HC Deb 25 July 1983 vol 46 cc912-28 12.52 am
Mr. Ray Powell (Ogmore)

I am fortunate to have drawn No. 4 in the ballot for the Consolidated Fund (Appropriation) Bill. My subject, unemployment and the Welsh economy, will undoubtedly be a follow-on of the debate on the west midlands.

At 3.19 am on 8 February this year, only five months ago, I was afforded the opportunity to introduce a subject on the Consolidated Fund (Appropriation) Bill. The subject that I nominated then was the nationalised industries in Wales. The Minister who replied, the late Michael Roberts, while having a different view from mine, nevertheless had a clear understanding of the problems that we face in Wales. Having re-read his reply to the debate, I appreciate more fully his ideology, viewpoint and sincere belief in the hope of solving the cancer of unemployment. I can well understand how and why so many of his close colleagues miss him. Only two days later he died, while replying to a debate on Welsh affairs. That was the last debate we had on problems in Wales. Since then, we have lost our Shadow spokesman on Welsh affairs, Alec Jones — a true and sincere representative of Wales. Both those Members played a part in advocating a better Wales.

I hope that this debate, although limited to one and a half hours, will afford us the opportunity to further the wishes of those we represent — not to score political points, but to present constructive thinking to close the great divide between those of our people with jobs and those without jobs. I feel that that would have been the wish of both our departed colleagues.

About six weeks ago, we had the general election. The electors gave their decision and, while I appreciate that they returned a Tory majority nationwide, a Labour majority was returned in Wales. I remind the Minister of State, Welsh Office of the mandate that the Government received from the Welsh electors. The number of votes for the Conservatives was slashed from 526,254 in 1979 to 499,310—a mere 31 per cent. of the electorate. The Labour party received 603,858 votes—36.7 per cent. of the electorate and 104,000 more than the Conservatives. Let us recognise from the start that the Government have no mandate to introduce policies in Wales other than those that the present system allows, and, if nothing else, they should pay far more heed to the party in Wales that received the support and blessing of the majority of electors.

Time does not permit us to analyse the election or to debate in depth and detail all the promises made to the electors by the Tory party, but we know them all. What appals me is that within three weeks of the Government's getting back, the new Chancellor of the Exchequer discovered that all the figures given by his predecessor were wrong. All the predictions made during the election campaign of a recovery round the corner were false. Within days of moving into 11 Downing street, the new Chancellor checked the books and found that public spending was going out of control. After consultation with the mistress, the right hon. Gentleman hurried along to the House to tell us the sorry tale.

Since then, the Government have tried to convince everybody that they were not aware of the facts before 9 June. Some people blush when they lie, some go green and others are capable of telling lies and proving them. The electors know only too well what was the truth and who was telling it.

Only days after 9 June, the mortgage rate was increased. Why was that not disclosed before the election? What has happened in Wales since 9 June? Have we had any redundancies? Have there been any closures? Can we look forward to an upturn in the economy? I shall give the House details of job prospects in the near future. I shall deal later with the long-term outlook.

I have a long list of job losses and gains since the election. It starts on 14 June with five job losses at Winvest in Cardiff. On 15 June, there were, as my hon. Friend the Member for Gower (Mr. Wardell) will probably confirm later, 638 job losses at Brynlliw colliery. On 16 June, the NCB announced that 70,000 jobs were to go. Terry Thomas, the vice-president of the south Wales miners, estimates that 9,000 jobs will be lost in Wales.

On 18 June, there were four job gains in Gwent Aluminium industry. On 22 June, there were 150 gains at Avana Rogerstone. On 23 June, there were 20 gains at Haeffner Holdings, the pigmeat processors at Clwyd. On 28 June, there were 70 to 80 losses at Saunders Valves of Newport. On 30 June, Jon Windows, Cardiff, 60 job losses; 30 June also, WDA Factories, Dyfed, 10 firms, 30 to 60 jobs in the pipeline, so call them all gains; 1 July, Milk Marketing Board, Newcastle, Emlyn, 165 jobs lost; on the same day, Kraft Cheese, Haverfordwest, 60 jobs to go; also on the same day, a little consolation, W. H. Pryce, Welshpool, 30 jobs gained, but in that one day we had a net loss of 195 jobs; 2 July, Snakpak, Cardiff, 180 jobs lost; the same day, South Wales Transformers, Treforest, 72 jobs lost; 4 July, STC, Milford Haven, 56 gains; 5 July, Welsh-Irish Ferries, Barry, 30 jobs lost; 8 July, BP Chemicals, Barry, 200 jobs lost; 9 July, Tredomen Engineering, Ystrad Mynach, 200 jobs lost; the same day, South Wales Switchgear, Blackwood, 95 jobs lost; 15 July, Blaengwrach Colliery, 160 jobs lost; the same day, Leos Superstore, Cwmbran, 20 jobs lost.

On these figures—there are numerous others; if they employ fewer than 10 they are not even mentioned—there are 2,000 losses to 300 gains, and 70,000 losses nationally forecast by the NCB. With unemployment escalating out of control to this degree, what have we in store during the summer recess? Can we go away on holiday thinking that the prospects for our people in Wales are improving? Will we return in October to cheer for job prospects?

We are also made aware, through deliberate Cabinet leaks, that £5 billion could be the aim of the Chancellor's cuts in public spending, in addition to the already announced cuts of £500 million and the sale of assets worth another £500 million. At Welsh Question Time on Monday I failed to receive an adequate reply from the Secretary of State about the effects of the cuts on Wales. How many doctors, nurses and other hospital staff will be lost to cut the Welsh authorities' grants by £6.5 million? That is a scandalous action and foreign to the promise made by the Prime Minister that the Health Service was safe with the Tories. These cuts are bound to be a risk to the health of our people and will obviously mean a reduction in services generally.

We need think back only to 1979 to know how our hospitals have suffered. It is appalling to think of the 1,000-plus elderly people at home at risk because there are no hospital beds available for them. More, not less, social services, sheltered accommodation, doctors, nurses and other staff should be made available, and that should be the demand of the Secretary of State in Cabinet.

What is even more nauseating than the lapdog tactics of the Secretary of State for Wales is the attitude of the Chancellor and of the Prime Minister to those out of work. They suggest that some people prefer the dole to work. The Chancellor even suggested that there were plenty of jobs available but that people chose to remain workless because they were better off on the dole.

The Prime Minister, speaking about school leavers, said it was too easy for some of them to go straight on to social security at the age of 16; they liked it and they had a lot of money in their pockets. Speaking as a grocer's daughter and a disciple of St. Francis, she told the House a few weeks ago that older unemployed family men could easily make do on less if their wives fed them more sensibly.

In the coming months there will be more and more of these high-living layabouts to ponder on the Government's words. The redundant Health Service workers will be joined by 5,000 from British Aerospace, 70,000 miners, 50,000 teachers, 2,000 Liverpool biscuit workers, 2,200 from Birds Eye and Walls, thousands displaced by the privatisation of local government and the National Health Service, 3,700 shipyard workers and possibly thousands of gas industry staff if the Government, as predicted, renew their attempt to hive off the showrooms. All that is predicted is doom and gloom.

What happened during the four years of the Tory Government who were elected in 1979? Prices increased by 50 per cent., investment in industry fell by a third and manufacturing output fell by a fifth. Britain ended up importing more manufactured goods than it exported for the first time since the industrial revolution. Unemployment soared and public spending and public services were slashed. New laws were passed to hinder the trade unions in protecting the pay and conditions of working people. In the first six weeks of the new Conservative Government the signs are that these desperate dosages are to be repeated even more harshly than in the preceding four years.

That will happen if displaced Ministers and others allow it to happen. The dismissed Foreign Secretary was right when he expressed the hope that there would not be a landslide victory for the Conservative party. We have yet to hear the rumblings and grumblings erupt, but perhaps some of those who are making these noises are waiting for the end of the summer recess before they do so.

What can we expect for the future? The CBI, the Government's friend, is demanding more cuts in public spending and estimates that there will be 360,000 more jobs lost. This is to happen for the sake of tax cuts to big business. This is the CBI's hit list — 47,000 Civil Service jobs in 1984–85, 41,000 teachers, 90,000 teacher-support staff, 19,000 front-line Health Service workers and 63,000 support service staff. The president of the CBI accepts that the Prime Minister, aided and abetted by his confederation, is succeeding in reducing pay increases but says that this is not happening fast enough. The fault could be attributable in part to himself, having last year accepted a 28 per cent. increase as chairman of Scottish Television and a 21 per cent. increase in his remuneration as chairman of Dunlop.

The tax concessions to the well-off continue. The Government have agreed to raise the level at which a higher rate of tax is paid from £12,800 to £14,600. The loss in tax revenue will be about £1,000 million. That is the sum by which the Chancellor cut public spending, as he announced only two days earlier.

What can the coal industry in south Wales expect? During the long summer recess a new chairman will take over at the National Coal Board. On 1 September, Mr. MacGregor, the steel industry butcher, will take over, at a cost to the nation of about £1 million in compensation payments, plus expenses. We shall then have an expert to reduce another of our basic industries.

We have not yet recovered from Mr. MacGregor's demanning of the Welsh steel industry. Even before he takes up the post, and since the general election, the NCB has announced its intention to cut 17,000 jobs. Why was that not announced before 9 June? Why was Arthur Scargill criticised for his forecast of massive pit closures? We all appreciate that job losses of such magnitude will have a devastating effect nationwide, but especially on Wales when we consider the additional job losses in rail, road, engineering and other associated industries there.

Mr. Terry Thomas, vice-president of the south Wales miners, warned this weekend at a conference at Llandridnod Wells that manpower in the south Wales coalfield will be cut from 23,000 to 14,000 and that only five or six of the present 31 pits might survive. When those figures were announced some months ago, what reaction did we have from the NCB and Conservative Members? We were called scaremongers and liars and told that we were using pit closures for political advantage and quite a lot more. In my constituency there are five collieries. I should like to know how many will be left after MacGregor wields his axe. Pit closures pose many other problems, because for every job that is lost in mining, two are lost in supporting industries.

Mr. Geraint Howells (Ceredigion and Pembroke, North)

As the situation is grim in the south Wales coalfield, would the hon. Gentleman be willing to try to persuade our counterparrts in Europe to set up a common energy policy which would benefit south Wales miners?

Mr. Powell

The hon. Gentleman is right. As we are to have European elections next year, the Opposition parties could advocate a European energy policy, consider seriously how much compensation and support the British Government give to the coal industry and compare that with what other European Governments provide.

I fear that, after 12 weeks of recess, we shall return to find that miners are going into recess for the rest of their working days. I am the son of a miner and come from a mining area. I visualise that, in the Ogmore area, 5,000 people could be put out of work in the five collieries. A further 10,000 people would lose their jobs for every colliery that closes. In Ogmore, 8,000 people are out of work and there are only 100 vacancies.

Can we find any hope in the Manpower Services Commission report for 1982–83? I have read the MSC report, the corporate plan 1983–87 "Welsh Economic Trends, 1982–83", "Unemployment in Wales: the present situation and future trends" by the Institute of Economic Research in Bangor and the documents that are published monthly by the Department of Employment in an attempt to find out what prospects there are for the 8,000 people in Ogmore and for the 200,000 others in Wales who seek employment. The MSC report says of the long-term unemployed—the forgotten generation—that 410,000 of those aged 18 to 25 were out of work for more than 12 months. That figure represents 45 per cent. of the 940,000 jobless in that age group, and the community programme just cannot cope. Youth unemployment figures reached a peak of 25 per cent. in October 1982, despite the youth opportunities programme which provided 750,000 places.

Where is the hope for young people? When will we have the skills that we shall need should the Government decide to change their policies and to end this so-called recession, which was deliberately contrived by the Government? What hope have we in Wales unless our spokesman fights the demands of the Chancellor of the Exchequer, instead of playing lapdog to the Prime Minister and her other pet poodles? We need a strong, determined voice to press our claims for our people, instead of the obvious relenting from this super Lloyd's "yes man". What fight did he put up to stop the £6.5 million drop in the funding of hospital services in Wales?

On 16 June, an all-Wales conference on unemployment was convened by the Welsh counties and district councils. The Secretary of State will undoubtedly have received a copy of the papers. I should like to place on record the resolutions of that joint conference and the action that it called for from the Government. Perhaps the Minister will tell us what action he intends to take, in response to the series of resolutions, that could alleviate the present grave situation.

Before reading those resolutions, I shall quote what the secretary of the Welsh counties committee suggested by way of direct job creation. The Secretary of State for Wales would do well to consider the suggestions earnestly.

He suggested: It might be appropriate to refer to a possible programme of direct job creation. Local authorities are well placed, with their strong and direct financial management controls, to be involved in a programme of direct job creation as part of developed regional policy. Even within the wider limits of central government thinking it might be possible to get an extension of the MSC programmes to provide for public payroll schemes which enable local authorities to take on staff with the difference between the cost of keeping someone unemployed and the job rate met by the local authority supported by RSG and certainly not penalised for seeking to co-operate in the policy. It will still be costing money, but the people concerned will be doing work of real benefit to the community—we need creative thinking to devise a plan for a wages subsidy in both the private and public sector as an alternative to the wasteful use of our precious resources that is currently taking place. An extra 2M unemployed costs the country 3 per cent. of its GDP—compare this with the cost of the entire local government sector: less than 10 per cent. of GDP. On the government's own figures it is costing an average of £70 a week to keep a person unemployed—a tragic waste when they could be doing useful work. There is a strong case for local government demonstrating to the public and the government that it is not only doing vital work but that it is essential to the national interest that it does more. We need better transport, housing, education, more industrial sites and factories. It is far better to improve society and the economy by employing people in these areas than paying them to be unemployed. The real cost is only the difference between wage rates and unemployment costs; at an average wage of £5,000 a year the real cost is about £1,500. If local government in Wales was allowed to spend £50M in real terms on direct job creation schemes at average wage rates, an additional 33,000 could be employed in Wales—reducing unemployment to less than 13 per cent. The draft resolutions from that conference, which I believe should go on record, stated: The Conference calls on the Secretary of State fm. Wales to recognise the severity of the economic problems of the Principality and to acknowledge the need for a strengthening of regional policy … to give local government the financial capability to perform a meaningful role in regional and local economic development. In particular, the Conference calls for the relaxation of controls on local government to enhance, not inhibit, their contribution to local employment initiatives. In particular, the Conference calls for the relaxation of statutory and ministerial controls on local government to enhance, not inhibit, their contribution to local government initiatives and enable EEC regional grants to be truly additional to National Government Capital allocation. The Conference would stress the importance of introducing joint consultations between Central and Local Government aimed at identifying new initiatives which could form the basis of direct job creation measures in the public sector in Wales. This is considered to be vital at a time of increasing demand for local services which cannot be met at a time of financial cutback. The Conference calls on the Secretary of State to give his full backing to the concept of regional policy and its relevance in the present situation. The Review of Regional Policy should lead to a reinforcement of incentives for new industry to come to Wales. Joint Consultation should also proceed as a matter of urgency aimed at introducing an enhanced local authority capital programme in Wales which would create both short and long term job opportunities, as well as improving the country's basic infrastructure. The local authorities stress the need for a consistent approach to capital spending programmes and deplore the 'stop go' approach which has bedevilled their planning. The Conference calls on the Secretary of State to consider a joint approach with the local authorities to see in what way planning policies can be made more sympathetic to the need for economic development. The Conference stresses the need for local authorities to play a proper part in providing recreational and leisure opportunities at this time, and for them to be given the financial support to fulfil this role. Those are the views of local authorities in Wales, and they are the resolutions adopted. I remind the Minister that they are not all Labour-controlled authorities.

I have outlined what the Government intend to do, and shown the butchery with which they intend to attack the fabric of our society. Redundancy announcements, which were not forthcoming during the election campaign, are escalating. Massive pit closures are forecast, and steel and shipbuilding will be further devastated.

The Government, bankrupt of policies to solve the problems that they have created, turn their attention to those unable to defend themselves — pensioners and those whom they have thrown on the scrap heap—by cutting their benefits, all to satisfy this headlong rush towards a Victorian society based on private affluence and public squalor. We have a duty vigorously to oppose those measures, to stop this insanity, and to stop them taking us on this course of economic and industrial disaster. The Government must and will be stopped. If Conservative Members cannot or will not help, the fight will be taken outside and the united trade union movement will be called to assist.

1.25 am
Sir Anthony Meyer (Clwyd, North-West)

In that part of his speech that was addressed to the House of Commons as opposed to a general management committee—I am bound to say that it was the greater part of the speech—the hon. Member for Ogmore (Mr. Powell) made a number of valid points to which I shall allude. I hope that he will not take it amiss if I say that the extremely warm and generous tribute which he paid at the beginning of his speech to Michael Roberts and Alec Jones won the sympathy of the House and ensured a careful hearing for the remainder of what he said.

Perhaps the hon. Member for Ogmore will not be surprised to find that there are a number of matters in which, although I do not entirely agree with him, I share his anxiety. Like him, I want to see more, not fewer, social services, doctors and nurses. Like him, I am disturbed when I hear the Chancellor of the Exchequer suggesting that there is plenty of work for those who wish to find it. I took the trouble to check the transcript of the television interview to see what the Chancellor of the Exchequer said. The report went a long way beyond what he said, and the headline writer went a great deal further. At no point in the interview did the Chancellor use anything like the words which are attributed to him. Having thus far exculpated him, I am bound to say that some of my right hon. Friends bother me when they appear to suggest that the level of unemployment benefit is such as to provide a disincentive for people seeking work. Their proposition is valid in some areas, especially in London.

I think nothing of that great sign on County Hall which each day tells us the total number of London unemployed because I know also that a number of jobs in London are not being done because people are not prepared to do them at the wages offered. I do not blame them, but I believe that some unemployment in London is bogus. This is not the case in Wales, especially in those areas which have been hit harder by industrial change than any other parts of the United Kingdom.

We are all familiar with the excessive dependence in the Principality on traditional industries. We know that the change from traditional industries to those of the next century was bound to be painful throughout the country, and that it was bound to be agonising in Wales; and agonising it has been.

I support the determination of my right hon. Friends not to stand in the way of technological change. If we do as the hon. Member for Ogmore would have us do we shall try to hang on to jobs in mining and steel for as long as possible—heaven knows, there is every justification for wanting to do so. I do not see how any Member of Parliament with such jobs at risk in his constituency can do anything other than burst himself to hang on to them. I did much the same thing when faced with the massive closure at Shotton, which is just outside my constituency. By delaying that closure programme I did immense harm to my constituents. I do not expect the hon. Member for Ogmore to accept it when I say that if he were successful in trying to defer the closure of pits which are coming towards the end of their economic life—I am choosing my words carefully—he would be damaging rather than helping his constituents' interests. I do not expect him to accept that and I do not expect his electors to accept it, but, none the less, I believe that that will be history's verdict.

I support the process of technological change which, if it is carried through to a successful conclusion, will mean that in the 21st century Wales will be able to hold its own in competition with the rest of the world and provide a decent standard of living for its people. However, we have another 17 years of this century to go. It will be a painful transition. Where I might perhaps find myself at odds with some of my right hon. Friends is over the actions that I believe that the Government should take over those next 17 years—because they will be 17 years of Tory rule—not to slow that process of change but to ensure that it does not result in blighted lives.

Part of the answer lies in the programmes for youth employment, training and the like, which I welcome.

However, we all know that they are palliatives and not the real answer. I believe that I can see the glimmer of an answer, but I do not see how one reaches it. I believe that the answer must lie in an enormous expansion of work-sharing. The trouble is that the moment one mentions job-sharing, every trade union boss opens his dossier and finds in it a cast-iron case for paying his members a great deal more for doing a great deal less.

If job-sharing is not to prove catastrophic and wreck the competitiveness of the Welsh economy before it has even begun, it will have to go hand in hand with the acceptance of at least a postponement of a rise in living standards. We must accept the idea of a shorter working week, day, year and life and with it a much more intensive use of our capital equipment. We are building modern factories with modern equipment, but they are not being used fully. They are manned by one or, at the most two shifts. This equipment should be worked by six shifts around the clock. Enormous wealth would be created by the intensive use of our capital equipment. Such wealth could be used to finance more lavish social services, a better National Health Service, more doctors and nurses, smaller classes and more home helps. They are the objectives of us all. Opposition Members will say, "Oh, but the Government are doing precisely the opposite."

The Government are cutting down on our social services. Once again, I have to accept these cuts because even the inadequate social services that we have are more than we can afford without imposing an intolerable burden on our industry and thus destroying its competitiveness. Somehow or other, we have to get past, this point. I do not see how that can be done, but it needs to be done.

I am distressed, however, to hear some of my right hon. Friends talking of cuts in the social services — fewer teachers, fewer welfare workers and the rest—as if this were a desirable objective in itself. I do not accept that. I accept the cuts as a horrible necessity, the very last thing that I should want to do. I support the Government's policies. They are on the right lines and I am convinced that the Labour party's policies are a recipe for catastrophe. However, I only wish that my right hon. Friends, in putting forward their admirable policies, could offer us a little hope.

Mr. Rowlands (Merthyr Tydfil and Rhymney)

The hon. Gentleman is making the usual persuasive speech made by Tory Members. However, there are two questions to be asked. First, will the hon. Gentleman therefore not oppose, on any count, cuts in the real standard of living of the unemployed, that is, a cut in the real meaning of benefits as we understand them, for the unemployed? Secondly, when he speaks of social services and home helps, and the necessity at the moment for the cuts, does he not realise that there is a massive on-cost? If we cut home helps, there will be more need for more expensive places in old people's homes, hospitals, or geriatric wards. We suffer from this in our community. It is thus not a saving in any sense of the word to cut home helps. The consequences of those cuts in the short term—not even the long term — will be visited on the Government anyway.

Sir Anthony Meyer

On the hon. Gentleman's second point, I agree. To cut the social services in such a way as to make it impossible for people to remain in the community and to force them into institutions is lunacy.

On the hon. Gentleman's first point about cuts in the level of unemployment benefit, I did a broadcast this morning. In the past I have opposed the Government's ideas for reducing the level of unemployment benefit by 5 per cent. Once the principle of taxing the unemployment benefit —which I support—had been introduced, I opposed the concomitant use of the 5 per cent. abatement.

As to the future, I could not commit myself here and now to opposing any fall-back in the increase of unemployment benefit. I could not commit myself to the idea that the unemployment benefit must keep pace at exactly or more than the increase in the cost of living. I should want to look carefully at any proposals for cutting that benefit. It was, and it remains, my thinking that we cannot solve the problem of unemployment by clobbering the unemployed. That does not necessarily commit me to fight for the unemployed to escape all the sacrifices that the rest of us may have to bear.

1.39 am
Mr. Gareth Wardell (Gower)

The incidence of involuntary unemployment is a key variable that has to be carefully examined whenever one considers the efficacy of the Government's management of the real economy. In the past four years economic textbooks have added chronic involuntary unemployment to the types of unemployment that previously existed. It is the new economic and social disease of the 1980s. Never in recorded economic history have any Government presided over such a tremendous acceleration in the rate of long-term unemployment.

The Secretary of State for Wales has provided me with quarterly figures for long-term unemployment for each county in the Principality. He knows only too well the sorry picture that that unfolds. Of every five unemployed persons in the county of West Glamorgan, in which my constituency lies, two have been unemployed for more than a year.

In May 1982 the House of Lords Select Committee on Unemployment summed up the kind of effects which this new type of unemployment has on people. It said at page 55: Among the long-term unemployed, surveys suggest a sequence of psychological reactions, which can be compared to a downward spiral. At first, shock and disbelief are combined with optimism and a sense of being on holiday; then the holiday feeling gives way to meaningless leisure, inertia and exhaustion, with tensions in the family and a loss of self-esteem; money Wins short, activities are curtailed; lastly comes the 'broken state', in which despite the lifting of earlier anxiety and depression there is a feeling of inferiority, submissiveness, and inability to provide for needs, with acceptance of the new `non-occupational' identity, a more limited way of life, and little hope of change. Poverty among children rears its ugly head when the cold wind of unemployment blows through their parents' lives. One indicator of this poverty is the number of children receiving free school meals. Until the financial year 1979–80, caring local authorities gave free school meals to all children of low-income families. In September 1980 local authorities engaged in tightening the financial belt and started to give free school meals only to children whose families were in receipt of benefits.

The 1982 annual education report to Parliament by the Secretary of State for Wales, which has only just been published, summarises the school meals situation. This is the crucial point. Despite a fall in the number of children in Wales consuming school meals, from 187,957 in 1979 to 138,428 in 1982, the number of children receiving free school meals rose from 40,682 to 44,854 in the same period. By 1982, 32.4 per cent. of pupils in Wales taking school meals in Wales were receiving them free of charge. That shows the increase in poverty under the Conservative Government. Of the 28,500 school meals consumed daily in West Glamorgan, almost 32 per cent. are provided free because of low parental income.

Those children see their future in a world of joblessness. The area director of the National Coal Board in Wales promises jobs for every man in Brinlliw if that colliery closes, but he and the children of Wales well know that there are not 638 extra jobs in the pits around Brinlliw. The truth is that job opportunities in the mining industry in Wales are being cut. That is the future that stretches before the children. In my experience, if there are cuts in the mining industry that does not bode well for the other industries in the Principality.

Great and traumatic as those effects of unemployment are, there is a greater and more damaging danger—a growing feeling that unemployment is a natural product of forces beyond man's power to control and a return to a decadent mode of thinking best symbolised by the determinist school of geographical thinkers at the beginning of this century, with man as the passive element tossed hither and thither by earthquake, tide and storm.

In such schemata, with the resurrection of Say's law, the powerful real balance effect and the stability of the velocity of the circulation of money, the Government's role is periodically to summon a couple of carefully selected free market economic gurus to deliberate on the economic trends of tomorrow. All too often these experts turn out to be less reliable in predicting the economy than the fairground fortune-tellers with their tea leaves. Out of the best empirical evidence and the best models available, they conjure up titbits of comfort for the consumption of their political paymasters.

There was a classic example of that on 17 May 1982, when the then Chief Secretary to the Treasury opened the Cutlers garden in London. The quotation is well worth repeating: The evidence of the start of a recovery is all about us and not even the most blinkered pessimist could fail to see it". The Government's reliance on augury is touching, but it is not a sound bedrock on which to build the economic future of Wales and Britain, because the symptoms of deep despair are all around us and it is only the blinkered who fail to see those. We are living in a period of our country's existence when the inevitability of economic failure is rapidly becoming the new conventional wisdom.

If the Government continue their obsession with monetary variables—their search for the stability of the velocity of the circulation of money — without giving due weight to the real economy, stagnation may become a permanent feature of Britain's standard of living. Progress will be at an end, for people will begin to accept their lot, feeling unwanted and alienated in a world of rapid technological change.

The Government have the opportunity to match wasting resources and desperately needed improvements. There are sick people in desperate need of hospital treatment. There are rutted roads in great need of maintenance, without which the risk of accident and death is increased. There are antiquated sewers needing replacement. There are Airey and BISF houses in need of rebuilding. The problem of Cornish units is only now coming rapidly to the fore as one of the new problems facing our housing stock.

Mr. Rowlands

And the classes of 36 too.

Mr. Wardell

I am grateful to my hon. Friend. I shall confine myself to housing capital expenditure. It can clearly be seen how the Government are preventing local authorities from assisting people to improve their homes.

This morning I met the chief executive of Lliw Valley borough council, which forms part of the Gower constituency. I went to see him because many of my constituents are complaining bitterly about the ceiling imposed by the authority on house improvement grants. In the current financial year, Lliw Valley has allocated £4.7 million for capital expenditure on housing, of which £1 million is for improvement and repair grants. The high commitment of £3.7 million is largely because of 66 Airey houses and 290 BISF houses in the housing stock which must be extensively refurbished, yet Lliw Valley borough council cannot get extra Government cash unless its improvement and repair grants comprise at least 50 per cent. of its capital expenditure for housing. To do that it would have drastically to curtail its programme on Airey and BISF houses. Such action would be heartless.

The response of the other local authority in my constituency has been to exclude certain geographical areas from improvement grants. None of my constituents living in the Swansea city council area are entitled to receive the grant. Unemployment in the construction industry in Wales is high, while unmet needs abound. The Government must act now to boost morale. If they lower morale, increase hopelessness and encourage people to feel that they cannot participate in the future of this country, we shall be on a slippery slope into a new and dark economic age.

I urge the Minister to give hope to the people of Wales and to give them an injection of enthusiasm. We see a future without hope and a generation of our children with no hope of ever working again.

1.56 am
The Minister of State, Welsh Office (Mr. John Stradling Thomas)

I congratulate the hon. Member for Ogmore (Mr. Powell) on raising the important subjects of unemployment and the economy of Wales. Those matters are close to the hearts of all Welshmen, and there can be no doubt about that. As a Conservative, I can say that those matters are very much at the heart of the Government's thinking on Wales and the future of its people and I welcome this opportunity to put the Government's view on record.

I thank the hon. Gentleman for the tribute he paid to the late Michael Roberts and Alec Jones. Both men had many more friends than opponents. I add my tribute to his. Both men went through life making friends, which is an achievement for anybody, especially in politics.

It is right that unemployment should be at the front of our minds in the debate. But it is misleading for Opposition members to argue that the high levels of unemployment are the responsibility of the Government or the consequence of our efforts to tackle our basic economic problems — which are there whichever Government are in power because they go back a long way.

It is true to say that we laid the foundations of recovery during our previous Administration. I remind the House that in our manifesto for the recent election we set out the policies that we intended to pursue to continue and build on that recovery. Hon. Members opposite put forward to the electorate proposals for econimic recovery based on spending our way out of trouble. I accept that they were sincere in those proposals, but we have always maintained that such proposals, however well intended, would lead to even more severe economic problems and higher unemployment.

Obviously there is disagreement on that fundamental matter. The electorate made its choice and has given us a vote of confidence for the path that we are pursuing. I do not deny that it is a difficult path. I am not unsympathetic to many of the points raised tonight, but I disagree about the remedies.

What concerns us tonight is the particular problems of Wales, although as part of the United Kingdom our economic well-being depends upon what is happening in the country and in the world as a whole. The level of unemployment in Wales, as hon. Members have made clear, is unacceptably high. My hon. Friend the Member for Clwyd, North-West (Sir A. Meyer) made a sympathetic and thoughtful speech and hon. Members on both sides will agree about that.

However, I reject the absurd suggestion that this Government are indifferent to unemployment. That is not a good basis for debate. Neither I nor my right hon. Friend the Secretary of State has tried to disguise from the House our anxieties about the unemployment level. In the longer term we need to create the conditions necessary to provide new and secure jobs for our people. This we are doing. We are also concerned about the short-term problems. The scale of help that we are offering to the unemployed demonstrates our concern.

Reference has been made to our future policies. No decisions have been made. One area of concern to us is the number of people who have been out of work for an extended period. The hon. Member for Gower (Mr. Wardell) referred to that in detail I understand his arguments and feel the deepest sympathy for the long-term unemployed, but we should take a careful look at one factor to which he referred in a different way. The sting of unemployment is not the poverty that the hon. Gentleman stressed; the sting is the loss of status. I appreciate that and I do not want Opposition Members to attempt to lecture me on that, because I understand the problem and feel it deeply. That is why we introduced the community programme.

Mr. Rowlands

If the Minister is concerned about the dignity of unemployment will he confirm that many people will remain unemployed and should not be sacrificed by cuts in benefit? Does he support the principle of upholding the real value of benefits for the unemployed? That is the key to the dignity of being unemployed. Where does the hon. Gentleman stand?

Mr. Stradling Thomas

I understand the point, but I shall not be diverted. We have introduced the community programme to offer aid. The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) understandably is concentrating on the material aspects. That is vital, but it is not the most important issue. The programme is to provide about 130,000 places a year nationally and £380 million will be devoted to it.

We are all also concerned about the problems of the young. With my special responsibilities under the Secretary of State for Education and Science and for the careers service, that is of particular concern to me. School leavers today face a different world from that of 10 years ago. Whether it is the long-term unemployed, the redundant or the youngster about whom we are so concerned, we cannot escape by any ideology the fact that we face rapid technological change. That is accepted on both sides of the House.

We disagree only about the way to grapple with this massive problem. For those not fortunate enough to find employment, the work experience, training and other support provided by the youth opportunities programme has been of great value in improving their prospects. However this year it is being replaced by the new youth training scheme, which we should all welcome. Its aim is to help us move towards a position where all young people under the age of 18 have the opportunity either to continue in full-time education or of entering a period of planned work experience combined with a work-related training and education.

In Great Britain as a whole, some £1 billion will be spent this year on the youth training scheme, which shows our determination not only to alleviate unemployment but to provide young people with the chance to obtain agreed standards of skill and to provide them with a basis for progress through further learning.

But we must also look at the longer term. In our manifesto for Wales we said: We have had to prepare the infrastructure and create the environment in which the economy of Wales, so long dependent on old basic industries, can be diversified and rebuilt around the new technologies. The hon. Member for Ogmore appeared to be fighting for his constituents. That is understandable, as my hon. Friend the Member for Clwyd, North-West said. I appreciate that, but I think he does it at his peril if he holds up the future, because we must live in this changing world whether we like it or not. This applies to all of us—the young, the long-term unemployed and those still in work. This point must be put across by every responsible Member to his constituents.

We are doing much to improve the infrastructure of Wales and in particular we are doing much to irnprove communications. I do not want to go over the ground in detail but perhaps I can mention two specific schemes which highlight the continued and dramatic improvement in our road network. Just over a week ago, I had the pleasure to open the new Crumlin to Aberbeeg section of the A467 and last Friday my right hon. Friend the Secretary of State opened the Carmarthen southern bypass. Those two schemes will, in their various ways, be of immense value, the one improving access to the heart of one of the great industrial valleys and the other making communications a great deal easier with the rural western part of Wales.

It is also appropriate that at this point I refer to the work of the Welsh Development Agency. It is playing a significant part in helping to create new jobs in Wales. At the end of June there were 434 Welsh Development Agency units available for letting in Wales, a further 80 were under construction and a further 102 planned.

Mr. Rowlands

Empty sheds.

Mr. Stradling Thomas

That is very illustrative. If we do nothing we are criticised; if we prepare for the future we are also criticised. What does the hon. Gentleman want —inactivity or foresight?

Mr. Rowlands

A balance between the two.

Mr. Stradling Thomas

That is precisely what the Government are providing. I am glad that the hon. Gentleman said "a balance between the two" because the balance is a difficult one to achieve. I hope that Opposition Members will have seen the 1983 report of the Welsh Development Agency which was published last week. It contains a valuable record of achievements. Perhaps I can highlight some of the more prominent points. We have again seen a record in the allocation of factories by the agency exceeding the previous record which was set in the previous year. Well over 1.5 million sq ft of space was allocated in the year with a promise of nearly 6,000 jobs over the period when the factories become fully occupied. I trust that all hon. Members will recognise that this is an entirely praiseworthy achievement and the report contains a good deal of other material which I can only mention in passing — for example, the executive secondment scheme and the venture capital subsidiary, "Hafren". The past financial year was also a good one for the WDA's investment. I am confident that the agency will continue to make a major contribution to the Welsh economy.

It is perhaps appropriate at this point also to note that there has been increased interest from Welsh-based industry and incoming firms in the forms of the selective financial assistance available under section 7 of the Industrial Development Act to support projects that will improve employment opportunities in the assisted areas. In the past financial year there has been an increase of 32 per cent. in the number of applications received. A similar increase occurred in the number of offers taken up by firms, which involved a total grant commitment of nearly £26 million in 1982–83, an increase of 37 per cent. on the previous financial year.

Similarly, in the first half of 1983 the small firms centre received nearly 9,500 inquiries—an increase of 15 per cent. over the same period last year. We have also taken important initiatives in helping to regenerate the older and decayed parts of urban Wales, through the urban programme and the urban development grant.

The urban programme makes an important contribution towards economic regeneration and job creation. In selecting schemes for approval in 1983–84, my right hon. Friend has been keen to give further encouragement to the creation of small businesses and has allocated about £6 million for new factory units, workshops and other job creating schemes within the urban programme.

Special attention has been given to areas of high unemployment. The five designated districts of Blaenau Gwent, Cardiff, Newport, Rhondda and Swansea together have received over £4 million—a quarter of the total urban programme resources—and substantial allocations have also been made to individual authorities in north-east and south-west Wales that are experiencing particular economic difficulties.

Mr. Rowlands

This is fantastic.

Mr. Stradling Thomas

I accept that description. It is a fine record.

Mr. Rowlands

The Minister's marvellous description of all the factories that have been let, the new small business schemes and the rest does not tally with the fact that 170,000 people in Wales are out of work. That is a fantastic number. That is what I meant when I said "fantastic". The Minister's description of a great, booming Wales is not in line with our experience or with the fact that 170,000 people are out of work—double the 1979 figure.

Mr. Stradling Thomas

But what I have said shows clearly that it is false to suggest that the Government are not doing their utmost to overcome the problem, which is not peculiar to this country.

Mr. Rowlands

They are failing hopelessly.

Mr. Stradling Thomas

As a former great Prime Minister of this country said long ago, wait and see.

My right hon. Friend has also been reviewing the status of all Welsh authorities under the urban programme. I am pleased to announce that, as a result of the review and subject to the completion of the necessary statutory procedures and consultations with the European Commission, he proposes to add the borough councils of Merthyr Tydfil, Cynon Valley and Afan to the existing districts designated under the provisions of the Inner Urban Areas Act 1978. I am sure that this change of status will be a valuable measure in dealing with the particular problems of these urban valley authorities. I am glad to see a smile of pleasure on the hon. Gentleman's face.

Mr. Rowlands

A modest smile, yes, but not necessarily of pleasure.

Mr. Stradling Thomas

The House will be aware of the major new initiative announced last year, the urban development grant scheme. The grant is designed to trigger private investment in rundown urban areas and the results so far are most encouraging. Hon. Members will recall that earlier this year my right hon. Friend was able to announce that out of some 50 applications submitted for consideration, he had approved 13 projects for which UDG of some £5.9 million will trigger a total investment of almost £40 million. These projects will provide about 1,300 permanent job opportunities, with a similar number of construction jobs during the development period.

One of the most exciting features of the UDG scheme is the way in which support for one project can stimulate investment in other development projects in that area. An excellent example of this is the splendid new maritime quarter in Swansea, where UDG support for a major international hotel has been a factor in bringing forward high quality development of the whole area. Welsh local authorities are now preparing bids for the next UDG round and there is every indication that local authorities and developers will again respond with imaginative schemes to regenerate our inner urban areas.

In this connection, my right hon. Friend has already made it clear that he will give sympathetic consideration to proposals for urban development grant where this is necessary to bring forward the very exciting proposals for the redevelopment of Cardiff docklands.

Mr. Gareth Wardell

The Minister said that investment in new developments had a multiplier effect on jobs. Does he agree that when factories close there is a negative effect? We in Wales want the net effect of both movements to be positive, rather than negative as they are now.

Mr. Stradling Thomas

I am well aware of that factor. I said in an exchange earlier that getting the balance right was extremely difficult, and I do not renege on that.

Mr. Rowlands

And the Government got it wrong.

Mr. Stradling Thomas

That is a matter of opinion. The electorate thought otherwise.

There are many other aspects with which I could deal, but time is short. Reference was made to our great basic industries in Wales of steel and coal We want strong, competitive, efficient and viable coal and steel industries. They are part of our great tradition in Wales. But to imagine that we can achieve that by holding back the clock is unrealistic. I will not, in the limited time available, go into the details of both great industries, except to comment that the references that were made to the future of the coal industry were excessively gloomy. There is no queston of butchering it. We want strong, viable pits where investment can be put to the benefit of those who work in the coal industry and the nation because it is part—

Mr. Ray Powell


Mr. Stradling Thomas

I will not give way.

Mr. Powell

I want to know—

Mr. Deputy Speaker (Mr. Haro║d Walker)

Order. The Minister said that he would not give way, and the debate is due to conclude at 2.22.

Mr. Powell

I am anxious to intervene because the Minister is dealing with the subject on which I concentrated, and I am sure that he would like to give me an assurance that my five collieries in Ogmore and the 5,000 people employed in them will be assured of a future after MacGregor is appointed on 1 September.

Mr. Stradling Thomas

The hon. Gentleman is aware that that is a matter for the NCB. He denigrated the area director in a way I deplore, and used words such as "lies", and that is well below the dignity of any hon. Member. I cannot given an assurance one way or the other, for it is a matter for the National Coal Board and not for me. Many of our pits—I am not referring to the five in the hon. Gentleman's constituency—are old, beset by geological faults and entirely uneconomic by any commercial standards. It is no good the hon. Gentleman challenging me or any other Minister on a matter which is entirely within the responsibility of the coal board. It is a fact of life that pits decline as they grow older and that there must come a time when it is no longer sensible to keep them open at a loss. No purpose is served if the NCB is forced to subsidise losses and to delay job-making investment in new pits. In view of the hon. Gentleman's background, he should know that as well as anyone else in the House.

The coal industry needs a period of calm and realistic consideration that is aimed at achieving a viable industry that offers a good service to its customers and real security to its workers. There has been much talk of high technology and the future and the growth of such industries is encouraging for Wales. An impressive range of companies have established themselves or are in the process of so doing. Names such as Mitel, Ferranti, Amersham, Inmos, Matsushita, more recently Align Rite and very recently Comdial, whose decision was announced to the House last Monday, show the attraction that Wales holds. The expansion recently of AB Electronics shows the potential that exists for the growth of homebased industry, as do the recent announcements of other firms which are not in high technology, such as Avana and Smith Kendon.

We must build upon our successes and foster the establishment of Wales in the minds of industrialists and investors as a place where industry, particularly high technology industry, can thrive. This is for the future and does not concern the past. Some spend too much time dwelling upon the past. However, there is no point in laying the foundations for new technological industries if we do not have the manpower to meet their requirements.

It is right in this debate to mention the needs of young people. As we are more specifically concerned tonight with unemployment and the economy, I shall not comment on what is being done in schools. The progress of the information technology centres—

Mr. Deputy Speaker

Order. It is 2.22 am, the time set by Mr. Speaker for this debate to conclude.

Mr. Stradling Thomas

I shall draw my remarks to a conclusion briefly. I have been most impressed with the co-operation that I have found throughout Wales from local authorities and the new local enterprise trusts. The positive steps that we are taking to help the transition from old to new technology in Wales, and the fostering of the growth of indigenous Welsh businesses, will provide a healthy future for our people. These developments, when set within the framework of our general economic policy, provide the only realistic path for secure and lasting opportunities for jobs in Wales in future.