WALES: SOCIAL AND ECONOMIC POLICY

HL Deb 20 February 1980 vol 405 cc841-88

7.58 p.m.

Lord BROOKS of TREMORFA rose to ask Her Majesty's Government what policies they are pursuing to alleviate the social and economic problems of Wales particularly in view of the proposed cut-backs in the steel industry. The noble Lord said: My Lords, I am grateful for this opportunity to air some of the social and economic problems facing the Welsh people, and I am grateful to those noble friends of mine who have indicated that they are going to take part in the proceedings. I am particularly honoured that the noble Lord, Lord Hooson, should be making his maiden speech this evening. He has a long and distinguished record of service to the Principality, and I am particularly pleased that he is speaking. I am also pleased that the noble Lord, Lord Harris of High Cross, will also be taking part in the debate. I had occasion to write to him last week and say that I had read his speech of last Wednesday with great interest and, as a South Welshman, I found myself in disagreement with much of it. I informed him that I intended to make a reference or two to what he had to say.

On the 14th February, there was a debate in another place on Welsh affairs. This, I am told, was the first occasion on which a Labour Opposition had called a three-line Whip on such a debate. That is a measure of the concern felt by Opposition Members in another place over the rapidly deteriorating position in Wales, particularly in view of the matters current in the steel industry. I listened to much of that debate and read the report of the whole of it, and it was a very depressing debate. I am bound to say that the Government spokeman seemed indifferent to the scale and the nature of the problems facing Wales.

What has happened since May last year? We all know about the cuts in public expenditure. We know of the hardship facing local authorities. We know that high interest rates and high mortgage rates will affect the whole country. But the cumulative effect of these policies on regions such as Wales will be disastrous. It is almost impossible to exaggerate the scale of the disaster which could hit Wales, if the proposed loss of jobs in steel and coal goes ahead.

In the steel industry, 6,800 jobs at Port Talbot and 4,500 jobs at Llanwern will be lost from August if the BSC's plan to reduce production to a total of 2.

8 million tonnes per year from the two works goes ahead. These jobs will be additional to the 7,500 jobs to be lost following the end of steelmaking at Shotton. It is likely that there will be a further 1,500 job losses at all steel plants if the BSC succeeds in linking any pay settlement to a further demanning exercise. The coal industry will lose approximately eight pits and 7,500 jobs, as a direct result of the reduced output in the steel industry. If the BSC goes ahead with its plans to increase imports of coking coal, then a further 11 pits and 7,500 jobs would be at risk.

If the steel and coal industries, which between them provide 15 per cent. of all male employment in Wales, suffer cuts of this size, then there will be a substantial effect on jobs in other industries and services. From railways and road haulage, which in South Wales depend for so much of their business on the movement of coal and steel, through firms supplying equipment and services to pits and steelworks, to the newsagents, the corner shops and the cafés which depend for their very survival on trade from miners and steelworkers, the effect will be felt throughout the whole of South Wales. The loss of one outside job for every two jobs lost in coal and steel would represent a further 16,000 to 18,000 jobs, or a total of jobs lost in excess of 50,000 in Wales. Unemployment in Wales in recent years has been in the 80,000 to 90,000 range, and job losses on this scale would mean an increase to over 130,000, or 13 per cent. of the insured population.

The effects of this tragedy would not be confined to Wales. In recent years, there has been much talk of "de-industrialisation" in Britain as so many industries contract and decline in the face of imports. If Llanwern and Port Talbot close, representing one-third of Britain's modernised steel-making capacity, it will be a critical step in the destruction of British industry across the board. Such a development would put at risk the already fragile prospects of Leyland, which would be at the mercy of foreign steel suppliers for both price and certainty of supply; and the collapse of Leyland, with job losses running well into six figures, could be the death-knell for a very wide range of the British engineering industry.

At this time of crisis for Wales, the policies of the Government are designed to make the problems worse. Government public expenditure cuts were responsible for the rigid break-even date imposed upon the Steel Corporation, which has led to the panic cuts put forward by the BSC. The steel strike over pay was also a response to this rigid cash limit, which led to a zero pay offer and a threat of 50,000 redundancies being made to a workforce which has accepted all pay policies and has negotiated a loss of over 30,000 jobs in six years. While Government spending cuts led to the rigid break-even date, Government monetary policy, involving 17 per cent. interest rates and an over-valued pound, has hit steel demand at home and caused the BSC to give up voluntarily 2 million tonnes a year of export business.

The Government's refusal to provide a small tapering subsidy of £20 million over four years, to help the Coal Board compete with heavily subsidised foreign coking coal, is inexplicable. Pits cannot be mothballed. When a pit closes, the coal is lost for ever. In an era of energy shortages, it is criminal to sacrifice millions of tonnes of coal on the altar of free market monetary dogmatism.

The Government are now having second thoughts over the down-grading of many parts of Wales for regional aid. But even if development and special development area status is restored to areas such as Port Talbot, the value of regional policy is severely reduced if the Government persist in their refusal to follow a policy of steering firms to the assisted areas through a vigorous IDC policy. The extra £48 million of Government help channelled through the WDA must be seen in the context of cuts in the WDA budget, which have already brought new land reclamation schemes—vital to creating industrial sites in so many of our valley communities—to a halt. How much of the £48 million will simply be used to restore cuts in the WDA budget?

I can hardly be described as the original European man. I opposed our entry into the EEC. It seemed to me that the Treaty of Rome would lead to an inward-looking Community, and I was never convinced of the so-called economic benefits that would accrue to this country, were our membership to be confirmed. However, we are now fully-fledged members of the EEC, which adds, of course, a different dimension to the problems facing Wales. I am involved in visits to Brussels in order to obtain EEC help from the social and other funds, but what has been happening under this Government? There was an announcement in December that the BSC is to set up a new subsidiary called BSC Holdings, which will include most of the profitable parts of the Corporation. This is a further threat to jobs in Wales. The tinplate works of BSC-Trestre, Velindre and Ebbw Vale—are to be removed from the control of the Welsh Division and will come into BSC Holdings. This will hit the financial results of the Welsh Division, which will offer a potential threat to the role of Port Talbot and Llanwern as suppliers of coil for tinplate, and will create a new possibility of tinplate investment being sited outside Wales. Further, it is clear that one role of BSC Holdings is to create a structure through which sales of profitable BSC assets to the private sector will become much more straightforward.

The BSC cutbacks have come as a surprise to the European Community. EEC proposals to cut back steel capacity in the nine Member States—known as the Davignon plan—will involve a reduction of 6 million tonnes of capacity in the whole of the EEC over a three-year period. The BSC proposals involve a reduction of 6 million tonnes in a mere seven months in the United Kingdom alone, thus removing all pressure on the other eight EEC countries to make any cutbacks.

The Government appear to have little interest in using the EEC to obtain the maximum help to cushion the blow of any rundown. A proposed new scheme put forward by the Commission to finance redundancies in steel, and potentially worth £70 million to the United Kingdom, was vetoed by the United Kingdom among others in the Council of Ministers.

The Government have not shown particular enthusiasm in seeking maximum help from existing EEC schemes. In January, Social Affairs Commissioner Vredeling charged the United Kingdom Government with failing to inform him of the scale of the problem now facing the United Kingdom. The Government denied the charge. It turned out that the full extent of their representations until then had been a letter sent before Christmas by a relatively junior official in the Department of Industry to an official in the Social Affairs Department of the Commission, stating that there would be a number of redundancies in the United Kingdom steel industry in the near future. Top level pressure and any real assessment of the scale of the problem had been entirely absent. The dogmatism of the Government, in addition to attempting to destroy our industries, is also blocking the fullest use of available assistance from the EEC to help cushion the effects of that policy.

I referred earlier to a speech made by the noble Lord, Lord Harris of High Cross, in the debate on economic affairs that we had about a week ago. I want to refer specifically to two matters in his speech. One of these completely puzzles me. As far as the other is concerned, I, as an A-Level economist—and that is becoming more and more popular—think, with respect, that I may be able to educate a very distinguished economist. The noble Lord said in his speech: We need more mobility, both occupational and geographical. I believe that reform of the trade unions will help a little"— but this is the point I want to emphasise: as will the sale of council houses". The very reverse will occur. If persons in areas like South Wales where mass redundancies take place own their homes, that is a reason for them to stay put. They have a stake there. They did not have that in the 1930s; they were able to put their possessions into a suitcase and take off. The other point to which the noble Lord, Lord Harris, should address himself is this: if there is a mass sale of council houses in South Wales and these mass redundancies follow, who is going to buy them? There will be nobody there to buy them. There will be no market for these houses. I think that the noble Lord might have hesitated a little before he introduced dogma of that kind into his speech.

The noble Lord also had this to say: Secondly, let the Government remove the incubus of the so-called ' employment protection ' measures from all new jobs created by private enterprise in places such as South Wales which are most likely to be affected by the growing redundancies and unemployment in steel, cars, shipbuilding and the rest".—[Official Report, 13/2/80; col. 250.] There has been an enormous injection of public expenditure in the communications field. South Wales has benefited greatly from this. We have the M.4 and other roads which have helped to open up industrial areas in South Wales and we have, I am told, the fastest train service in the world. I thought the idea of all this public investment was to bring industry to areas like Wales. What is going to happen to all that expenditure if the kind of philosophy propounded by the noble Lord should take place?

I am sure that the noble Lord saw the first instalment of the Friedmanite lectures on television last Sunday night. Anybody who was not absolutely appalled by the arguments being put forward by Professor Friedman can have no concept of the social consequences of such an economic theory. The Friedmanite vision of heaven is a world of ill-ventilated sweat shops manned by non-union labour and surrounded by a permanent way of street market traders. That is what came over in that film and I am bound to say, having watched it, that I really did think for one moment that Professor Friedman is "having us all on".

The Secretary of State for Industry was recently in the North of England and I am told by a Member of the other place that he said to a group of people up there, "It is up to you". In the 'thirties, a man named Walter Runciman went to Jarrow and he said, "Your destiny is in your own hands". It is no wonder that echoes of the 'thirties are constantly coming back to us. It is no wonder that there is so much unrest in the regions, unrest in South Wales.

Aneurin Bevan once said that Britain is an island built on coal and surrounded by fish. Well, the coal is still there. I understand that the fish are rather more sparse than they used to be, but if Bevan were alive today and were to be told that Britain had indigenous energy reserves of coal which will last us 300 years, natural gas from the North Sea and North Sea oil, he would wonder what on earth the country is coming to. We are the only country in the Western world which has this wonderful opportunity, the very lifeblood of a modern industrialised society under us and around us—and we panic.

The present generation is not going to be like Aneurin Bevan's generation. He often used to remind us of the conditions of the workers and their families in the interwar years. But they were largely apathetic and somewhat deferential. The threat to the social fabric of Britain is not an external threat. It comes from within. It comes from a Government which simply does not understand the complexity and the dangers inherent in a modern industrial society. Last Sunday, the Sunday Times had a leader which was headed: "How to avoid the Third World War"—a far cry, noble Lords might think, from the problems of Wales; but in fact Wales is mentioned in the leading article, so I will bring it in aid. The leading article dealt with the paperback, North-South, a Programme for Survival. This is the Brandt Report to the United Nations. In the depths of the leader it says: What is more eccentric, one might wonder, than having a steelworks in Llanwern lie [idle] while India laments a steel shortage? It also says at the head of the page: The cost of a tank would buy 1,000 classrooms; a fighter would pay for 40,000 village pharmacies. Half a day's military spending could eradicate malaria, which threatens a billion people. The North has a quarter of the world's people, 80 per cent. of its income, and 90 per cent. of its manufacturing capacity. It consumes 85 per cent. of world oil production". The heading of those quotes is, "The lunacies of Planet Earth It is said that the gods make mad those whom they intend to destroy. Before this Government destroy us, I urge that they step back from the brink and bring some sanity into their policies.

8.18 p.m.

Lord HOOSON

My Lords, I owe the House an apology. I failed to attend here in time to hear the opening remarks of the noble Lord who has just sat down. I apologise for that. I must admit that I am unused to a House which has the singular merit of a winding-up speech in a previous debate taking only two or three minutes.

I have been reflecting this evening back to 18 years or so ago when I made my maiden speech in another place: whether I felt more nervous this evening than then. I came to the conclusion that I felt more nervous this evening than then. Whether it was the bracing atmosphere of the other House and the intense kindliness and friendliness of this House which has created this feeling in me, I do not know.

I have received much advice on the nature of a maiden speech. It has been suggested to me that, above all, the merit is to be brief. The second merit suggested is that I should be non-controversial; but siren voices, I must admit largely with a Welsh lilt, have told me, "Take all the time in the world, boy". Others have suggested that there is no reason why I should not be controversial. In fact, I am assured by the scholars in this place that within its annals lie precedents for all kinds of maiden speeches.

I should like to congratulate the noble Lord, Lord Brooks of Tremorfa, for introducing this subject at a very important time. I should say here that I was born and brought up in rural Wales and that I represented a rural constituency, so I was not immediately connected with the industrial scene. However, my profession certainly took me into the industrial areas of Wales throughout my professional life, and I have just returned from a six weeks' stint in my profession at Cardiff. One would be insensitive indeed not to sense the feeling of anxiety and even despair that is prevalent at the present time.

I think one cannot understand the nature of the problem as it faces the Principality without appreciating the history of the matter: how in fact, in a few generations in the 19th century during the Industrial Revolution, Wales was transformed from a rural society, largely Welsh-speaking, to an industrial society with all kinds of social and cultural consequences of that epic change—an epic change which I think in literature has been insufficiently chronicled. What did it lead to? It led to a period of prosperity, and a distinguished Welsh economist estimated at the close of the 19th century that the Welsh miner, badly paid though he appeared to be, and appears to have been in retrospect, nevertheless was the highest paid industrial worker in Europe. Up to the end of the First World War in relative terms Wales—and certainly industrial Wales—was relatively prosperous.

It was against this backgournd that there came the traumatic events of the 'twenties and the 'thirties which were shattering to Wales. There was disillusion with the system. People lost their belief in the ability of the capitalist system or free enterprise—call it what you will—to solve the ills, and people became addicted to other systems. If we look statistically at the situation, over half a million young people left Wales during that 20-year period to find work elsewhere because there simply was no work.

I think it would be as well for the Government, and indeed for the House, to reflect on the nature of unemployment. It has never happened to me, save that I lost my seat in the other place and I had that kind of feeling of being rejected. But one can understand the head of a family trying to explain to his family why he is rejected, why his skills are not wanted; why he does not go out, as other people, to work; there is no employment for him. It is a traumatic experience, and when that experience is conditioned by an upbringing where parents are constantly referring to the 'twenties and the 'thirties, and where the prospects look so bleak, one can perhaps understand why people in Wales have reacted as they have done to the present situation.

That is the background. It is perfectly understandable, though not, I think, excusable, why the people of Wales largely place their hopes for a different system on the panacea of nationalisation. Without going into it at length—and I remember the only time I was nearly howled down in another place was when I spoke for my party against the nationalisation of steel—I think the nationalisation of steel and the way it was done was a gargantuan mistake from the Welsh point of view. There is no getting away from this in fact, that one of the options revealed to the unions by the British Steel Corporation was either that Llanwern or Port Talbot should become a mausoleum. Each of them represents an investment of hundreds of millions of pounds of public money, and if one of them were to become a mausoleum, and certainly on the other options many of their buildings will become so, they will be mausoleums in memory of what?—remote control, bad judgment, prodigal spending, everything unrelated to economic reality.

I do not want to follow that train of thought, save that I think the country suffered, understandably perhaps from the Welsh point of view, because of its experiences in the 'twenties and 'thirties, from a theoretical approach, and we are in great danger of suffering from the other side of the theoretical approach at the present time. The unknown author of an article the other day in the Observer referred to A-level economics when he suggested that in fact the Secretary of State for Industry went to achieve martyrdom in south Wales. He is much more likely to have achieved it last Saturday at Twickenham, though we can leave that aside for the moment.

I think there is great danger of the Government taking a theoretical approach to what is an enormous economic human social problem in South Wales. The noble Lord, Lord Brooks of Tremorfa, has already given the statistics and described the huge economic problem facing the Principality. Fifteen per cent. of the male working population in Wales is engaged in either the steel or the coal industries. It is a huge proportion. We may be too dependent on basic industries, but what is the responsibility of the Government? The Government surely have an enormous responsibility to the country to ensure that basic industries are in good heart. The British Steel Corporation has been so wrong in the past in its projects. How do we know that it is right now? I think it is extremely unlikely that it is.

A very pertinent question was asked by the right honourable Member for Ebbw Vale, as to how we were going to fight the Third World War, if it came. Would it be with battleships made of plastic? That was referring to one aspect of the importance of one industry; but there are many other things to which it can be referred. There is a heavy burden of responsibility on the Government to investigate more closely the British Steel Corporation's projections into the future.

Secondly, surely the Government should understand the problem in such a way that their right hand at least knows what their left hand is doing. It was announced by the Secretary of State for Wales the other day that £48 million was to be provided additionally, as I understood it, to the funds already available. I know there is a doubt as to whether this is additional money, but let us assume that it is correct. That follows closely on his announcement that £35 million has been cut off regional aid for Wales; and that was only announced a few months ago, so the Government do not seem to have worked out their strategy for dealing, with this situation.

When it is suggested that there should be alternative employment, let us take a realistic view. In the steel industry alone in South Wales 11,000 people have been made redundant; and when one considers all the dependent employments, even in the service industries that are funded, as it were, by the basic employment, building advance factories will not cure this enormous problem. The problem is not only there but in the Shotton Steel Works in North Wales. How will it affect mid-Wales, which so far has been able to attract industries because there was not the alternative magnet of the industrial areas?

The outlook for Wales is bleak indeed, and the only way forward is for the Government to take a much more realistic view of this. I am one of the greatest critics of the Steel Corporation. I think it was a highly bureaucratic body. The whole country went mad in the way they viewed the enormous investments in the steel industries. I lived not so far away from the Shotton Steel Works when I was a youngster; there was a very good labour force there, and if the steel making had been modernised, even in a modest way, that would have been a successful and viable works because, quite apart from anything else, it has a superb industrial relations record.

If I were to select the greatest single mistake in the steel industry in Wales I would say it was the setting up of Llanwern, with the consequent harm that it did to Ebbw Vale and other places. But that is water under the bridge now. I think the Government should consider much more massive investment in Wales, on a scale they had not thought necessary until now. Far from there being less public expenditure, there must be more, and much more public investment.

I am no theoretician about this; I think it is necessary to preserve the economic and social fabric of a country. You cannot do it by adherence, as it were, to economic yardsticks alone. In fact the article in the Observer last Sunday, which I have previously adverted to, seemed to me to suggest that the author at least realised the danger of simply doing this. I think he said the posture was more appropriate to a Marxist than a Conservative, and I think that is right; I think it is a Marxist belief that economic considerations alone or economic theory shall be enthroned higher than anything else.

The Government should also think of the desirability of introducing into the steel industry, and possibly the coal industry, earlier retirement, at 60, so that the benefits of pensions and so on are given at an earlier age than at the present time. I do not see why in our country at the present time such innovations should not be introduced industry by industry if necessary, if we cannot afford to spread them to the whole community at one and the same time. But, above all, I think, and hope, that when the noble Lord speaks from the Government Bench in explanation of their policies to relieve the situation which arises in Wales, the Government will approach the problems with commonsense rather than with theoretical considerations in mind; will realise that there is a huge problem there, the scale of which does not appear to have dawned on them so far. Above all, I hope their attitude is charged with compassion.

8.32 p.m.

The PRINCIPAL DEPUTY CHAIRMAN of COMMITTEES (Baroness WHITE)

My Lords, I have the very great pleasure of congratulating the noble Lord, Lord Hooson, on what was difficult to recognise as a maiden speech. Those who have had experience in another place perhaps have a little less to fear in this place, although this place is a very different one, as possibly the noble Lord has already realised. I live in the same county as he does. I was one of his constituents for a number of years—disenfranchised, of course, which perhaps was just as well for him! But we share a common concern for Wales as a whole, with a special concern for that beautiful part of mid-Wales in which we have the good fortune to find ourselves. I am sure that on occasion we shall hear further from the noble Lord about some of the problems of mid-Wales.

Tonight, however, in what is meant to be a relatively short debate on an Un-starred Question, we are very grateful indeed to my noble friend Lord Brooks of Tremorfa for bringing to your Lordships' House a situation which all of us, whatever part of Wales we come from, feel very deeply about. For those of us of my generation it naturally brings back—it is inevitable that it should bring back—recollections of the nineteen-twenties and nineteen-thirties. As a young woman my first job was with the then Ministry of Labour, as it was called, to go round the valleys; I also went to some of the other depressed areas in England, in the North-West and the North-East and Lancashire. They were renamed; it was thought that "depressed areas" was indeed unattractive, so they became "special areas", but that did not cure their ills. I would ask those Members of your Lordships' House who do not have the memories that some of us have to use a little more imagination. For example, I felt almost a physical pain when I read a remark in The Times newspaper on Monday, in an article by a very experienced and very skilled journalist, David Wood. He used the phrase that they, the Government, were expected"to use our money, the taxpayers' money, to pay blackmail to played-out regions." I am quite sure that South Wales would have been fairly near the top of his list.

A noble Lord: Like Aberfan.

Baroness WHITE

It shows a complete lack of imaginative understanding of what remarks of that kind mean to those of us who know. I hold no brief for people who throw eggs and tomatoes when a Minister of the Crown visits the area, but I can understand why, because it was symbolic of something which appeared to be—I am sure it was not in fact—a kind of dehydrated indifference to what we had all experienced, either directly or because of the family emotions and traditions that are passed on from one generation to another.

Therefore, I hope very much that we shall be able to look as rationally as we can at the situation, realising, however, that it is not just a matter of whether you pay blackmail to a played-out area, but that you are concerned with the whole social fabric of an area which, after all, lost, as we have already been reminded, so many of its best and most enterprising people.

This afternoon I looked very briefly at a book of my late father's which included a bitterly satirical article, which was published anonymously at that time in 1935, called What's wrong with South Wales, in which he made a suggestion which, ironically, is now becoming a reality, that some of the valleys might be used as an open-air industrial archaeological museum and that we should keep a few winding machines and cages and one or two of the pits and it could become a tourist attraction. The National Museum of Wales is now turning the great pit of Blaenavon into exactly that.

I myself was for many years the representative of the constituency in East Flintshire in which the Shotton Steelworks are situated, and for the last months I have been feeling very deeply the fears, the apprehensions, of the people there on Deeside. It may be that it would have been better if the change there had not been so long delayed. It has now come perhaps at a worse time than if it had been faced squarely a few years ago. But Deeside is basically a very good area indeed, a very attractive area for industry. Communications are not perfect but they are very much improved from what they were. There are some very good sites there. But what matters most of all is that you have absolutely first-class people there with a very good record. I would hope very much indeed that everything possible will be done to make certain that the skills and experience of the steelworkers of Deeside will not be wasted.

If I may speak for a moment of the other area which is very much in our minds and in the mind of the noble Lord who asked this Unstarred Question—South Wales—here I have to declare a kind of interest because, as many of your Lordships know, I am chairman of the Land Authority for Wales. I am not speaking, of course, for the Land Authority, but I am drawing on my experience in that position. I can say quite firmly that although we certainly have very great anxieties—we must have—I do not believe things are anything like as bad as they have been painted in some of the media. The "Panorama" programme for example, showed the most dismal areas of South Wales. They just went round quite deliberately picking out the most unattractive areas they could possibly photograph. If they had come to us, or if they had gone to our colleagues in the Welsh Development Agency, we could have shown them very much better pictures. That type of image of South Wales—which again is another facet of the same attitude as that of David Woods in the article in The Times—is something which we resent.

I am speaking from not sentiment but from experience. We have some quite excellent sites in South Wales. On two conditions, which I wish to emphasise in a moment, we have had no difficulties in disposing of them, although it takes time to find the right persons. We have just exchanged contracts on an excellent site not many miles from Cardiff, for some three-quarters of a million pounds, which I am sure we shall be able to market very successfully for industrial purposes.

I ask the Government very seriously to consider whether putting so much money into advance factories is necessarily the right policy. Certainly one needs some advance factories, and certainly one needs some starter factories. Some can be very modest, as the noble Lord, Lord Brooks of Tremorfa, knows. For example, on the East Moors abandoned steel site in Cardiff we have been able to keep some buildings which will provide good opportunities for people starting out for the first time on businesses of their own. There are other situations in which advance factories undoubtedly have their value.

But I believe that if we are looking for substantial investment we are likely to have greater stability and greater permanency if people put some of their own money into the building. It is very attractive to be offered one or two years' rent free or a reduced rent; it sometimes pays off, but not always. However, if you can offer a first-class site to a firm or to an enterprise which has its own resources, you are more likely to have a more prosperous and permanent future than you sometimes have with those who come in with minimal resources but who are attracted by the various buildings that you are putting on offer.

However, the sine qua non to attract any people of real substance to an area like South Wales are two: communications and drains. Those are, as I have said from our practical experience, the two things that matter. One can be held up very seriously indeed if the particular area which one is trying to develop and sell to an enterprise that is worth attracting, is not in the drainage programme for the Welsh Water Authority with whom we have most excellent relationships.

I can disclose that on one of the very best sites that we have been dealing with in South Wales over the last two or three years we have had to spend something of the order of £300,000 on a temporary sewerage arrangement which is really a waste of money. If there had been adequate forward planning as regards that location this expenditure could have been avoided. We would not have had to provide a private enterprise sewerage system in order to keep to the timescale of the people who were coming in.

But, even more important—I think the most important element in the situation—is, of course, communications. There is no doubt whatever that South Wales is a different place since the M.4 came into use. It is not completed yet, but it is sufficiently so to be a very obvious and specific element in the sitution. Similarly, in North Wales, when communications are not yet so far advanced, if we are to have even some public investment in the area, then I would ask the Government to put everything they have into communications and into basic infrastructure, such as the drainage services that I have mentioned.

I do not believe that the balance of investment is necessarily quite right at present. To put up buildings is all very well, but unless one has the type of communications that first-class firms are attracted by, one will not get those firms. There is a situation in Cardiff, for example, where we have been extremely disappointed to learn that a particular link road which would improve the situation for the East Moors site is not regarded as a first priority for investment. That is a great error of judgment.

Although I do not want to weary the House with other detailed comments, I hope that this matter will be looked at quite clearly. If we have the right site properly prepared, the right infrastructure and the right communications, it is quite possible to market that site for the kind of industry which we would all wish to have. So I hope that Her Majesty's Government will pay very close attention to the way in which they use such resources as they are prepared to give us.

We must help ourselves. We shall not help ourselves if we are regarded as a played-out region from which people, if they have any ambitions at all, will escape as quickly as possible. That is the fate which we have suffered once. We must never suffer it again.

8.47 p.m.

Lord HARRIS of HIGH CROSS

My Lords, I am personally grateful to the noble Lord, Lord Brooks of Tremorfa, for his courtesy in serving notice of his intended chastisement, and I was glad at any rate that we share the doubts or disillusion about the EEC, which I personally have always strongly opposed. However, I must say that I am fairly unrepentant in my approach to domestic economic problems because my view is that the noble Lord played down long-term deep-seated problems by reference to short-term and rather superficial symptoms.

I would rather build on the historical illusions of the noble Lord, Lord Hooson, in his most eloquent maiden speech. After all, the grievous problems that confront Wales and other areas did not start with the last election. We have had lectures from time to time from the noble Lord, Lord Kaldor, and others, pointing out that Britain's great staple industries have been declining for perhaps 100 years. But certainly the most rapid relative decline has been in the last couple of decades when Britain's average real income per head has fallen from sixth to sixteenth in the league table of Western developed economies listed by the OECD.

I want to put to the House that the root cause of the British disease has been a persistent failure to make the best use of human resources in the light of changing technical opportunities. There are many reasons that we can all offer for that failure, but I shall suggest that one of the most fundamental has been a natural human conservative resistance to change. However radical our ideas may be on many other issues, most of us cling to familiar arrangements and routines rather than risk disturbances and untried experiments which threaten destruction to our working methods and our way of life and so on.

Lord BROOKS of TREMORFA

My Lords, I ask the noble Lord to give way on that point. Would be not agree that, in the light of the acceptance by tens of thousands of South Wales miners of the closing of their pits, and the acceptance by many thousands of steel workers in South Wales of the closing of their obsolescent steel mills, they did not indicate a conservatism or a refusal to accept change?

Lord HARRIS of HIGH CROSS

My Lords, I am coming to the point that much of the dramatic and disturbing running down of industries is the result of the failure of past policies which, in my view, we may be in danger of maintaining beyond their usefulness. It was the noble Baroness, Lady White, who reminded us that this whole problem goes right back into our history. In the 1920s the talk was of the "depressed areas". In the 1930s they became the "special areas". In the 1950s we had many bewildering changes, movements towards what were called "development places" and "development districts". By 1966 we had "development areas" covering half the country and a distinction was made between "special" and "intermediate" areas.

For all of these over this period of 50 years there has been a whole range of Government policies, including policies of all the parties—Conservative, the national Government before the war and Labour and Conservative Governments since the war—escalating from quite modest beginnings of Government contracts and cheap loans, going on to the setting up of trading estates and factories, the granting of payments for removal, the holding back of developing areas through IDCs, all kinds of wage subsidies like SET, regional employment premiums; investment subsidies like free depreciation of machinery; initial allowances on buildings, temporary employment subsidies and the rest.

Where has all this got us? The persistence of decline over the whole of this period suggests that the spending of thousands of millions of pounds in these ways has, at any rate, to some extent been misdirected. To go on calling for more Government expenditure seems to me to do more credit to your hearts than to your heads. It is like a third, fourth or fifth marriage—a triumph of hope over experience.

In medicine we use drugs to anaesthetise the patients while change, and if necessary surgery, may be conducted. But if we use drugs so that they become a crutch and they perpetuate the weakness and frailty of the patient, then we are doing the patient no good turn. I believe that no longer can we evade a fundamental choice. It is a choice that was summed up almost half a century ago in a book I recommend to the noble Lord, Lord Brooks of Tremorfa, by Professor A. G. B. Fisher called, The Clash of Progress and Security. It seems to me that it is the clash that we are now seeing in the conflict between what I believe is a radical approach by a Conservative Government against a conservative nostalgia of the Labour Party, and I am afraid also of the trade unions. Fifty years ago Professor Fisher pointed out, with great prescience, that the single-minded pursuit of security at the expense of progress would threaten to sacrifice both progress and security. The simple explanation in ordinary, everyday economic terms is that progress, on which security ultimately depends, requires the continuous, continuing reallocation of labour and capital to new forms of employment and industry.

Lord DAVIES of LEEK

And new markets, my Lords.

Lord HARRIS of HIGH CROSS

And new markets. One of the merits, for all their shortcomings, of competitive markets is that they exert a continual, gradual, persistent pressure to shift resources from old and declining employments into new and expanding employments. It seems to me that it is by obstructing market forces that we have delayed change and then caused a massive aggravation and intensification of the problem. I am ready to admit that change creates worrying social problems, but my argument is that they are best dealt with by social policies directed to income support in transitional unemployment, which would be made shorter by retraining, removal grants and all that. What we should see is that we cannot secure lasting security by trying to run great industries, like the steel industry, as appendages of the Welfare State.

I am afraid that my next stricture will be ill-received because as a young man born of a working-class family, with a father an active member of the Transport and General Workers' Union, I have observed that the resistance to change, which is perfectly natural in all of us, has been institutionalised by trade unions, everywhere trade unions have operated—unintentionally often—to hold back the growth in output per worker. The result has been that while our real wages have declined to about half those in many European countries, even so our labour costs per unit of output are still so high that we lose markets and jobs to foreign competition.

Lord BROOKS of TREMORFA

My Lords, not in Hong Kong.

Lord HARRIS of HIGH CROSS

The noble Lord mentioned Hong Kong in relation to Professor Milton Friedman. I daresay that everyone in this House was brought up to mock Hong Kong as a source of unfair competition to British industry because the natives were fed on a handful of rice. It is now a matter of speculation in what year in the 1980s Hong Kong will overtake Britain in terms of average real income per head. That has all been achieved by trade unions and Government intervention.

The Government cannot solve all our problems, at any rate at once. I believe that they must persevere in reducing the monetary excess; in reducing where they can taxation and, with it, inflation. They, therefore, have no alternative but to contain the expenditures on subsidies for these great industries. My proposal, to which the noble Lord took exception, is that Ministers should now see how far they can go towards reversing the decline in South Wales and other afflicted areas by reducing the artificial costs of employing people in new jobs. They should move towards a fashionable idea, the creation of free zones of new enterprise and growth. It seems to me that however well-intentioned past measures have been—including employment protection and, I am afraid, rent controls, development planning and even minimum wages and union restrictions—they can often be seen to operate as either a tax on employment or as a brake on the mobility to new jobs. I am arguing that the Government should now exempt firms creating new jobs from the many burdens of bureaucratic control that hamper economic progress in these areas and keep wage costs above the value of marketable output. I propose it as an experiment in particular areas. It is an experiment from which we might learn valuable lessons.

The most urgent lesson for my money is that by giving a higher priority to economic progress, we might best advance the true security of employment; for security of employment is everywhere in the long-run based on producing the changing goods and services which customers, at home or abroad, want and for which they are prepared to pay no more than a fair market price.

8.58 p.m.

Lord DAVIES of LEEK

My Lords, although I must pay respect to the scholarship of the noble Lord, Lord Harris of High Cross—it would not be in my nature to try to pretend that there was not quite a mass of common sense in some of the things he says—I must now proceed to put another point of view. If the noble Lord were a trained economist and was trained to bring to economics an accurate science, it would be an impossibility, because people are so ingenious that there is always foolhardiness. With people one cannot bring, for instance, the differential calculus to prove the Phillips curve; the hypothesis of the Phillips curve in economics is nothing more than the elementary statement that if you increase wages, there is a likelihood of inflation. There would be, without the trade union movement and other balances. All the beautiful calculus that is used to prove that we must get new enterprises depends on what the devil you will do with what the enterprise produces if nobody will buy the product. That is logic. In chemistry I can put a catalyst with various elements and can mathematically, and through physics and chemistry, tell what the end product will be and even whether it possesses toxicity, or whether it is benign; and every time I shall be right. The same thing can be done with a differential equation. But professors of economics have been apt—and I have been around a long time now—to try to apply these things to beautiful books and marvellous thinking. The cellular thinking of these people is not to be ignored. It is magnificent. But I have seen 76 years of existence, and I have on my study shelves the May Report, and I have brought it here. I have read through the minutes of evidence. God save us! Some economists in America were blaming the crisis in the 1930s on sunspots, and they believed it just as the noble Lord who has just spoken believed in every word he said.

There is not time to get going a lovely philosophical discussion on these two points of view, but let us take marketing of houses. Heavens above! I remember the terrible explosion on 13th October 1913 at Senghenydd when 416 miners were killed. Some of my family were in the pit. Not long after when the depression came, in streets called Park Terrace and Station Road you could buy a house for £25. I would have made a lot of money if I had bought a dozen of them and kept them empty until the rearmament. I have put forward a Davies axiom, which somebody will destroy one day: the acquisitive system of society—quoting dear old Tawney—cannot produce full employment as it now works unless it has had war or is preparing for war.

This seems a long way from South Wales, but it is dealing with a truism underneath the squalor of the modern crises: this poor old country of ours, while we were rearming and fought alone for a time without Russia or America, spent all its treasure and we are still in pawn—we have not yet paid for the Battle of Waterloo. We have discovered the power of the tomb over the living. There are no pockets in a shroud, but the rates of interest go on forever for those who have dropped dead if they have money in the bank. These are the logical realities of the world we live in.

I do not want to get into the national debt tonight, or we shall be here until one in the morning. But if we try to explain away the national debt we find we shall never pay it. If tomorrow by black magic a war broke out, where would the money come from? How would it be paid? We throw the burden of our wars on to the unborn. You reach a point where everybody now born is thousands of pounds in debt before he draws one drop of his mother's blood. This is the illusion of the capitalist system of society, which is ending itself all over the world.

Do not think only of South Wales, which has its problems. The United States, Germany, the whole of Europe have problems, and the Common Market, which is in such a twist with its bureaucracy, is neither a Parliament nor a Market at the present moment. I shall not go any more into Friedman's monetarism but I will say that there is not much point at this late hour in reiterating all the facts of what has taken place in South Wales and is taking place in Wales and in the steel industry. I will take pity on the House. I will not quote the Western Mail, despite its excellent article on the steel position. The steelworkers are not all that at fault. By the way, I beg the noble Lord's pardon, I did not even pay a compliment to that splendid maiden speech. I have done it en passant.

All fault was not with the steelworkers. We have an inept Steel Board. Its attitude is pompous, stuffy, and pretentious. It did not get down to brass tacks. The Steel Board is a modern industrial yo-yo going up and down. How do you explain its contract to buy limestone just after it had spent millions of pounds to set up Port Talbot? A few months later you find that it has made a I5-year contract to buy limestone for £300,000 a year which is—this magic modern expression which the professor and I would agree about—index-linked. The money that we pay for this limestone is index linked, like pensions and other things. That means that you pay for the next 15 years for limestone you cannot use, but you have made a contract to buy it. This is the yo-yoism of the kind of people who want shifting. Do not blame just the steelworkers for this.

May I come back to South Wales after that little bit of philosophical diversion? Before the ink was dry they were already talking, as you have already been told, of finishing the steelworks. This is a tragedy. But it is not just that, it is the whole of Wales that is being looked at in the round. Although we managed to lose the match through ruffianism at "Twickers a few days ago—

Lord BROOKS of TREMORFA

We were provoked.

Lord DAVIES of LEEK

Well, we should not have been provoked. I do not approve of that. What I should say is that Wales has paid its price, and when it is sometimes accused I always remember World War I, when we had to stop the colliers not only in Wales but in England from signing up for the army because they wanted sappers, but we had to have people to cut coal. As I said a few weeks ago, there was great pompous talk about battleships and going to war like a nation of gladiators. I think it was reiterated by the economist and some others here. You cannot go to war with plastic battleships. How can you have a war when you have no aluminium and no steel? Let us talk a little more like doves for a few more years, and then if you want a battle do not count me in it. I am in the wrong age group anyway.

So I come to my last point, much to the joy of the Front Bench who I can see shrugging. I have been speaking for only nine minutes so far and it would be quite easy to do another nine. I want to make a plea, as somebody who comes from colliers and farmers. While we are talking about the South, remember that the spin-off from the poverty and desolation of the South hits the hitherto prosperous places.

I was interested to read in the Sunday Express that farmers in Wales are trying to urge the Government to give loans to encourage more young farmers to go in for farming. This after it has been shown by a Common Market survey that 45 per cent. of British farmers are over the age of 55. There must be a diversion in order to stimulate hill farming and agricultural work generally in Wales. I pay tribute to Aberystwyth University for the agricultural and other research which has done much for the agricultural prosperity of Wales.

In this connection, I am sure that some noble Lords would be surprised if they went upstairs and looked at the maps of land utilisation in Wales. I never knew—I admit that I should have been aware of this—that it is thought that the ordinary ferns on the Welsh and British hills may cause cancer of the stomach. As those of us who have lived in the marginal lands and areas where hill farming is done know, the ferns are poisonous when eaten by cattle. A great project to regain much of that land for real food production could result in a first-class asset for the nation. And if we are talking about making our- selves strong, there is no point in talking about silly things like producing rubber suits to protect people against radioactivity. Far better to get our steel industry to turn out ships and the necessities, if we want to be warriors, than to let the whole business decline.

At school I took geography at an intermediate stage, but I admit that at that time we did not refer to the Celtic Sea. I should like to know what encouragement is being given to the maritime areas of West Wales for oil reserch. Is the project, to use a colloquialism, a dead duck, or is there reality and hope in this expensive business of searching for new energy sources, including oil, in that sea? As much as I am tempted to speak longer, 12 minutes for any speaker at this time of night is enough. I regret that, and I regret that, in deciding not to speak longer, I shall deny the House a lot of interesting philosophical information. Having said that, I will sit down.

9.10 p.m.

Lord MAELOR

My Lords, I am one of the last two speakers on the list: I am glad the House has acted scripturally because we learn in scripture that the best is always the last. I wish at the outset to compliment the noble Lord, Lord Hooson, on his maiden speech—and a fine speech it was! I wish also to thank the noble Lord, Lord Brooks of Tremorfa, for arranging this debate. Wales deserves a debate of its own, for the Welsh people are a separate nation within the United Kingdom; we have our own country and traditions, we have our own way of life and our own language—the oldest language in Europe—and to my way of thinking it is the language of heaven.

I am tempted to repeat a true story which I have related to your Lordships before. When I visited Palestine I had occasion one evening to sit on a chair on the shores of the Dead Sea. An Arab came up to me and pointed to a high mountain across the water. "That," he said, "is Mount Nebo. It was from the top of that mountain that Moses ascended to heaven." I thereupon jumped to my feet and sang a Welsh hymn relating to Mount Nebo, and I will sing it for your Lordships: "Adenydd colomen pe cawn Ehedwn a charrydrwn ymhell; I gopa bryn Nebo mi awn, I olwq ardalodd sydd well; A'm golwq tu arale i'r dwr, Mi dreiliwn fy nyddiau i ben, Mewn hireath am weled y Gwr Fu farw dan hoelion ar bren.

Lord DAVIES of LEEK

You better tell them what that means.

Lord MAELOR

When I sat down the Arab came up to me and said, "What language is that?" "Oh," I said, "that is the language that Moses learnt after he ascended to Heaven."

I do not want to appear facetious for I am a very sad man tonight—a very sad man. I feel sad because of the hopeless economic situation of Wales. It is in a worse economic plight than it has ever been in in all its history. That is no exaggeration, but a true statement of the state of events. Its two main industries—steel and coal—are being destroyed, with agriculture in the rural areas following in their wake. I believe that the BSC's proposals for Port Talbot and Llanwern are catastrophic.

The halving of the output of Llanwern and Margam will cost not just 11,000 jobs in the steel industry, but also the closure of 11 pits and the redundancy of 7,500 coal workers. I firmly believe that the management of the British steel industry should all retire—all of them! They are mismanaging the industry, and are purely political in their outlook. Yes, they are acting politically; and the Prime Minister's Statement in the other place yesterday confirmed this.

Think of this, for instance, my Lords. In 1977 the BSC chairman gave a categorical pledge to the work-force at Shotton that he would give no consideration for five years to the proposal to close. Why did he change his mind so suddenly? It was the Tory Government who changed his mind for him. I cannot forgive the Labour Government for having appointed this man and his colleagues. We are now paying the price.

It seems to me true too that Sir Keith Joseph, the Secretary of State for Industry, does not appreciate the terrible economic plight which is facing Wales. This is what the leading article in the Western Mail had to say the other day. Sir Keith gave no sign that he understood the harsh realities facing Wales. Or, if he did understand, he was not able to come up with any imaginative lead to providing a solution. Sir Keith"— continued the article— made a great deal of the Government's commitment to plough an extra £48 million into the Welsh Development Agency to build advance factories". This idea of getting advance factories to solve our problems rather frightens me. We have scores of them in Wales—and very many of them are empty. They are unoccupied for the simple reason that employers cannot be persuaded to leave more prosperous areas in order to fill them. Even when they are occupied they never employ a large number of people. Let us take Ebbw Vale as an example. Of the 5,000 redundant steel workers there only a third have been engaged in advance factories in the area.

I said at the beginning of my speech that I am a sad person. I feel sad for the simple reason that for the rest of this century, at least, South Wales will be a land of unemployment. It will truly be an industrial desert. At least 20 pits will be closed, half of them as a consequence of the closures proposed in Wales by the Government and the BSC. Those pits alone will swell the number of unemployed by 15,000. The BSC complains that the cost of Welsh coal is too high. There is a strong case for an independent audit of the comparative cost and savings of using Welsh coal as opposed to imported coking coal. If European competitors can subsidise coking coal as Belgium does at £24 per tonne, France at £14 a tonne, and Germany at £11 a tonne, what excuse can there be for the Government to refuse to subsidise our coal industry? It is simply economic madness to close these pits. It would mean the loss for ever of the much needed energy resources of the future.

I happen to be a North Walean, so quite naturally I should like to deal briefly with the economic situation in North Wales. Here, again, the situation is as bleak as that in South Wales. Let me give your Lordships the callous instance of employment irresponsibility in the case of the Bernard Wardle factory in Caernarvon, as it was stated in another place by the MP for Caernarvon. Over the last two and a half years there has been virtually no reduction in the market demand for its product, and last year this factory made a profit of over £600,000. It has now decided to go elsewhere. What a damning manifestation of capitalism is such a decision! My Lords, 322 people will be put out of a job; and the irony of it all is that the firm has told the workers that if they want a job they might be able to transfer to a factory which they have bought, these 18 months, somewhere in Lancashire. So the only remedy proposed is depopulation. Poor Wales!

Let us consider Shotton and the steel works. It has been decided to close these works, which will mean the loss of 6,000 direct jobs plus 3,000 indirect jobs. The social consequences for the Deeside will be devastating. What has become of the BSC chairman's statement in 1977 that Shotton steel will be required for many years to come? How are the Government, in the midst of an economic recession, to deliver 9,000 new jobs to Shotton? It is calculated that many men and women in that area will be doomed to a decade on the dole; and these faithful workers have never been known to strike. This thickly-populated area will be an area of gloom.

The same is true in relation to our farmers in the rural areas of North Wales. They are beaten by the Common Market. We were informed on TV last Friday evening that French farmers are demanding a 6 per cent. increase in the price of products. Farmers in the Common Market, with the exception of British farmers, are paid to over-produce and to stock. Butter is over-produced, stocked and then sold cheaply to Russia. Three hundred thousand pounds were sent to Russia recently. Italian farmers have tomato subsidies, and the other night on television we saw a picture of them burying half the crop in the ground. This has a great bearing on the plight of many of our Welsh farmers today; and, added to this, is the rise in the cost of school meals for their school-children and the increase in transport fares to convey them to school.

Let us face the alarming fact that from now on Wales is going to be an industrial cemetery. I am not exaggerating. We do not realise the facts unless we believe that. It is going to be an industrial cemetery. Let the Government arrange another Referendum—I make that plea. The verdict next time will be different from the last. Let us have a Welsh Assembly, where our own representatives can discuss our peculiar problems and propose to the Government our own solutions. Cymru am byth!

9.20 p.m.

Lord CLEDWYN of PENRHOS

My Lords, I know that I speak for the whole House when I say that we are grateful to my noble friend Lord Brooks of Tremorfa for initiating this debate and for his excellent opening speech. His long experience of public life in South Wales qualifies him to speak with great authority on Welsh problems, and the Government will do well to heed the powerful arguments which he has advanced this evening. It is sometimes said that politicians are prone to exaggeration. There is perhaps some truth in this from time to time but my noble friend Lord Brooks of Tremorfa did not exaggerate in his speech today. He described the scene starkly, as it is; he described the fears and apprehensions of the people of Wales; and he spoke the truth. We are all grateful to him. I should like also to congratulate the noble Lord, Lord Hooson, on his maiden speech. He and I are very old friends. He made a characteristically well-informed speech and the House will look forward to hearing a great deal from him again. There is no greater expert, certainly, on the problems of rural mid-Wales, than the noble Lord, Lord Hooson.

For nearly 30 years I have taken part in more debates on Welsh affairs than I care to remember. In that time, I have praised, defended and criticised Governments, and for a time I bore the responsibilities of the Welsh Office myself. But in all that time I have not known so gloomy a scene in Wales or so forbidding a prospect. We have heard powerful speeches from several of my noble friends, fortified and inspired by the well-known Welsh hymn which was sung by my noble friend Lord Maelor, who, I thought, was in excellent voice, as befits a native of the famous mining village of Rhosllannerchrugog, which has one of the finest male voice choirs in the world. I am sure that we are grateful to my noble friend Lord Maelor who must surely go into the Guinness Book of Records as a result of his effort this evening in being the only one to have sung a hymn, in Welsh or otherwise, in either of the two Houses of Parliament. As I say, in all the time that I have been participating with my noble friends in Welsh affairs, this is probably the most depressing. As my noble friend Lady White said (and she has apologised because she had to leave to 20 to Brussels on the business of this House) we remember the inter-war years and we do not want to see a return to those wretched times.

The Government have two themes which they repeat on these occasions in reply to criticisms. First, they say that the economic situation is grave and therefore calls for extreme measures. They then go on to say that unemployment did rise under the last Labour Government. Of course, no one can dispute the gravity of the economic situation. It is the Government's response to the economic situation which is causing concern—even among some of the Government's closest supporters, as I shall hope to show in due course. Nor can it be denied that unemployment increased under the last Labour Government. It was a unpleasant fact. But the levels of unemployment which we now face in the United Kingdom in general, and in Wales in particular, are of such a magnitude and their repercussions can be so widespread that they create problems of a quite different dimension. This is why I believe the debate to be justified this evening.

The future of entire communities could be threatened as a direct result of Government action or inaction. And they are communities—if I may say so to the noble Lord, Lord Harris of High Cross, to whose speech we all listened with interest and respect—which were created 150 years ago, during the Industrial Revolution. They are communities of people who were exploited in one way or another for over a century through no fault of their own. They are communities which are now in danger of being broken up and we see no prospect that the kind of free enterprise which he so much believes in and praises can resolve their problems. That very free enterprise was given the opportunity in the inter-war period and it was a complete failure. So the noble Lord, whom we respect as a man of integrity, must do a hit better than he did in his speech this evening. The future of these communities are at risk.

The consequences of steel closures at Shotton, Llanwern and Port Talbot, and the ensuing pit closures to which my noble friends have referred will tend to overshadow the serious unemployment difficulties which exist in other parts of Wales. I said that the Welsh problem was of a different dimension. That is because the Welsh economy has, as I have just said, for over a century been over-dependent on a few major industries: on coal and steel in the main; on tinplate and, until recently, on slate in the North. Recessions have always hit us harder, and successive Governments have recognised this and made provision for it in various ways. Special development area status was given to wide areas. The Labour Government of 1964–70 made an impact on the problem, and the last Government set up the Welsh Development Agency and the Development Board for Rural Wales. They have both proved themselves to be effective and successful. I should like to congratulate the members of both boards in what they have done.

The party opposite opposed the legislation which set up these boards but they subsequently conceded that they were justified. I shall come to the Government's present attitude towards them a little later. It has been an accepted principle that the so-called regional imbalances in the United Kingdom are wrong, that they are dangerous and that they should be corrected. This again is where the noble Lord, Lord Harris of High Cross, and I will disagree. They exist, as he knows, in Scotland, in the North-East and in Wales. The attempt to diversify industry in Wales over the past 30 years or so has met with a good deal of success. Important industries have come in and the Welsh worker has shown himself to be skilful and adaptable.

The one lesson that we have learned during that period is that diversification of industry takes time. The last issue of Welsh Economic Trends tells us that it took 10 years to create 32,000 new jobs in South Wales. What the Government are now doing is allowing an unemployment problem of so great a magnitude to develop that we see no prospect that it can be resolved in the foreseeable future. Our current unemployment rate, as some of my noble friends have reminded us, is 8.3 per cent. of the insured population compared with 5.9 per cent. for Great Britain as a whole. In figures, that comes to nearly 91,000 people.

Then we have the calculations about the possible consequences of steel closures and pit closures. They estimate a loss of a further 40,000, bringing the total to well over 130,000 people, the figure mentioned by my noble friend Lord Brooks of Tremorfa. I am sure that the Minister of State will agree that we must take that figure against a generally worsening employment prospect in the United Kingdom as a whole over the next decade. It has been projected that unemployment could be of the order of 2 million people by 1982 and 2½ million in 1985. I hope that this will be proved wrong. The predictions must be taken seriously as they are made over a wide range by a number of economists holding a wide range of views.

The Government have a duty to tell us their reaction to these figures and what plans they have to deal with the situation in the United Kingdom and in Wales itself. I noted that the Secretary of State for Wales said a number of things in another place on 4th February. I welcome some of the undertakings that he gave in that debate. Examples were his promise to continue to improve the industrial infrastructure and his promise of an additional grant of £48 million over the next two years. That is obviously to be welcomed. Of course we have to take that £48 million in relation to the other figure mentioned by the noble Lord, Lord Hooson.

What we should really like to know is the nitty gritty of what we are actually going to receive to resolve the problem. The problem is too grave for us to play about with it. I was very dismayed that the Secretary of State in that debate was unable to supply information about the future employment prospects. I believe that the Government should tell us what they think the figures are likely to be in 1981 and 1982, and again what plans they have in mind to resolve the problem.

The Government's mishandling of the steel industry, as my noble friend Lord Brooks eloquently demonstrated, has been a tragedy for the people employed in it and a tragedy for the country as a whole. Some of the most responsible workers and trade union leaders in the United Kingdom have been driven to actions which would have been unthinkable a few years ago. I am tired of seeing the Secretary of State for Industry, Sir Keith Joseph, on television, constantly talking about his duty to the taxpayers. By their handling of the steel dispute, he and his colleagues have already cost the taxpayers of this country untold millions of pounds. And who does Sir Keith Joseph think the taxpayers are? They include all those in Wales whose livelihood will be affected by the Government's policies. They include the small shopkeepers and small business people whom the Government affect to care for; and the consequences of this strike are extremely serious for the taxpayers of this country.

It is for the Government in power to take the necessary measures to deal with the problem; but I will in conclusion make one or two suggestions to the noble Viscount. One clear need is for a new economic plan for Wales. Ad hoc, short-term measures are not enough; and I plead with the Government to set up a team to draw up a plan now. I published an economic plan for Wales in 1967: Wales, The Way Ahead. I make no great claims for that, but it is the only economic plan which has ever been published in respect of the Principality. It was produced, as I think now, in too much haste, but it did examine the problems of Wales in quite considerable depth, and gave impetus to a number of developments for which Wales can now feel grateful, including in particular the development of the infrastructure. It was, in fact, the starting point for the M.4 which has been referred to.

I think the time has come for a new plan, because of the changes that have taken place and because of the new developments. In any future strategy, the Welsh Development Agency and the Development Board for Rural Wales must play a central role. I am glad they are not to be abolished, but I believe also at this time that it would be quite scandalous if they were to be deprived of resources or of powers. To do so would be comparable to reducing the number of doctors and nurses in the country in the middle of a serious epidemic. They need to be given the means and the confidence to fulfil their useful functions at this time.

I also believe that the Government should now intervene decisively to resolve the steel strike, even if this means the resignation of Sir Keith Joseph. The future of the Welsh economy and of its communities is more important than one single Minister. This is not a personal attack on Sir Keith Joseph, who has great abilities, although policital acumen is not one of them. He has lined himself up with the BSC and he cannot now be regarded as a detached observer. This does not mean that the unions will not need to face the realities of steel at home and abroad or settle on a realistic basis, but there must be early negotiations in a new atmosphere which is both realistic and fair. It is no use the Government saying that this is a matter in which they should not intervene. This, I believe, is immoral, because it is the Government which at the end of the day hold the purse strings and it is their manifest duty to intervene, or at least to sit in the chair in the consultations, in order to seek to bring this damaging strike to an end.

Time will not allow me to deal with the equally acute difficulties of other parts of Wales to which reference has been made—in towns like Caernarvon, which was referred to by my noble friend Lord Maelor, Ffestiniog and Llangefni—and also the problems that loom ahead for the agricultural industry. They are very much in our minds, and, I hope, in the Government's mind as well. There is so much that is good in Wales—we must not decry our country—so much that is promising. It is a splendid country in which to live and work, and we do not want to see our people marching out again to look for work as they did in the 'twenties and 'thirties. There has been a good deal of success in attracting new industry in the last few years and there are still jobs in the pipeline. It was stated at some time that there were 18,000 jobs in the pipeline over the next three years. I should be grateful if the Minister of State would be good enough to give us some information about this prospect. Does it still hold good?

I do not underestimate the tasks facing the Government, but I would say this to the Minister of State and to the House. The Government can succeed only if they have the confidence of the great majority of the people in Wales. I hope that the Minister, when he replies, will not shrug off his responsibilities or those of his colleagues by blaming the previous Government. We tend to get a little tired of this. The Government have been in office for 10 months and they must learn to shoulder their responsibilities and to realise that a large part of our present crisis is due to their acts or omissions. I do not want to go into detail, but I could tell him precisely what those acts and omissions are.

I am bound to say that there are signs in parts of the Front Benches opposite that some wisdom is entering the counsels of the Government. The Lord Privy Seal, Sir Ian Gilmour, has recently delivered an interesting lecture. I think that he is always worth listening to. I will quote one of his sapient remarks: It would be foolish to forget this, to think that we can ignore the social and political consequences of what we do. He is not a doctrinaire monetarist and he is not a non-interventionist. The Lord Privy Seal went on: The size of our task suggests that we should be even more mindful than usual of political considerations. We must not make the same mistake as Karl Marx and give economic considerations primacy over political ones. Those are very wise words. I think that the people of Wales will applaud Sir Ian Gilmour. If he went there, I think he would receive a welcome.

Now let the Government consider the social and political consequences of their actions and mend their ways before it is too late. They must seek the co-operation and understanding of the Welsh people at this time. If the people of Wales and all the affected organisations in Wales can be brought to work together, we can overcome our problems. This is one point on which I would disagree with my noble friend Lord Maelor. I do not believe that Wales is in danger of becoming an industrial desert. Wales is one of the most beautiful countries, and we are determined that it will not become an industrial desert.

What we are saying tonight in our appeal to the Government is that they should come forward in a spirit of co-operation, not in a carping spirit of constant criticism of the unions, because the unions are part of the community. The men and women who form the trade unions are as much part of the community as anyone else, and they want to see Britain succeeding. This means, of course, a new approach and a new spirit and I hope that it will be forthcoming very soon.

9.44 p.m.

The MINISTER OF STATE, DEPARTMENT of INDUSTRY (Viscount Trenchard)

My Lords, let me start by saying that if I get some of the Welsh names wrong, I hope that my place of birth will be adequate excuse. I asked those briefing me to make sure that they did not put in any of the more complicated ones. I am afraid that I could not follow all the marvellous hymn which was so beautifully sung by the noble Lord, Lord Maelor. I shall be very interested to read Hansard tomorrow. I do not know whether they are going to interpret it as "Amid the encircling gloom".

We owe the noble Lord, Lord Brooks of Tremorfa, thanks on two grounds for putting down this Question today. First, it gives an opportunity—I think I have to say another opportunity, because in the other place and, in terms of the steel industry, in this House there have been several—to look at a problem which everybody agrees gives deep and real cause for concern in Wales at the present time. I should also like straight away to congratulate the noble Lord, Lord Hooson, on a magnificent and very charmingly expressed maiden speech. We hope very much that we shall be hearing much from him in future debates in this House.

I will start by picking up the positive note that the noble Lord, Lord Cledwyn of Penrhos, mentioned at the end, when he disagreed with one of his colleagues. I, too, believe that all is not lost, neither for Wales nor for the rest of the United Kingdom. I shall touch later on the position of Wales in relation to that of the United Kingdom. We must all look positively at this very difficult problem. I certainly hope that we can send out from this House to all concerned with extremely difficult problems, a message of backing and courage in facing up to those problems.

The noble Lord, Lord Cledwyn of Penrhos, said that he hoped I would not start by recounting the failings, as we see them, of the last Government, but he and his colleagues have castigated our policies —as he put it, for making things worse. He did not entirely blame us for the level of unemployment which we have reached. He asked me not to dwell on the previous Government's record, but at the same time his colleagues, more than himself, have described how they see our policies making things worse.

I do marvel—I have to say it; I am not going not to say it when noble Lords opposite have said what I believe to be quite incorrect—at the failure of noble Lords opposite to face facts about the situation that has developed under both their custody and the custody of previous Conservative Governments. As the noble Lord, Lord Harris, pointed out, in the last 15 years we have sunk, industrially, nationally, lower and lower and lower. My right honourable friend the Secretary of State for Industry now has to face up to a situation in which British industry has never had it so bad. I hope that nobody in this House would have the audacity to blame him, after nine months, for that situation.

If one looks at the balance of payments in 1979 as a whole and subtracts from it the North Sea oil and gas credit figure, what is left in the balance is a £10,000 million deficit. It is no good noble Lords opposite castigating us for saving expenditure, for cutting back, when that is our inheritance. If this country is to have anything to live on when the oil runs out, some appallingly difficult decisions have to be taken—and taken now.

So far as the subject of this debate is concerned, in Wales and in the steel industry we are suffering from a situation in which previous Governments did not face up to reality. The predecessors of my right honourable friend the Secretary of State gave British Steel the same targets which he is now requesting them to meet, one year later than Mr. Eric Varley required. It is no good procrastinating.

I must say a word about my Secretary of State and I remember, first, the remarks of my old father when he said: "When you are not criticised in this world it is quite certain that you are not doing anything of consequence or good". We have heard a lot about newspaper articles. I believe that my Secretary of State and his colleagues in the Cabinet and our Leader have the courage and the ability to face up to steps which are long overdue. My Secretary of State is a very human man. He not only understands but he feels very deeply the plight of ordinary people. He is not "lined up with the Steel Corporation", as was said. He is standing back very much from the Steel Corporation but, together with his colleagues, is looking at the overall economic situation which I have sketched and which we have inherited, and is saying, "How much more can we possibly give to this industry after the money that has been put in?".

Let me just sketch the real situation in steel; the economic background I want to describe, which makes a decline in the employment in the steel industry inevitable, both in Wales and in the United Kingdom as a whole. The Steel Corporation is faced with a lower demand for its products. It has sold an average of 17 million tonnes in each of the last two years and there is not really any doubt that the demand is going down; but I know. of no reason to doubt its particular estimate, either upwards or downwards, of 15 million tonnes on which it is making its new plan.

It is of course true, as noble Lords have said, that if the British car industry is producing fewer cars then demand for sheet steel from the South Wales strip mills is bound to be affected. We can hope, and indeed we can believe, that longer term, with the superb equipment that the British Steel Corporation now has, we may be able to build up an export and other trades; but there is no question but that at the moment, due to the decline in the share that British Leyland hold of cars, this too is bound to affect demand.

Now BSC judge—and, as I say, I have no reasons for contradicting them—that this is a fairly permanent downturn. I am sure that they will be very quick to sense an upturn, but so often we go on hoping that things will turn up and we get into a worse and worse mess. So BSC believe that they have no option but to make a sharp reduction in capacity. There is no point in producing steel for which we have not got a market. BSC's cumulative losses over the last four and a half years are £1,250 million. Added to money for investment and other essential capital requirements, that means that the Government have put taxpayers' money of the order of £3½ billion and more into BSC over the same period. In those circumstances it was not unreasonable that we should require the BSC to break even in 1980–81, and I say that taking account of the points made by noble Lords opposite on coking coal subsidies on the Continent, which have been examined with considerable care, and, I am afraid, taking account of comparative productivity, which is the biggest single reason why these losses, even with superb capital equipment, are continuing; and that productivity is not only in the factories, it is in the factories and in the offices, but we simply are not competitive.

This target, as I have said, was less stringent than that set by my right honourable friend's predecessor, and we have promised a further £450 million in 1981 for capital investment, working capital and redundancy payments. If the BSC does make losses in 1980–81 I say to noble Lords opposite that, against the national figures that I have described and the figures that have been put into steel which I have also mentioned, it is reasonable to require them to cover those losses from within their own resources, by a reduction of stocks and by disposals of ancillary activities.

As we all know, the BSC faces severe international competition. This means that it has little room for manoeuvre through raising prices. Indeed its prices are certianly not low internationally at the moment. That is why it has been insisting that increases in pay must be matched by improvements in productivity, and whatever the arguments over details may be, the comparisons with our European and other competitors leave no room for doubt that substantial improvements are possible.

My Lords, I would hope that this House will endorse the hope that the present strike will soon be settled in a realistic way and on terms that the industry can afford. There are those who have suggested that a slower pace of rundown would be kinder to those who will lose their jobs. Like other noble Lords, one understands that, one understands the sentiment. But recent history shows that such intervention in the past has made matters worse, not better. The Beswick review in 1975 guaranteed that East Moors would not shut before January 1980, but events moved on and that plant shut nearly two years ago. Meanwhile the losses mounted, further weakening BSC's finances.

It is against this background that, as noble Lords have mentioned, the BSC propose to reduce their workforce in South Wales by more than 11,000 people by August 1980. I shall not go into the detail of the follow-through possible job losses that the noble Lord, Lord Brooks, mentioned. I feel that he has overstressed the total of the negative in building up to 130,000, on the figures and information that I have. Later I also will come to the upside questions, because there are things which are going for both North and South Wales.

In relation to the EEC aid, I did answer a Question on this asked by my noble friend Lady Vickers on 13th February, at col. 164. I would merely briefly assure the House yet once again that we have taken all the possible aid from existing EEC schemes, and they are very big sums, including recently some £71/2 million for Shotton and very considerable loans, up to £100 million. We have taken some 40 per cent. of the conversion loan scheme in the EEC. So, there has been no lack of communication or system in drawing EEC aid. Commissioner Vredeling, in fact, was referring to a proposed scheme in the EEC which would cost about £70 million for short-term working and early retirement and other factors of that kind. There is no money in the ECSC Budget appropriated for that scheme. It is at a very early tentative stage and at the moment, as far as my information goes, only one country—Belgium—is in favour of that particular scheme.

Lord BROOKS of TREMORFA

My Lords, I wonder whether the noble Viscount will give way for a moment? Will he not accept that the Social and Regional Funds of the EEC are constantly under-spent, and would it not be to the advantage of the people of Wales if the Government were to press for extra moneys for areas like Wales which are suffering the terrible consequences of these closures?

Viscount TRENCHARD

No, my Lords I would not agree with that. We have had our full shares of the Regional and Social Funds. This charge has been levied against us in relation to the changes in the regional policy. But the charge is not correct. We shall be able to take our maximum share for certain—and regional policy is my particular sphere—up to 1982 and I am pretty sure beyond that, but it rather depends on the alterations of the EEC policy which, like ours, is tending to concentrate on narrow areas.

The problems of Wales, of course, are not confined to the steel industry. The problems of coal have been mentioned. Clearly these will be affected. In that context I would mention that I personally was glad to see last week that the BSC and the NCB had reached an agreement on imports of coking coal which covered all the coking coal which the BSC was not committed on. Therefore, I am a little sad to hear the lack of welcome given to this agreement in terms of the economic figures which I have been over. I regard it as a highly constructive agreement between the two parties, and believe that it should be welcomed.

Those are the problems. What can we do about them? Let me say that the Government fully accept the responsibility for alleviating the social and economic consequences of these drastic changes in South Wales as elsewhere. We have them in Consett as well, and we have problems in other industries which affect the North of England and other areas very badly. We must also see what we can do to assist the growth of new industries in the affected parts of Wales.

I think that there are three strands in any strategy. First, basically we must get the economy of the country as a whole right. We have been over that and we shall continue to follow policies which have been highly successful in raising the standards of living of countries miles beyond our own in other parts of the world. We shall push that forward with the utmost vigour. It is only within the framework of a turnround of national industrial decline that we can really hope to help, to a major degree, the sadly affected areas of highest unemployment.

We also need to make money available so that the basic infrastructure—by which I mean industrial land, factories and similar development—is right for incoming industry. That has been covered by most of those who have taken part in the debate. We have confirmed the plans regarding the M.4 and the A.55. I would tell the noble Baroness, Lady White, were she here, that I am afraid I am not briefed on drains, but I shall look into them! The infrastructure is vitally important, and my right honourable friend the Secretary of State for Wales and the Welsh Development Agency are very clear on that and are very active.

Thirdly, we need to look again at the question of the assisted area status of the localities affected in South Wales. We have received many representations from all the Members of Parliament from the constituencies affected in this area and from most of the local authorities; I have made the acquaintance of many extremely dedicated and interesting people, and have learned a lot—at least in theory—about the region.

After change the regional policy still leaves—and I want to put this comparison in—94 per cent. of the population area of Wales classified as "assisted areas" of one kind or another compared with only 88 per cent. in the North of England, where the unemployment at the current time and over the last two years has consistently been a little higher than in Wales, and 71 per cent. in Scotland. I hope that my friends from the North of England and Scotland will not read those figures and be on my doorstep tomorrow morning.

This then is the basis of what can be done. How does it work out in practice? The Government have already shown their ability to react quickly and positively to drastic changes in employment in Wales. Following the British Steel Corporation's announcement of the cessation of iron and steel-making at Shotton by March 1980, the Government announced that the Shotton travel-to-work area would be upgraded to Special Development Area status. We also announced a provision of an additional £15 million over a three-year period for the Welsh Development Agency for industrial development in the area affected by the redundancies. I should emphasise the word "additional"; this was in addition to the Welsh Development Agency's normal budget.

This, together with work already in progress, has been an impressive response. At the Deeside Industrial Park, which is the main focus of industrial development in the Shotton area, 103,000 square feet of advance factory space is already complete —a total of 15 units. A further two units of 25,000 square feet are nearing completion. Moreover, a further 136,000 square feet is planned for the industrial park as part of the WDA's fifth general programme.

At this point I want to say that there has been some questioning whether factories are everything. Of course they are not everything. But the uptake of factories in Wales and elsewhere is one of the most encouraging signs amid the encircling gloom that we have. This applies particularly to the small factories, and it applies all over Great Britain. There is growth, there is uptake and there is confidence in small industries—as yet far too small to compensate for the decline of the large ones. However, we intend to support success and to try to quicken it.

I take note of the remarks made by the noble Lord, Lord Harris of High Cross, in relation to enterprise zones. I should love to have entered into the quasi-economic debate between the noble Lord and the noble Lord, Lord Davies of Leek, on a number of interesting subjects, but I should detain your Lordships too long.

Still referring to North Wales, of the units completed or under construction, 13 have been already formally allocated and two units have been provisionally allocated. Only two units are still vacant. This shows that even in these difficult times there are still plenty of firms in-interested in factory space, if it is available. It is not only the Deeside Industrial Park in North Wales that is proving successful. In Delyn, for example, six factory units totalling 40,000 square feet have been completed. All but one have been formally allocated, and that one is already provisionally allocated.

In the difficult situation in South Wales we are reacting in the same positive way. My right honourable friend the Secretary of State for Wales recently announced an allocation of £48 million additional re sources for remedial action following the BSC rundown. (Those are the words from my official brief, approved from his office.) It will thus be able to get on without delay with a substantial programme of acquisition and development of industrial sites which will be available for public and private sector development.

Lord RAGLAN

My Lords, will the noble Viscount give way? My noble friend Lord Hooson is too diffident, being a maiden, to press the point. He raised the question as to whether this aid was in fact additional, because, according to his information, the aid had previously been cut by £35 million.

Viscount TRENCHARD

My Lords, I believe that the cuts to which the noble Lord referred were in regional policy. If he refers to copies of Hansard which I shall let the noble Lord have, he will see that we have discussed regional policy, its cuts and its effectiveness on many occasions, and I am quite satisfied that Wales, with a bigger share than any other of the main unemployment areas with less areas covered, has a greater drawing power to the areas of greater need in regional policy now than it ever did have.

Lord PITT of HAMPSTEAD

My Lords, what the noble Viscount has said is that the £48 million comes after you have cut £35 million. Therefore, in effect you ought to be saying that you have given £13 million.

Viscount TRENCHARD

We are not talking about cutting the same thing. We have cut the cost of regional policy for what we believe is a more effective one by some £200 million in Great Britain over a transition period of one year and three years. As I understand it, £35 million is the Welsh part of that cut. I will not say that that has nothing to do with this, but I would ask the noble Lord to read the debates we have had on regional policy in this House.

I am sorry, but I am getting a bit behind. In relation to assisted area status in South Wales, the Government are looking at this subject urgently at the present time, and we have the usual inter-departmental group looking at it closely, and we shall act at what I believe will be the right time. There are two other steps which my right honourable friend the Secretary of State for Wales has already mentioned. The Manpower Services Commission clearly has a major role to play, and since he described this in the other place I shall not detain your Lordships by describing it now. I shall leave the second point because I cannot find it. I think I have deleted it.

I had better close on this note. I hope that what I have mentioned already will show that the Government are taking effective and constructive action in South Wales within the limitations of the extremely serious situation which we face there and nationally, and there will be more to come. No one can dispute that the problems are serious, but if I may be permitted to speak as an Englishman, I hope well disposed to the interest of Wales, the gravity of the problems must not lead us to talk Wales, as some have suggested, almost into an industrial desert. Welsh industry is diversifying fast. Wales has good communications and a good labour force, and it was the excellent reputation of the labour force and their experience at the Swansea plant that were key factors in leading Fords to decide to locate their new engine plant at Bridgend. In short, Wales has a lot going for it. Industry has appreciated this. In 1979 140 factories were allocated promising just under 5,000 new jobs. In the first few weeks of 1980, 10 advance factories were firmly allocated and a further 80 provisional allocations are being processed. We need to build on this firm base and it is a positive approach that will succeed.

Of course we understand the concern that everybody feels, but the Principality is an attractive base for profitable operations. In recent years it has attracted an impressive list of new investment projects, including many from Japan, and to many of those firms I have spoken; and if we can keep things going as they are, which has happened in all bar one case, then I believe we can attract more investment from that country into Wales. They are very fond of Wales and the Welsh.

A study of the unemployment statistics, as I have said, reveals that in every month between January 1978 and December 1979 the unemployment rate in Wales was below that in the northern region of England, which contains most of England's major unemployment blackspots except Merseyside. I say that not because two blacks make a white by any manner of means, but to try to put Wales in perspective. Despite the impact of a contraction in steel and any resulting contraction in coal, Wales should still remain attractive to inward investment.

I hope I have indicated, first, that the constraints on this Government are very real; secondly, that I believe other policies to turn round industrial decline have failed, and I would ask your Lordships to give our present ones the backing they deserve; and, thirdly, I hope the whole House will look towards the Welsh problems with a constructive attitude and will encourage all those faced with appallingly difficult decisions, including my right honourable friend the Secretary of State, by at least giving the support that they require. I do not expect for one moment that we shall all always agree about every detail, but let us at least work within the constraints of the facts about the general economic situation and the Welsh situation, and let us back those who have difficult decisions to take.

Lord GORON WY-ROBERTS

My Lords, may I put a question to the Minister before he finally sits down? He referred a few moments ago in his speech, a very fair speech, to the likelihood that the Government would look again at the situation in South Wales, and I believe that by association he included Deeside and Shotton, particularly in regard to assisted area status, if I heard him aright. I beg him, in any such reappraisal of the possibilities of helping certain parts of Wales very badly hit by the recession in any case, and particularly by recent developments, to include the area of North West Wales, particularly the area including and surrounding Caernarvon, about which we heard so eloquently from my noble friend Lord Maelor. And would be, in looking at the position in that area—where I believe the incidence of unemployment is already the highest in Wales; I believe that is true of the unemployment count districts—look at the possibilities of helping that area and particularly look at the circumstances, the almost inexplicable circum stances, under which a highly viable industry is now proposed to be moved from Caernarvon to Lancashire?

Viscount TRENCHARD

My Lords, at this hour, with 36 minutes on the clock—which for me is worse than ever before; and that is saying quite a lot—I should like to say to the noble Lord, Lord Goronwy-Roberts, that I will write to him on the points that he has raised in relation to Caernarvon and its current situation and the particular removal that he mentioned, I am not briefed in detail on these matters. I was surprised when he said that the unemployment figure was the highest in Wales. At the time that we did the regional regrading that was not so—that I can remember. But I have not looked at the figures very recently.

However, let me assure the noble Lord that we are looking at these figures constantly. There is no possible way by which I could not look at them constantly because of the steady stream of all the Members representing Welsh constituencies in the other place who come into my office week after week. That requires me to look at the figures. I am determined that the criteria and the policy that we have announced shall be applied fairly and offensively all over the country. We have that now, and we shall keep it. We will not alter gradings every five minutes. The criteria are to look forward and look back on unemployment and to look at prospects for the region generally. But we will continue to act as and when necessary, when a change of substance is clear.

Lord DAVIES of LEEK

Before the noble Viscount sits down—

Lord SANDYS

My Lords, my noble friend has already sat down.