfordwest, 3,255 people are unemployed. In Pembroke Dock, the figure is 1,385. That is 22.8 per cent. In Tenby, there is a total of 811, and male 314 unemployment there is 30.7 per cent. I hope that, when he goes to Pembrokeshire, he is proud of those figures and of his record.
My right hon. Friend the Member for Rhondda (Mr. Jones) asked about the total number of jobs that had come to Wales following all the announcements about new factories. We should have a balance sheet of the -lumber of jobs that have been lost in Wales since the Secretary of State took office, and the number of jobs that have been gained in Wales. It is that last figure that would persuade us of the efficacy of his stewardship. The right hon. Gentleman took pride in house building. Those figures have come down probably to a figure almost as low as they were in war time. To take pride in a marginal increase in those figures is a grotesque parody of ministerial pride.
The Secretary of State spoke about the factories that he had completed. I take joy in every factory that is completed in Wales at whatever time. However, of the ones that he mentioned, many were planned and the resources provided for them during our period of office.
In my speech I shall deal with matters mainly in my own constituency. During the Easter Recess, I had the privilege of being invited back by the Blaenau Gwent council to see the results of the energetic steps taken by the Labour Government to deal with the problems caused by steel closure in the area. We allocated a considerable amount of money to the area. The basic need was to deal with sewerage, infrastructure and water supplies, without which new industry could not be attracted. We started work on the Abergavenny-Raglan road, and we began the construction work on the very necessary southward approach to the M4. A major industrial site was needed to attract new industry—the Rassau industrial estate, in particular. My right hon. Friend the Leader of the Opposition, the then hon. and learned Member for Brecon and Radnor, Mr. Roderick, and my hon. and learned Friend the Member for Abertillery (Mr. Thomas) fought like lions for the attention and resources of the Welsh Office. I, my Under-Secretary, and one of our senior civil servants discussed the matter month after month, or went to Ebbw Vale to see what progress was being made. In the teeth of an adverse report by the planning inspector, I decided to go ahead with the Rassau industrial estate.
Unusually—I think it is right to remind the House of this—as common land was involved, the planning decision was debatable, as such, in the House. The current mood of the then Opposition was to behave like political juvenile delinquents. They seized every opportunity to embarrass and frustrate the Government of the day. They demanded and got a debate. As a result, 323 hon. Members stayed up until 3.44 am in an effort to frustrate the rapid building of the Rassau estate. One hundred and twenty seven Opposition Members voted to send the issue to a joint Select Committee, where, inevitably, there would have been considerable delay, if not frustration of the whole venture.
I remind the House of the names of those who made it their business to come down at 3.44 am. In that number, 127—almost the full parade, but not quite— Welsh Tory Members of Parliament all opposed expansion in Rassau in South Wales. Who were they? The right hon. Member for Pembroke (Mr. Edwards), the Secretary of State, was the first in the batting order in the alphabetical Division List. There was the hon. Member for Cardiff, North (Mr. Grist). The hon. and learned Member for Denbigh (Mr. Morgan) was far enough away, so he could come down in 315 luxury to vote against the project. There was the Under-Secretary, the hon. Member for Conway (Mr. Roberts), and the Deputy Chief Whip, the hon. Member for Monmouth (Mr. Stradling Thomas). The right hon. and learned Member for Hendon, South (Mr. Thomas), a former Secretary of State, should have known better. Lest he thinks that he is forgotten, there was also the Under-Secretary, the hon. Member for Cardiff, North-West (Mr. Roberts), who was there as a Teller for the Noes. It was a proud moment in the history of the Conservative Pary in Wales—to be on the roll of honour, having stayed up half the night to frustrate the real intentions and the needs of communities affected by steel closures in that part of Wales. When I went to Blaenau Gwent, I was glad to hear that the present Secretary of State, when he had the face and the gall to go to Ebbw Vale, was reminded of that by my right hon. Friend the Leader of the Opposition.
It gave me some joy to see what we had sought to do and the resources that we had sought to provide to avert the tragedy in that area. The tragedy, unfortunately, is that the area has since been hit by the twin evils of the Tory Government and the recession. It could have have been within our grasp to reduce unemployment to more acceptable levels. But, despite the many factories that have been built, the large resources that have been provided, and the many people who have come in, unemployment there is still at a horrific level.
The following day, so that I might compare the resources that we provided and the factories that we built, I took the opportunity, with the help of the Welsh Development Agency, to see how the money was being spent in Port Talbot in my constituency, following the steel slim-down. Incidentally, the Tory Party in the House initially opposed the setting up of the Welsh Development Agency, and voted against it. Now it is the main weapon that it uses to tackle unemployment in Wales. Indeed, the Tory Party has no other weapon. Nevertheless, that was its initial response. Careful reading of the last few words of the Secretary of State will show that the enhanced role that he now gives the WDA by way of finance and intervention is quite contrary to what he said in our long Committee deliberations, which were handled mainly by my right hon. Friend. It is an important but significant U-turn on his part, although I welcome any conversion.
It is important for us to measure the efforts that are being made—I do so in my constituency, having seen what we sought to do in another part—against the real needs. The latest unemployment figures for my travel-to-work area, which includes that of my hon. Friend the Member for Ogmore (Mr. Powell), are 12,588, of whom 6,825 are in the Port Talbot, Cymmer and Porthcawl area. The travel-to-work unemployment is 15.5 per cent. for the whole area, but it is nearer 20 per cent. in Port Talbot and higher still in the valley. We have lost more than 6,000 jobs directly at BSC, and, in addition, there have been indirect losses in other industries in the area.
I therefore want to ask a number of questions. I do not expect the Minister who is winding up to give me a complete answer tonight. Indeed, with respect to whatever figures that he can give tonight, I would prefer to receive a comprehensive letter from the right hon. Gentleman, giving me the kind of social audit that my right hon. Friend demands for Wales, for the Port Talbot travel-to-work area, to see how we are getting on.
316 First, how many jobs have been established to date in the Port Talbot and the Port Talbot travel-to-work area since the steel closure announcement? I suspect that the figures are not very different from those that my right hon. Friend the Member for Llanelli (Mr. Davies) sought to elicit. Secondly, how many jobs have been lost in the travel-to-work area since then? Thirdly, is the Secretary of State content with the funds committed so far to deal with the problem? May we have a complete breakdown of the sums allocated to the steel areas in my constituency and those of my hon. Friends the Members for Ogmore and Newport (Mr. Hughes)? Indeed, my hon. Friend the Member for Newport is as concerned as I am to know where the money has gone and how many jobs have been created by the much-vaunted package announced by the Secretary of State, which has, from time to time, been prayed in aid by the Prime Minister.
§ Mr. Grist
Would it not have been possible to bring more modern and secure jobs to the right hon. and learned Gentleman's constituency and to the other constituencies that he mentioned if the British steel industry had been as competitive as our competitors were 10 or 15 years ago, during the lifetime of previous Conservative Governments, and if we had not waited until a world recession?
§ Mr. Morris
It would be a pleasure to take the hon. Gentleman through the history of how manpower was built up in Port Talbot. Unhappily, we inherited what had been set up. There should have been more planning and there could have been a greater commitment of funds and more foresight before taking draconian steps overnight. Something similar to that provided in Ebbw Vale could have been offered. Indeed, I take great pride in the achievement at Ebbw Vale.
Through the good offices of the Welsh Development Agency I saw the work that was in progress at the Baglan industrial park. The scale of the achievement should be put on record. About £3 million has been expended on sub groundwork and on the provision of utility services. The same problems also had to be tackled in Ebbw Vale. The work is continuing and we expect to spend a further £3 million in 1982–83. So far, so good. The construction of factories will begin shortly. Nine factories will be built, of which five will be 25,000 sq ft and four 10,000 sq ft. They will be built at a cost of £3.25 million. We are told that they will be completed within about 12 months. Such construction is welcome.
However, after all the huffing and puffing, I discovered that when the factories are let—I hope that they will be let quickly—and fully occupied, a mere 500 jobs will be provided. That is against the background of 12,000 unemployed in the travel-to-work area and 6,000 plus unemployed in Port Talbot and the surrounding area. Six thousand jobs have been lost in the steelworks alone. There is also some other provision at Kenfig.
§ Mr. Nicholas Edwards
Surely the right hon. and learned Gentleman is not suggesting that the scheme in Baglan is the only scheme available for people in that travel-to-work area. He knows perfectly well that that is not true.
§ Mr. Morris
Of course I am not suggesting that. I am examining the much-vaunted claim that millions of pounds have been provided for the steel areas and I am trying to 317 show that that sum is inadequate compared with the area's need. In addition to the unemployment in that travel-to-work area there is unemployment in Swansea and among those who used to travel 30 miles to work in Port Talbot.
§ Mr. Nicholas Edwards
In trying to give a picture or analyse the situation, the right hon. and learned Gentleman has, for some reason best known to himself, decided to give only some of the figures and facts.
§ Mr. Morris
Before I was interrupted, I said that there was also some building at Kenfig, but perhaps the Secretary of State did not hear me. If the sums involved are added up, it can be seen that they are minuscule compared with the need. Even if we give the Government the benefit of the doubt and agree that 1,000 jobs will be provided, the fact remains that 12,000 people are unemployed. In the town, 6,000 are unemployed and there is also high unemployment in the constituencies of Neath, Swansea, East and Swansea, West. Therefore, the needs are much higher than the sums allocated. The much-vaunted sums that have been allocated are small and totally inadequate.
I cross-examined officials at the Welsh Development Agency, but they said that only nine small factories are to be built in the Baglan industrial park in this financial year. There is no commitment of funds for 1983–84 or 1984–85. There was no sign of any pre-planning by way of funds for these years.
§ Mr. Anderson
The Department of Industry's working assumption is that it costs the Exchequer at least £30,000 to create each new job. If that is so, the much-vaunted £48 million package for the steel areas will create roughly only 1,600 new jobs in Gwent and Glamorgan despite the scale of need that my right hon. and learned Friend has mentioned.
§ Mr. Morris
My hon. Friend has underlined my point. The Secretary of State should tell us whether more funds are available. Of course, I expect our share of the Welsh Development Agency's funds for 1983–84 and the following years. However, we shall have to compete against the needs of the whole of Wales. The special steel funds will have been exhausted and other competitors will have high claims. Therefore, if the Secretary of State wants to give the area some confidence and wants to give some message to the 6,000 or more unemployed, he should quickly announce his plans for 1983–84 and 1984–85. Has he got any plans, or is he, in his battles with the Treasury—as in every other battle—a born loser? We all suspect that that is so.
We need a breakdown of the figures. It is no good emulating the Secretary of State for Employment and telling the young people who will soon leave school with no hope or confidence in the future that they should get on their bikes. Where can they go? It is no good telling them what the Prime Minister said when she went to Swansea two years ago. It is no good telling people that they should be prepared to move. Where can they go? What message can I give to the young people in my area against the background of that inadequate provision?
I come to the subject of apprentices. We are eating the seed corn because nothing is being done. If we ever come out of the recession and if industry recovers there will be a lack of skilled workers in my area and in most other areas in Wales. Two years ago, the British Steel Corporation cut 318 its apprentice intake by half. Last year, its apprentice intake was nil. I hope that there will be some intake this year. Construction workers tell me that apprentices are being made redundant. I have the figures with me, but shall not weary the House with them. In one year, the figures are 27, 39 and 6 and that is in addition to those who have not yet completed the probationary period. Where are they to turn to to complete those apprenticeships?
I asked the chairman of the MSC in Wales for an assessment of this travel-to-work area. I asked about existing planning and provision for apprentices. I asked what would happen to apprentices who failed to complete their apprenticeships. I was given a helpful but general answer about what the MSC was doing for the whole of Wales. However, in respect of my particular inquiry all he could say was thatThe MSC does not at present have information on the numbers of apprenticeships by travel-to-work areas including Port Talbot. We are, however, actively considering ways and means of obtaining such data as one of the elements of training information framework currently in preparation.Given the nature and extent of the problem, the MSC should have furnished that information to those of us who for the last few years have been campaigning for something to be done, given the shortfall in apprentice training in the main industry—BSC—which is now causing such anxiety to every young school leaver in my area who is seeking some skill and training.
In the Welsh Grand Committee, I queried the Government's views on the litigation between the BSC and the British Transport Docks Board in connection with the fees for handling the iron ore at Port Talbot harbour. As I received no answer at all from the Minister on that occasion, I tabled a question to the Chancellor of the Exchequer asking whether he would increase the borrowing powers of both corporations to ensure that their capital investment proposals would not be harmed, arid so that they could finance the litigation. Eventually, the answer came back from the Chancellor:I hope it will be possible for the two boards to resolve their dispute without the need for litigation".—[Official Report, 27 April 1982; Vol. 22, c. 227.]That view is very different from the one contained in the recently published annual report of the docks board, which said thatthis matter is being actively pursued through the courts.That is very odd. After all, the nation is a shareholder in these two great corporations which are going to law to determine the appropriate amount to be paid for handling iron ore, presumably at Newport as well as at Port Talbot. This matter is being canvassed at public expense, yet the Government do not intend to take any steps, so perhaps they will clarify the situation. If we can avoid the litigation mentioned by the chairman of the docks board, I hope that it will not be at the expense of either Port Talbot or Newport paying such an amount for handling iron ore that it makes them less competitive.
The Government believe in free competition. They believe that these industries should be able to stand on their own feet. It would be quite wrong if, as a result of an inheritance in the past when inflation was not contemplated and before the BSC came into being, there were to be frustration in both Port Talbot and Newport.
The Government have been in power for three years. Each year in Wales the situation has got worse and unemployment has increased. The Labour Government had many problems with which to deal, but quite often one 319 forgets that during that time unemployment was reducing while employment was increasing year by year. Employment was certainly up at the end of our period of office.
This Government have managed to double unemployment and reduce the number of people employed in Wales. That factor is frequently forgotten. I suspect that the Government have given up the ghost on tackling unemployment this side of the election. It would be much better and worthier if the Secretary of State were to be frank with Wales. The same applies to the Chancellor of the Exchequer. They should say "There is no hope at all of doing more than making a dent in unemployment this side of the election". Then at least the man, woman, young boy and young girl who face no hope today would know where they stand.
§ 6.4 pm
§ Mr. Tom Hooson (Brecon and Radnor)
The right hon. and learned Member for Aberavon (Mr. Morris) referred to the desirability of competition. It is deeply depressing that, when we consider the Welsh economy, no coherent competition with the Government is offered by the Labour Party. All that we heard were jungle noises interrupting the speech of my right hon. Friend the Secretary of State.
The alliance, that bright new hope of Wales, is represented in the debate by only one of the four hon. Members who represent the centre in Wales. The Plaid Cymru Party is missing. I should therefore like to analyse what little we have been offered in the Labour Party's alternative economic strategy.
Speeches about the number of people unemployed are a completely useless exercise unless there is an analysis of the nature of the economic problems that have produced that unemployment. Yet the moment that my right hon. Friend began a careful analysis of the Labour Party's alternative, he aroused such horror among the Opposition that in no circumstances could they listen to the truth, which sometimes even appears in The Guardian.
Quite startling is the extent to which unemployment afflicts every advanced economy, with one significant exception—the Japanese economy, where the rate of unemployment is about 2 per cent. From my student days when I read Keynes, I believe that it must be regarded as the normal, frictional minimum. In the Western nations as a whole, between 26 million and 28 million people are unemployed. Obviously there are no easy answers to the problem.
I am grateful that the right hon. and learned Member for Aberavon referred to the fact that any solution must be a relatively gradual one. I do not see why he should recommend that either to my right hon. Friend the Secretary of State for Wales or to my right hon. and learned Friend the Chancellor of the Exchequer as the theme of gradual recovery has been the truth uttered by every member of the Conservative Government.
Labour Members have spoken about the doubling of unemployment under this Government. It should be remembered that unemployment has doubled under just about every Government of the past 15 years. There is an extent to which the economy is not under the control of any Government. All that a Government can strive to achieve is conditions that permit a gradual hope for business men, entrepreneurs, inventors and so on to create work.
320 I would have very little confidence in the competence of even the present Cabinet to create jobs. I would have no confidence whatever in the competence of the Shadow Cabinet to create jobs. The only contribution that politicians can make is to create the conditions in which business men can create jobs. The economic illiteracy that characterises the Labour Party is utterly pathetic. Goodness knows, we have enough trouble grappling with the economic problems of the nation. We have heard evidence from the Opposition of the total inability of the Labour Party to articulate any alternative.
To the extent that there is an alternative, it comes back to those two unmentionable words. I am not sure whether my right hon. Friend was able to make those words heard through the hubbub from the hon. Member for Merthyr Tydfil (Mr. Rowlands). I regret that the hon. Gentleman is not in his place, because I wanted to say some critical things about him.
§ Mr. D. E. Thomas
I understand that during my absence in the Business Committee the hon. Gentleman said that no member of my party was present. Perhaps he will note that I was facilitating the business of the House, which is in his interests as well as mine.
§ Mr. Hooson
I accept that the absence of the hon. Member for Merioneth (Mr. Thomas) was short, and I apologise.
What is the alternative offered by the Labour Party? Of course, one has to ask "Which Labour Party?", because there are at least two Labour Parties.
§ Mr. Ray Powell
Is the hon. Gentleman suggesting that the Tory Party is united on all issues?
§ Mr. Hooson
Will the hon. Member clarify his point?
§ Mr. Powell
The hon. Gentleman said that there are two Labour Parties. There is only one Labour Party and it is far more united than the Tory Party is now or ever has been.
§ Mr. Hooson
The truth is that there are several Labour Parties. The more I brood on the question, the more fascinated I become by the fissiparous tendencies of the Labour Party.
There is the official Labour Party, which, generally speaking, is still wedded to the policies which, when it was in office, doubled unemployment in Wales from 38,000 to 84,000. The Leader of the Opposition tripled the unemployment in his constituency of Ebbw Vale while the Labour Government were in office, and his post at the time was that of Secretary of State for Employment.
§ Dr. Roger Thomas
The hon. Gentleman might like to ask his right hon. Friend the Secretary of State for Wales about unemployment in Milford Haven, Tenby and Pembroke Dock. Does the hon. Gentleman agree that it has at least quadrupled?
§ Mr. Hooson
When unemployment is rising in a country, there are bound to be increases in particular localities.
I do not wish to be diverted from my comments about the fissiparous tendencies of the Labour Party. We have an alternative Government with no new ideas who are simply wedded to defending the policies which were so unsuccessful that they led to the Labour Party's electoral defeat by the biggest swing that Britain had seen in 40 years, and the biggest swing ever in Wales.
321 I now come to the second Labour Party, because we can see more than one Labour Party represented on the Opposition Benches—I have yet to come to the shrewd deserters from the ship. At least, the second Labour Party has an alternative economic policy. Heaven forbid that it should ever be implemented. It is a policy of isolationism, of departure from Europe. It is a policy of "Stop the world, we want to get off'. It is a policy which overlooks the jobs which have been brought to Newport. The hon. Member for Newport (Mr. Hughes) is an enthusiastic anti-European but the future of his constituency depends overwhelmingly on integration with the European Comunity.
That is the second Labour Party. Its hope for the future is to have feather-bedding in every category of industry and to create extra paper jobs in every conceivable situation so that overmanning of the type that we saw in the 1970s would be multiplied even further. That way lies the further decline of Britain—but at least it would have the advantage that we would become recipients of development aid, having gone so far down the scale of industrialised countries.
Then there is the group of ex-Labour Party Members whose hope for the future lies in alliance with the Liberal Party, to give Wales the benefit of a completely separate Welsh Parliament. That is the new hope, yet that direction was rejected by a rather impressive 80 per cent. of the Welsh electorate. We have to look at the strategies that are offered before we can possibly consider the solutions, within the Welsh context, to the problems of employment. The absence of any serious discussion of that subject has characterised Opposition contributions to the debate.
The key element in the latter period of the 1970s—and which has to be seen as the price we paid for the Labour Government—was that concessions were made to the trade unions on so many fronts, economically and in every other way, with the social contract, that the increase in British wage costs averaged 14 per cent. a year over the life of that Government. It was twice that of the United States and Canada and three times that of Germany. During that period the super performer, Japan, showed no increase at all in wage costs. Naturally, it was Japan's trade that prospered.
In 10 years, British earnings increased in paper value by over 300 per cent., while productivity improved by 15 per cent.—only one-twentieth as much. We lost sales and jobs. It was true of the country as a whole and true specifically of Wales.
The right hon. and learned Member for Aberavon takes pride in his achievement in cushioning the effects of the decline of the steel industry but, as he was a member of the previous Labour Government, should he not also accept considerable responsibility for the long-term evasion of the fact that there was a massive degree of inefficiency hidden within the steel industry? The spectactular turn-round in the efficiency of Llanwem and Port Talbot—which we welcome on both sides of the House—is testimony to the fact that issues were neglected by the Labour Government because they were hot potatoes. The lack of courage shown by them naturally meant that problems which would have been easier to deal with in the mid-1970s became horrendous to deal with by the end of the 1970s.
§ Mr. John Morris
Was it lack of courage for the then Prime Minister, my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan), to have the closure 322 of the major steelworks in his constituency? Was it lack of courage for the then deputy Prime Minister, my right hon. Friend the Member for Ebbw Vale (Mr. Foot), to have a massive closure in his own constituency''
§ Mr. Hooson
The right hon. and learned Member for Aberavon must be well aware that there are times when it is the duty of a responsible Cabinet Minister to tell the truth, however unpalatable it may be. The remarkable characteristic of the Labour Party has been that, when it is in office, it treats the electorate rather like nanny treats the children—"Never blurt out the truth before the children, it might upset them too much."
§ Dr. Roger Thomas
I hope that the hon. Gentleman will not forget that when the then right hon. Member for Altrincham and Sale, Mr. Anthony Barber, was Chancellor of the Exchequer during the mid-1970s—he is now, of course, Lord Barber—his policy of printing money got Britain into great difficulties.
§ Mr. Hooson
It is clear that we have learnt one or two lessons that I hope are beginning to penetrate the Opposition parties. The first is that printing money is a particularly profitless exercise, although it seems to be absolutely fundamental to the policies offered by the shadow Chancellor of the Exchequer.
The second lesson that I hope is being gradually learnt is that, just as we saw an incredible loss in our wage competitiveness in the 1970s, we are now seeing the basis of an industrial recovery for Britain, including Wales, which is very closely geared to the improvement in our competitiveness. Price competitiveness against other nations improved by 10 per cent. last year, and that is remarkable progress.
I have an extract from The Daily Telegraph of 18 March this year reporting the trend in labour costs. I note, as an index of how Britain was becoming more competitive, that the increase of 2.6 per cent. in the final quarter of 1981 compared with increases of 5 per cent. in West Germany, 3 per cent. in Japan, 6 per cent. in America and 5 per cent. in France. We have reached the point where we are either neck and neck with or even ahead of the Japanese in our improvements. That is how we will establish a strong base. It is against that background that I repeat, since the House is in a calmer state than it was when my right hon. Friend the Secretary of State was speaking, the thrust of his remarks when discussing the various offerings to the Treasury model. It is remarkable. I am not aware of any alternative policy to that of the Government that has come anywhere near the effectiveness of the Government's policies on the basis of that model. It has always been open to Plaid Cymru to make its offerings and to each of the parties in the House or any individual to feed their figures into the model.
From the lack of any new strategy from the Labour Party for strengthening the economy I move to the secondary subject of the tactics for handling the problem of unemployment in Wales. In some respects I quarrel with the Government about those tactics, but the areas in which I have my quarrels are set in the wider context of my overwhelming endorsement of the strategic direction of the Government. I disagree merely about some of the tactics.
We face an important month or two during which Ministers will be reviewing the downgrading of the present 323 assisted areas. I was not satisfied with the reply by the Under-Secretary of State for Wales, my hon. Friend the Member for Conway (Mr. Roberts), in the Adjournment debate yesterday. We had a dialogue of the deaf.
My main argument was that Mid-Wales is not comparable with other areas. It has an extraordinary sparsity of population. The sparsity of Powys is demonstrated by its average population of 0.2 persons per hectare compared with 0.6 persons even in the neighbouring rural counties of Gwynedd and Dyfed. We have a sparsity of population that is unknown except in the Highlands and Islands. In turn, that is reflected by quite extraordinary burdens on the community and on the councils in the provision of numerous services, because we do not have the population base to sustain costs that are easily borne by areas with an average density of population. The economy of our area is comparable only with that of the Highlands and Islands. My complaint is a mild one, because I still have hopes that Welsh Office Ministers will listen to what we are saying in Mid-Wales.
§ Mr. Anderson
The hon. Gentleman said that Ministers are deaf.
§ Mr. Hooson
I said that yesterday's debate was a dialogue of the deaf. Perhaps Ministers have now found a deaf aid.
My complaint is that I presented a case which was fundamentally built upon the comparability of Mid-Wales with the Highlands and Islands of Scotland, and with no other area, but my hon. Friend the Under-Secretary did not even mention Scotland in his reply. Instead, he gave a long recital of comments which meant very little. Welsh Office civil servants are very good at preparing stonewalling statements that say nothing. That is what they have been instructed to prepare. It is important to clarify my differences with Welsh Office Ministers and that debate was at least valuable in identifying areas of confusion. It is not for me to speculate on whether the confusion was caused by a genuine misunderstanding or by a tactical wish not to understand the points at which we are driving.
When I was a boy I had a bumper book of conjuring tricks and I remember that one part of every trick was to find something to distract attention from the main object. That was achieved by my hon. Friend the Under-Secretary last night by means of a long discourse on the varied nature of the 10 travel-to-work areas in Mid-Wales. There was no need for him to become wrapped in all the obscure statistics of what is going up and what is coming down. The key area on which to concentrate is that covered by the Development Board for Rural Wales.
Another persistent theme that I have heard from my hon. Friend the Under-Secretary and, previously, from my right hon. Friend the Secretary of State is that the control of the review of assisted areas is in the hands not of Welsh Office Ministers but of the Secretary of State for Industry. The two Secretaries of State are to receive a deputation from the Powys county council, the local district councils, the DBRW, my hon. Friend the Member for Montgomery (Mr. Willians) and myself, and we hope that we shall make some progress, but if we do not we in Mid-Wales will not reproach my right hon. Friend the Secretary of State for Industry for following an absolutely rigid 324 statistical line, as he is not the member of the Cabinet who is specifically charged with protecting the interests of Wales.
Mid-Wales will know in about a month the Government's response to our representations. I reject the idea that this debate is about the ups and downs of 10 travel-to-work areas. It is about a strategic concept for rural Wales which we had assumed was generally accepted by all parties in the House and is certainly strongly supported by the overwhelming number of Conservatives in Mid-Wales.
We in Mid-Wales are fairly straightforward country people, but I hope that Welsh Office Ministers do not assume that because we are fairly simple we are also mentally sluggish. In that context, I wish to complain about three statistical arguments that I was offered in the reply to last night's Adjournment debate.
First, we were invited to applaud the only piece of good news offered by my hon. Friend the Under-Secretary, which was the allocation of £50,000 for a fishing research project to be based in Aberystwyth. That is good news and we welcome that initiative, but we were also told that we must not be too concerned if the loss of development area status led to the non-availability of EEC funds, since Powys had received only £2 million of such funds since 1975.
As I have said, we are simple country people, but we can see that the ratio between the £50,000 of good news and the £2 million of bad news is 1:40. I confirmed with the chief executive and treasurer of Powys county council this morning that a 1p rate in Powys raises £92,616. Therefore, £2 million is a not insignificent contribution to the economy of the area over a few years.
My second complaint about the too casual approach to the statistics of the Mid-Wales problem is that we were told to cheer up because Powys has the fastest growing population in Wales. It is true that there has been a considerable improvement in the population trend. That is a considerable tribute to the achievement of the strategy of the DBRW and its predecessor bodies because it reverses what had been for a century a trend of decline.
However, that news is not altogether good. Because of the attractiveness of our rural areas, they are areas to which people retire. The moment that there is a rather larger element of elderly people in the community—and they are most welcome—the social costs for a large number of services are greatly increased. Yet the working population continues to be a declining proportion. Again, I was not satisfied with the meticulous care on the statistics. The surface figures of the trend look good but the proportion of working population is not so good.
The third part of my hon. Friend's reply that I was dissatisfied with was his assurance that, after all, the Government were taking care of the funding of the DBRW because it was going up with the rate of inflation. Yes, it has done so, but I come back to the comparison with the similarly disadvantaged area of Scotland and what it gets. In February 1980, while the DBRW was being held strictly to the Public Expenditure Survey Committee budgets for 1980–81, the Highlands and Islands Development Board had an increase of £2½ million in its budget—from £14.8 million to £17.3 million.
Those are the three problems that need far greater discussion when I and my hon. Friend the Member for Montgomery meet the two Secretaries of State.
§ Mr. Nicholas Edwards
I am listening very carefully to my hon. Friend, and I thoroughly understand the strength of his case. However, I am inclined to ask him whether he thinks that in giving financial backing account should be taken of the unemployment factors, in particular job losses? Would he care to compare the unemployment figures and the job losses in his constituency with those in the Highlands and Islands Development Board area?
§ Mr. Hooson
I accept that we have to recognise that the number of jobs lost in particular areas is a big factor. I have no quarrel with the overwhelming priority given to the steel areas; that is right. I recognise that there have been particular problems such as that of Invergordon. I am not saying that one can make a direct comparison between the two countries in every detail.
We shall he looking for some support for the concept of a recovery programme, over a period of years, for Mid-Wales. Let us recognise that reversing the trend of a century is not achieved in a few years. We have had a period of remarkable progress by the DBRW. It is not a political football and I hope that it never will become one. It has had remarkable achievements in the creation of jobs and rural amenities in its first three or four years.
The question now is whether the DBRW will lose its momentum. A great deal of its strength has been not only the support that it has given to the economy and to the social features, but the fact that it has been able to couple this with marketing to small businesses. They are the sort of businesses that are not in competition with Deeside. There is also the degree to which the DBRW has been able to offer investment incentives in terms of grants on machinery.
I shall not be rigid in looking for the form in which that provision of incentives is made. We have to allow Ministers to exercise initiative. My hon. Friend the Under-Secretary told me that we should not worry about a trivial sum like £2 million. Therefore, I assume that the Government would not worry about providing a trivial sum of £2 million or £3 million to make up for any loss of European money.
§ Mr. D. E. Thomas
I endorse all that the hon. Member has been saying, and I hope to develop it later if I catch your eye, Mr. Deputy Speaker. However, does he agree that, by adding £2 million to the overall budget of the DBRW, the Government would be merely taking it to the spending level of the Labour Government, which they reduced?
§ Mr. Hooson
I am not sure about the hon. Gentleman's statistic. He may be right, but I am not familiar enough with the figures to know. My understanding is that during the life of the Government figures have been maintained at a good, basic level but I am not in a position to answer authoritatively on that point.
We should allow some flexibility to Ministers in proposing a solution that addresses the peculiar problems of Mid-Wales. Our absolute statistics of unemployment are not that large. To a great extent, the problem is related not to unemployment but to the healthy functioning of a society and the propping up of little villages and small towns that are on the margin of a viable community.
The community may find itself paying the costs in a different way if it is not tackling the costs through the DBRW. Each year we look to the Secretary of State for Wales for the safety net, which is the only source for a real 326 solution of the rate problem in Powys. Were pure statistics to be followed, the rate burden would be absurd. We are the extreme freak in all of England and Wales. The nearest freak in the same category is the Isle of Wight. We are able to survive only because we are given a dollop of charity—about £1½ million a year—by the Secretary of State, because he has to recognise that the computer print-out produces utter rubbish. That is inevitable. At the extremes, there are freak cases.
Therefore, our problem is not large in money terms; it is not even large in the number of people who are out of work. However, it is a problem that cannot be tackled by the sledgehammer. It needs a particular approach. Basically, it calls for rather small factories, but it calls for factory employment. Overall, the increase in manufacturing employment in Mid-Wales, the DBRW area, from 14.7 per cent. in 1967 to 19.8 per cent. in 1977 is crucial if we are to have a reasonable balance of employment in the area.
Agriculture has shown an improvement in productivity and efficiency which, had it been matched in the rest of British industry, would have left us in a very different state as a nation, but there are limits to the number of jobs in agriculture, as there are in tourism. We wish to develop tourism, but a realistic appraisal of the number of jobs that can be added in tourism in the DBRW area over five or six years is about 750.
In this context, the continued encouragement of factory employment is essential, whether it comes through assisted area status or by enlarging the legal powers of the DBRW. That could be done by simply adding two words to the definition of its object in life. Here we should allow some flexibility to Ministers. We shall be looking to my right hon. Friend for evidence that in the next month or two he has understood that we have a particular problem in Mid-Wales.
§ The Under-Secretary of State for Wales (Mr. Wyn Roberts)
I should like to correct one of my hon. Friend's remarks a propos of what I said last night about the population of the development board area. I said:while the rest of Britain has experienced a growth in the proportion of the population over working age, the proportion has not increased in the board's area. Indeed, the working age population of the board's area has increased by more than in the rest of Wales and Great Britain.I think that my hon. Friend has misinterpreted what I said last night.
§ Mr. Hooson
I accept my hon. Friend's correction.
I shall conclude with one point that modifies my hon. Friend's remarks. Although we have an increasing population in Powys, the death rate continues to exceed the birth rate. Without further inward migration and population, the population will decline.
We need jobs for the people of working age—people in the age groups from 20 to 50—in the factories. It is important that we do not slip below the population level at which the retrieval of costs is only possible by the charity of the Secretary of State, in such directions as the rate support grant.
Mr. Deputy Speaker (Mr. Bryant Godman Irvine)
Hon. Members should know that the last two speeches have taken over an hour. Twelve hon. Members wish to catch my eye. Therefore, the rate of production must be increased considerably.
§ Mr. Donald Anderson (Swansea, East)
The aim of a conjuring trick, as the hon. Member for Brecon and Radnor (Mr. Hooson) has truly stated, is to distract the eye and attention from the principal object of interest. For us, the object of the debate is the number of unemployed in the Principality, which is now more than 170,000, and rising. We shall not be distracted by articles in The Guardian or by lists of additional floor space when we see around us the human misery caused, in large part, by Government policies.
The scale of unemployment in Wales is unprecedented. The seasonally adjusted figures for April this year show that Wales, at 15.2 per cent., has the largest percentage of unemployed in Great Britain. That is a far cry from the picture that was given by the Secretary of State.
All regions have suffered an increase in unemployment, but the largest over the two and half years to December 1981 was in Wales. My source is last month's Employment Gazette. We see the picture in each of our constituencies. In my area male unemployment has risen from 8 per cent. in May 1979 to almost 20 per cent. now. Therefore, not only is the scale of the problem unprecedented, but it was not expected, and the response has been insufficient.
My hon. Friend the Member for Pontypool (Mr. Abse) chaired the Select Committee when we had our initial sittings on unemployment in the Principality. In March 1980, we were told by the permanent under-secretary at the Welsh Office that unemployment would peak at 125,000. The range of estimates for unemployment in 1983 that was given to the Select Committee during the spring and summer of 1980 was from 144,000—estimated by Cambridge Econometrics—to 172,000, according to the Bangor college model. We may have thought that the academics, as theoreticians, were far from reality. In fact, they were optimistic in their predictions. The reality is that the figure is already above their predictions, and rising. We predicted a job gap with high pockets of unemployment in certain areas, which could not exist for long without creating social problems and tensions. We see nothing in the Government's response that in any way measures up to the scale of the need in Wales.
From the end of the 1970s—the beginning of the Government's period of office—we have seen the death of traditional regional policy. In no way can the most dire predictions be avoided without a change in national economic and regional policy.
Traditionally, our regional policy was designed to operate in a different context from the one that faces us today. It was designed to influence growth and the movement of manufacturing jobs to areas in decline and less healthy areas. Now we have little or no growth in the United Kingdom. There is little or no movement of industry. Manufacturing is in decline. Production in the United Kingdom has decreased by over 19 per cent. during the Government's period of office. All areas are unhealthy to a greater or lesser degree.
We understand the traditional criticisms of the old policy, which were that it was too concerned with manufacturing industry and encouraged branch factories and failed to promote the expansion of existing firms, yet in Wales in the 1960s and early 1970s regional policy was a major success. We had an active regional policy, good labour relations and improving communications that served us well. We were able to diversify after the coal 328 losses as a result of manufacturing industries coming to the Principality. As the pace of manufacturing growth slowed down, in the middle 1970s service industries took the strain, but by the end of the 1970s even that input from service industries was declining.
The 1979–80 period brought that era to an end. We have had real cuts in public service employment. There has been a decline ip the manufacturing sector and slow growth at home. By the late 1970s regional policy in Wales was one-third as effective in creating new jobs as it had been in the hey-day of the late 1960s. There have been regional policy cutbacks, the IDC machinery has gone and the regional employment premium was abolished by the Labour Government in 1976. In August, regional development grants will be cut from 20 per cent. to 15 per cent., and downgrading of assisted area status is likely in many parts of the Principality.
If we are to make any impact on the current problems that face Wales and the level of unemployment, we should look again at the old regional policy, which served us so well in the past in different circumstances. Drawing on all the resources that are available to us in the Principality, we should create a new regional policy, which must be more service industry orientated and must boost job creation in local areas.
The Secretary of State talked about growth and mentioned certain industries. As is seen from the CBI predictions, that growth is not relevant to us in Wales, whereas there have been some healthy signs outside. The last statement from the chairman of the CBI wasCount us out in Wales. We see no such signs of any new dawn.Even if there is growth in the private sector, there is such massive spare capacity at the moment that it will not have a major effect on unemployment. Therefore, where does the Welsh Office expect the contribution to the reduction of our unemployment totals to come from? When does it think that the recession will come to an end?
A more positive role in public sector investment can help. The Secretary of State will know of the British Institute of Management Cardiff sponsored research via the Polytechnic of Wales and its detailed analysis of our unemployment problems. It stresses that its figures are not as co-ordinated as it would like and suggests that the MSC and the Welsh Office should get together to co-ordinate those figures. Its conclusion is clear. The biggest single impact on the level of male unemployment in the Principality can be achieved by a major public construction programme over a number of years. If the Government impose constraints based on their monetarist policies and the PSBR, the BIM suggests that other sources such as banks, the building societies and pension funds might be tapped in experiments such as the Tarmac M20 proposal.
It is clear that these job losses will continue as a result of public sector cutbacks both directly within the public service and indirectly. My right hon. Friend the Member for Swansea, West (Mr. Williams) and I saw the Minister recently in relation to the South Wales Transport Company cutbacks. In this economics of the madhouse, the transport company, as a result of the general pressures on local government spending, had to save £100,000 by cutting 50 jobs, by making 50 men redundant, at a time when we know from trade statistics that one unemployed man costs the country £5,000 on average in lost income tax and increased social security payments.
329 My view is that we can accept a certain level of "inefficiency" in areas such as bus undertakings and old people's homes, which are not in the directly competitive sector if we are serious about bringing down unemployment in our areas. Growth will not be sufficient. There is too big a deficit on job generation; and short-term measures can only be of assistance—they cannot be a solution.
It may be that we need a new approach to unemployment, a new work ethic. It may be that "full employment" as we have known it is a thing of the past. Surely the Government must accept that, even if all their policies are successful, even if all that floor space is filled, even if there are incoming industries, they will not make a substantial impact on the current level of unemployment.
Let us say that that level of 170,000 or 180,000 is reduced over the medium term by 20,000 or 30,000. The key question is this: are the Government prepared to tolerate an unemployment level in the Principality of not less than 150,000 for as far ahead as we can see? If they are, I believe that they are massively letting down the people of Wales. How much unemployment are they assuming for next year? Certainly the Budget, which the Chancellor called a "budget for jobs", anticipated that over the period there would be an additional 300,000 people unemployed—of course, the Government are normally optimistic in their forecasts—over the United Kingdom as a whole, and Wales will have an undue proportion of that increase, as shown by recent statistics.
Are we prepared to tolerate long-term unemployment which will result from those levels? Are we prepared as a society to tolerate the levels of youth unemployment which will stem from that? However prepared the Government are to massage the figures by moving retired people at 60 from the register on to social security, by the youth training scheme at the other end, and by making the figures appear less bad than they are, a man knows if he is unemployed, and we know the levels of unemployment which are likely to result. These are for us completely unacceptable in social and moral terms and demand a radical rethinking of our policies.
The required more radical package of measures should include, first, a decision to delay the downgrading of our assisted areas which is due in August of this year until the unemployment figures are significantly lower. We shall have to accept a more positive role for the public sector, possibly, as the Cardiff BIM suggested, tapping more sources of private finance. We should, too, as the Wales TUC has suggested, consider a Welsh "Neddy" to co-ordinate activities in this field.
We have to adopt a longer-term basis by identifying the problems in our area and seeing how the pool of unemployed can assist. In Wales, we look around and see the derelict land, the scars of the industrial activity of the past. We need local landscape improvement schemes on a far greater scale than we have at present, absorbing in particular young people.
There are considerable and increasing numbers of people in our community who need help in various ways—elderly people, the mentally handicapped and the physically handicapped. One area for job expansion must surely be in working with and caring for people and bringing the community together, paying neighbours perhaps to help the aged, the mentally ill and others. That 330 has not been attempted in this country, but it is being done in the United States to some extent, mainly through tapping private sources of finance.
We need to carry out research on new work regimes. An example is job sharing, and I would hope that the public sector would set an example in experimenting in this field. We need to support local initiatives, particularly in manufacturing. I recognise that in the recent Budget the tax position for start-up firms has been made considerably more favourable, but firms which need small amounts of assistance and soft-loan finance often have difficulty in finding money and in finding the basic professional advice to get them going. These are important matters, but will not be major job providers.
We must also do something about our industrial structure in Wales, the existing industries, the public corporations and local authorities, which have multiplier effects in their own purchasing policies and together can buy local in a form of local "import substitution" exercise—that is, collaboration among the major users in our localities on their suppliers going back into the production line, on the old co-operative principles.
These are all major and radical initiatives which will have to be attempted if we are to refuse to accept the present levels of unemployment and which will otherwise continue to be with us. The basic question which the Government—indeed, any Government—have to face is this: are we prepared to tolerate the current levels of unemployment, and, if not, are we prepared to break down those traditional constraints, the traditional perspectives, and seek more radical solutions?
§ Mr. Ian Grist (Cardiff, North)
We have been told by the Opposition, who have called for the debate, that they are concerned about the unemployed. That is the essence of the debate. It is extraordinary that, apart from the speech of the hon. Member for Swansea, East (Mr. Anderson), we have heard little about what should or could be done for the unemployed. The hon. Member for Swansea, East really did not say very much either. He indicated, among other things, that he would tolerate inefficiency in transport undertakings in order to save jobs, without seeming to appreciate that inefficiency in such a major industry would itself have a knock-on effect. both morally and on other related industries, which would deter investment, productivity and jobs in that sphere as in others.
The hon. Gentleman also called for job sharing—a concept that I have never understood, unless it is that the cost of employing one man is to be split equally between two. Otherwise, presumably, employing two people to do one man's job, with national insurance payments and all the other things involved, would mean that the employer would be burdened with even greater costs. So how job sharing could benefit our industry and enable us to save jobs in a competitive world economy I have never understood.
§ Mr. Anderson
The hon. Gentleman must know that our major competitors subsidise their transport undertakings far more heavily than we do. The sort of thing that I had in mind was a move to one-man operation of buses, which meant that elderly bus drivers, who found the strain too great, could then become conductors. There are good social reasons, not only from the point of view of fighting 331 unemployment but also as regards assisting people getting on buses, for not having a totally one-man operation throughout the bus undertakings.
§ Mr. Grist
The hon. Gentleman is mistaken about this subsidy to public transport. If he looks at the amount which British Rail is given every year, he will find that it compares favourably with what the French give to their special lines.
The hon. Gentleman might also consider the modern electric trains that British Rail has cluttering up its yards. It cannot use them because the unions will not permit one-man operation. Millions of pounds are tied up because of restrictive practices. The country has borne such curses for far too long. That is why we should have sympathy for the unemployed. Leaders of industry and of unions have for many years lived with an inefficient outlook. Time and again they have yielded to buy peace, as it seemed the easiest option at the time. We all knew in Wales that our steelworks were inefficient. We got away with it until we could no longer do so. We did not tell the people the truth early or strongly enough.
The Opposition now stand on a programme that flies in the face of the programme that the Labour Party stood on at the election three years ago. For six years I watched a Labour Government put forward the same policies. For instance, the right hon. Member for Cardiff, South-East (Mr. Callaghan) rightly supported membership of the EEC, as did the right hon. Member for Leeds, East (Mr. Healey) and most leaders in the Labour Party at the time. The party did not; it split down the middle. For the first time, we did not have Cabinet responsibility. The Labour Government told the people to vote to stay in Europe, but Back Benchers campaigned against it. That shows Labour unity, even in government. At least its leadership then had the guts to tell the truth. We must remain in the EEC.
That is also the difference between the hon. Member for Swansea, East and the hon. Member for Newport (Mr. Hughes), who spotted the lacuna in his hon. Friend's argument. The hon. Member for Swansea, East and other Labour Members are rightly not willing to see us leave Europe, but that is a major factor on which they will be asked to stand at the next election.
On the question of maintaining a nuclear deterrent, the Labour Party has again changed since being in office. If Britain breaks her alliances and responsibilities in trade or in defence, others will not trust us for long-term contracts.
Apart from the right hon. Member for Glasgow, Hillhead (Mr. Jenkins), when he was Chancellor of the Exchequer, the greatest monetarist was the right hon. Member for Leeds, East when he was Chancellor. Building on housing estates in my division came to a halt for as long as three years because of the Labour Government's sudden spending cuts on a scale that we have never experienced under the present Government.
Incomes control is a dirty expression now, but the Labour Party carried it through. In the autumn of 1978, when he funked the election, the right hon. Member for Cardiff, South-East stated that if pay rises were higher than 5 per cent. unemployment would rise. It is what everyone who was economically literate knew. When pay rises reached 15 per cent., up went unemployment, just as surely as night followed day. If Labour Members did not know that, they darn well should have done.
§ Mr. Donald Coleman (Neath)
How did the hon. Gentleman vote on the Ford issue? That was all about an incomes policy. Did he vote against the 5 per cent?
§ Mr. Grist
I cannot remember a vote, but I remember Ford breaking the limit. [Interruption.] That is why we do not now have an incomes policy.
If a company is daft enough to pay what it cannot afford, it will go bust. The alternative is a law to prevent the firm paying the money, which I do not believe the hon. Gentleman would support, bailing it out with subsidies which would have to come from the few companies left that had not paid the rises and were still making profits, or printing or borrowing the money. We are in the present mess through a mixture of all those policies.
The right hon. and learned Member for Aberavon (Mr. Morris) was Secretary of State when we opposed the WDA. We were concerned about the mood in which the WDA and the NEB were formed before we went to the IMF and Labour lost its majority and the right hon. Member for Bristol, South-East (Mr. Benn) and his policies were riding high. We feared that the body could have been used—it would have been, but for Labour losing its majority and the economic crash—to further creeping nationalisation, which is still the policy of a large number of Labour Members.
I return to the point that jobs lost in the BSC are, sadly, in many respects our responsibility. The Labour Party is worried about unemployment. It has not offered a plan to combat it. The Wales TUC has a plan. There is the chant of withdrawal from the EEC. It also wants more public spending, although we know that would have a chronic effect on overseas trade. Until we are competitive, more public spending means higher inflation. Even Mr. Wynne Godley admits that. According to the Cambridge school, the Labour Party's policy will have a minimal effect on unemployment over the next five years and result in higher inflation.
The Wales TUC also wants a minimum wage. That is anti-female and anti-black. Not necessarily in Wales, but in textiles and other poorly paid trades generally the lowest paid tend to be women and the disadvantaged. They would be priced out of their jobs, which would go to Taiwan and other Third world countries, unless the policy was tied to import controls and quotas. That in turn would damage Third world countries, which we are urged to help.
§ Mr. D. E. Thomas
The hon. Gentleman has exhibited himself to be sexist, racist and imperialist. The corollary of what he says is that blacks, women and workers in Third world countries should perpetually be on subsistence wages.
§ Mr. Grist
It would be better for people to be in, rather than out of, jobs. That is also relevant to the young workers scheme. We are discussing unemployment. If wages become uneconomic, people lose jobs, unless we have import controls to keep out goods that are made more cheaply or competitively abroad.
Many Opposition Members advocate import controls. Indeed, that is the policy of most of those who want Britain to leave the EEC. They want to put up import controls against the EEC. Presumably they do not want to do that against the rest of the world with which, as my right hon. Friend the Secretary of State pointed out, we have lost competitiveness faster than with our European neighbours.
§ Mr. Jeffrey Thomas (Abertillery)
Does the hon. Gentleman agree that if Britain were to withdraw from the EEC thousands of jobs—about 90,000 in Wales alone—would go? Does he also agree that firm after firm that came to Wales purely and simply because it is a springboard for Europe would pull out?
§ Mr. Grist
That is obvious. The European head-quarters of National Panasonic is in my constituency. If we were outside the EEC, the attractiveness of Britain would severely contract. Apparently, some Opposition Members believe that we could come to a form of free trade area arrangement with the remaining members of the EEC. Such hon. Members are living in cloud-cuckoo-land. It is absurd to think that we should be able to compete freely and openly with countries that have no control over our competitiveness. Do Opposition Members seriously believe that British Steel, subsidised and protected, as they wish, would be allowed to enter the remaining countries of the EEC tariff and control free? Of course not. Do they seriously believe that, if we have trouble now persuading Italy to accept some of our cars with a Japanese content, such cars would be allowed in if we were not members? Of course not. It is downright dishonest for Opposition Members to con innocent members of the electorate into believing that such would be the case. They know that it would not.
§ Mr. Roy Hughes
What tariff does a motor car imported into the EEC from Sweden bear?
§ Mr. Hughes
It is nothing.
§ Mr. Grist
If the hon. Gentleman believes that Britain, a country of 55 million people, is on a par with Sweden, a neutralist and small country, he should go out and tell the people of Newport that he believes that that is all we are worth. Great Britain is a major world power, not a small neutralist country.
I should like the Minister to deal with education. The hon. Member for Merioneth (Mr. Thomas) may also wish to say something about it. I am anxious that educational standards in Britain, and especially in Wales, may not be sufficiently high now or in the future to sustain our entry into the new technology age.
My right hon. Friend the Secretary of State mentioned the many new firms that have come to Wales. Many of them deal with new technology. I am worried not about having sufficient workers to man those plants, but about the number of people who are able to originate such works. I am worried whether people will have been educated to a sufficiently high standard to be able to start their own firms and carry on business in Britain.
We welcome the gentleman who formed Mitel. Are we not glad that he is coming back to Wales? What a good export he was. Thank heavens he is coming back, but what a pity it is that he could not have made it here in the first place. Why did we not have the atmosphere that would have made him a multi-millionaire in Britain? The reason is that many people become envious of such people. However, when they create factories in their constituencies, they no longer seem to mind quite so much. Can we be sure that people are being educated in maths and physics? Can we be sure that in night classes and adult education centres computer technology is sufficiently studied?
334 There are worrying aspects about the paper that my right hon. Friend published on "The Effects on the Education Services in Wales of Recent Local Authority Expenditure Policies: An Assessment by HM Inspectorate". It shows a slight drop in such studies. May I be assured that in school and further education we are managing to hold our own in this subject?
We have had this debate about three times in the past seven weeks. Nothing new has been said since the first one. We have been round the course time and again. It is about time that the Opposition started to reveal a little of what it means to be in Government. Many of them know the troubles and difficulties of Government. In their hearts, many of them know the real answers. They have been terrorised by their Left-wing and troubles in their constituencies, and, in some cases, a sense of power seeking. Their behaviour to the British public in the past three years, quite apart from any doctrinal differences that I may have with them, has been nothing short of absolutely disgraceful.
§ Mr. Barry Jones (Flint, East)
The hon. Member for Cardiff, North (Mr. Grist) has made an unusually passionate speech. He left the Front Bench to make it. I am reminded that he once worked for the Conservative Party Central Office. The House has just heard the pure and undiluted accents of Conservatism, with which I completely disagree.
If the Secretary of State were without the Welsh Development Agency in the present emergency over jobs in Wales he would be utterly without an instrument to give any shred of hope to the Welsh people in the decade ahead.
I have referred briefly to the speech of the hon. Member for Cardiff, North and will now deal with the Secretary of State. Where is the dignity of the famous office that he holds? There was none of that in his speech today. It is not for him to take so divisive an attitude when the Welsh people suffer the agony of mass unemployment. Many of us would say that the Secretary of State carries some responsibility for that. His speech was divisive, irritable and provocative. He should be greatly ashamed of it.
§ Mr. Nicholas Edwards
Is the hon. Gentleman suggesting that the Opposition, in advancing their alternative policies, are to be immune from criticism? If they do not put forward credible policies, I shall unceasingly expose that fact to the Welsh people and the House.
§ Mr. Jones
The right hon. Gentleman made an unpleasant speech. He has a responsibility, at the best of times, to try to take Wales with him. Nothing he said today adds honour to his office. The deplorable facts at the centre of the debate are that 171,000 Welsh citizens are seeking work and there are only 12,000 jobs in the pipeline for the next two or three years. In my constituency nearly 9,000 people are out of work and there are but 1,200 jobs in the pipeline.
In the British context, since 1979, we have lost 2 million jobs. It is not an exaggeration to say that the Welsh economy has been pulverised and that the monetarist experiment has hit the regions and Wales hardest. There are now nearly 1 million citizens who have been out of work for six months or more. Long-term unemployment is widespread throughout the regions. That is especially so 335 in Wales. Welsh Office Ministers at this stage in the history of the Government do not inspire a great deal of confidence.
They took office as fervent supporters of monetarism, but they now have to rattle their begging bowls in the Cabinet Room and elsewhere in Whitehall. In their hearts, they must all by now be Keynesians. Without a major shift in the Government's economic policy, our hopes of getting rid of mass unemployment in Wales will never reach fruition. I suspect that the daily prayer of Welsh Office Ministers must be for such a major shift in economic policy. Only huge and sustained public spending systematically to reflate the economy will banish the dole queues in Wales.
If we wish to tackle mass unemployment in Wales, we should not invest in the Trident missile. If, as a nation, we are to be serious in tackling mass unemployment, that must surely be a battle for many years. The investment of £7 billion, £10 billion, £12 billion or even more on this unnecessary missile will surely make the British economy weaker rather than stronger.
I urge the Government, first, to introduce subsidies for firms that take on and train labour and also for firms that recruit workers as a consequence of reduced working time. Secondly, I urge that such firms should employ workers who have been unemployed for more than six months. The emphasis of Government aid to companies must be shifted from capital subsidies to employment subsidies, and financial aid should be channelled more emphatically through the National Enterprise Board and the Manpower Services Commission.
My hon. Friend the Member for Swansea, East (Mr. Anderson) made a brilliant analysis of some of the problems in Wales and made some effective comments on regional policy. The Government's regional aid policies must be boosted. It could be argued that at present the Government are partially dismantling regional aid policy. They should encourage more early retirement and the existing job release scheme for those in their early sixties should be greatly enlarged. So massive is our country's unemployment problem that we should also encourage more time off for workers to study, longer holidays and earlier voluntary retirement. We should also seriously consider a 35-hour week and arrangements for part-time working.
§ Mr. Jones
We have been asked to keep our speeches brief, but I will give way to the hon. Gentleman if he wishes to prolong mine.
§ Mr. Grist
The hon. Gentleman has put forward some very desirable objectives, which I believe that we shall achieve in time if we can pay for them. But how can we pay for them in the short term and remain competitive with other countries?
§ Mr. Jones
I cannot respond fully to Conservative Party Central Office conundrums in the time available, but I have already said that the Trident missile is unnecessary. That will cost the nation at least £10 billion, which could be spent on some of the measures that I have briefly outlined.
The hopes of many young people who are currently out of work will rest on the early implementation and success 336 of the Government's new training scheme. I warn the Secretary of State, however, that the chances of successfully operating the scheme may be blighted if the Government recklessly continue dismantling the statutory industrial training boards. If the training scheme is to be successful, the industrial training boards are vital, so that the skills and training can be delivered. In dismantling the industrial training boards, the Government are creating trouble that may well prevent their new training scheme from being successful.
It is entirely wrong for the Government to say that payment for school leavers taking up traineeships under the scheme should be as little as £15 per week. I hope that the Government will heed the recommendation of the Manpower Services Commission's task group that by the autumn of 1983 the payment should be about £28 per week. It would also be foolish for the Government to say that school leavers who decline places on the scheme will be debarred from supplementary benefit. That would be unjust, mean and disgraceful and would introduce an element of compulsion that would not help the scheme.
§ Mr. Delwyn Williams (Montgomery)
Will the hon. give way?
§ Mr. Jones
No, I am pressed for time.
Having young men and women on the scheme who have no wish whatever to be part of it is one way of wrecking its prospects. Therefore, with regard to the weekly payment and to the possible element of compulsion and debarment from supplementary benefit, the Government should heed the warning of the CBI and the TUC.
Between the wars, President Roosevelt gave hope and employment to thousands of working-class people in America who were without work by effectively expanding the economy through the policy that became known as the New Deal. I hope that the Government will give a new deal to the Welsh economy. The wealth from the North Sea should be used to create new work rather than to pay dole to 3 million or perhaps 3½ million demoralised citizens. My constituents face a miserable future unless there is a major change in Government policy. Untrained teenagers and the redundant middle-aged in Wales may never work again unless British Governments are prepared to invest hugely over five years or longer in industrial renewal and job creation.
I understand that the task force in the South Atlantic may cost more than £500 million. The Secretary of State for Wales should ask the Prime Minister to set up a small task force of senior Cabinet Ministers to respond to the urgent need to bring forward measures to get rid of mass unemployment in Britain. I would welcome a task force in Deeside designed entirely to get rid of mass unemployment.
I wish briefly to raise the question of the future of the Abbey Mill at Greenfield near Holywell in my constituency, where 130 jobs are at stake. I am informed by the secretary of Olives Paper Mill Company Ltd., which wishes to buy the mill, that £1 million will be required over the next three years for the mill to have a viable long-term future. I am told that the Welsh Office has now been asked to provide £250,000 to assist in saving both the mill and 100 jobs. I am told by the secretary of the company that wants to buy the Abbey Mill that negotiations are continuing and that a decision will be 337 made at a meeting of the responsible committee of the Welsh Office next Monday. I am asked by the company and by the work force to plead the case for saving the mill and the jobs that total over 100. I had thought that the bargain was struck.
The work force at the mill has been magnificent in collaborating. It has agreed to de-manning and has boosted productivity hugely. It has done all that the Government can ask of any factory to survive. I wish to remind the right hon. Gentleman the Secretary of State that Connah's Quay power station has a very bleak future——
§ Mr. Nicholas Edwards
I should like immediately to respond to the hon. Gentleman. My Department is in close touch and is having discussions with the company to which he has referred to see if the criteria can be met. As he rightly says, the project is going to the Welsh Industrial Development Advisory Board on Monday. We shall do everything in our power to see that a package is put together that is successful. I cannot say more than that at the moment.
§ Mr. Jones
I am grateful to the right hon. Gentleman for his positive and sympathetic intervention. It must be good news for my constituents whose jobs are at risk. Nevertheless, the right hon. Gentleman must remember that, notwithstanding the fact that there are nearly 9,000 people out of work in the East Flint constituency, it is probably the case that 250 jobs will be lost at Connah's Quay power station while the Courtaulds mill at Flint is at least temporarily closed. I look to the right hon. Gentleman to help those constituents of mine.
§ Mr. Tom Ellis (Wrexham)
I was surprised to hear the response of the right hon. and learned Member for Aberavon (Mr. Morris) to the Secretary of State's speech. It would he churlish of me—I speak, like the right hon. and learned Gentleman, as a political opponent of the Secretary of State—if I did not congratulate the right hon. Gentleman on what I thought was a brilliant exposé of the hollowness and the ambiguity of the Labour Party's economic policy. I do not think that the right hon. Gentleman will be accorded higher praise than that which was implicit in the behaviour of the official Opposition whose barrage of interruptions from sedentary positions and girlish giggles amounted to what I can only call infantile behaviour which at times reduced the Chamber to the level of a circus. It was behaviour that contributes greatly to the contempt in which so many of our fellow citizens hold hon. Members.
Your predecessor in the Chair, Mr. Deputy Speaker, reminded us several times that we were debating the economic and employment prospects of Wales. Despite some of the better news that the Secretary of State gave, it is clear that the prospects are bleak. They are bleak because prospects for the British economy and for British employment are bleak. If anyone is not convinced by what I say, I can do no better than commend some of the excellent speeches made last night in the debate on the national insurance surcharge amendment to the Finance Bill. I commend especially the speech of the hon. Member for Chippenham (Mr. Needham) from the Conservative Benches and also the speeches of my hon. Friends the Members for Gateshead, West (Mr. Horam) and for Colne Valley (Mr. Wainwright).
338 The hon. Member for Chippenham, who speaks with considerable experience of industrial management, gave many examples of what at one time were competitive companies that have gone out of business through loss of productivity. The hon. Gentleman pointed out that industry did not want lectures rather like the contribution of the hon. Member for Cardiff, North (Mr. Grist), on overmanning, demarcation disputes, shoddy work, failure to deliver on time, strikes and poor management that are trotted out year after year by those who, by and large, have no experience of industry. The hon. Member for Chippenham pointed out that both Front Benches in that debate had virtually no experience of industrial management. The same seems to apply in today's debate.
The hon. Member for Chippenham also pointed out that productivity—a key issue—is affected not only by overmanning and demarcation, and all the other hackneyed phrases that one could use, but by plant utilisation, building up of stocks and greater confidence in the fact that regular orders will flow. The Welsh economy has to be regarded within the context of this greater British economy. That is the real challenge at the door of the Government. Despite what the Secretary of State says, the Government are not really assisting industry to achieve the productivity that they claim is essential.
I wish to refer specifically to the Welsh economy within the context of the British economy. There are certain objectives that are fairly obvious. First and foremost is the need for real answers to the immediate political necessity of dealing with unemployment; that must be the top priority. Within that lie all sorts of things, including not only policies for Wales but policies—I think here that I shall have the support of the hon. Member for Brecon and Radnor (Mr. Hooson)—for Mid-Wales, North Wales and South Wales, and urban Wales and rural Wales.
There is also the need, to which the Secretary of State referred, to give a positive view of Wales as an attractive region for the future. Another important point is to see that, whatever policies are produced, they are within the context of EEC regulations. I should like to say to the official Opposition that I find the opportunities within the EEC to achieve what I would call a structured economy and what the West Germans call a social market economy—not a pure free market but a mixed economy—is there for the taking. If, at any time, I had been offered a portfolio in the Community, I would have leapt at the competition portfolio. This gives the opportunity to develop the structured market economy.
§ Dr. Roger Thomas
§ Mr. Ellis
I cannot give way because time is limited and there have been some long speeches.
There has undoubtedly been a transformation of the Welsh economy since 1945. However, the transformation has been nowhere near radical enough, adequate enough or good enough. The plain fact is that we, in Wales, continue to lag behind the more prosperous areas of England on the basis of all kinds of economic criteria such as per capita income, GDP per capita and so on. All the time, we have had a consistently higher unemployment rate than in England.
The question is whether there is something inherently wrong with Wales. I believe that there is. Leaving aside the historical development of Welsh industry, the inherent deficiency is the lack of political clout. That is my brief 339 answer to the scornful reference of the hon. Member for Brecon and Radnor to the proposals of my party to alter the political structure of the United Kingdom. This is essentially a question of trying to spread political clout more equitably across the whole of the territory of the United Kingdom.
Another feature of the Welsh economy that is worth mentioning is that over half of all employment in Wales derives from what I might call governmental activity—that is to say, national Government, local government, nationalised industries, public corporations and agencies. This excessive dependence in Wales on the public sector is aggravated by the lack of adequate regional Welsh influence on the decision-making, administrative and political framework based in London. I say that without any disrespect to the right hon. Gentleman. Indeed, the right hon. Gentleman certainly fights for his corner as well as any of his predecessors.
Another obvious feature of the Welsh economy is the fact that it is still excessively dependent on nineteenth century primary industries such as coal, steel, agriculture, and forestry. It is still heavily dependent on a nineteenth century communications system. Of the modern industries that have come to Wales, few are labour-intensive. I keep making the point, and I shall go on making it, that it is extraordinary that the Government have about 100 large research establishments in the physical and biological sciences, employing about 15,000 graduates, but not one of those establishments is in Wales. It is crucial to introduce that sort of high quality industry into Wales.
Taking all those factors into account, the SDP in Wales has been having a number of meetings to discuss the problem. An estimate has been made of the number of jobs required in Wales to attain relatively full employment in the next 10 years. Taking into account the growing population, the increased number of women looking for work, existing unemployment, future structural redundancies, the increased capitalisation of manufacturing industry, and so on, we have concluded that 300,000 jobs will be needed in Wales over the next 10 years. That is far in excess of anything that any Government have achieved. That is why I believe the prospects are bleak. I do not seek to make a party point, but as many male jobs were lost in Wales between 1960 and 1970—a decade of world economic boom—as were lost between 1971 and 1981. That is a remarkable fact.
§ Dr. Roger Thomas
Will the hon. Gentleman say whether the new jobs would be under a devolved Parliament in Wales or under Westminster?
§ Mr. Ellis
I am sorry that I gave way. That is a point that the hon. Gentleman and I could discuss later.
§ Dr. Thomas
It is important that we know some part of SDP policy.
§ Mr. Ellis
I shall not expound on SDP policy on the political structure of the United Kingdom in a 10-minute speech on the Welsh economy and its prospects. There are enormous difficulties ahead in seeking an adequate solution. For all the encouraging news that the Secretary of State peppered into his speech, the outlook seems pretty bleak.
The unemployment problem can be met only by solving other problems, of which unemployment is the symptom. 340 It is difficult to guarantee extra employment from reflation, particularly without an incomes policy. Those are very real and difficult problems for which there is no short-term solution and which will be extremely difficult to solve in the long term. The policies need to be a compromise between the social necessity of providing prospects in the short term, and planning to achieve long-term solutions.
In that context I give the example of the package produced by my right hon. Friend the Member for Glasgow, Hillhead (Mr. Jenkins). He specifically geared up, costed and worked out a programme that would produce, he claimed—and we believe—about 1 million jobs within two or three years. My right hon. Friend announced that package during the Hillhead campaign. Six days after it had been published the Chancellor of the Exchequer visited Hillhead to do some electioneering. However, it is interesting to note that the Chancellor made no reference to what was obviously a key plank in my right hon. Friend's campaign. I found that a fascinating commentary.
One of the obvious moves that I imagine most hon. Members would agree with is to concentrate first on the infrastructure that is so sadly lacking—housing, roads, railways, harbours, airports, water, sewerage, education, training and many other aspects. For the full solution to the problems of regional infrastructure in all areas of the country—not merely Wales—all Government departmental expenditure should be geared to achieve agreed regional objectives in an integrated way. The interests of the regions must be more fully represented at all stages of Government decision-making. That is one of the points that concerns us in this issue of political structure.
I welcome the initiative taken by some of the local authorities in the North that are mounting a campaign against the location of what we now call the third London airport. In the North of England there is a gathering together of political forces in local government. I welcome that because it emphasises my point about the need, if we are serious about regional prospects, to get away from the over-domination of London and the South-East.
I refer now to investment. The SDP will not get into the sterile arguments about nationalisation or free enterprise. We are clearly committed to a mixed economy and to an objective assessment for each particular industry. Steel has been referred to. It is sickening to hear hon. Members talking a great deal of humbug and using the steel industry as a political football, as they have for many years.
There is talk of free enterprise, nationalisation, denationalisation, renationalisation, rationalisation, review, cash limits and "wash your hands of it". In the last Session we had what was, in effect, a further denationalisation Bill. Whatever the other problems, that sort of political approach has made the steel industry's problems almost intractable. The SDP are committed to getting away from that.
Investment is needed within Wales. Most Welsh investment comes from overseas. There is the consequential disadvantage of the branch factory syndrome—the subcontracting element of Welsh industry. Of some 4,000 industrial enterprises in Wales, 3,600 are, in effect, subcontractors. That is the great weakness in the Welsh economy. To put that right means that in the initial stages—one might say decades—a much greater public 341 involvement is necessary. That is one of the key roles for the future development of the Welsh Development Agency.
I pay tribute to the WDA. It is currently the largest factory developer in Western Europe. That is a remarkable achievement for a small country in the United Kingdom with about 20 million sq ft of factory space. I congratulate the WDA.
I welcome the noises made, so to speak, by the Secretary of State because I should like to see the WDA developing further along the lines he appeared to be hinting at—that is, acquiring a greater enterpreneurial role with a finely balanced relationship with the Government. It should be at arm's length to the politicians. That can be done. For the first time in a long while we have an instrument that will lead to successful entrepreneurial investment in Wales. I shall read carefully tomorrow what the right hon. Gentleman said, but I hope he takes the point and tries to push the WDA. I am sure that the WDA, with its arm's length relationship with the Government, will be only too happy to develop along those lines.
§ Sir Anthony Meyer (Flint, West)
As usual, the hon. Member for Wrexham (Mr. Ellis) has talked a great deal of sense. I hope that he will forgive me when I say that occasionally he reminded me of a story which the late Ernest Marples used to tell of the mouse painfully gnawing its way through the forest while an eagle flew overhead. The eagle said to the mouse "I cannot understand why you set about things so laboriously by gnawing your way through the forest. Why do you not fly over it as I do?" The mouse replied "Yes, but how?" The eagle answered "Do not bother me with the details. I deal only with general principles".
I wish to raise two constituency matters with my right hon. Friend the Secretary of State. They are crucial, but not directly within my right hon. Friend's sphere of competence. I am asking for his help in making approaches to the appropriate Ministers. The first issue concerns the future of the Point of Ayr colliery. The hon. Member for Flint, East (Mr. Jones) has already mentioned the anxieties which are felt because of the announced closure of the Connah's Quay power station.
This morning brought substantially worse news. One of the most hopeful prospects in my constituency has been the pilot plant to be built for the extraction of oil from coal. Today, I read the dismaying news in the Financial Times that BP, which was to have provided a substantial proportion of the capital, has withdrawn from the project. The article in the Financial Times states that the project ison the brink of collapse following the decision yesterday by British Petroleum … to withdraw from the project.The coal board said last night that it was 'disappointed' with BP's decision but it was intent on maintaining the project. 'We remain committed to the national importance of coal as a source of liquid fuels'.It was being emphasised last night within the Board that the cancellation of important synthetic fuel projects abroad made it more important that UK continue its coal liquefaction development. That would enable the NCB and others in the UK energy industry to gain a lead in synthetic fuel technology.I wish to echo as loudly as I can the words of the NCB.
I have said in speeches in other debates that, considered as a purely British project, the plan to develop the extraction of oil from coal may be highly marginal in view of our large reserves of oil in the North Sea. However, if 342 it is considered as a European project, as surely it should be, given Europe's desperate need for a sure supply of liquid fuel, the economics of the project are transformed. It seems that the withdrawal of BP now puts an onus on the Government to say to the EEC "This project may fail altogether and leave Europe without the possibility of extracting desperately needed oil from the huge reserves of coal in Britain and, to a large extent, on the Continent of Europe. If this project fails, the much needed flexibility of fuel supplies will be denied to Europe."
I hope that my right hon. Friend will support me in the approaches that I shall be making to my right hon. Friend the Secretary of State for Energy to try to ensure that the scheme is put fair and square to the European Community and that it is made to face its responsibilities.
§ Mr. Nicholas Edwards
The Government have offered financial support for the scheme, but we have always taken the view that commercial and technical assessments are much better made by those with expertise, which the Government do not have on the scale possessed by the private sector. That is why we were so anxious to have the involvement of BP. In BP's judgment, the scheme does not have the prospects that it would wish. It is now for the National Coal Board to ascertain whether it can find sufficient backing. If it can, the Government will continue to give the scheme their support.
§ Sir Anthony Meyer
I accept what my right hon. Friend says. I accept also that the Government's contribution should indicate their confidence in the scheme's long-term viability. I am saying that the scheme is probably not commercially viable as a United Kingdom project. It should be considered as a European project and we should consider its strategic implications. Given the extent to which Europe is dependent on outside sources of energy, the sums are quite different from how they appear in the board rooms of BP and Phillips Petroleum.
One of the most disreputable Acts passed by the previous Government was the Dock Work Regulation Act 1976. We all know why it was put on the statute book. The dockers' section of the TGWU put a half-nelson on Jack Jones, who put a half-nelson on the TUC, which put a half-nelson on the then Labour Government, who put a half-nelson on Parliament. That meant we were landed with an iniquitous Act. I am sorry to say that even the present extremely tough Secretary of State for Transport has not repealed it. If an order is made under the Act, any port: can be reduced to the shambles to which the dockers' union over the years has reduced the once great port of Liverpool.
The dockers are threatening strike action to force the Government to make orders under the Act to drive out of business small non-scheme ports, such as Mostyn in my constituency. Mostyn keeps going without any of the immense natural assets of the port of Liverpool, because it employs workers, many of whom are part-time, who, whenever there is a ship to be unloaded, will turn out and stay on the job until it is done. Therefore, owners go to Mostyn with their small cargoes in the knowledge that their ships will not be held up by strikes or demarcation disputes. I hope that my right hon. Friend the Secretary of State for Employment will stand rock firm on the issue. He has only to study recent history to learn what happens once we start to give way. If he has to make concessions to the dockers, let him not offer the non-scheme ports as 343 a sacrifice. The trouble is that the dockers have resisted change for so long. Now they are having it forced upon them at a pace that is causing them genuine distress.
In a way, that has been the sad history of Wales. The loss of jobs in our traditional industries may be for our good in the long run, but it is intensely painful in the short run. One new job is better than hanging on to one old job in an obsolescent industry. That is why I cannot agree with some of the comments made by Labour Members. However, we are getting one new job to replace two old ones. There is a terrible discrepancy in time between the jobs that are lost in obsolescent industries, or in firms that are no longer competitive, and the jobs that are created in industries of the future, such as electronics, communications and service industries generally, especially the leisure and tourist industries which Wales is so well placed to sustain.
I believe that the discrepancy is such that we cannot rely exclusively on market forces to fill the gap. That is why I was especially pleased to hear what my right hon. Friend said about the increased entrepreneurial role of the Welsh Development Agency. There is a continuing and probably slowly growing role for State intervention. Having said that, I hasten to add that, in my view, all subsidies should be in the nature of pump primers and shaped to taper to zero as rapidly as possible. The last thing that I want to see is quasi-permanent State subsidisation of jobs in industries which cannot meet overseas competition.
That brings me to Wales and the EEC. The Select Committee on Welsh Affairs will have as its next subject of inquiry an in-depth consideration of the impact of the EEC on Wales. Nothing could be more timely or useful. For far too long we have been dependent on highly selective statistics that have been thrown by each side at the other. There has been a poor stock of anecdotal evidence from firms in Wales, most of which seem far too frightened for some reason to say anything on the subject. We shall now have a mass of evidence on this vital issue. There will be the opportunity to examine and cross-examine each witness.
It would be absurd for me to pretend to have objectivity in this matter. I recognise the threat to many jobs in Wales from the free importation of European goods which are directly competitive with goods made in Wales. However, it is not unfair to point out that this competition will be in no way diminished if we replace the Treaty of Rome by a free trade area. Nor is it in any way unfair to tax the opponents of the EEC with their failure to produce a coherent and credible alternative. Mere wishful thinking, as of a free trade area without a common agriculture area, or with a let-out clause allowing us to exclude any goods which compete with our own, is not worthy of a supposedly mature legislature.
I believe that I am entitled to make use of the statistic that was quoted yesterday to the Select Committee by officials of the Welsh Office industry section—namely, that Britain is the most popular overseas base for United States electronics companies. Nearly one-third of those planning overseas investments gave Britain as their first choice, but 43 of the 53 firms in question said that Britain would no longer be suitable, or would be less suitable, if it left the EEC. That statistic, which could probably be applied more strongly to the incoming Japanese electronics companies, is important because it is precisely 344 on firms such as these that the Welsh economy will depend if it is to lay the foundations for a revival which will carry us through not just the next decade, but the first half of the next century.
In the light of that evidence, it is not surprising that the TUC and the Wales TUC are resiling from the bravado with which they declared their wish for Britain to quit the EEC, and to hell with the consequences. I look forward to questioning Mr. George Wright, who is a thoughtful man, and his colleagues to find out exactly how their minds are moving behind the facade of politically-motivated hostility to the EEC. I suspect that they have gone a long way towards making the kind of calculations about the future of jobs in Wales, if we pull out of the EEC, which the CBI is now, rather belatedly, beginning to make.
We in Wales have to face the fact that, on many of the usual criteria, other parts of the country have as strong or stronger claims to regional aid as we do. The debate has been full of demands that we should resist any change or seek any improvement in regional aid.
In my constituency, both in the Rhyl area and in the Mold area, unemployment is now as high as anywhere else in the country, but the increase in unemployment has been—and we must face it—substantially higher in areas such as the West Midlands, which hitherto have been regarded as areas of over-full employment. We also should acknowledge that we have the special advantage of the Welsh Development Agency and the Development Board for Rural Wales which other parts of the country, particularly the North-East, already enjoying the benefits of development area status, would give their eye-teeth for. Hon. Members from the North-East are extremely vocal on this issue.
It seems to me, therefore, that we in Wales should think in terms not so much of upping our assisted area status, or even fighting to preserve existing categories of assisted area status, as of trying to get a better infrastructure and, above all, better road communications. In my case, that means keeping up and intensifying the pressure for accelerating still further the dualling of the A55. I acknowledge with gratitude the immense achievements that have already been made, but in my constituency there is still the bottleneck of the interminable tragi-comedy of the Holywell bypass. Even now, the route has not been finally settled. Each successive month seems to bring a fresh landslide or subsidence on the existing road to make it impassable. Some of the difficulties have arisen because of bickering between the Clwyd county council and the Delyn borough council. I sometimes wish that there were an effective way of knocking heads together in such cases.
The same thing is happening over the road pattern in and around Mold. I have kept out of the dispute between the two councils in that case, although I have my own views on some of the disputed proposals. I believe that I can give support to both parties by urging an altogether higher priority for the A494 Mold bypass. I confess that it has taken a long time to convince me that this bypass deserves a high priority. However, now that most of the A55 decisions have been taken, apart from the Holywell bypass, I believe that the Mold bypass should be moved up in the queue. I give my right hon. and hon. Friends notice that I shall press continuously for that both in and out of the House.
I know the importance that my colleagues from Mid-Wales attach to a high-grade link with the English 345 motorway system. I know also the anxious interest which South Wales colleagues take in the Severn crossing. All Welsh Members have a common interest in improving communications between the Principality and the rest of the country, and we would do well to concentrate perhaps more of our attention on that—if need be, at the expense of other, more direct forms of aid.
I said that the leisure and tourist industries were particularly well adapted for exploitation in Wales. Clearly I have a special constituency interest. Rhyl has sometimes been amiss in fully exploiting its tourist potential. There is still a huge amount to be done in improving the harbour and cleaning up the beach. That work is labour-intensive. There could be big dividends for the environment and for local prosperity if ways could be found of making still more imaginative use of the various youth opportunities schemes.
However, I must pay homage to the courage and imagination of Rhuddlan borough council, which has equipped Rhyl with its triumphantly successful, all-weather suncentre. That was done in the face of every possible discouragement. Many obstacles were erected in its path by the Labour Government, and notably by the right hon. and learned Member for Aberavon (Mr. Morris). I am proud to be able to say that I backed the scheme from the first. It cost me many votes, but I believe that a Member of Parliament who sticks to what he believes to be right does not necessarily lose out in the end. The suncentre, after a few hiccups, has turned out to be a money spinner for Rhyl.
The other day the Select Committee heard evidence from Lord Parry and his colleagues on the Wales Tourist Board. It emerged clearly from that hearing that there is considerable potential for new jobs in tourism, and that the cost of creating jobs in that industry compares favourably with manufacturing industry. However, a number of shackles still need to be struck off, and a good bit of adjustment to political thought is required.
The upper limit of investment by the Wales Tourist Board, at £50,000, is precisely the lower limit for a single intervention by the Welsh Development Agency. In my view, there is a strong case for giving the Wales Tourist Board more flexibility. Surely it no longer makes sense to make a tourist project eligible for aid by virtue of its situation in an area requiring industrial aid. Of course, it would be impossibly expensive to give grants or tax concessions to all tourist projects in all areas. However, many areas of high unemployment, which are ineligible for industrial aid, would benefit enormously from aid to the tourist industry. It is well outside my area, but I think that many such projects are to be found along the Welsh-English border, notably in the Mid-Wales canal system.
I have tried to be brief. It is not easy to be cheerful. The Government have chosen a hard path back to national prosperity. Unpleasant and painful though some of the consequences may be, I believe that they are right. I do not believe that, despite superficial attractions, there is any credible alternative.
§ 8.7 pm
§ Mr. Leo Abse (Pontypool)
As I listened to the speech of the hon. Member for Flint, West (Sir A. Meyer), I noted his emphasis on the dilemma of the gap that arises as a consequence of two jobs being lost and one job being created. That is why he and I and all the other members of the Select Committee, when we directed our attention 346 to the problem of unemployment in Wales, came to the conclusion that there was a job chasm, that there was a much greater need than was then realised by the Government, and that the Government would need to make a greater financial contribution if they were to close the gap which he and I pointed out and which he has re-emphasised today. Indeed, he does not lack the political courage to say that, whatever his long-term view of the shape of our society, there is an immediate need for public intervention. The hon. Gentleman advocated that as a temporary aid to stabilise society.
However, whether that view or my view that society needs to find the sense of communality that is missing in a private enterprise, laissez faire economy is advocated, the Government repeatedly give the same answer. Indeed, they gave that answer in response to the Select Committee's report, and the same view was expressed today in the Neanderthal politics of the hon. Member for Cardiff, North (Mr. Grist). The Government ask where the money is to come from. They ask how such schemes can be funded. The Government admonished the Select Committee sayingthe Committee has not paid adequate attention to the necessity to contain public expenditure … The Government believes that additional expenditure on the scale required"——clearly implying the scale prompted by the Select Committee's very modest demands——would seriously prejudice the reduction of public sector borrowing which is essential to the general economic recovery that provides much the best means to the creation of fresh jobs.The Government said that they had major reservations about the Select Committee's proposals.
It is asked where the money will come from and how it can be found. However, the Government have different views about different situations. When we discuss employment in Wales we are entitled to take account of the past week's tragic events and to test the validity of the proposition that money is not available. A few days ago, the Chancellor of the Exchequer addressed the Periodical Publishers Association conference, and is reported to have saidThe cost of the Falklands operation would not affect the Government's central economic strategy. The cost should be seen in the perspective of the Government's £14,000 million a year spending programme … 'There is no doubt at all that we shall be able to keep … to our central economic strategy'.There is a great contrast between the consequences claimed by the Secretary of State for Wales of the comparatively unambitious proposals agreed by members of the Select Committee to meet the job chasm and the Chancellor of the Exchequer's insouciant attitude towards the consequences of the Falkland Islands adventure. The Tory Government have no difficulty in finding money for death and destruction. The Government's blunders have caused the crisis, because they miserably and stupidly left the islands quite defenceless.
Today, Wales can contrast the Tory Government's churlish response towards expenditure on life-enhancing programmes with the way in which they claim that they can deal with the mounting cost of the Falkland Islands expedition. What is that "modest" cost? It is bound to be considerable. We are aware of the cost to our reserves, which dropped in April by £451 million. Some think that the Government have massaged the figures to mask the effect of the Falkland Islands crisis. However, even those who do not take that view acknowledge that at least £219 million was lost in April. How could they do otherwise given the fall in sterling in relation to the other major 347 currencies? Those less credulous in the City say that up to £700 million was spent supporting the pound during the month.
We are told that it is absurd to have a programme that demands public expenditure to cope with the problems of unemployment. However, what about all the other costs that are apparently easily borne in order to deal with the Government's blunder in provoking and creating—by their initial lack of stance—such events? Last week, the Treasury—on the basis of what some of us would regard as highly dubious assumptions, tailored to minimise the price being paid for the Government's initial blunder—leaked to the economics correspondent of the Financial Times the figure of £100 million as the price for sending the task force to the Falkland Islands.
Since then, we have lost HMS "Sheffield". The Ministry of Defence has admitted that it will cost £120 million to replace it. From bitter experience we know the cost of weaponry and, therefore, the figure of £120 million must be a gross underestimate of the cost that would be incurred if we were so foolish as to rebuild such a tragically ill-equipped destroyer. With defence inflation running at 14 per cent., the replacement of such a vessel would cost £180 million, exclusive of the replacement cost of £6 million for a Harrier.
With the current cost of supplying the war effort at £12 million a day, it is not surprising that the economics editor of The Guardian should tell us today that so far the expedition might have cost as much as £1 billion. The Government are blatantly trying to damp down alarm.
§ Mr. Delwyn Williams
Does not the hon. Gentleman recall that the Labour Government spent exactly £1 billion on updating Polaris? Did he not support that policy?
§ Mr. Abse
Let us consider the events that have caused this additional expenditure. Unhappily, we can now reckon the costs of the adventure. Let us consider the effect on the economy of squandering so much public money and the Government's response when they are asked to spend similar sums on conquering unemployment. The economics editor of The Guardian—no doubt repeating what he has been told—states:The Government's overall finances are considered to be in good shape at the moment. Even if the eventual cost turned out to be as much as £3 billion this would"—say the cooing voices from the Treasury—be less than the £2.4 billion already set aside for contingencies … This helps to explain the comparatively relaxed stance being adopted in the City to the financial side of the war.My point is simple and clear. It is that the Government, by their initial blunder, have created a situation in which at least £1 billion is to be spent, perhaps even £2 billion or £3 billion. There are costs that we cannot count. We all know that we cannot measure in material terms the tragedy of the families of those who have lost their lives. In concentrating on the material costs, I do not forget that there are immeasurable costs as a consequence of that initial blunder that allowed this situation to arise.
I may be challenged to say where the money will come from or to explain how the Labour Party schemes can possibly work without creating inflation or causing more money to be printed. Today, Wales will be asking how the Government can claim that without affecting their 348 economic strategy they are able to contemplate with equanimity costs of perhaps £1 billion or £2 billion on this Falklands adventure.
§ The Under-Secretary of State for Wales (Mr. Michael Roberts)
I appreciate that the hon. Gentleman places the greatest importance on the non-material costs of the Falklands episode. However, does he put any price at all on the defence of freedom?
§ Mr. Abse
Not only on the defence of freedom but also on the rights of man. The major right of the men and women of Wales is a right to work. Political liberty without economic freedom is an utter farce. I need no lectures from the hon. Gentleman about defending freedom.
§ Mr. Ray Powell
According to the tapes, two more Harrier jets have been shot down. Perhaps my hon. Friend will comment on that and on the expense to the nation——
§ Mr. Deputy Speaker (Mr. Ernest Armstrong)
Order. Five hon. Members are still waiting to catch my eye, and I understand that they have been here throughout the debate. There are 50 minutes left before the Front Bench spokesmen reply. I remind the House that interventions merely prolong speeches.
§ Mr. Powell
I merely mentioned that, Mr. Deputy Speaker, because it is of such importance.
§ Mr. Abse
If that is the tragic news, it adds another £12 million to the material costs. I trust that the news proves to be false. It is not possible to count the cost of the lives of those pilots and what it means to their families. As a lawyer who must often take cases to obtain so-called compensation for people killed or injured in industry, I know only too well that no money can compensate the families or individuals for the losses that they have suffered.
My hon. Friend's intervention clearly underlines what I have said. The Government do not seem to have any difficulty facing up to the billions of pounds involved. Is it true that there is no difficulty, or are they masking their blunder? I shall accept them at their word and so shall Wales. The people of Wales will ask why the Government remain so grudging and parsimonious when hon. Member after hon. Member has been pleading for money for his constituency. The hon. Member for Brecon and Radnor (Mr. Hooson) pleads for crumbs for Mid-Wales. The hon. Member for Flint, West also pleads. There are not only pleas from Labour Members. Yet each time the Government say "The economy cannot stand the strain". Wales will not believe that.
Is the Under-Secretary surprised at the fact that at its conference last week the Wales TUC vigorously reacted to the Falklands expedition? Is he really surprised that that was the response of the 400 delegates? It should not be a surprise. On the one hand, they see the worst unemployment that Wales has ever endured and, on the other, the readiness with which money can be expended on so-called defence. Is it surprising that they react in the way that they do? Is it surprising that every local council has said that it wants to become a nuclear-free zone? When they hear of the billions to be spent on Trident, is it any wonder that they ask "Why cannot we have it for work?" There is such a pacific reaction from Wales because of the 349 contrast between what has been spent and squandered on arms—the blunder caused by the Government necessitating billions to be spent on the Falklands dispute—and the demand to implement the Labour Party's programme.
We have been challenged in the miserable speech of the Secretary of State, who evidently ran from the Chamber before I rose to speak. As other hon. Members have said, his speech will not be forgotten either for its length or for its meanderings, lack of contribution and the divisiveness that it expressed.
In our debate in January, the Secretary of State affirmed the principle of collective responsibility. He did so because he denied that the Welsh Office was a lap dog with regard to decisions affecting Wales. Let the right hon. Gentleman accept the principle of collective responsibility with regard to the blunder that has caused the squandering of billions of pounds in the Falkland Islands dispute, as he must. How dare he say to the House that we cannot afford the expenditure for which the Labour Party has asked.
We have also been challenged about the missing element that has been hinted at as a consequence of the Treasury model. The Government believe that the way to deal with wage claims is not through free collective bargaining but by the threat of unemployment. As long as that is so, we shall never get the consensus that is required if the national interest is to be taken into account in any wage-related problem.
There is no ineluctable mystery within the Labour Party programme as it has been put forward. It is based, with sensitivity, upon the understanding that if we give a sense of reassurance to the people we shall be able to gather them in, in a belief that we can within the national interest steer towards policies relating to wages which are not tooth and claw.
The Under-Secretary must acknowledge that there was a fierce debate inside the Wales TUC as to the possibility, within the environment created by the Tory Government, of having restraints or understandings on wages. That is what happens as a result of the Government's absurd monetarism and their savagery——
§ Mr. Michael Roberts
§ Mr. Abse
I shall not give way again. The Minister has his own speech to make. I am coming to my conclusion.
When the people of Wales realise the billions now being spent to remedy the blunder of the Government, I ask them not to believe that it is impossible so to organise society that we can have the funds to provide the infrastructure which Wales needs to bring its industries up to date and to make them competitive, with the investment of public capital.
I ask the people of Wales not to believe that unemployment is determined by a destiny that men cannot control. There was a lack of dignity in the speech of the Secretary of State, but it comes not only from the temperament of the man; it comes from the nature of a policy which says that there is no answer to unemployment and that we have to submit passively to vague, predestined, economic forces that we cannot control. With a miserable lack of dignity, the Secretary of State is saying that man cannot control his economic destiny. That is why we have had such a wretched speech from him. That speech, and the blunders that the Government are making all along the line, will in due course be answered at the polls by a people who will more and more understand that this is the most disastrous Government of the century.
§ Mr. D. E. Thomas (Merioneth)
The hon. Member for Pontypool (Mr. Abse), in a powerful speech, has made the connections that need to be made between the international situation and the national situation in Wales.
There is another connection of which many of us, as constituency Members, are keenly aware. Many of the young men who have already found their way—or are about to find their way—to serve in the South Atlantic joined the forces because of the level of unemployment in large parts of Wales. It should concern us all that young men should find themselves driven into military action as a result——
§ Mr. Delwyn Williams
Is the hon. Gentleman aware that most of our major neighbours in Europe have compulsory conscription for periods ranging from eight to 15 months?
§ Mr. Thomas
I shall not respond to that intervention. I am making the point that hon. Members who have had Service men in their constituencies killed on active service must be aware that the failure of this House to pursue correct policies has led to the deaths of those Service men. [Interruption.] I am not taking any sedentary interventions from the hon. Member for Anglesey (Mr. Best).
I turn to the major subject of the economic and employment prospects within Wales. We have had speeches that have tended to deal with the short-term trends, and I shall say something about those trends. The Secretary of State has stressed yet again the advance factory programme of his Government. I understand that 15 per cent. of the factory stock is now standing empty, as compared with 6 per cent. a year ago. For example, a factory at Bala in my constituency has been empty since 1977.
The strategy of advance factory building is a kind of sweeping-up strategy, which fails to take into account the sectoral policy pursued by the Government. This is where our whole debate about regional policy is, in a sense, bedevilled. We tend to talk about regional policy as though the regions control the policy. It is the regions that are controlled by the overall movement of capital and the overall ebb and flow of the economy, which is ultimately controlled not by the State or by the Government—and certainly not from within Wales by any Government agency—but by the dictates of multinational companies.
We have in Wales an economy that is divided roughly into a 10 per cent. indigenous sector, mainly controlled by self-employed persons, small businesses and so on; we have 25 to 30 per cent. of the economy directly controlled by multinational capital; and lastly we have the large public sector. It is that sector that ought to be the democratic determining force of the future of our economy.
The Government have emphasised once again their strategy of building small-scale advance factories and of looking to Wales as a location for multinationals to invest because of our membership of the EEC. Our membership of the EEC, in fact, perpetuates the uneven development that has characterised the Welsh economy throughout the years since industrialisation. The peripheral regions of Wales—and the peripheral regions of Western Europe generally—are still being maintained at a lower level of performance in comparison with the core regions. That process has quickened as the Community has developed and since the accession of Wales to that Community.
351 I hope that when the Select Committee on Welsh Affairs looks at the relationship between the Welsh economy and the European economy it will consider comparisons between other regions and will look in detail at EEC regional policy and identify the mechanisms that lead to further uneven development within Europe. We have higher youth unemployment and higher aggregate unemployment, and the trend has been accentuated by the over-specialisation of the Welsh economy.
Successful job creation must concentrate on advanced forms of manufacturing and developments in the service sector. Major changes have taken place in the Welsh economy over the past 35 years. Since 1946 there has been a massive decline in the primary sector, with a reduction in the number of jobs from 225,000 to 110,000. The number of manufacturing jobs has increased in the same period from 134,000 to 300,000 and there has been a massive tripling of the number of jobs in the service sector, from 175,000 to 500,000. We have not taken account of those changes in the development of our regional policy.
Wales has suffered a decline in its heavy industry and we have not been able to make up the loss by additional manufacturing and service jobs. Generally, there has not been a replacement factor and even where there has been such a factor it has failed to provide for a balanced choice of jobs. It is the branch factory syndrome to which a number of hon. Members have referred.
We have never asked why branch factories are located in peripheral regions such as industrial South Wales. If we consider the history of Cardiff and its immediate area, we see the de-industrialisation of the area, a massive reduction in the numbers employed in manufacturing industry and the collapse of the steel industry. In the coalfield areas, the valleys and, to a lesser extent, Clwyd, there has been an intensification of the branch office economy, which has also spread into Gwynedd and Mid-Wales.
The result has been a de-skilling process. Many parts of the manufacturing system that require a lower-wage, lower-skill work force have been located in Wales. The reason why many multinational and British industries moved into Wales in the 1960s, at a time of relative growth, was that they were able to take advantage of a pool of labour that was available at relatively cheap rates.
There has been a decline in the number of men employed in the economy and an increase in the level of female employment, particularly in low order service jobs in both the public and private sectors. Substantially more women are employed part-time in such jobs in Wales than in any other country or region in the United Kingdom. That is a reflection of the high male unemployment in Wales and the preparedness of women to accept poor wages and conditions because of oversupply in the labour market.
When examining incoming investment in Wales, we have to look at the sort of investment and jobs that are being created and at the failure of regional policy and Government policy to match the overall decline in the basic industries by ensuring replacement jobs. We have had not replacement jobs, but new jobs that have not filled in the gaps created by the collapse of the heavy end of our industry.
That process has resulted in the de-skilling of our labour force. It is not redundant coal miners or steel workers who are being re-employed in great numbers, but their wives 352 and daughters. I do not object to women taking their place in the labour force, but the reason for the increase in the level of female employment is that companies find it cheaper to employ women.
As we look at the pattern of economic development within Wales we see within the sector of capitalist-controlled industry a failure to replace jobs, and a failure to provide a level of jobs and wages that is adequate to the needs of the people of Wales. Therefore, we have to look to the public sector and to the democratic public control of the economy for expansion and stabilisation within the Welsh economy. This is where the Conservative Party is unable to look, because of its ideological position. It believes not in economic planning, but in allowing Wales to operate at the mercy of market forces. That is why we have had the massive increase in unemployment during the period of this Government.
However, neither is the Labour Party, either in Government or in Opposition, capable of producing a democratic public sector strategy that answers the needs of Wales. So far, all that we have had from the right hon. Member for Rhondda (Mr. Jones) on the issue is a 5 per cent. United Kingdom version of the Labour Party's alternative economic strategy. It is an attempt to bring in an economic strategy that is not sectorally suited to the needs of the Welsh.
One of the most frightening predictors was the recent NEDC study, which showed that Wales had a greater number of declining industrial sectors than any other part of the United Kingdom. Once we see that, we need to go well beyond the reflation through public sector spending or investment that was outlined in Labour's alternative economic strategy. We need to grapple with the basic issues of what causes regional imbalances and what the role of the State ought to be, whether it is the British State, a Welsh State or the European State that so many hon. Members seem to believe in, although it is evident from their activities in the past three weeks that they do not believe in an international State.
The intervention of the State at whatever level is a key mechanism in the operation of the Welsh economy because we have such a large public sector economy. There has been a failure by the Labour Party to take initiatives in Wales. I speak as an ordinary Labour voter in this morning's local elections for London. In the Labour Party in London, Sheffield and the West Midlands there is a commitment to local enterprise boards, to an interventionist role, to sectoral planning and to setting up co-operatives through local enterprise and through support in local government planning.
However, there is no policy of that sort in Labour authorities in Wales. Although I vote Labour in London, I do not do so in Wales. In the Labour party's policy for Wales there is no attempt to grapple with the regional problems. This why the Labour Government presided over the collapse of the Welsh economy that has been made substantially worse—twice as bad—by the policies of the present Tory Government.
Therefore—finally, in view of the time—the argument I deploy is that we need to examine the structure of the Welsh economy, identify the sectors of the economy that are potential growth areas and within them provide levels of investment that can ensure an adequate level of jobs and wages for people in Wales. We need to examine the structure of the Welsh economy in relation not only to the 353 British and European economies but to the whole world-wide movement of capital and of economic demand. We need to see regional policy not as a separate policy for each region but as one for all regions which is related to the sectoral changes that take place in the wider economy.
§ Mr. Deputy Speaker
I am grateful to the hon. Member for Merioneth (Mr. Thomas) for being so brief at this time of night. There are three or four hon. Members trying to catch my eye. Therefore, I appeal for brevity.
§ Mr. Delwyn Williams (Montgomery)
I regret that the hon. Member for Pontypool (Mr. Abse) is not in the Chamber. When he spoke he hypnotised me with his rhetoric, as he always does. When I came out of the trance I remembered the Wales of 1976 and the Government of which he was a member. At that time there was no recession, no war, oil prices were low and there was low unemployment. I remember the generosity of that Government towards Wales when they wiped off £30 million of regional employment premium at one stroke. They also put Powys county council into such a state that it came near to shutting down. That was the generosity of that Socialist Government at a time when there was no war or threat of war.
I shall concentrate on youth unemployment. Unemployment in the 15 to 19-year-old bracket is not just a Welsh problem but a problem in every advanced European nation, Canada, America and even Japan. The Japanese youth unemployment figures are distorted because of their system of family undertakings.
World recession, combined with the baby boom of the 1960s, technological advance, increased labour cost and competition from new emerging manufacturing nations have added to the problem. In Wales the young unskilled worker tends to seek short-term employment. Employers, faced with adults and young people with equal qualifications, tend to employ the adult. Most important in the short term, the wages expected by young persons are higher than they can justify. Since 1973 youth wages in Britain have risen by 446 per cent., which is way above what the market will stand and higher than in the rest of Europe.
How can we solve or alleviate the problem of youth unemployment? Conscription is one possibility. All our larger EEC neighbours have compulsory military service. In France, a survey showed that the average cost of conscription was lower than the average cost of unemployment benefit and associated social security payments. However, the effect of conscription on youth unemployment was marginal. In France in 1978 there were 266,000 conscripts, yet there were over 4 million people aged between 15 and 19. If the cost of barracks and equipment is added, conscription looks a less attractive option, bearing in mind that our population in that age bracket is nearly 5 million.
Voluntary repatriation of immigrant workers could reduce youth unemployment. That measure has had some success in France. In this country it would be a sensitive political issue, but the nettle must be grasped because both white and coloured young people would benefit.
§ Mr. D. E. Thomas
Will the hon. Gentleman give way?
§ Mr. Williams
I shall not give way. I am bowing to Mr. Deputy Speaker's wishes.
§ Mr. Thomas:
I do not want a racist in the House.
§ Mr. Williams
I thought that we already had one in the House. One has only to read the hon. Gentleman's ramblings in the Welsh press to know why one is almost afraid to go home to Wales and the valleys these days.
Early retirement is being encouraged all over Europe but one drawback that I fear is that many people will become bored and seek fresh employment. Work sharing is another method, but it must be responsible work sharing. In 1976 many people thought that British industry was overmanned by about 4 to 5 million. That lost us our competitive edge and was work sharing of the worst possible kind. Work sharing based on sensible shifts and cost effective production targets is an eminently sensible aim for all industrial sectors.
I now come to a less controversial matter. In some regions of Wales and the United Kingdom we should give more grant aid to the service industries. International events are overtaking us. Our traditional industries of cars, textiles and consumer durables can no longer compete in the world markets. Some 60 per cent. of the working population is engaged in the service industries. In my constituency only 37 per cent. of the working population is engaged in the service industries, whereas in Wales as a whole 60 per cent. is so employed.
The definition of a manufacturing industry should be relaxed to include many fringe industries that at present do not qualify, or the office and service industries scheme should be expanded and the qualification requirements relaxed. At the moment in Wales only 10.3 per cent. of all section 7 grants is devoted to the service industries. When one notes the qualifications that must be satisfied, that is understandable.
Many petty planning restrictions still frustrate small businesses. My good friend, John Emberton, still fights a lone battle for the right to erect a bed and breakfast sign near a traffic island in Welshpool. When he put up the sign, his business boomed. He built six more chalets. The planning office stepped in and said that he must take down the sign. Now business has slumped and his daughter and several local people are becoming redundant.
Another of my constituents, a small farmer, employs six men in agricultural contracting, yet he is haunted by an enforcement officer who worries about whether he uses his diesel tanks for his farming or contracting business. Does that matter when jobs can be created?
Another local firm, Del Renfrew of Newtown, have just lost an industrial tribunal case because it sacked one man in an attempt to save the jobs of 40 others. Beaten by the system, it now informs me that it will not expand any more, despite its ability to do so, because the directors feel that they are not working in a benign industrial climate.
I am sure that these three examples in my relatively small constituency can be repeated many thousands of times across the country. Many statutes passed in the last 10 years stifle commercial enterprise, although they were passed with the best intentions. I refer to the oft-quoted example of the effects of the anti-pollution legislation on the Detroit car industry. There, because of the amount that well-intentioned law put on the cost of the product, Detroit car workers now walk to the dole office in extremely clean air.
One of the problems in the Principality is that of our identity abroad. We heard from Lord Parry that in America everyone knew of Scotland because they had heard of the 355 bagpipes—it appears that bad sounds travel as well as good music in that respect. A business location file study in 1979 showed that only 4.6 per cent. of businesses were interested in Wales. This was before the Government decided not only to tighten up on assisted areas but to relax industrial development certificates. This relaxation was another nail in the Welsh coffin, because only 13 per cent. of the 3,000 firms in that survey wanted factories of over 50,000 sq ft.
I generally commend the youth agenda of the Manpower Services Commission, but I wish it would look more towards the German model, which has 60 per cent. of school leavers in apprenticeships in more than 460 different types of work. It has apprenticeships of from one to three years and the apprentices receive 12 hours a week vocational training in other skills and learn about trade, politics, culture and religion. The wages are 20 per cent. of the adult wages in the first year and 30 per cent. in the third year. Even unemployed youths are required to attend vocational courses—and what is wrong with compelling young people to learn skills that will make them better citizens and help them to rear their families decently? In Germany the parental attitude leads to apprentices staying with their firms. In times of recession they are switched to other jobs, which many can do as a result of their vocational training. In the United Kingdom our schemes so far have led into blind alleys.
In Japan, the same paternal attitude leads to the lifetime employment system, whereby apprentices are given a contract for life and their promotion and wages depend on length of service.
We need in this country a young, educated, trained and flexible work force. In Japan, instead of being made redundant, people are switched to different departments, using their previous vocational training.
Even in the depths of our recession the CBI found 3,000 key skilled jobs unfilled in the North-West of England and 44 per cent. of companies were limiting production because of these shortages. In short, every skilled or multi-skilled youngster generates work for others.
I end on a note of caution. Increased production and increased national welfare will not necessarily lower unemployment for youngsters. Any meaningful growth will come from high technology industries and not from the old traditional consumer durables area, which has always absorbed surplus labour in previous booms.
In the meantime, as I have said, I commend the efforts of the Manpower Services Commission, but I still believe that 12 months work experience under the youth opportunities programme, due to be extended in 1983, will lead only to temporary work for youngsters in the absence of the long-term paternal attitude shown by Germany and Japan. I also believe that our education syllabus should be drastically altered, but that is a matter for another debate.
I wish to support what my hon. Friend the Member for Brecon and Radnor (Mr. Hooson) said about Mid-Wales. In Newtown, male unemployment is nearing 18 per cent. and will be even higher when, sadly, Dowty closes down in two months' time. I beg my right hon. Friend the Secretary of State for Wales to use his best endeavours to convince the Department of Industry that, at least, Newtown, as a travel-to-work area, must retain its present status, and indeed should be upgraded if that area is to prosper.
§ Dr. Roger Thomas (Carmarthen)
I fear that Welsh Office Ministers are open to the same criticism as the chairman of the CBI recently made of the Chancellor of the Exchequer. They concentrate on a few bright spots and ignore the general gloom of the total picture in Wales. That was shown par exellence by the Secretary of State's long speech.
In three years of reactionary Toryism what a setback the promotion of moral integration in our urban industrialised society has received. At the same time, elements of authoritarian repression have appeared. There is now more than ample evidence of accelerating and, at times, frightening social conflict.
In Wales we have more than our share of the needy and disadvantaged. We need increased social sensitivity and growing prudence and foresight among the privileged and the leaders who come from that strata. Unless we have that, the Welfare State will begin to crumble and safeguards for the poorer people against old age, accident, illness and other threats will disappear.
We are going through an economic depression. Its consequences lower social stability. We are suffering from policies that are cutting more deeply and cruelly into the public sector economy than is necessary. Hence the disillusionment, particularly if the misery is felt to be part of an overall scheme to control the working classes. The Government show their lack of compassion by using ever-increasing unemployment to cut wages and the standard of living of those fortunate enough still to be in work. That policy is admitted by the Chancellor.
There is great disappointment as the number of people unemployed long term mounts to over 1 million, with the misery, ill health, frustration and apathetic futility that accompany the widespread and despicable situation. Fully 25 per cent. of that 1 million are between 18 and 24 years of age; many are married with small families.
The Manpower Services Commission could not contain its disappointment at the minuscule expansion of the community enterprise programme announced by the Secretary of State for Employment last December. In March the Chancellor decided to expand community work by using the frustrated unemployed on the cheap. He proposed temporary jobs to benefit the community. The determination to use the unemployed and thus force down public sector wages was more callous than one could imagine.
The psychological consequences of unemployment are under-researched and inadequately understood. Little work has been done to discover what special help and support are needed. Satisfactory and constructive use of leisure time would counter the tendency to depression and the feeling of not being wanted or able to contribute to the family and society.
Rising youth earnings relative to those of adult workers is blamed for increasing youth unemployment. But it results from the same conditions as the general high rate of unemployment when the local economy is depressed. Youth unemployment just fluctuates to a far greater extent. The young workers scheme, in which the Government will subsidise only firms prepared to take on young workers and pay them low wages, is an example of how the Government are keeping young people's wages down. The unemployed are now being drawn disproportionately from 357 the ranks of the lower paid. Accepting low wages or wage cuts to protect jobs and prevent unemployment is a piece of fiction—a governmental sleight of hand.
There has perhaps been an over-emphasis on the plight of unemployed school leavers. The problems of the older worker who has been laid off for ever longer periods have been overshadowed. Some believe that withdrawing older workers from the labour market and releasing jobs for younger people has merit. Those who are over 55 who lose their jobs are probably more disadvantaged than those who are in early middle age. Once unemployed, the older worker has much less chance of being re-employed. For many older men, becoming unemployed is, in reality, retirement. It is the end of the road. But financially they are severely disadvantaged. When they get work, it is often consistent with a far lower paid job.
Even the elderly in work are vulnerable. They work less overtime and are more likely to suffer periods of sickness—sometimes prolonged—although older workers are more active and healthy than in past generations. As unemployment has risen swiftly in the past two or three years, the aim has become more explicit and more generally acceptable. Nevertheless, too many workers find that retirement comes too soon and they are unprepared for it.
The resort to premature retirement and the increased incidence of unemployment after the age of 55 cannot be allowed to continue unchallenged. We must not continue to 'discriminate against older workers. They will become generally poorer and less able to deal with inflating living costs. Britain is behind in making provision for their needs.
The culture and values of the privileged classes are still far too often characterised by social insensitivity and irresponsibility. The suffering of the low-paid and the less fortunate are far too frequently treated as inevitable and therefore unimportant. That does not mean that some younger and more progressive members of the privileged strata do not produce some effective reform and prevent the destruction of social changes that have already been substantially consolidated, but they are usually small groups in the Conservative Party and they are often politically isolated within it. Power holders strive to get rich and the rich strive, even in adverse conditions, to hold on to their status. Far too often, such people possess power because of family connections or because they are members of an ideological clique.
The development of the Welfare State has been resisted periodically, but it goes on. Those who are responsible for inter-regional disparities bear a heavy penalty such as we find in Wales now. Although Wales may not be suffering most, it suffers greatly.
§ 9.2 pm
§ Mr. Ray Powell (Ogmore)
I shall continue the theme developed by my hon. Friend the Member for Pontypool (Mr. Abse) in an excellent and logical speech. He dealt with the farce of the Government's policies.
People throughout the country will be wondering why Parliament is today debating Welsh affairs when there is a war raging in the Falklands. Fathers, sons, grandsons and daughters are out there in the perils of the Antarctic winter seas fighting a war that has been escalated by Tory warmongers while we sit here in the comfort of the House pontificating about the problems in Wales.
358 The Scottish debate earlier in the week was adjourned. This debate should also have been adjourned to provide time for a full debate of the issues that affect everyone in Britain and others abroad. How any hon. Member can switch his attention to matters domestic when the nation is at war is beyond my comprehension.
Men, women and children, innocent of any crime against this or any other country and trapped by the actions of politically motivated Mad Hatters, should not be sacrificial lambs committed to the Falklands slaughterhouse by the total incompetence of the first woman Prime Minister and her Cabinet of millionaire warmongers. If there is a war, there will be no negotiations for the 100, 1,000 or 10,000 who will be killed. They will not come back. Who can negotiate for lives already lost?
The total financial allocation for all services in Wales throughout the disastrous period that this bunch of mad monetarist warmongers has been in office will have been spent 10 times over in the suicidal exercise in the Falklands. History is repeating itself. In the Boer War, the First World War, the Second World War and even today, the Tories have not changed their attitudes. They still think in terms of 1902, not 1982.
The complete development of the new Bridgend hospital could not be afforded and had to be phased over a period of years due to lack of Government funding. Local government cuts have been imposed throughout Wales due to lack of financial support by the Government. Industries are collapsing in Wales and throughout the country for a multiplicity of reasons, but the main reason is the lack of Government funding.
What could we do if we decided to plan for peace? What could we do with the £10 billion to be spent on Trident missiles? We should concentrate our minds on that. What could we do with the money in Wales? We could expand and develop public services, and create thousands of jobs. We could improve roads, renew sewers, build new schools, re-establish our social services as they were in May 1979 and provide home helps, meals on wheels, school meals and school books, improve hospital services to reduce the waiting lists and reintroduce free prescriptions.
We could stop the outflow of capital. We could spent' more money on the Wales coalfield and develop the new mine at Margam. We desperately need more investment in the Welsh coalfield. What are the Government's plans to meet that desperate need? We should be planning our industry and trade. There should be strict regulations on imports, investment in areas of need, more help to retain existing jobs in industries that are failing because of Government policy and the recession. We should create a fairer society and redress the inequalities between the rich and the poor. Voluntary retirement at 60 should be our aim, with pensions sufficient for people to enjoy their usual standard of living. In that way, we could create one million jobs for the young people of this country.
Where is the money to come from? I suggest that it should come from the bottomless contingency fund that the Financial Secretary has tucked away. Or is that money to be used only for war? The Secretary of State, in his miserable 63-minute speech, said that the Labour Party had not spelt out its alternative economic strategy. The Labour Party in Wales and throughout this country is united in its policies for economic and industrial change. We have already announced policies which will deal with the appalling state of the economy, with the differences 359 and divisions created by monetarist policies, with the problems of those in employment and those at present unemployed, and with the problems between black and white communities, between working men and women and between public and private enterprise. Our alternative Socialist policies will put the nation's resources to full productive use.
I referred the Secretary of State to a document that I held up in an intervention when he would not allow hon. Members to question him. It was a document about Labour's plans for jobs. If he wishes, I shall send him a copy. The right hon. Gentleman cannot possibly expect my right hon. Friend the Member for Rhondda (Mr Jones), in half an hour, to go into great detail about Labour's alternative economic policies. The right hon. Gentleman's reply to a question that I put to him about the Welsh Development Agency was merely that the agency would give me the details that I wanted. That was a fortnight ago. I am still awaiting the reply.
§ Mr. Donald Coleman (Neath)
During recent weeks, the attention of hon. Members and that of many people outside has been mainly focused upon the aggressors and their aggression, reports of diplomatic activity, negotiations, the collecting together of the task force and other military preparations for the possibility of war. In their speeches in this debate, my hon. Friends the Members for Pontypool (Mr. Abse) and for Ogmore (Mr. Powell) have concentrated on the events that have exercised the minds of all hon. Members over recent weeks. It should be remembered in this difficult situation that young men and young women from our Principality of Wales are involved. We pray that the spirit of negotiation will break out and that it will succeed so that those young people can come back to the land that they love.
Today's debate has brought us back to earth. Despite our recent preoccupations, the inescapable fact is that the problem of unemployment remains as severe as ever and its impact on our people is undiminished. Unemployment in Wales today blights the lives of 171,349 people directly and many more when we take into account their families. The level of unemployment represents 16.1 per cent. of the working population of the Principality, who now find themselves discarded.
The Secretary of State has again today exuded confidence about the prospects for the future, assuring us that the bad times are over and that from now on the future for Wales is one of unbounded prosperity. We are glad to hear these tidings as, no doubt, are the people of Wales. The trouble is that we have become accustomed to the Secretary of State saying these things. What the right hon. Gentleman says does not wipe out the fact that 171,349 people, a figure that ranks among the highest in Britain since the last war, are unemployed in Wales today.
The industrial editor of the Western Mail wrote on 3 February this yearMore job losses are on the way—despite a small glimmer of optimism about the long-term future—a survey of Welsh industrial trends showed yesterday.The writer of the article went on to point out thatAt the time of the survey 86 per cent. of firms in Wales were working below a satisfactory full rate of operation—this is a worse situation than the last check in October 1981.360 The survey, it is reported, also showed that investment intentions had become weaker, and that there were indications that prices would increase over the next four months. That sort of article by a respected and knowledgeable journalist, and the results of the survey carried out by the Confederation of British Industry, on which he was commenting, are not supportive of the right hon. Gentleman's confidence in the argument that he expects Wales, and us, to swallow today.
On 10 April the Financial Times reported that the Christie-Tyler Furniture manufacturing group is to make almost 300 people redundant at Bridgend and Cardiff because of falling sales at the cheaper end of the market.
§ Mr. Ray Powell
The firm of Christie-Tyler had a meeting at which 1,000 of the staff agreed to a 10 per cent, reduction in wages to save their jobs. Within three weeks the company had to declare 300 redundant as a result of a factory closure.
§ Mr. Coleman
My hon. Friend shows great knowledge of the situation—the factory is in his constituency—and underlines my point.
Again referring to my hon. Friend's constituency, Avon Rubber is to close its Bridgend factory in July, making 260 people redundant. The company blames the closure on the recession in the automotive and tyre sectors and on cheap imports.
The South Wales Echo reported that figures produced by Trade Indemnity, a leading credit insurance underwriter, show that about 15 per cent. more businesses collapsed in the first quarter of 1982 than in the same period in 1981.
The Government must recognise that the policies they, have pursued since coming to office have brought about the unemployment that has so sorely afflicted Wales. Those policies will have to be abandoned if there is to be any hope of unemployment in Wales being reduced and if the Welsh people are to have confidence in the economic future of Wales. With the high unemployment in Wales that has persisted during the right hon. Gentleman's term, of office, neither he nor his right hon. and hon. Friends can expect the Welsh people to have much conviction in his optimism for the future.
I turn now to the problem of teenage unemployment. One of the Opposition's favourite items of reading is the 1979 Conservative Party manifesto for Wales. That document passionately expressed the thoughts of right hon. and hon. Conservative Members. It stated:There can be no more depressing start for these young people than to go straight from the classroom to the dole queue.The Opposition fully agree with that statement because there is no monopoly on holding that view. In April 1979, when this document was being pressed upon the electors of Wales by the then indignant Conservatives, the number of school leavers going straight from the classroom to the dole queue in Wales was 2,092. In April 1982 that tragic journey was being made by 7,973. With such a state of affairs persisting in Wales, can we expect any other newspaper headline than the one which ranJob crisis 'makes teens lose hope.'That headline was over a report to the education vocational committee which Mr. Hugh Loudon, director of education for Gwent, made on the county's careers service. In his report Mr. Loudon said:fewer than half the youngsters leaving school can expect to find jobs within nine months.361 It would appear that some teenagers have virtually given up hope after being disappointed so often in their search for a permanent job.
We must not blind ourselves to the fact that without special employment and training measures the situation for young people in Wales would have been even worse. The Government must not be complacent about the schemes. The effect that they are having upon youth unemployment figures, valuable as they might be, is no substitute for real jobs. Obviously these special measures are of importance and we welcome them as far as they go in giving work experience to the young, provided that they do not become the means of enabling exploitation to take place. Unless they lead to permanent work, the disappointments and frustrations that will arise will lead to a no-hope atmosphere among young people and to a resistance on their part to participation in further schemes.
I turn to the proposals published this week by the Manpower Services Commission. These are proposals to give all 16-year-old school leavers and unemployed 17-year-olds a full year of training and work experience. The scheme that it has put forward is designed to replace the youth opportunities programme and other special measures from September 1983. The report is the work of a task group representing employers, trade unions and educators and has been endorsed by the MSC. It makes clear that any scheme, if it is to succeed, must be voluntary both for employers and for those taking part. It makes clear also that young people taking part should not be made ineligible for supplementary or unemployment benefits.
The MSC chairman, Mr. David Young, has said that the report must stand on all fours. However, knowing the Secretary of State for Employment, we are not surprised to hear that he is likely to reject the scheme—possibly on the ground of paying youngsters £25 a week, which will be adjusted to keep its real value, as against £15 a week for his own scheme. We hear that he is likely to reject it also because it lacks the element of compulsion. However, the MSC scheme, including the subsidy of £1,850 to employers for every trainee covered, will fall within the £1 billion that the Government plan to spend. We hope that the Secretary of State for Wales will use his influence to counter that of his right hon. Friend the Secretary of State for Employment.
Last weekend the Wales TUC talked of the activities of the Secretary of State for Employment and his attacks on the trade unions, which it described as Tebbit's law. I urge the Secretary of State for Wales to make it quite clear to his right hon. Friend that his rejection of the MSC scheme is not on. If his right Friend gets away with rejecting the MSC scheme, we shall soon hear from young people that Tebbit's rule is not OK.
I come now to the industrial scene. The trials of the steel industry under this Government have been a cause of great anguish to the people of Wales, and the upheaval that has taken place will not be forgotten by the people in the steel towns of South Wales. However, time has passed, and it is to the future that we must now look. There is clear evidence at both Port Talbot and Llanwern that the morale of both management and workers has been restored. In the plants there is now a better spirit, and that is bringing better results in the steel plants of South Wales.
Mr. MacGregor, despite our earlier reservations about him, can take credit for the leadership that he is giving the industry, which is making its contribution to the revitalised atmosphere in the South Wales steel plants, in particular. 362 This success can be maintained only if the industry receives the investment that is needed. Enthusiasm alone will not ensure the future.
There is a need for investment. Because of lack of time this evening, I shall not go into the details of what is required, but I note what the Secretary of State said earlier about the steel industry. I ask him, or the Minister who is winding up the debate, to assure us that Mr. MacGregor will get the Government's support in making the investment that must be made in the steel industry in Wales if we are to remain at the top in steel making.
A matter that is related to the steel industry arid that is of particular concern in Wales is the sale by BSC of Redpath Dorman Long to the Trafalgar House group. If that sale goes through, the future of the establishment in Kenfig in the constituency comes into question and there will be serious redundancies. My right hon. and learned Friend the Member for Aberavon (Mr. Morris) has been very active in this connection. In addition to the activities of my right hon. and learned Friend, yesterday a group of trade unionists came to see members of the parliamentary Labour Party's steel industry sub-committee to discuss this problem.
A number of problems have been put to us by the workers who are involved. I should like to put them to the Minister. I do not necessarily expect him to give me the answers this evening, but I hope that he will use his endeavours to find the answers to the questions that are of concern to those who work in the plants. For instance, is the proposed selling price of £10 million a fair reflection of the value of the company? Inevitably, people working in that establishment are concerned about the sale of other national assets at knock-down prices. Again, they wonder whether the takeover serves the best interests of the workers in particular, and of taxpayers in general. How does the takeover encourage the healthy competition that the Government are constantly urging upon us' Has an undertaking been extracted from Trafalgar House that asset-stripping and further redundancies at Redpath Dorman Long will not take place? The people have a right to know the answer to such questions. I hope that the Government will endeavour to find an answer to the problems that are causing those people such great anxiety.
In Wales, as in other parts of the country, another matter gives rise to concern. On Sunday, The Observer reported:Tories to make Jobcentres redundant.When I read that I thought that the Government had turned over a new leaf and had wiped out the unemployment that they had created. What is more, I thought that they had discovered how to wipe out unemployment altogether. But, no, the headline means that the Government are still stuck with their party dogma, which is now wrapped up in the new-found expression "privatisation". What an ugly word.
In a debate on Wales, it is appropriate that that latest nasty Raynerism should be challenged. It was a Welsh politician, David Lloyd George, who first brought the Government into the business of finding jobs. Everyone has the right to a job. We will not accept that the quality of the job found for an unemployed person should depend on the size of the fee that he can afford to pay for having a job found for him.
We warn the Secretary of State and his colleagues that the bitterest opposition will be brought to bear if there is any likelihood of that latest disgraceful example of greed 363 being implemented. There is to be no profit-taking by anyone from unemployment. We make it clear to the Government that the people of Wales will have none of that.
The Secretary of State keenly quoted The Guardian. I, too, will quote from that newspaper. On 26 April it carried the following headline:Mrs. Thatcher on course for over 4 million unemployed.The report beneath that showed that in continuing the Thatcher policies the country would eventually have 4,478,000 unemployed, while under Labour's strategy there would be 2,582,000 fewer unemployed. If we accept what The Guardian says—as the Secretary of State obviously does—Thatcher policies will lead to 4.5 million unemployed in the United Kingdom. Wales' share of the misery will be about 250,000 people out of work. We will not accept that. Wales will not accept that. If there were elections in Wales today, as there are in the rest of the United Kingdom, the Secretary of State and his colleagues would be made forcefully aware of that fact.
§ The Under-Secretary of State for Wales (Mr. Michael Roberts)
The hon. Member for Neath (Mr. Coleman) has put his case clearly. However, he misrepresented—no doubt unintentionally—my right hon. Friend the Secretary of State when he said that he had painted a euphoric picture of the Welsh economy and had said that everything was fine. That is not what my right hon. Friend said, although I can understand why the hon. Gentleman made that mistake. A barrage of noise was coming from Opposition Members which I am sure on reflection they will regret.
Quite reasonably, the right hon. Member for Rhondda (Mr. Jones) said that we often hear about closures but rarely about extensions and openings. Quite rightly, my right hon. Friend responded to his argument and gave a reasonably long list of openings and extensions since 1979. We all wish that it were a longer list, but I do not think that anyone can complain when my right hon. Friend responds so quickly.
The hon. Member for Neath asked about investment in the steel industry in Wales. The revised corporate plan is still under discussion, and clearly I cannot go further than saying that. He also asked about the sale of Redpath Dorman Long. This is a matter for the commercial judgment of BSC, which does not need the approval of the Secretary of State for Industry to make the deal. It is Government policy to encourage the nationalised industries to privatise activities which, like Redpath Dorman Long, are outside their mainstream activities. In these circumstances, there is no reason for the Government to intervene.
The hon. Gentleman paid Mr. MacGregor a notable tribute. I suggest that we can leave this matter to the commercial judgment of Mr. MacGregor, which I suspect is better than the hon. Gentleman's or mine.
§ Mr. Coleman
I am worried not about Mr. MacGregor, but about the Trafalgar House group.
§ Mr. Roberts
This is a commercial judgment that Mr. MacGregor and the corporation will make.
In a recent speech to the Birmingham chamber of commerce, my right hon. and learned Friend the 364 Chancellor of the Exchequer said that in the long run the only way to achieve higher sustainable growth and more jobs that are secure is by competing successfully on quality, efficiency and productivity.
The signs for British and Welsh industry in improving performance are reasonably encouraging. Output per man in manufacturing industry rose 10 per cent. last year. It is now higher than its previous best figure. Industrial companies increased their profits by about a quarter in the second half of 1981. That must be good for investment and, at a later stage, for jobs.
As my right hon. and learned Friend the Chancellor pointed out, there are solid signs that modest and reasonably broadly-based economic recovery is under way. Contrary to what has been suggested tonight, the latest quarterly survey of the Wales CBI is also moderately optimistic. I am talking of a slow but strong and mounting recovery. No one is suggesting that there will be a dramatic change overnight. The results of the survey show that optimism is increasing in Wales.
Over the next four months, a slight rise in both output and orders is expected. I share the view of the chairman of the Wales CBI that the results are encouraging, and I also share the view that continued restraint on wage claims will be of crucial importance to our hard-earned and continued recovery which it would be a tragedy to jeopardise now.
§ Mr. Alec Jones
§ Mr. Roberts
I hope that the right hon. Gentleman will excuse me, but I am trying to reply to a number of hon. Members and to develop a theme of my own and I do not have much time—[Interruption.] It would waste less time if the hon. Member for Merthyr Tydfil (Mr. Rowlands) contained himself occasionally for five or 10 minutes. I do not ask him to do so every time, just occasionally.
The right hon. and learned Member for Aberavon (Mr. Morris) made a number of points and we shall try to answer them by letter. I believe that the statistics were taken from a selective list and I should like to try to put the matter properly in perspective. I know that he agrees that that would be a satisfactory way of dealing with it.
The hon. and learned Member asked whether I could say something about the relationships and the negotiations between the British Transport Docks Board and the British Steel Corporation. There is a long history to this, as he knows, and it is a commercial dispute which it is better for the two parties to resolve together. The Government are taking an interest in the argument, but they are not seeking to impose an answer. My right hon. Friends the Secretaries of State for Transport and for Industry are very much in touch with the issue and there are hopes of an early solution. I am sorry that I cannot go any further than that, and I am sorry that I cannot give the right hon. and learned Member a more detailed reply.
§ Mr. John Morris
Does that mean that litigation is to be allowed to proceed, despite the tenor of the Chancellor of the Exchequer's answer the other day?
§ Mr. Roberts
I can make no further comment on that. I shall make certain that the right hon. and learned Member is kept immediately informed of all developments, but there is hope of a solution to this difficult problem, which has existed for a considerable time.
My right hon. Friend the Secretary of State has covered the issue of the Development Board for Rural Wales in 365 detail in his speech, as did my hon. Friend the Member for Conway (Mr. Roberts) last night in the Adjournment debate, so I shall not take the time of the House further, except to re-emphasise that the review is under way and that no decisions have yet been taken.
The right hon. Member for Rhondda, my hon. Friend the Member for Cardiff, North (Mr. Grist) and the hon. Members for Flint, East (Mr. Jones) and for Neath all raised the important question of training. As my right hon. Friend said in his opening remarks, we are to debate education and training at another time, but with the publication on 4 May of the Youth Task Group's report it would be wrong of me not to say a few words. In any case, I feel that I ought to respond to the points that were made forcefully by the hon. Members to whom I referred.
As I said, the task group's report has only just been published, and it is too early to say anything specific about its proposals. Obviously my right hon. Friends will study the report very closely. I am sure that the House will accept that there is little I can say specifically about its recommendations at this stage, but I hope that too much will not be made of the differences between what the Government proposed in their White Paper last December and the present report. In my judgment, the similarities are much more important. Although I know that there are things that divide us, let us unite—and unite very firmly—on the things on which we are agreed.
I remind the House of the radical departure in thinking about training that we have adopted, and which is embodied in the White Paper. In so doing, I must again emphasise the great similarities between the White Paper and the task group's report. Certainly the House should not minimise the commitment that the Government have already made towards the training of young people. Indeed, our conclusions on the content and duration of training courses for young people have been fully reflected in the scheme devised by the task group, completely endorsing the Government's attitude towards the training needs of young people.
I am sure that all hon. Members will agree that major investment in new plant and equipment—particularly in new technology—is essential. If industry and commerce are to become more competitive and take advantage of the opportunities created by the new technology and provide services which can capture a ready market, a skilled and adaptable work force is essential. But we in Britain have one of the least trained work forces in the industrial world, particularly among young people, and it certainly applies in relation to our major competitors. The Government are determined that that should not be allowed to continue. That is why we are not talking about another programme of short-term temporary measures designed to alleviate unemployment, although the White Paper and the task group's report contain a commitment to give priority to unemployed. Rather we are concerned about a programme of genuine training intended to equip young people to adapt successfully to the demands of employment by developing basic and valuable skills which employers will recognise and require in the future. Already the basis for that programme is being laid down with YOP. About 100,000 of the new places being provided this year will be new training places of a year's duration. About 8,000 of those will be in Wales. The places will provide good quality training of the type envisaged in the White Paper.
§ Mr. Rowlands
Is not the saddest and most tragic sacrifice of the immediate recession the destruction of automatic training within firms? Within companies such as Hoover and BSC Dowlais, natural apprenticeship schemes and training were provided. Those schemes have been closed down, although they were more important than the YOP and all the MSC schemes that one could devise. When will the Government address themselves to that issue?
§ Mr. Roberts
The Government have been considering that problem seriously all the time. The Manpower Services Commission supports apprenticeships, the traditional form of British training within industry. to a very large extent. In the United Kingdom the support amounts to £56 million. I am aware of the problems and I am aware of the personal tragedies involved, but that does not diminish—I hope that the hon. Member for Merthyr Tydfil recognises this—the importance of a new and imaginative training scheme which is long overdue. Of course, we want to sustain the traditional methods of apprenticeship, but do not let us denigrate the moves that should have the support of the whole House. I give an illustration.
A new scheme started recently at Fords in Swansea. There it has a training workshop which offers training in a wide variety of skills—electrical, welding, woodworking, vehicle maintenance, paint, decorating, catering and administration. All the trainees will receive proper induction training, basic skill training, planned work experience, integrated relevant further education as well as life and social skills training and personal guidance and support. In addition, the workshop is assisting in piloting and evaluating a trainee profiling system developed by the Manpower Services Commission in conjunction with the City and Guilds of London Institute. It is hoped that this profiling system will enable the development of a record of achievement which can be given to young people when they leave the scheme and which will be recognised by potential employers and by the young people.
There is one other point that I ought to make about both the White Paper and task group proposals. It is the extent of support that will be needed if a training scheme is to have the beneficial effects that we have envisaged. The whole community must give its support—employees, trade unions, local authorities, local education authorities, the careers service, voluntary bodies, and, not least, the trainees themselves and their parents.
Nor should we forget that, in the meantime, we shall be improving the provision of training places. The YOP is still being developed and it is expected that 46,000 young people will enter the programme in Wales in 1982–83. There is, too, the provision of more traditional forms of training for young people. In 1982–83 the MSC will continue to provide financial support for 35,000 apprentices at a cost of £56 million in Great Britain.
§ Mr. Alec Jones
Will the hon. Gentleman give way?
§ Mr. Roberts
I apologise to the right hon. Gentleman, but I have already given way to his hon. Friend the Member for Merthyr Tydfil and I have only 12 minutes Left in which to make some important points.
I had hoped to have time to mention achievement in our secondary schools, but I shall not be able to develop that theme. The hon. Member for Neath said that it was not much of a transition to go straight from school to the dole 367 queue. I recognise that, but our schools can do a great deal if they take full advantage of the available facilities to give school leavers better opportunities to acquire skills. Perhaps some pupils do not take advantage of those facilities or are not given all the opportunities that they deserve. Within the existing resources we could do much more, but perhaps we can develop that theme in the Welsh Grand Committee.
The Government are taking other initiatives. First, there is the urban programme. For 1982–83, the Secretary of State has approved urban programme resources for Wales of £15,294,000—over 30 per cent. more than originally planned—and the additional premium has been allocated mainly to new schemes associated with economic regeneration and job creation.
As part of the programme for 1982–83, over £8 million has been allocated for new nursery factory units, workshops, and other job-creating schemes providing 3,500 job opportunities, and £2.4 million for new environmental improvement projects and schemes to alleviate social problems. The programme is widespread in the Principality.
I had hoped to be able to refer to some of the details of the programme, but I have time to refer to only one, which is a modest but nevertheless welcome scheme. I am happy to announce that my right hon. Friend has approved for grant aid all the 1982 summer holiday projects put to him by local authorities under the urban programme.
There are 211 projects, costing £205,000, of which 75 will be run by voluntary organisations. Together with the £45,000 announced earlier this year for Easter schemes, the holiday programme in Wales this year will be by far the largest ever undertaken as part of the programme. That is a good use of money, because it brings in local authorities and voluntary workers and provides holidays for many children who would not otherwise have them.
A second Government initiative is the enterprise zones. I am glad that the early experiences of zone authorities in Swansea and elsewhere are encouraging. [Interruption.] The hon. Member for Merthyr Tydfil keeps interrupting from a sedentary position. Clearly he does not approve of the scheme, and I wish that he would appreciate reasonably good news.
It is too early to draw firm conclusions about the impact of designations in areas that are dissimilar and where projects were designed to be experimental. Nevertheless, the Swansea zone has already attracted 34 firms since designation and there have been 375 inquiries. More than a quarter of the inquiries were from outside Wales and eight new ventures have occupied, or expressed commitment to, the zone since designation. That is encouraging for the future and I shall continue to keep in close touch with the city council to ensure that the early progress is maintained.
Thirdly, there is the enterprise allowance scheme, which was devised to examine the scope for overcoming the alleged deterrent effect of the loss of benefit on unemployed people thinking of setting up their own business. The scheme provides for the payment of an "enterprise allowance"—£40 per week taxable—for up to 52 weeks to unemployed people who set up their own business and are employed full time in it. One such scheme is operating in Wales covering Wrexham Maelor, Alyn and Deeside and Delyn in Clwyd.
368 The Clwyd scheme opened for applications on 1 April 1982. At the end of April 110 applications had been received with 55 accepted and 34 still in the pipeline, but likely to be approved.
A number of hon. Members referred to the EEC. It is vital to make correct judgments whenever we talk about employment in Wales and in the United Kingdom in relation to our membership of the EEC.
§ Mr. Alec Jones
We have heard examples of all the progress that is being made by the Government. Will the Minister answer a simple question? As a result of the progress, does he envisage that the figure of 171,000 unemployed will increase or decrease in the coming year?
§ Mr. Roberts
The right hon. Gentleman knows that when he spoke from the Dispatch Box he never made forecasts. I intend to follow his example. The projects that I have announced are of value to Wales and will be appreciated there. I said that they were modest, but they were worth reporting.
There has always been considerable prejudice and feeling against our membership of the EEC both in the country and in the ranks of the Labour Party. When the matter was put to a referendum the misgivings disappeared, as I suspect they would if the people were again asked to vote.
I do not know where the SDP in Wales stands. I know where the hon. Member for Wrexham (Mr. Ellis) stands in relation to the EEC. We shared a platform many years ago on that issue. I am not so sure about the hon. Member for Caerphilly (Mr. Hudson Davies) and the hon. and learned Member for Abertillery (Mr. Thomas). Perhaps they are both late gatherers in the vineyard, but they are welcome. However, whenever we discuss jobs and future employment in Wales we cannot ignore our membership of the EEC, the threat to end it, and what would result if our membership were ended.
It is difficult to quantify the number of jobs involved. In 1980 the eight other Community States were among the 12 most important export markets for this country. Some 42 per cent. of our exports go to the EEC. Germany is now our largest customer. In 1980 Britain got 59 per cent. of all United States investment in Europe, worth over £14 billion. Some 50 per cent. of Japanese investment came to the United Kingdom. The EEC offers an unrestricted market of 270 million customers with money to spend. Much United States and Japanese investment comes to Wales.
We must ask the simple question: would withdrawal have any effect on those investments and the jobs that they create and sustain? We have much to offer—we have good labour relations and good communications—but we and Opposition Members should not underestimate the importance of the unrestricted EEC market, which is attractive to inward investors.
In the House we frequently invite Nissan to come to the Principality. Barely a week goes by without the hon. Member for Flint, East showing his enthusiasm for the project coming to his area. The hon. Member for Neath said the the project's proper home should be in West Wales. There is no guarantee that Nissan will come to Europe, let alone to the United Kingdom or the Principality, but it is certain that it will not come if we are not a member of the EEC. That applies to many inward investors. Hon. Members can draw their own conclusions. 369 If the hon. Member for Methyr Tydfil and the right hon. Member for Rhondda take a different view, let them promulgate that view. No one will believe them.
When we are assessing job prospects, if we were to withdraw from the EEC, we must consider whether the companies that are already here would remain, whether they would expand and whether others would come. Is talk of withdrawal from the EEC already causing overseas companies and investors to look on the Principality and the United Kingdom with disfavour? I ask those Members who express the view, and have always held the view, that we should be out of the EEC to calculate what effect that would have on jobs in the Principality.
We as a Government are also committed to stimulating the growth of new technology in Britain, and we in Wales, with our need for new and diversified industries, are well placed to benefit from this. The examples of Inmos and Mitel show the potential of this area for new jobs.
In his Budget speech my right hon. and learned Friend the Chancellor of the Exchequer announced a package——
§ It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.