Sitting of 4 February 1980

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  TRADE

    Statistical Information
    Mrs. Fennerasked the Secretary of State for Trade to what extent he has alleviated the burden of providing information for statistics for which his Department is responsible.
    The Under-Secretary of State for Trade (Mr. Reginald Eyre): The Government are determined to reduce, so far as possible, the number of statistical forms sent out to industry and commerce, particularly to small firms. The number of such forms to be sent out this year, in the inquiries for which my right hon. Friend is responsible, will be 15,000 fewer than last year. I am personally reviewing all inquiries and I expect to make substantial further savings.
    Mrs. Fenner: I am impressed by my hon. Friend's determination. Among the
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    forms that were sent out, did he notice a reduction in those relating to the 1978 retailing inquiry, which was such a pest to my constituent, Mr. Archer?
    Mr. Eyre: I was impressed by the strong representations my hon. Friend made on behalf of her constituent. We have cut the number of forms sent to retailers in the annual retailing inquiry from 24,900 in 1979 to 19,900 this year. Moreover, no independent retailer with an annual turnover of less than £25,000 will be required to fill in a form. That may well be of benefit to my hon. Friend. In addition, simplified forms are being sent to retailers with a turnover of £150,000 or less.

    Import Regulations
    Mr. Norman Atkinsonasked the Secretary of State for Trade if he will now reconsider the early introduction of multilateral import regulations as a means of assisting world-wide growth in manufacturing industries.
    The Secretary of State for Trade (Mr. John Nott): No, Sir.
    Mr. Atkinson: Does the Minister appreciate that over the period from 1968 to 1978, import penetration, in terms of ratio between imports and home demand, rose from 17 per cent. to 25 per cent? We are now within 3 or 4 per cent. of a disaster in manufacturing industry. Is the right hon. Gentleman aware that whole sections of the industry will go

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    out of business unless the Minister takes some action?
    Mr. Nott: I accept that import penetration increased substantially over that period, but we have to look at the export side as well. Nearly one-third of our gross national product is represented by exports. We have to maintain a balance between the need to keep open our overseas markets and preserve the jobs which depend on them, and the problems faced by British industry arising from imports. The best way to safeguard the trading system is to abide by the rules of GATT and not to erect new multilateral controls of the sort the hon. Gentleman sugests.
    Mr. Latham: Is my right hon. Friend aware that the British carpet yarn processing industry has been almost totally destroyed by American imports within the last 12 months? Only two firms are still working. As the reason for that is almost entirely because American oil is30 per cent. cheaper than ours, should not an immediate import ban be considered as a matter of urgency?
    Mr. Nott: I examined the figures for a number of carpet firms this morning and I am surprised to hear my hon. Friend say that only two are working. With respect, there are rather more firms than that which are concerned with imports of yarn. As my hon. Friend knows, we have been pressing for action on this matter within the Community. I shall be attending the Council meeting at the Commission tomorrow. We await the report of the Commission on this and other matters, and I hope that, by the end of the week, there will be more to tell my hon. Friend and the whole House.
    Mr. James Lamond: May I say that I share the view of the Secretary of State in that I, too, am not enamoured of import controls? Will the Minister consider trying to assist the man-made fibre industry, for example, by looking at the question of fair trading, which was an important aspect of negotiations in Japan?
    Mr. Nott: I agree that we must maintain a balance between protecting our industry from disruptive imports—I am concerned to do that—and the need to promote our exports. One-third of our manufacturing industry depends on exports. I accept that the Government must
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    take firm and decisive action against unfair trading practices. I am sure that the hon. Gentleman appreciates that we must now act through the Community.
    Mr. Alan Clark: Does my right hon. Friend agree that there is little point in adhering strictly to GATT if we are constantly in deficit in our overall trading account? Has the Department of Trade made any detailed study of the national origin of exports and imports and the likely effect of retaliation on sectors such as unemployment, production, the public sector borrowing requirement and so on?
    Mr. Nott: I spend my whole time studying these figures. It happens to be my job. The figures are published. As soon as Question Time is over, I shall immediately present a document to my hon. Friend setting out import penetration figures in almost every major product. All those figures are available and I shall be happy to discuss them with my hon. Friend.
    Mr. John Smith: Will the Secretary of State tell us precisely what he will ask for as regards protection for the manmade fibre industry when he attends the Council of Ministers tomorrow? Is it a countervailing duty or an import ban? When the meeting has concluded, will the Secretary of State make a statement, thereby giving the House an opportunity to ask him about the real meaning of the Council's decision?
    Mr. Nott: As the right hon. Gentleman knows, I always wish to be helpful towards him. I shall be negotiating tomorrow and it will be more helpful if the matter is not negotiated now across the Floor. I am prepared to ensure that a full statement is made. Whether I am allowed to make an oral statement depends upon my right hon. Friend the Leader of the House. I shall ensure that the House is fully informed by, written or oral statement by the end of the week, and I shall let it know what arose during the discussions at the Council of Ministers meeting.

    Hairdressing Council
    Mr. John Huntasked the Secretary of State for Trade if he will seek an early meeting with the chairman of the Hairdressing Council, in view of the withdrawal of part of the membership of that body.
    Mr. Eyre: I have no power under the Hairdressers (Registration) Act 1964 to intervene in the running of the council but if either the chairman of the Hairdressing council or my hon. Friend wishes to get in touch with me I shall gladly arrange for a meeting to take place.
    Mr. Hunt: I hope that that invitation will be taken up by Mr. Ledger. Is my hon. Friend aware that last December the Hairdressing Council resolved to wind up, and to set up a new body, although it gave no clear indication as regards what would happen to its existing finances, although fees for 1980 were still coming into its accounts? Is that not extremely unsatisfactory? Is it not time that a new Hairdressing Council was set up, answerable to the Department and to the House?
    Mr. Eyre: Those who remain on the Hairdressing Council are seeking legal advice as to what steps may be taken to resolve the outstanding problems that have been referred to. I repeat that under the terms of the 1964 Act the Government have no standing on this issue. I shall gladly meet the representatives of the various parts of the hairdressing profession should they wish to discuss those problems with me.

    Trade and Development Programmes
    Mr. Lennox-Boydasked the Secretary of State for Trade what initiatives are being taken in the negotiation of individual or collective trade and development programmes to absorb an increased share of the surpluses of oil exporting countries in British exports.
    Mr. Nott: With the full support of our posts overseas and export services at home, British exporters are participating actively in the trade and development programmes of all the oil exporting countries. Although performance in individual countries varies, United Kingdom exporters have generally been increasing their share of these markets in recent years.
    Mr. Lennox-Boyd: I thank my right hon. Friend for his reply. Does he agree that, after his recent highly successful visit to the Far East, the time is now right for a similar trade visit to be made to the Middle East, to promote British trade?
    Mr. Nott: I made an equally successful—although perhaps not so well publi-
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    cised—visit to the Middle East only two months before going to the Far East. That was worth doing. I visited Saudi Arabia and Iraq and I spent a fair amount of time in both countries. Perhaps I shall have the opportunity of returning to the Middle East before the year is over. However, I have only just been there.

    Inflation
    Mr. Ioan Evansasked the Secretary of State for Trade what is the latest annual increase in the rate of price inflation.
    Mr. Joseph Deanasked the Secretary of State for Trade by what percentage the rate of price inflation has increased since May.
    The Minister for Trade (Mr. Cecil Parkinson): The retail prices index increased by 17·2 per cent over the last 12 months and by 10·3 per cent. over the 12 months to last May.
    Mr. Evans: As the Department of Prices and Consumer Protection has now been absorbed by the Secretary of State's Department, who is responsible for keeping prices down? Most Ministers are increasing prices. There has been an increase in VAT, MLR and several other increases. Who is responsible for keeping prices down?
    Mr. Parkinson: The hon. Gentleman will remember those unhappy times when his Government had a Secretary of State for Prices and Consumer Protection and a Department, yet prices doubled during that period. The sooner that the hon. Gentleman realises that having a Department that keeps records and reports on prices does not provide a way of controlling them, the better.
    Mr. Dean: Does not the Minister agree that most of the components that make up that considerable increase across the board are a deliberate result of Government policy? They are not due to the intervention of outside forces. How does he relate that to the promises made to the electorate last May to the effect that the Government would solve the problems of prices, mortgages and so on? Does he not think that the general election was won on a completely false premise?
    Mr. Parkinson: I shall not bore the House by quoting from the speeches of

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    the former Chancellor of the Exchequer and of the former Secretary of State for Prices and Consumer Protection. At the time of the election they both confirmed that inflation was on an upward trend and that the figures were bound to rise during the year.
    Mr. Latham: Is it not a fact that under the previous Labour Government prices more than doubled? The Opposition have an absolute cheek to lecture my hon. Friend on this subject.
    Mr. Parkinson: Once again, my hon. Friend has put his finger on the problem. It is bad conscience.
    Mr. Pavitt: Has the Minister examined the crippling effect of 15 per cent. VAT upon our hospital services and upon all supplies? Is it not nonsense? Will he arrange that one Department does not have to pay for another Department's increased costs?
    Mr. Parkinson: The hon. Gentleman knows that the change in the rate of VAT, and the consequent increases, were part of a major switch from direct to indirect taxation. That switch is, and was, necessary. However, it gives rise to certain problems, as the hon. Gentleman has suggested. The overall long-term effect should be beneficial.
    Mr. John Smith: Will the Minister explain what contribution the doubling of VAT, the increase in minimum lending rate, the 10 per cent. increase in gas prices above that asked for by the BGC, and all the other increases in the public and private sectors, make to the Government's counter-inflation policy? All those increases have been allowed to go ahead unchecked. Should there not be a Minister who is responsible? Is there any counter-inflation policy? When do the Government expect to see inflation in single figures, as it was when they took office?
    Mr. Parkinson: It may be disappointing news to the right hon. Gentleman, but the only time that the previous Labour Government showed any sign of gaining control over inflation was when they cut public spending and started to take control of the money supply in accordance with the instructions of the IMF. That is the long-term direction in which the country must move.

    USSR
    Mr. Greville Jannerasked the Secretary of State for Trade what is the current balance of trade between the United Kingdom and the Union of Soviet Socialist Republics; and whether Her Majesty's Government have yet decided whether to renew the current credit arrangements with the Union of Soviet Socialist Republics when they expire.
    Mr. Nott: Provisional figures for 1979 show a deficit on our visible trade with the Soviet Union of approximately £410 million. On the separate question of credit, the Governrment have decided not to renew the Anglo-Soviet credit agreement when this expires.
    Mr. Janner: When the Government converse with the Soviet Union regarding our trade with them, or the renewal of credit arrangements, will they emphasise the deep concern that is felt in the House and the country on the questions of human rights and the exile of people such as Sakharov, Ida Nudel and Vladimir Slepak? Does the right hon. Gentleman agree that, if and when the Soviet Union comply with the rights and duties of the Helsinki agreement, we shall be more likely to engage in trade, as we did before?
    Mr. Nott: I am sure that the hon. and learned Gentleman is right. We should lose no opportunity to bring our strong views home to the Soviet Union. Their contempt for the dignity of the individual and for human rights are repugnant to the whole House. We must take every opportunity to make that view known.
    Mr. Robert Atkins: In the light of that answer, and in view of recent events, will my right hon. Friend urgently consider the dumping of Russian Christmas cards in this country and the possible dumping of general greetings cards and other stationery?
    Mr. Nott: We have a recognised procedure for dealing with dumping. Christmas cards will not have much of a market for a few months, but if my hon. Friend can tell me of other specific items that are being dumped, we shall look into the matter and take speedy action.
    Mr. Clinton Davis: Has there been an increase in cargoes carried by British

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    shipping in trade with the Soviet Union since the right hon. Gentleman's Government came to power? What discussions has he had with the Soviet authorities on this topic?
    Mr. Nott: I confess that we have not made a great deal of progress. We have had nine months to try to deal with the problem. The hon. Gentleman had several years, and I do not believe that he would claim that he was particularly successful, either. Discussions are continuing with the Soviet Union. It is a serious matter. I believe that the hon. Gentleman will agree that effective action can properly be taken only through the Community. If we acted alone—and we have the right to do so under the Merchant Shipping Act—it would be much less effective than persuading some of our Community partners to join us.

    Reports (Deletions)
    Mr. Meacherasked the Secretary of State for Trade what are his criteria for determining the public interest regarding major deletions from official reports.
    Mr. Eyre: The public interest is not defined in the relevant legislation for which my right hon. Friend is responsible. He has to take a view of the public interest according to the circumstances of each report.
    Mr. Meacher: How can it be in the public interest for the Secretary of State to delete from the Price Commission report on car components a finding that the cost to the car owner of replacement sparking plugs is 10 times the original price charged to car manufacturers? Does the hon. Gentleman agree that leaving out such information can only be in the interests of the Society of Motor Manufacturers and Traders and definitely not those of the public? Does he further agree that it is an abuse of the powers of the Secretary of State to cover up private exploitation from public view?
    Mr. Eyre: I can only assume that the hon. Gentleman is guessing about the precise content of that confidential report. The report was extremely detailed. In making deletions, my right hon. Friend had regard to the commercial interests of companies, where they are justifiably part of the wider public interest. An obvious
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    example is where the disclosure of detailed information would be of considerable aid to foreign competitors.
    Mr. Costain: Does the Minister appreciate that the question is misleading, and that for a number of years in order to popularise their sparking plugs, the manufacturers gave them away?
    Mr. Eyre: I note my hon. Friend's point.
    Mr. Norman Atkinson: How does the Minister justify a profit margin where the retail price is 10 times the wholesale price?
    Mr. Eyre: It is a speculative discussion, and I am not able to comment on the details.
    Mr. Cormack: Is it possible to use some of the money that my right hon. Friend did not use in publishing the Price Commission report to publish the Underhill report?
    Mr. Eyre: I shall ask my right hon. Friend to consider that.

    Air Traffic (South-East)
    Mr. Adleyasked the Secretary of State for Trade if he will seek to regulate the operation of charter and part-charter air traffic to and from Heathrow and Gatwick as part of his plans to control the growth of air traffic in South-East England; and what cities in other countries operate scheduled air services from three separate airports serving the same city.
    The Under-Secretary of State for Trade (Mr. Norman Tebbit): Whole plane charters have not been allowed to use Heathrow since 1 April 1978. The Government would like to see more effective use being made of airports other than Heathrow and Gatwick, but my right hon. Friend has no plans artificially to restrict leisure traffic in the South-East. New York has three airports operating scheduled services.
    Mr. Adley: What does my hon. Friend mean by "artificially to restrict"? Is the night ban at Heathrow not proper action by the Government, taken for environmental reasons? Does he contemplate with equanimity tour operators continuing to bring coach loads of people down the motorway from Newcastle,

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    Manchester and Birmingham to fly to Majorca, because it is cheaper than using regional airports? What are the Government's views?
    Mr. Tebbit: The night ban applies to all classes of traffic. It is extremely difficult to draw a line between leisure traffic being a bad thing and some other form of traffic being a good thing. The customer—the passenger—demands the cheapest possible air transport, and I understood that we were interested in giving it to him.
    Mr. McNally: Does the Minister agree that there is inertia among airlines and tour operators about using London's airports? The hon. Gentleman is being too casual. Would not ministerial activity benefit airports such as Manchester, which have the will and capacity to take such passengers?
    Mr. Tebbit: The hon. Gentleman appears to expect me to do the job of tour operators. If Manchester is a good airport for that purpose—and I believe that it is—it is up to the management of Manchester airport to persuade tour operators and passengers that that is so. We are not in the business of directing people to airports.
    Mr. Haselhurst: Are we not in the business of trying to minimise the impact on the environment of an unlimited buildup of airport capacity in the South-East? Does my hon. Friend therefore agree that it is entirely reasonable to balance the views of tour operators with those of the country as a whole, to ensure the best overall result?
    Mr. Tebbit: We are in the business of protecting the environment, and we have recommended that Stansted be expanded rather than have further expansion beyond terminal 4 at Heathrow. An aeroplane landing at Stansted will disturb about 17,000 people as opposed to 1½ million at Heathrow.

    Footwear (Exports)
    Mr. Marlowasked the Secretary of State for Trade what action is being taken to counter the effect of Canadian import controls which restrict opportunities for British exports such as footwear.
    Mr. Parkinson: The EEC Commission has had extensive discussions with the
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    Canadian Government, and both they and the United Kingdom Government have repeatedly stressed the harm done to our footwear manufacturers by Canadian restrictions on footwear imports. I am not aware of any other quantitative Canadian import controls which cause concern to United Kingdom exporters.
    Mr. Marlow: What action are the Government taking to ensure that footwear imported into this country does not come in at below the cost of production? Further, is my hon. Friend satisfied that that action is adequate and, if not, what further steps does he intend to take?
    Mr. Parkinson: We have an extensive range of controls, especially on footwear from low-cost countries. If my hon. Friend can suggest ways of strengthening those controls, I shall be happy to hear from him. They are extensive and they are in operation. However, we propose to press the Canadian Government to stand by their assurance that their restrictions will be removed in November.
    Mr. Wigley: Is the Minister aware that the dumping of leather cloth from Canada and elsewhere has undermined the leather cloth manufacturing industry in the United Kingdom to the extent that there is now asset stripping and factories are collapsing with resulting unemployment?
    Mr. Parkinson: As the hon. Gentleman knows, anti-dumping action is now for the EEC. We have an anti-dumping unit in the Department that is available to help industries with information that establishes dumping. If the hon. Gentleman will put the leather cloth manufacturers in touch with me I shall do what I can to help.

    Price Commission
    Mr. Canavanasked the Secretary of State for Trade when he expects the Price Commission to have been wound up.
    Mr. Eyre: The Commission will be formally wound up shortly after the Competition Bill receives the Royal Assent.
    Mr. Canavan: Will the Minister ask the chairman to publish a report showing how much this Government's disastrous policies have contributed to inflation by increasing VAT, mortgages and rents, bus

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    fares, petrol, gas and electricity prices and the prices of bread and many other essential foodstuffs? Would not such a report show that we should retain the Price Commission instead of abolishing it?
    Mr. Eyre: The hon. Member should remember with humility that the retail price index doubled during the life of the previous Government. The Price Commission was entirely ineffective in dealing with this and merely operated to delay price increases. This had the effect of storing up large increases for the consumer at a later date.
    Mr. Bruce-Gardyne: May I ask my hon. Friend a rather more constructive question? Will he consider introducing legislation to give those whose jobs were destroyed by the Price Commission—that is, those in the bread industry, the brewing industry and elsewhere—an opportunity to sue the members of that Commission for damages?
    Mr. Eyre: That is an interesting suggestion which would be of particular interest to members of the legal profession.
    Mr. John Smith: Will the Under-Secretary ask the Secretary of State to consider answering a question on prices and inflation at least once during his tenure of office? Is he aware that his right hon. Friend has answered none since he took office? Also, will he explain why his right hon. Friend and other Ministers in his Department seek to evade responsibility for a counter-inflation policy by a change in ministerial responsibility for questions? What is the sense in asking Members of this House to direct questions about the retail price index to the Secretary of State for Employment?
    Mr. Eyre: The right hon. Member is not being fair. My right hon. Friend has twice answered a substantial number of questions about prices. The arrangements that are to be made for the future will be an improvement, yet again, because questions on prices will be answered by the Minister responsible for the policies concerned.
    Mr. Gummer: Does my hon. Friend agree that, if the Price Commission is to
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    write another report before it is closed down, it might find it very difficult to write one listing those commodities in which prices have been permanently kept down by its actions? Indeed, would it not be so short a report that he would be able to afford to publish it?
    Mr. Eyre: I am sure my hon. Friend is right. All these interesting suggestions will be put to the part-time chairman of the Price Commission.

    Civil Aviation Authority
    Mr. Michael McNair-Wilsonasked the Secretary of State for Trade when he expects next to meet the chairman of the Civil Aviation Authority.
    Mr. Tebbit: My right hon. Friend and I expect to meet the chairman of the authority on 25 February.
    Mr. McNair-Wilson: When my hon. Friend next meets the chairman will he suggest to him that he should end the nonsense of duty-free shops at international airports? Is my hon. Friend aware that in the cabin of a wide-bodied aircraft today on an international flight, literally hundreds of bottles of liquor and scent are being carted from country to country, creating an additional hazard to passengers in the event of an accident, and an unknown amount of weight in the aircraft? May I suggest that the time has come for vouchers to be issued at the airport of embarkation which could be cashed at a duty-free shop at the home base of the passenger?
    Mr. Tebbit: I have often thought it slightly bizarre that we freight millions of bottles of Scotch across the Atlantic so that they can come back again to Scotland carried by passengers as duty-free liquor. However, that is part of the tradition and the way in which these things are now conducted. Hon. Members may find that rather amusing, but I suggest they ask their constituents whether they want to give up the privilege of buying duty-free or cheap liquor on the flight from one place to another. I note what my hon. Friend said about the safety hazard, but I do not believe that there is an unacceptable safety hazard if the liquor is properly stowed. However, I shall draw his remarks to the attention of the Civil Aviation Authority.
    Mr. Wellbeloved: Would not the problem of duty-free goods and the absence of real turnover be overcome if those purveying so-called duty-free goods offered a genuine price to the travelling public? Is it not a fact that the words "duty-free" are merely a cloak for privileged traders to make excessive profits? Is it not a rip-off?
    Mr. Tebbit: It is, in fact, a cloak for the way in which airport charges are held down to acceptable levels. The major profit goes to the airport authorities and thereby holds down the other service and landing charges. The hon. Member for Erith and Crayford (Mr. Wellbeloved) can smile—he obviously does not know that about 30 per cent. of the British Airports Authority's revenue comes from concessionary sales.
    Mr. Biggs-Davison: Will my hon. Friend get the chairman to obtain an explanation, for the information of this House, why British Airways staff refuse to stay over in Belfast, thus adding to the costs of their airline and sometimes leaving passengers stranded? Does this not contrast with the more courageous behaviour of the staff of other airlines?
    Mr. Tebbit: My hon. Friend has a fair point, but he is addressing it to the wrong chairman. I have already addressed this question to the chairman of British Airways.
    Mr. Donald Stewart: Will the Minister discuss with the chairman of the CAA the impending fantastic increase in landing and passenger dues—400 per cent. in my constituency, and even higher elsewhere? Since not even this Government's increases have come anywhere near that figure, will he advise the chairman that they are totally unacceptable and should be reversed?
    Mr. Tebbit: The Civil Aviation Authority has a statutory obligation to balance its books and not be a charge on the taxpayer. It is clear that the operating deficit and the accrued interest of the Scottish Highlands and Islands airports will be higher this year, even after increases in the charges. Therefore, the right hon. Member is really asking me to ask the taxpayer to underwrite larger losses. It would have been helpful had their rates not gone up so much as they did this year.

    Price Restraint (Competition)
    Mr. Dormandasked the Secretary of State for Trade if he will undertake a study to measure the effectiveness of competition in restraining prices.
    Mr. Tebbit: No, Sir. There is no doubt that competition restrains prices substantially, but the effect is difficult to isolate in terms of precise figures and varies from industry to industry—[Interruption.] Labour Members should go out shopping. They might find out. The extent to which the absence or distortion of competition causes prices to be higher than they would otherwise be can be taken into account by the Director General of Fair Trading in deciding whether to refer anti-competitive practices or to make a monopoly reference to the Monopolies and Mergers Commission, and by the Commission in its investigations.
    Mr. Dormand: Is the Minister aware that that is a disappointing reply, as well as a long one? Even without such a study, does not the Minister agree that it is obvious that competition does not restrain prices? Does he not agree that, although competition has a role to play, it is totally inadequate in a modern economic system? Therefore, will he agree to reinstate some controls similar to those exercised by the previous Government in an attempt to restrain the present roaring inflation?
    Mr. Tebbit: Obviously the sort of controls that the hon. Member has in mind are those which put one of the major bread suppliers out of business and led to a loss of competition in that industry. No doubt that has something to do with the fact that bread prices have gone up somewhat higher than they would otherwise have done.
    Mr. Forman: Is there not a wealth of evidence that competition brings about more competitive prices—for example, with refrigerators and television sets? Is it not also the case that the Government's new Competition Bill will strengthen the Monopolies and Mergers Commission and the Office of Fair Trading, to the advantage of consumers?
    Mr. Tebbit: My hon. Friend is right on all grounds. I suggest that those hon. Members who do not believe that competition holds down prices might care to

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    look at the newspapers and the news tapes today and see that one grocery chain, under the pressure of competition, has again reduced its prices and estimates that this will save the average housewife about 50p a week.
    Mr. Clinton Davis: Reverting to the question of references to the Monopolies and Mergers Commission. is the hon. Member aware that, if the GEC bid for Decca is successful, a monopoly will be created there? Is it his intention to refer this matter to the Commission?
    Mr. Tebbit: That is an interesting question and, no doubt if the hon. Member tables it, he will get a reply when we have considered the matter.
    Mr. Adley: Will my hon. Friend confirm that it is not the Government's policy in any way to encourage any of the nationalised industries to create a State monopoly for any of the products that they manufacture?
    Mr. Tebbit: I do not think that monopolies of any sort are normally desirable at all.

    South Korea (Imports)
    Mr. Garel-Jonesasked the Secretary of State for Trade whether he will forbid the import of dangerous dolls from South Korea.
    Mr. Parkinson: The Toys (Safety) Regulations 1974 impose requirements relating to the main hazards likely to be presented by toys. These regulations do not prohibit the importation of non-complying toys, but it is an offence under the Consumer Protection Act 1961 for any person, including any importer, to sell or possess for sale any toy which does not meet the requirements of the regulations. Importers are, therefore, generally careful to ensure that the toys which they import comply with the regulations.
    Mr. Garel-Jones: I thank my hon. Friend for that reply. Will he say whether dolls, known as "Cutie" dolls, imported from Korea, fall within these regulations?
    Mr. Parkinson: My hon. Friend will be pleased to hear that there has been a successful prosecution of an importer who brings in these dolls. Other prosecutions are pending. This would suggest that any-
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    one who is importing them should prepare to be prosecuted.
    Mr. Edward Lyons: In view of the ambition of South Korea to become the world's largest textile exporter within the next five years, will the Minister consider reciprocating its treatment of British textiles? South Korea creates enormous difficulties over the admission of our textiles and imposes an 80 per cent. import duty on some of them. Why do we not reciprocate?
    Mr. Parkinson: When my right hon. Friend was in Korea last week he made a speech on this subject, pointing out that unless the Koreans opened up their markets to other people's goods they would inevitably invite strong retaliation.
    Mr. Canavan: In view of the Government's general policy of inadequate consumer protection, combined with their attack on living standards, is it not a fact that the most dangerous doll in this country is the one in No. 10 Downing Street together with her puppets at the Dispatch Box in the House of Commons?
    Mr. Parkinson: I think sometimes that the hon. Gentleman is some sort of hazard. I await the day when he finally explodes in this House.

    Japan
    Mr. Simsasked the Secretary of State for Trade what progress he made in his recent meetings in Tokyo with regard to developing trade between the United Kingdom and Japan; and if he will make a statement.
    Mr. Nott: During my recent visit to Japan, I met Ministers of the Japanese Government, senior representatives of Japanese industry and commerce and members of the British business community in Japan. Our talks covered a broad range of economic and trade matters.
    Mr. Sims: I am grateful to my right hon Friend for his reply and for the efforts that he and the Minister of State have made to develop trade between this country and Japan. Was he able, when in Japan, to raise the question of the structure of the liquor tax, to which I have referred on a previous occasion? Was he able to point out that, with the change in the rate of exchange, it is

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    likely that Scotch whisky will shortly attract a much higher rate of tax? This is bound to affect sales. Was he able to persuade the authorities to adjust the tax?
    Mr. Nott: While in Japan I raised this important matter with the Minister of Finance and with the Minister of Trade and Industry. I asked, particularly, that the threshold should be raised. I pointed out that this was our single largest export to Japan. But it is a budgetary matter. Just as my right hon. and learned Friend the Chancellor of the Exchequer is not keen to disclose the contents of his Budget in advance, neither is the Minister of Finance in Japan. I did, however, make strong representations.
    Mr. Ian Lloyd: Was my right hon. Friend able to make any assessment, while in Japan, of the immense efforts that the Japanese are putting into industrial robotics?
    Mr. Nott: I have to confess that I do not know what industrial robotics are. If I did, I am sure that I would have made representations about them.

    Inflation
    Mr. Mike Thomasasked the Secretary of State for Trade when he expects the price inflation rate to return to single figures.
    Mr. Parkinson: No one can predict this. Inflation depends on many factors, but, above all, on the Government's success in bringing down the rate of growth in the money supply and the wisdom of wage bargainers in avoiding pay settlements that cannot be financed.
    Mr. Thomas: Is not part of this strategy, if strategy it be, that the Government are asking every worker in the public sector to take a real cut in their standard of living?
    Mr. Parkinson: The only time that Governments of this country have shown signs, in the past five years, of getting control of inflation is when they have followed a policy of controlling their own expenditure and controlling the money supply. The previous Government were forced to do so by the IMF—and it worked. We are determined to
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    follow that policy as the only long-term strategy that will work.
    Mr. J. Enoch Powell: How does a pay settlement that cannot be financed contribute to inflation?
    Mr. Parkinson: The Government can do two things. They can either inflate the money supply to accommodate the pay settlement, in which case, the right hon. Gentleman will agree, it would contribute to inflation, or they can hold the money supply, in which case unemployment will increase. In either case, unearned wage increases not covered by productivity will produce no benefit to anyone.
    Mr. Burden: Is it not the case that inflation will be kept down if workers accept the fact that they must not continue to ask for increases in wages without increases in productivity? Is it not the case that they must put their full effort into production?
    Mr. Parkinson: I have already said that wage increases that are not brought about by increases in productivity will eventually result—if the Government maintain a strong monetary policy, as they mean to—in increased unemployment. Wage negotiators asking for unearned increases must take that into account.
    Mr. John Smith: Will the Minister now answer the question that he has been asked repeatedly at this and other Question Times? What contribution have recent Government policies, namely the doubling of VAT, the increase in MLR and the increase in gas prices, made to counter-inflation?
    Mr. Parkinson: The right hon. Gentleman does not listen to the answers. It is, therefore, hardly worth giving them. I repeat that the move to increased indirect taxes—so that reductions in direct taxation could take place—was voted on by the people of this country. They voted in favour of it. The Government's long-term policies of not holding down prices artificially in areas where they can only hold them down for a short time, but of allowing the market to find its own level—a sound monetary and fiscal policy—is the only way to control inflation.

    Multi-fibre Arrangement
    Mr. Trippierasked the Secretary of State for Trade when he intends next to meet the Council of Ministers with regard to the renewal of the multi-fibre arrangement.
    Mr. Nott: There are no meetings arranged at the present time to discuss the renewal of the MFA, but I shall be attending tomorrow's meeting of the Council of Ministers to discuss another important question on textiles.
    Mr. Trippier: I am grateful to my right hon. Friend for that reply. I thank him for the efforts that he is making, particularly, this week, on behalf of the British textile industry. May I respectfully remind him that there would be a revival of confidence in the textile industry if negotiations for the renewal of the multi-fibre arrangement in 1981 were completed as quickly as possible?
    Mr. Nott: Preliminary discussions are taking place on this subject. I must ask my hon. Friend to cast his mind back to the time when the present MFA was established and to accept that the conditions that we face today are very different from those that existed when the MFA was first entered into. While I have always accepted that orderly marketing arrangements are bound to continue when the present MFA expires, I am anxious not to arrive at any premature conclusions when world trade in textiles and general economic conditions are changing so rapidly. I am aware of my hon. Friend's view and that of the industry. I shall take those views fully into account.
    Mr. Barry Jones: Is not devastating damage being done to the man-made fibre industry by subsidised American imports, which now account for 25 per cent. of British sales? What urgent action does the right hon. Gentleman intend to take? Will he bear in mind that in my constituency, at the Deeside Mill at Flint, some 500 jobs depend on him taking urgent action?
    Mr. Nott: Great damage is being done to sections of the fibre industry at present. I fully accept that. The matter will be discussed at the Council of Ministers' meeting tomorrow. I have already said
    22
    during Question Time that I hope that we shall be able to make some statement by the end of the week.
    Mr. Leighton: Does the Secretary of State agree that trade questions are largely becoming a farce? When hon. Members seek safeguards for constituencies against imports from EEC countries, the Secretary of State says that we are bound by treaty obligations. If the imports, or dumping, stem from any other country, the right hon. Gentleman says that he must discuss the matter with the Commission, which does nothing. The right hon. Gentleman has no powers. Does he not agree that those were given up when we signed the European Communities Act?
    Mr. Nott: Ninety-five per cent. of all imports from low-cost producers of textiles coming into this country are now under some form of restraint. The hon. Gentleman is not right to claim that there is no protection against low-cost imports. The present problem that we face is imports from developed countries and that is the subject of tomorrow's meeting. Of our six leading trading partners, particularly those to whom we export, five are Community partners and nothing could be gained from taking action against countries that take the overwhelming proportion of our exports.
    Mr. Straw: Is the Secretary of State aware of the deep anger among textile employers and trade unions in Lancashire about the remarks of the Minister of State on regional television on Thursday to the effect that the problems faced by the industry in Lancashire must largely be sorted out by the industry itself? Does the right hon. Gentleman not recognise that the problems of a high exchange rate, imports from the United States and Mediterranean associates are problems over which the industry has virtually no control, and that they require firm and immediate Government action?
    Mr. Nott: Apart from the extensive range of restraints on imported textiles that existed when we came into office, we have imposed 14 new quotas under the basket extractor mechanism, taken safeguard action against Turkey and entered into new agreements with China, Malta, Cyprus and Mauritius. We are also seeking transitional arrangements

    23
    on textiles for the accession of Spain and Portugal.
    My hon. Friend the Minister of State was correct. It is for the textile industry to sort out its problems. We shall do our best to support it in some of the ways that I have described, but changes of fashion and technology are taking place all the time and the British textile industry must respond to them. That is not something which politicians can do. We cannot run the textile industry on behalf of the directors of the companies.
    Mr. John Smith: Will the Secretary of State understand that the multi-fibre arrangement, which has been successful, is a necessary development on which the Government can take action? Their prevarication in making a statement of policy for the future is causing widespread uncertainty throughout the industry. Will the right hon. Gentleman say that he wants to have another MFA and then argue about the details? At least that will settle the principle.
    Mr. Nott: In Opposition I supported the right hon. Gentleman's Government when they negotiated the MFA. Nothing that I have ever said would suggest that I do not support the arrangement. However, the bilaterals still have nearly another three years to run and the MFA has two years to run. At the moment, there is nothing to negotiate about.

    Second-hand Cars
    Mr. van Straubenzeeasked the Secretary of State for Trade whether he has considered the suggestions of the Office of Fair Trading for dealing with the fraudulent practice of second-hand car salesmen who misrepresent the mileage to the detriment of the consumer.
    Mr. Eyre: The director general is now considering the comments of interested parties on his consultative paper. I shall await his report with interest, since I share my hon. Friend's anxiety about mal-practices in the used car trade.
    Mr. van Straubenzee: I understand that there must be consultations, but, in view of the widespread practices that they are designed to try to deal with, can my hon. Friend give any indication of how long he thinks the consultations may take?
    Mr. Eyre: I cannot be specific, but the report is expected soon and we shall certainly give urgent attention to the director general's recommendations.

    Airports Policy
    Mr. Haselhurstasked the Secretary of State for Trade what representations he has received since his statement on airports policy.
    Mr. Tebbit: Following the statement by my right hon. Friend on 17 December, my Department has received about 100 letters concerning airports policy.
    Mr. Haselhurst: Will my hon. Friend take early action to assist those people whose properties have been blighted by the Government's decision and which run the risk of being blighted for perhaps another two years until the public inquiry has been completed? Does he agree that some people have been placed in a most unfortunate position and that there ought to be some help from the Government in the meantime?
    Mr. Tebbit: The best help that can be given to such people is to get the inquiry over, so that the result is known one way or the other, as soon as possible. As my right hon. Friend said on 17 December, it is our aim that owners of property that will be required for the development should have the opportunity of selling to the British Airports Authority at an unblighted price. We are considering how that could be achieved, but it is a matter that will be relevant after the inquiry, rather than before it.
    Mr. Newens: Is the hon. Gentleman aware that many people who were prepared to support a moderate increase in traffic at Stansted believe that the Government's decision is disastrous, since it provides for a much greater expansion? Is there any possibility that, even after the inquiry, the Government will consider carefully the possibility of putting a ceiling on the development of Stansted, at something like 4 million passengers a year?
    Mr. Tebbit: I understand well enough the problems faced by the constituents of the hon. Member and of my hon. Friend the Member for Saffron Walden (Mr. Haselhurst), but the hon.

    25
    Gentleman is asking that we should abandon the policy that we have put to the House and find another site for an airfield, in which case, no doubt, we would find just as many hon. Members and local residents saying "Please take it somewhere else".
    Mr. Jessel: As 1½ million people live under the noise shadow of Heathrow, will the Government definitely stand by the decision announced on 17 December not to permit the construction of a fifth terminal at Heathrow, despite the campaigns to the contrary by British Airways, the Civil Aviation Authority and other interests?
    Mr. Tebbit: We have heard all those arguments. We heard them before we came to our conclusion that it would not be right to go ahead with a fifth terminal. Nothing that we have heard in the 100 or so letters that we have had since then causes us to change our minds.

    World Commodities Centre
    Mr. Knoxasked the Secretary of Trade whether there have been any further developments concerning the proposed world commodities centre: and if he will make a statement.
    Mr. Parkinson: The Government have decided that, in view of the need for further reductions in public expenditure, they cannot provide finance for the building of new premises in London for the existing commodity organisations already established here and the associated conference centre. The Government are still prepared to consider any future proposal for establishing the common fund in London.
    Mr. Knox: Is that not a rather shortsighted decision? Is my hon. Friend aware that it places in jeopardy the continued presence of those commodity organisations already in the United Kingdom? Does he not think that a world commodities centre in the United Kingdom would be a good investment and a good way of spending the revenue from North Sea oil?
    Mr. Parkinson: I know that my hon. Friend has put a great deal of work into the proposal, but the cost to the Government would be considerable and all that we would have would be new offices for
    26
    the existing organisations and a place to hold conferences. The cost to the taxpayer would be considerable and would involve a running subsidy of at least £1 million a year in addition to the capital cost. That simply could not be afforded.
    Mr. Tinn: Is the hon. Gentleman aware that other Governments think it worth while, in their national interest, to offer considerable inducements to the establishment of such centres and to enable commodity associations to be centred in their capitals? Does he not recognise that there would be a considerable benefit to our balance of payments from such a centre?
    Mr. Parkinson: When the Government came to power we inherited a borrowing requirement which was too large and a public expenditure programme which was out of control. There are many desirable projects which we might like to have but which we simply cannot afford.

    Provincial Airports
    Mr. Thompsonasked the Secretary of State for Trade what assessment he has made of the extra employment opportunities which result from the operation of provincial airports.
    Mr. Tebbit: I have not made such an assessment. However, air transport is a flourishing sector of the economy which is likely to offer valuable new employment opportunities in the future. This is one of the considerations the Government had in mind in deciding to encourage the growth of traffic at provincial airports
    Mr. Thompson: I thank my hon. Friend for his answer. Does he agree that the abolition of categories A, B and C for airports would give even more employment opportunities, especially at provincial airports?
    Mr. Tebbit: I am not sure that my hon. Friend is right. It is vital that we get at least one major international gateway airport firmly established outside the South-East of England. In my view, that airport must be Manchester, and, therefore, we should do everything that we can to encourage that airport to offer a full range of services to all destinations in the world.
    Mr. Spriggs: Is the Minister aware that, because of the high and unacceptable rate of unemployment in the Liverpool and Merseyside areas, some development of Liverpool airport could bring some advantages to those leaving school and looking for jobs?
    Mr. Tebbit: I agree with the hon. Gentleman, and that is why I have been pleased that Liverpool has developed to such a great extent in the past year and has been so successful in attracting a wide range of traffic. One contributing factor to the improvement of services, and the improvement of employment, is that there is now a private enterprise airline improving the service that, regrettably, our nationalised airline felt it had to give up.
    Mr. Steen: Is my hon. Friend aware that the number of passengers passing through Liverpool airport has doubled in the past year? Is he further aware that there is more freight passing through Liverpool than through Stanstead? Will he upgrade the airport from C to B category and allow private enterprise to move ahead?
    Mr. Tebbit: My hon. Friend quotes impressive figures. I have to remind him that during part of that period there were extensive runway repairs at Manchester which forced traffic away from that airport. None the less, it was a creditable achievement. We shall do what we can to help Liverpool to expand but, basically, it is a matter of whether the traffic wishes to go there, rather than whether we can push it there.

STEEL INDUSTRY
Mr. John Silkin(by private notice) asked the Secretary of State for Industry whether he will make a statement on the effects of the extended dispute in the steel industry.
The Secretary of State for Industry (Sir Keith Joseph): The employees of the private steel companies have now been brought into the steel dispute, although they have no quarrel with their employers. The loss of business arising from this action, and from the continuing dispute in BSC, is putting steel firms and the jobs in them at risk.
So far steel users generally have been little affected by the dispute, but production and employment will be threatened on a much wider scale if and when steel supplies run out. It is in the interest of all who depend upon steel for their livelihood that the BSC and the unions should end this self-destructive dispute quickly on terms which the industry can afford.
Mr. Silkin: Will the right hon. Gentleman indicate the value of lost production to date? He said that it is little. However, I observed a report in the weekend press which suggested that there was a conspiracy of silence between the CBI and the BSC as to the damage that had been done.
Is it not a fact that it is the Government's refusal to intervene—andespecially the inaction and complacency of the right hon. Gentleman—that has led us into a strike that is coming to its sixth week? Is not the real problem in the contraction of the British steel industry caused by the contraction of British manufacturing industry? Has that contraction not been accelerated by the Government's economic policies and by their failure to protect the industries that are at greatest risk? Is it not true that by cutting the economy the right hon. Gentleman and his colleagues are successfully cutting the British steel industry's throat?
Sir K. Joseph: I am unable to give a precise answer about the loss of production. From such figures that have been published, the quantity of production appears to have been very little down—about 1 per cent. in the third week of the strike. The real damage cannot be

29
measured in lost production only, serious though that is. The real damage is to confidence and to future orders for British steel.
The right hon. Gentleman's second question showed that, once again, he has flinched from putting what he really means. He has asked me to intervene when what he really means—I do not know why he does not say so openly—is that he wishes to Government to find more money from the long-suffering taxpayer. [HON. MEMBERS: "Yes."] Hon. Members may say "Yes", but most taxpayers have smaller earnings than the £112 per week average earnings of a steel worker.
It remains true that it is not in the interests of the taxpayers, the steel workers or the country as a whole that the taxpayer should, once again, pay money that the workers can earn by the higher productivity that is available. It is deeply in the interests of the steel workers to become internationally competitive. It serves those workers very ill when Opposition Members reject that basic argument.
The right hon. Gentleman charges the Government, after nine months in office, with bringing about the contraction of British manufacturing industry that was manifest during the five years of the previous Labour Administration. It is true that one of the factors reducing the demand for British steel has been the fall in demand of British steel-using industries. That is deeply tragic.
Mr. Silkin: The right hon. Gentleman is quite wrong to say that I have not said openly what I believe—I have said it in debate after debate—and that proves that he does not listen, any more than he listens—[Interruption.] If the hon. Member for St. Marylebone (Mr. Baker) will read the reports in Hansard of the last few debates he will find it at the beginning.
The right hon. Gentleman does not listen, any more than he has listened to those European competitors he praises so much or to Commissioner Vredeling, none of whom can understand what his rigid timetable is meant to achieve.
Mr. Kenneth Baker: Does my right hon. Friend agree that, following the decision by the House of Lords on Friday, which reversed the decision of the Court of Appeal, the law on secondary picket-
30
ing is in a state of considerable confusion?
Will the Government take an early opportunity to clarify the law and to narrow the range of trade union immunities, especially the immunity enjoyed against an action by an employer in a trade dispute when that employer is not involved in the dispute?
Sir K. Joseph: It appears deplorable to many that the law should allow the private steel sector, where there is no quarrel or dispute between employers and employees, to be brought into the BSC dispute. However, my hon. Friend's question is one for my right hon. Friend the Secretary of State for Employment.
Mr David Steel: Has the Secretary of State studied the reports on the success of the French steel industry following the restructuring carried out and back by the Government in 1978? Does not the right hon. Gentleman think that there are lessons to be learnt from that?
Is the right hon. Gentleman aware that there is a growing feeling among the public, including among the employers in the private steel industry, that the Government's steadfast refusal to take any action smacks not so much of the principles of Toryism as of the principles of anarchy?
Sir K. Joseph: The right hon. Gentleman is one of those who think that the long-suffering taxpayers—who number most wage earners among them—should be asked to make good earnings that the steel workers could make good for themselves.
It is true that a number of foreign steel industries, especially the Germans and the Dutch, but also the French, have either turned from loss to profit over the past two years, or are well on their way to doing so, by their own efforts and despite the difficulties facing steel industries.
Several Hon. Members rose—
Mr. Speaker: Order. We are dealing with a reply to a private notice question, not a statement. It is an extension of Question Time. I am prepared to call another three hon. Members from each side of the House.
Mr. Emery: Does my right hon. Friend accept that there is considerable pressure from workers and trade unionists in the West Country—whose average earnings are £60 to £80 per week—that no further Government subsidy should be paid to the steel industry that would enable steel workers to receive wages financed by the taxpayer that are higher than those that can be earned in the West Country?
Sir K. Joseph: I am sure that no one grudges higher earnings to the steel workers, but many people realise that the steel workers can earn more and need not, therefore, turn to the taxpayer.
Mr. Tinn: Surely the right hon. Gentleman is aware that a considerable proportion of the money involved in BSC's financial difficulties comes from the interest payments on debt incurred as part of the modernisation programme in constituencies such as my own—a modernisation programme towards which the steel workers have made their own contribution, with over 10,000 jobs lost in my area, and more in other parts of the country. Is it not right that the community should make its contribution by easing the burden of these repayments? Such an action could produce a settlement of this damaging strike.
Sir K. Joseph: The interest payments are less, proportionately, in the case of British Steel than in the case of practically all its European competitors. The last £1,500 million invested by the taxpayer in the British Steel Corporation pays no interest at all; it is public dividend capital.
Mr. Patrick McNair-Wilson: Since there still appear to be some lingering feelings in both the private sector and elsewhere that the Government can be coerced into intervening, will my right hon. Friend categorically and unequivocally state that the Government will not intervene, will not usurp the management function, and will not provide any more money?
Sir K. Joseph: I am grateful to my hon. Friend for giving me the chance to say again that, despite the disagreement of the right hon. Member for Deptford (Mr Silkin), it is deeply in the interests of the steel workers that they should become more competitive. In that way their jobs can be saved. In that way they
32
can earn more and have secure employment. Further rescue by the taxpayer will not help them.
Mr. Winnick: It is not clear that the responsibility for the lay-offs that will inevitably come will lie with the Government in refusing to lift a finger to bring about conciliation between the two sides, as well as with the Government's attitude in supporting the employers in refusing to make a sensible offer? If the allegations of telephone tapping at strike headquarters are true, should not these be looked into immediately by the Home Secretary?
Sir K. Joseph: Is it not possible for the hon. Gentleman to see that if the steel workers do not co-operate in increasing their competitiveness they will find themselves yet further behind their rivals, who are accelerating way ahead of us in increasing productivity? It is not in the interests of the steel workers to be lulled into ignoring their own self-interest in higher competitiveness.
Mr Hill: Is not my right hon. Friend aware that this strike has now moved on? There is the odour now of a politically motivated strike? I feel quite sure that my right hon. Friend and his right hon. Friends will do all they can to protect the employers, the employees and the public, who are not engaged in this dispute, by introducing the relevant legislation at the earliest possible moment.
Sir K. Joseph: Questions about legislation on that subject are for my right hon. Friend the Secretary of State for Employment.
Mr. John Morris: Will the Secretary of State answer a very simple question? For how long do the Secretary of State and the Prime Minister intend to maintain their stance of non-intervention and allow industry to bleed to death?
Sir K. Joseph: We hope that the management and unions will soon be negotiating very seriously, and with good results.
Mr. John Silkin: The Secretary of State said a moment ago that the future of the steel industry lay entirely in the hands of the steel workers. Is he not ignoring two facts? The first is that that they have themselves consented, over the past two years, to reductions of 35,000 in their work force. If he does not think that that

33
is working for productivity, I do not know what it is. Secondly, is not the real issue the demand for steel? Is not the fundamental point that the Government's policy is destroying manufacturing industry, and hence destroying the demand for steel?
Sir K. Joseph: I do not think that I used the words that the right hon. Gentleman says that I used, but certainly the demand for steel is not, in general, a problem. The demand for British steel from the British Steel Corporation is the problem. The demand for steel last year was at record levels in the world as a whole. We failed to hold our share of the market, partly because, as the right hon. Gentleman correctly says, our own steel-using industries have not been doing well, but also because our prices — and, to some extent, I fear, our quality and our delivery — have not been such as to hold our customers at home and abroad. There are large users of steel in this country who have despaired of getting the quality and the delivery that they need, and have therefore turned to overseas sources. I must include both management and workers in the responsibility for that.
Mr. John Grant: On a point of order, Mr. Speaker. May I suggest to you, Sir, that the Prime Minister, in a reply that she gave last week, on the question of EEC steel, to my right hon. and learned Friend the Member for Aberavon (Mr. Morris), seriously misled the House? My right hon. and learned Friend's question quite clearly related to the criticism that Commissioner Vredeling has expressed of the failure of the Government to apply for part of the £70 million that was earmarked in the Community budget for this purpose. When the Prime Minister replied, she led the House to believe — and the Official Report confirms it — that the Government have made applications for steel aid of this kind. That is not so, and I now have a letter from the Under-Secretary of State for Employment which spells out very clearly that
34
the Government have taken a conscious decision not to apply for that aid. In view of that fact, I suggest that the right hon. Lady owes the House an apology.
Sir K. Joseph: Further to the point of order, Mr. Speaker. The hon. Gentleman is, wittingly or unwittingly, misstating the facts. My hon. Friend the Under-Secretary of State for Employment is discussing applications that might become relevant under a scheme that has not yet been adopted. If the hon. Gentleman wishes to discuss that scheme, I can tell him that only one of the EEC partners is in favour of it, and that we are one of the majority of the partners who are against the scheme. The scheme is not in action; it has not been agreed. It therefore does not represent money that is available for us to apply for. The hon. Gentleman is on a bad point.
Mr. Grant: Further to the point of order, Mr. Speaker. My point of order concerned the Prime Minister's answer. If what the right hon. Gentleman has said was the case, we should have been told so at Question Time last week. We should not have had to drag it from a reluctant Government in this way.
Several Hon. Members rose—
Mr. Speaker: Order. I have told the House on previous occasions that hon. Members cannot expect me to rule on points of order relating to whether the content of a Minister's reply is satisfactory or—to use an old parliamentary expression—is misleading the House. It is not within my domain to rule in that way, and the House should bear it in mind.

STATUTORY INSTRUMENTS, &c.
Ordered,
That the draft Sea Fish Industry Act 1970 (Increase in Rate of Levy) Order 1980 be referred to a Standing Committee on Statutory Instruments, & c.—[Mr. St. John-Stevas.]

WELSH AFFAIRS
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wakeham.]
3.48 pm
The Secretary of State for Wales (Mr. Nicholas Edwards): This is the second Welsh day debate since the general election. Whatever other criticisms may be levelled against me and my colleagues today, I hope at least that no one will suggest that I am reluctant to provide Welsh Members with opportunities for debate. Our determination to restore the Welsh day, abandoned by our predecessors, and our decision to bring it forward at this difficult time, is a recognition of the seriousness of the situation we face and an acknowledgement that it should be fully debated.
The future of the coal and steel industries and the industrial and social consequences of the BSC's proposals will form the centrepiece of the debate and I shall deal with them before commenting on a few other matters of great importance to Wales.
First, I want to say a word about the economic background to those events. They are events which any Secretary of State for Wales, faced already with a depressing inheritance of social and industrial difficulties, would do almost anything to avoid. But no Secretary of State can, any more than can Government or people, dodge and evade economic reality for ever. It is at least in part because the previous Administration tried to do so that our problems are so formidable today.
Search though I may, I can find no way of avoiding the need to adjust to the further doubling, within the last 12 months, of world oil prices, or of the necessity to face up to the financial consequences of our spending far more than we produce. Neither am I able to see a way in which our industry can be insulated from the need to be competitive, and adjust to the size of the market it can obtain.
As I reminded an audience in my constituency 10 days ago, by spending more than we earn we are adding staggering amounts to the burden of public debt. The previous Government added £41
36
billion to it during their period in office, and it is likely that about £9 billion will be added to it this year. The consequence is that we are now spending about £10 billion each year in debt interest—more than the total spent each year on the health and personal social services, on education or on defence.
The inescapable consequence of the need to fund this huge burden of debt is high interest rates, which not only have unpleasant consequences for individuals, but which destroy industry, large and small, so that we produce even less. Unless we can escape from this destructive cycle I can see no way to avoid sharply lower living standards, and unemployment certainly higher than we are likely to face as a consequence of adjusting our spending to our output.
Faced with that situation there is no alternative—at least I have seen none seriously suggested—to the need either to cut expenditure or to raise taxes. There is a way—that is, to produce more—but I cannot see that happening with higher taxes and higher interest rates. Therefore, I accept, and support my colleagues in, the unpleasant but necessary task of reducing public expenditure.
That brings me to the argument whether we should continue using public money to sustain our steel industry at a larger size than it can itself support, by selling competitively in the market. Of course, I understand the argument of those who say that we face a temporary recession and that we should support the industry until the market recovers. But I have to face two unpalatable facts. The first is that if we add to the already enormous sums that have been paid into the steel industry in recent years that money will either have to come from the social services or by way of higher interest rates and taxes, which are likely to reduce output and destroy jobs in other industries.
Secondly, I have no evidence, and the Government have no evidence, to support the view that BSC's long-term assessment of the market is wrong or too pessimistic. The consequences of past Government interference are with us today, and I am not encouraged to repeat the process.
There are those who say—and no doubt it will be said today—that the BSC's decisions are entirely determined

37
by the Government's adherence to the target that the BSC should break even by the end of the financial year 1980–81. But that is not a new objective. It was an objective that was given the backing of the previous Secretary of State for Industry, who sought to achieve it a year earlier. He stated in his White Paper—"British Steel Corporation: the Road to Viability"—:
"The over-capacity that would result from unchanged policies would be more costly than either the Corporation or the country can afford".
The reality is that what now compels the BSC to act is not a financial target but the need to remain competitive with other countries' steel industries which are not standing still but which are moving still further ahead in their competitive position.
If the BSC does not adjust to its reduced market, losses will be bound to accelerate upwards again very sharply. No steel company in the world can operate so far below capacity and remain competitive.
Whatever the size of the future market, the BSC's ability to take its full share of it, to keep out imports and to export depends upon its ability to reduce its manning to the level of its competitors. If it does that, with all the new plant that is the result of recent investment, it has the prospect of success and of expanding production in future.
The Government are being asked to intervene in two ways—to impose a different judgment on the BSC of the size of the market—I cannot believe that would be right—and to delay. The TUC, in the meeting on Thursday at which I was present, asked for more time. Unfortunately, there is no reason to think that our problem will grow any easier by postponing it, although it is up to the BSC to negotiate with unions the time table for the reduction in manpower, as well as the details of the future structure of the industry.
Mr. Dafydd Wigley: The Minister states that one of the questions facing the Governmeint is that of judgment of the size of the market. Does he not accept that one of the options open to the Government is to control the size of that market in regard to imports, particularly from steel-producing industries that are indirectly subsidised through subsidies on coking coal? Does not that play a major part in the equation?
Mr. Edwards: I shall talk about coking coal later. With regard to import controls, we must remember that we are a trading nation. If we adopted additional controls other than those already exercised by the EEC, we would further damage our trade in the world. Also, our other industries, which depend on the steel industry for their supplies, would have less competitive supplies on which to base their efforts.
The BSC's decisions clearly have very serious consequences for the coal industry in Wales, although the real reason for the reduction in the demand for coking coal is the inability to sell steel rather than the closure or scaling down of plants. It should also be recognised that the coking coal problem is only part of the problem facing the NCB in South Wales, and the consequences of the BSC's position should be seen in context. Out of a total output of Welsh coal of 10·5 million tonnes, less than a quarter goes to the BSC in Wales. As hon. Members know, there are other high cost pits that the NCB believe might only have a limited life.
Obviously, a substantial reduction of consumption by the BSC will put South Wales pits at risk and lead to closures and loss of jobs, but they would be far less than some of the figures being bandied about, which include high cost pits that might have to be closed over a period, whatever the situation in the steel industry. No firm decisions have been taken by the NCB either on the timing or numbers, although the local management has put forward a number of possibilities.
There are no firm proposals from the National Coal Board, and I am unable therefore, at present to discuss firm figures here today.
Mr. Edward Rowlands: Do not the Minister's remarks contest the view of Mr. Philip Weekes, area director of the National Coal Board in South Wales, that the consequences of the combination of the rundown at the BSC and the large-scale imports of coking coal into South Wales—40 per cent. to 50 per cent. of the BSC's needs—will be massive closures and large-scale unemployment in the coal industry? Does the Minister deny the figures put forward by Mr. Weekes?
Mr. Edwards: Mr. Weekes has put forward a number of different figures on a number of different occasions.
Mr. Rowlands: That is not true.
Mr. Edwards: With respect, I have seen a great many different sets of figures. For example, I know that Mr. Weekes told a meeting of Labour Members recently that up to 10 pits might have to close. My point is that only a number of those closures are a result of the reduction in coking coal consumption. The coking coal problem is only a part of the problem which faces the National Coal Board in South Wales.
Mr. Rowlands: Has not the Minister had a meeting with Mr. Weekes? What did Mr. Weekes say about the number of jobs lost and pits closed as a result of the cutback in steel production at the BSC, and the amount of coal imported from the United States and Wales? Will the Minister give figures of the potential number of pit closures and lost jobs that have been given to him by the NCB in Wales? Does he deny that that is a reasonable assessment made by the NCB?
Mr. Edwards: I have been given a number of different estimates over a period by the National Coal Board. It has taken no firm decisions.
I have been asked about a subsidy for coking coal. The Government's position is quite clear. They have authorised, as part of their coal strategy, a substantial investment programme of over £600 million and are providing grants of more than £250 million. The Government have authorised the NCB to provide a coking coal subsidy from within its own finances and subject to its own commercial judgment. The NCB has asked for an additional £18 million towards the agreed cost of £33 million, but, since the subsidies and cash limits were agreed, the price of oil has risen sharply raising the Coal Board's headroom and the Government can see no reason why, on the scale of a total turnover of around £3,000 million, the NCB should not be able to find the necessary funds. At the request of the TUC last Thursday, we are again pressing the chairmen of the two industries to seek agreement.
The Government accept their share of the responsibility for cushioning the impact of change, and they will seek to do everything possible to encourage and assist the growth of new industries in affected parts of South Wales.
Mr. Roy Hughes: Can the Secretary of State elucidate the conundrum on coking coal imports for Llanwern? According to the managing director of the BSC Welsh division, a contract was signed some years ago for what he called very dear coking coal from Germany. Apparently that coking coal is not going to Llanwern, but is being diverted to Redcar. The second part of the cunundrum is that the BSC is talking about signing contracts for the import of cheap American coal for Llanwern. I think that some elucidation is required.
Mr. Edwards: That is a management decision for the BSC. If British Steel is to be competitive, it must have competitive coal.
I turn to the question of responsibility for encouraging change and development. I know that there will be anxiety about assisted area status. The Government have already made it clear that the grading of the relevant areas will be reviewed. But the BSC's plans are still the subject of negotiation with the unions—which has been delayed by the present industrial dispute—and we do not yet know just what the relative impact of closures will be on the travel-to-work areas most likely to be affected. My right hon. Friend the Secretary of State for Industry is reviewing the situation and will be making an announcement as soon as possible after final decisions have been taken by the BSC following consultation with the unions.
I am, however, most anxious that an early start should be made in providing the infrastructure needed to attract new industries to the area in Wales affected by the BSC's plans. I should add that my right hon. Friend the Secretary of State for Industry is urgently considering what may be necessary in the areas affected in England.
The prime need is for the acquisition, preparation and development of industrial sites together with a substantial programme of advance factories within the areas most affected, and taking advantage of the excellent communications provided by the M4 and the trunk road and high speed rail networks. There will be need for a continuing programme over a number of years which can be worked out as the situation becomes clearer. What is needed now is to launch a new infrastructure programme so that we can get

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things under way and give people the assurance that action will be taken.
I can now tell the House that within the reduced public expenditure programme we have been discussing the Government are planning to make available some £48 million over the next two years for remedial measures of this kind. The major part of these additional resources will go to the Welsh Development Agency, which is preparing detailed plans for this purpose. I have also asked the Cwmbran development corporation to discuss with local authorities whether they could develop industrial land in or around the new town as a contribution to providing alternative jobs in the Llanwern area. I am also in touch with BSC Industry to see what further contributions it can make.
I have discussed the situation with the WDA. My announcement today will enable it to get on without delay with a substantial programme of acquisition and development of industrial sites which will be available for both public sector and private sector development. I should again emphasise, as I have before, that we are determined to obtain an increasing private sector participation in the development of industrial sites, but this will take time, and the programme that I am announcing is an essential first stage.
Apart from this new programme, in the coming financial year the WDA will be spending about £12 million from its normal programme in the areas affected by the closures, including £8·5 million in Ebb Vale and Cardiff, while I have already announced a programme totaling £13 million for the first year—including BSC Industry's contribution—at Shot ton.
I should add that despite the overriding necessity about which I have spoken earlier to obtain public expenditure reductions I have defended the key motorway and trunk road programme, including the M4 and A55, which will proceed on the basis already announced.
All this is clear evidence of the Government's determination to tackle on a realistic scale the task of providing the infrastructure that will enable modern industries to develop in Wales.
Mr. Ioan Evans: The right hon. Gentleman is talking about attracting new industry to Wales, but there are the existing industries. Last July he said
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that he was considering investment in the Phurnacite smokeless fuel plant, which is affecting coal pits in Wales. What decision has been reached by the Government on that investment?
Mr. Edwards: That is the responsibility of my right hon. Friend, who will in due course be making a statement about the future strategy of the coal industry. It is primarily a management responsibility of the National Coal Board. The hon. Gentleman knows that there are difficulties, which the ANCIT proposals do not overcome, in connection with the environment. There is also the fact that, even with the increased price of gas, it is unlikely that many of the supplying pits will become competitive. That matter will be dealt with in due course.
The contribution by the Government to the job of assisting with change is not confined to the WDA and Cwmbran development corporation programmes or to the construction of trunk roads. I recently announced an urban aid programme for 1980–81 amounting to a record £8·4 million. In considering new schemes for approval, I paid particular attention to the needs of areas affected by job losses in the steel industry. The schemes that I have approved in these areas will assist both in alleviating the social consequences of major redundancies and in attracting new employment by promoting the development of industrial sites and the construction of small factory units. It will not be the last such programme.
The MSC also has a major role to play. At Shotton it quickly established a job centre at the works and it is carrying out vigorous training programmes. It is preparing to do the same in the South Wales closure areas. I am well aware that there is great anxiety about the future of the skillcentres, particularly those at Llanelli and Blaenau Gwent. The MSC has been concerned about the under-utilisation of its centres and the need to make effective use of resources, and it hopes to provide facilities to train more individuals than at present at less cost. I have made it very clear to the chairman, Sir Richard O'Brien, and to the commission that I consider that there are other important factors as well—the geographical availability of such centres and the part they have to play at a time when so many existing jobs are under threat. He knows very well the importance that I attach to

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the work of these centres. I am glad that the MSC has decided to undertake further consultation with local committees and others and has undertaken to provide adequately for major redundancies. I shall continue to keep in close touch with the chairman and with my right hon. Friend the Secretary of State for Employment on this important issue.
Mr. Keith Best: Does my right hon. Friend accept that, whilst it is important to provide as many training facilities as possible within the skillcentres and others that he has mentioned, the best form of training is always undertaken within existing industry. Does he also accept that there is still a large capacity within workshops in existing industry that could be used for training purposes? Will he concentrate upon that aspect?
Mr. Edwards: I have discussed that matter with the chairman of the MSC, and I know that it is in the Commission's mind.
I have little doubt that I shall be asked about Inmos, I wish to make it clear that no decision has been taken by the Government about the request from the NEB for the second tranche of £25 million funding for the project or its location. I would only say at this stage that I fully understand the importance of the issue, and I am in no doubt that there are many very attractive sites available in Wales and other regions.
Anxiety has been expressed outside the House—and it was expressed in the House earlier this afternoon—that the Government are not taking full advantage of the assistance available from the EEC. That is not true. The Government are making full use of existing schemes. The Commission was advised of the BSC's proposals in early December. Formal applications cannot be submitted until detailed agreement has been reached between the BSC and the unions. However, as with Shotton when £7·7 million was allocated by Commissioner Vredeling himself, this will be done at the earliest possible date. In addition, officials of my Department met an EEC representative in Wales on 31 December for dicussions in the light of the BSC's proposals and the implication of these proposals for South Wales. To eliminate any doubt, we have undertaken to examine with the TUC
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whether there is any further EEC aid that we could possibly obtain under existing schemes. As to the proposed social measures, involving subsidised jobs, these proposals have not been agreed and are at present supported only by Belgium.
It is clear from everything that I have said that the industrial prospects for the immediate future are extremely difficult. I would be the last person to underestimate the difficulties we face, which are not confined to South Wales and Shotton. The announcements last week of the impending closures of the Bernard Wardle factory at Caernarvon and Smiths Industries watch factory at Ystradgynlais made that point very sharply. The Bernard Wardle closure is, I understand, due to the sharp decline in orders for its products, but my officials are meeting with the company's manager today seeking further information.
Mr. Wigley rose—
Mr. Edwards: When I have had a report I will be prepared to discuss the matter further with the hon. Member for Caernarvon (Mr. Wigley) should he wish to discuss it. It will not be easy to fill this factory, though perhaps we can take some encouragement from the facts that GKN factory in my own constituency and the Wallis and Linnell factory at Blaenau Ffestiniog have both been filled again quickly. Last week's news that Borg Warner were to concentrate its production at Kenfig also came as a considerable relief.
Mr. Wigley: Does the Secretary of State accept that over the last two and a half years there has been virtually no reduction in the market demand for the product at the Caernarvon factory of Bernard Wardle and that last year this factory made a profit in excess of £600,000? In these circumstances, does not the Secretary of State accept that this closure is the worst manifestation of the ugly face of capitalism coming from an asset stripping operation as a substitute for moving the work elsewhere?
Mr. Edwards: I shall not comment in detail until I have had a report from today's discussions. I know that the total market for the goods supplied by this company has fallen and that the company has a more modern and more recently equipped factory elsewhere.

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Sometimes good fortune flows in our direction, as in the case of the Borg Warner plant, and sometimes we lose out. The Borg Warner plant is evidence that there is no particular prejudice by managements against Wales where it is in the interests of good management to go to the most recently equipped and modern factory.
Because the restructuring of the BSC has taken place too slowly and too late, we have had to attempt to restore the industrial base in an uncomfortably short space of time and in a period of world recession. It is absurd and a serious disservice to Wales to talk about the creation of an industrial desert. Our industry is far more diverse than it used to be. We have good communications and a good labour force. No one who has visited the industrial estates in Glamorgan or at the Heads of the Valleys could possibly say this was an industrial desert. During our last debate on the Welsh economy I said that there were 18,000 jobs in the pipeline from projects involving Government factories or Government assistance.
Last year my industry department handled over 700 inquiries by industrialists and handled over 800 visits. But in the face of the economic recession the level of interest in the second half of the year was on a par with the second half of 1978. These figures are reflected in the all-time record of 1979 of factory allocations. These reached 140, promising just under 5,000 jobs. In just the first few weeks of this year 10 advance factories were firmly allocated, promising 700 jobs, and a further 80 provisional allocations are being processed.
I am not underestimating the difficulties, but these figures show that there is still a good deal of steam in the demand for investment in Wales.
The allocation of a 500,000 sq ft factory at Rassau to Merry weather and Son with the prospect of 500 jobs and the expansion of Alfred Teves, also at Ebbw Vale, are equally encouraging developments. I am also encouraged by the quality and diversity of major projects attracted to Wales recently. Aiwa at Penyfan, the Ferranti development at Cwmbran, Merryweather at Ebbw Vale, the selection of Shotton for the titanium plant and the arrival of the new AA office at Cardiff, are all good examples.
Mr. Barry Jones: Can I assume from the assertions of the Secretary of State that he is confident that Deeside, which will need 8,000 jobs within three months, will speedily obtain those jobs? Will he also confirm that he fought against the Secretary of State for Industry's policy of non-intervention and is it not his ill-luck that he must be the apologist in Wales for the policies he opposed in Cabinet?
Mr. Edwards: I hardly believe that the policy that I have announced today indicates that the Government are standing back from their responsibilities or that they are not encouraging fresh industrial development in Wales. I have not attempted to underestimate the difficulties but the hon. Gentleman knows that there are very attractive sites on Deeside and that the area has good prospects for the future.
Mr. Tom Ellis: The right hon. Gentleman has poured scorn on the allegations that Wales is being turned into an industrial desert. Will he accept that there are 11 per cent. fewer men in employment in Wales today than there were 10 years ago?
Mr. Edwards: I know that there is a great deal more diversity and strength in the Welsh economy today.
I have said little about industry in the rural areas, but hon. Members will have the opportunity in the Standing Committee on Statutory Instruments & c. to debate the work of DBRW on Wednesday. However, I want to say something about agriculture.
There is no way that farmers, any more than any other group in the community, can be insulated from the doubling of the world oil price and other economic pressures. The publication shortly of the annual White Paper will no doubt show that there has been a rise in costs for Welsh farmers and a fall in their incomes. But the Government are determined to encourage agricultural production, and I find, as I go round Wales that farmers fully appreciate how much, despite the difficulties, we have been able to do.
Farmers have seen three green pound devaluations in the past year which, together with a strong pound, have largely eliminated the currency gap. The increases in milk prices have done something to

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cushion the greatly reduced margins of milk producers, while the increases in the hill livestock compensatory allowances have gone a good way to restore confidence in the hills after last years severe difficulties.
Farmers understand very well the problems that lie ahead during a period when prices must be held in Europe when costs are rising. I believe, however, that confidence has been maintained by our evident determination to assist them, and by our equal determination to take the measures that are necessary to bring down interest rates and inflation.
Despite the need for expenditure cuts my right hon. Friend the Minister of Agriculture, Fisheries and Food has been able to announce the continuation of a substantial capital grant scheme. We have set out to simplify it and to restrict assistance given to the largest farm businesses, but we have maintained the general level of assistance available to farmers in the less favoured areas, and I am certain that hill farmers will welcome the enhanced grants now available for sheep housing.
My reference to less favoured areas gives me the opportunity to say something here on the issue of marginal land. My right hon. Friend answered a parliamentry question on the subject on Friday and about two weeks ago I met representatives of the NFU marginal land committee to explain that we have now reached the stage when it is absolutely necessary for field inspections to take place, particularly in England where much of the land is more scattered than in Wales, before we can confirm the areas which will meet the less favoured areas criteria of the EEC Commission.
I am afraid there is no way of avoiding this and it will take time, but I hope to complete it next year. I have to repeat my right hon. Friend's warning—a warning also given by the previous Government—that we cannot give an undertaking at this stage that the less favoured areas will be extended as a result of the survey or that extra funds will be available. There will no doubt be disappointment that we cannot get the job done more quickly, but I know that those who have studied it understand the problem and have been reassured to
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know that, despite the difficulties, we are pressing on with the task.
I turn now to the floods that occurred on 27 and 28 December. Fortunately, loss of life was limited, but about 8,100 houses were flooded in South Wales. In addition, a great deal of other damage was done.
The emergency services, public services and local authorities responded immediately to the emergency and I should like to pay tribute to their efforts. The Under-Secretary of State, my hon. Friend the Member for Cardiff, North-West (Mr. Roberts), and I visited some of the most seriously affected areas. My hon. Friend the Under-Secretary has since discussed some of the problems with representatives of the Welsh Counties Committee and the Council for the Principality.
I emphasise that the expenditure incurred by local authorities in taking steps under section 138 of the Local Government Act 1972 in dealing with the emergency, including any help from individuals, qualifies for rate support grant. In addition, there are Government grants for approved land drainage works undertaken by the Welsh Water Authority and district councils, and my officials are in close touch with the bodies concerned about the acceleration and revision of schemes. Grants may also be paid to farmers under the farm and capital grant scheme.
The Government have also announced that in view of the gravity of the disaster they will pay a special grant to local authorities at the rate of 75 per cent. of net additional expenditure above the product of a 1p rate incurred in dealing with flood damage. A letter setting out details and inviting claims from county and district councils was issued by my Department on 25 January.
It is not, therefore, true that the local authorities have had to shoulder the burden alone, but through rate support grant and through specific grants they will receive substantial assistance. It seems to me right that the responsibility for deciding exactly what is needed locally should be left to them.
Several Welsh authorities asked to be declared a disaster area. However, this would have no significance either in English law or for the purposes of EEC

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aid. As to EEC aid, the possibility of applying for European regional development fund aid in respect of new or revised flood prevention schemes which would help the development of industry is being examined.
Meanwhile, on 9 January two senior officials of the European Commission visited South Wales at my invitation. Following that visit, the Commission has made available to Wales emergency fund aid amounting to £176,000. This aid will be distributed by district councils as quickly as possible at a flat rate per house to those householders whose homes were flooded. People have been asked to get in touch with their local authority as soon as possible in order that the fund may fairly be divided between all involved.
There have been complaints that insufficient warning was given of the impending flood. The issue of adequate flood warning depends on local circumstances. Flood warnings were issued by the Welsh Water Authority but were not, I think, in every case passed on. The local authorities and the police are now reviewing the matter to ensure that the system works better in future, and I am asking to be kept fully informed of their conclusions.
While we hope that flooding on a similar scale will not occur in the near future, it obviously may happen at any time. All flood defences are being reviewed. The proposed flood prevention scheme for the River Taff in Cardiff is being speeded up and will now take about three years to complete. Meanwhile, I am assured by the Welsh Water Authority that all breaches in defences have been repaired, either permanently or to a strong enough standard to afford protection until permanent and, where necessary, improved defences can be provided.
Sir Raymond Gower: Just after the flooding, statements were made by or on behalf of one or two local authorities, including county authorities, suggesting that they had to pay very large sums of compensation—in one case it was said, I think, £½million—before they could obtain any help from Government sources. Is my right hon. Friend able to reply to that?
Mr. Edwards: I have already made clear that any relevant expenditure quali-
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fies for rate support grant in the normal way, and my hon. Friend knows that that involves a substantial contribution from the Government.
I do not propose to repeat what I said recently in the Grand Committee about the Health Service or to duplicate the discussions taking place in the appropriate Committees on education, housing, the Land Authority or local government finance, but I want to say a brief word about the major transfer of responsibility for rate support grant to the Welsh Office.
It has for a long time been a weakness that the Secretary of State for Wales should not have responsibility for the administration of rate support grant in Wales, despite the fact that he is responsible for local government in Wales and that the grant represents such a large share of public spending there. It was an obvious step to take in the evolutionary development in the responsibilities of the Welsh Office and will, I believe, enable us to react with greater sensitivity to the particular needs of Welsh local authorities.
Some have suggested that Wales will get less under this arrangement than at present. There are no reasonable grounds at all for thinking that. Certainly, it has never been the experience of Scotland, which has for long operated under similar arrangements. Wales did well out of the RSG distribution this year, and I see no reason why we should do less well in future.
I think it right to take this opportunity to say something about the Welsh language broadcasting. It is my intention within the next few weeks to set out in a comprehensive form the Government's view on the Welsh language and the way in which we can fulfil our clear commitment to support it. We shall shortly be issuing a consultation document on the place of the Welsh language in the curriculum.
We have set in train the legislative steps to provide additional financial support for Welsh language teaching and, despite the financial crisis, we are planning further to improve the present financial backing given by the Government to the language. I have already announced support on an increased scale for the National Eisteddfod, which will enable

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those responsible to plan ahead with greater confidence. All this is an indication of our commitment.
The proper time to debate all this will be, I suggest, after I have made the announcements that I have promised, but I think it right to take this opportunity to explain the change of policy that has taken place with regard to Welsh language broadcasting. Having heard all the arguments and considered all the possibilities, I changed my mind, and I make no apology for that. There is nothing to be said for sticking obstinately to a policy when one comes to believe that it is wrong.
The arrangements that we are now proposing will, we hope, achieve at least 20 hours of Welsh television programmes a week from the autumn of 1982, and my right hon. Friend and his officials are having discussions with the broadcasting authorities about this. The Broadcasting Bill will make provision to ensure that there is consultation about the scheduling of Welsh language broadcasts.
We expect that in this way clashes will be avoided and that the Welsh language programmes will get their fair share of peak viewing times. The end result will be that when one of the four channels in operation is showing Welsh language programmes the other three will be showing English language programmes.
In providing a Welsh language television service there are two claims to be met: the interests of those who speak the language, and the interests of a larger number who do not. The one-channel solution was a satisfactory answer to the problem provided only that the fourth channel was not operating on a United Kingdom basis. To use the fourth channel exclusively for Welsh language programmes would mean that Wales would have to opt out of the United Kingdom network for nearly 50 per cent. of transmission time. It would be an almost impossible task to reschedule the programmes that were missed. That task becomes much simpler if the Welsh language programmes are spread over two channels.
I believe that there would have been great anger in Wales when people discovered that they were being deprived of the opportunity to see the greater part
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of what will be a very attractive new channel. And even if the single channel were available for Welsh language programmes, I do not believe that it would be in the interests of the Welsh language. It would have had the effect of confining the new channel to a comparatively small dedicated band of people who would watch Welsh language programmes irrespective of their content or quality. Far from increasing the audience, it would have reduced it.
Our solution gives as much Welsh language broadcasting as the other, it gives wider choice to the Welsh people, it enables them to enjoy much of the new English programmes on the fourth channel if they want to, it gives a sounder financial base, and it prevents the exile of Welsh language broadcasting into a ghetto. I believe that it is the best solution to a difficult problem to which there is no perfect answer.
Mr. Alec Jones: I understand the reasons which the Secretary of State is now advocating for having the Welsh language on two channels, but all those reasons existed when he wrote what he did in the Conservative manifesto and when he made a television broadcast even after the election. Nothing has changed. What persuaded him to change his mind? Was it not pressure inside the Government?
Mr. Edwards: No, it was not pressure from inside the Government, and it was not a battle. I listened to the arguments and concluded, as did all my colleagues, that this was the right decision to take.
To return to the central issue, I have not sought to play down the scale of the crisis that we face. What I have argued is that if we fail to face economic reality the consequences will be even more serious. There comes a moment when one has to face facts. Even the previous Government, though they tried, could not avoid a reduction of about 7,000 in the numbers employed in steel in Wales and of nearly 3,000 in the coal industry there. Even as they left office they knew that further substantial job losses would have to follow in both industries. They could not prevent a massive increase in unemployment during their period in office.
The argument, therefore, cannot be about the need for change, only about its pace and scale. We are being asked to

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postpone the adjustment and to impose a level of capacity on the steel industry and a labour force larger than management considers is realistic. We believe that postponing action will not save jobs but will actually risk more. We fear that other countries will move further ahead, that we shall be even less competitive, and that what then will be at stake will be the survival of any steel industry at all.
Mr. John Morris: Will the Minister give way?
Mr. Edwards: I really want to finish. I have taken longer than I intended.
Mr. Morris: For the benefit of the House, will the Minister summarise what new beneficial acts have flowed to Wales from the particular functioning of the Welsh Office under his stewardship which are not a response to the Government's policy of throttling Welsh industry?
Mr. Edwards: Welsh industry is not being throttled by Government policy.
Mr. Morris: Of course it is.
Mr. Edwards: The steel industry is having to contract in the light of its competitive position in a world market. The right hon. and learned Gentleman knows that perfectly well—or, if he does not know it, he ought to.
Mr. Rowlands: What about the coal industry?
Mr. Edwards: Frankly, I do not know how quickly the changes can be achieved. The Steel Corporation and the Coal Board have to negotiate that with the unions. What I do know is that I and the Government have a duty to accept responsibility for the social consequences of change and to assist in every possible way to bring it about. My statement today is an indication of our acceptance of that responsibility.
It is understandable that the Wales TUC and others should seek to avoid these changes; but they must recognise that, far from helping those affected, by their actions last week and their planned strike on 10 March they have added to the immensity of our task. I know already of two major overseas investments in Wales postponed or cancelled due to
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industrial action last year. Any further disruption will discourage the arrival of the new industry we want.
We shall make the process of change infinitely more agonising if we just seek to dodge reality and put off until too late the action that has to be taken. If we are to come through this painful period, we have to make use of all our assets—good communications, good industrial locations, the reputation of the labour force regional aids and increasing competitiveness. It is on those foundations that we have to build the future.
4.32 pm
Mr. Alec Jones: In the 13 years that I have been a Member of this House, and, my colleagues tell me, for years before that, we have had these Welsh days, and this is the very first occasion that we have felt it necessary to issue to our supporters a three-line Whip indicating not only our concern with the situation that is facing us in Wales but our complete dissatisfaction at the way in which the Government are setting about their business.
In these days we have a fairly wide-ranging debate. The Secretary of State did a little ranging himself today. For my part, I shall be concentrating on one subject—a subject which is of greater importance than all the others. I accept that there are problems in agriculture. I accept that we need to know more of the Government's views on the Welsh language. Certainly our colleagues in local government are concerned about the very future of local government under the present Administration.
The Secretary of State had a great deal to say about the flooding, and I think that it is appropriate that he should have said it, because it caused a great deal of personal hardship and still causes a great deal of worry to people in South Wales who still feel themselves under threat. It is important, therefore, that we have from the Secretary of State at some stage a full statement on the financing of any preventive measures which are necessary. I am not sure that it is sufficient to say that expenditure incurred under section 139 of the Local Government Act will qualify for rate support grant assistance when we are not sure whether it will be caught by the Heseltine concept of a standard rate. We want to know a little more about that.
Mr. Nicholas Edwards: Let me make it perfectly clear that we have said that in considering any action under the transitional arrangements we shall take account of the cost of the floods, and local authorities will not be penalised in undertaking essential expenditure.
Mr. Jones: I am very grateful to the Secretary of State for that statement. I am sure that our colleagues in local government will be equally grateful.
There is another point about flooding that I want to raise. It has been raised in my constituency and in Cardiff. The right hon. Gentleman referred to it himself. People felt that they had received no warning when many people in official positions knew of the danger. The right hon. Gentleman said that the water authority or some authority was taking steps on this matter. I believe that, again, a public statement has to be made to allay the fears on this aspect, which certainly still exist, and to ensure that people are given adequate warning, not only when their property is at risk but when their lives are at risk. Fortunately, there was little loss of life—two deaths in Merthyr—but there could well have been serious loss of life. The lack of public warning was a matter of great concern.
Mr. Ioan Evans: On the question of the flooding, does my right hon. Friend agree that, while we might sort out the financial formula for Government assistance to local authorities, the cases causing the greatest anxiety are the families who have lost all their possessions and find that there is no one to whom they can turn immediately? Must we not address ourselves to the problem of funds being made available to those families to meet their immediate needs?
Mr. Jones: Certainly it is a subject which must be examined, but the solution is not as simple as some seem to think. Nevertheless, it is true that the matter is causing considerable concern. It has been met in a variety of ways, none of which is meeting the gravity of the situation.
Before turning to my main theme, I say to Conservative Members that I am quite willing to give way but that they should not, at the end of my speech, tot up the time that I have been standing at
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the Dispatch Box if they have taken up a large amount of it themselves.
I come to the main problem facing us in South Wales. It is also prevalent in parts of North Wales, particularly Flint-shire. I refer to the particularly high level of unemployment. We have not seen such unemployment figures since the war. Unemployment among steel workers, miners, transport workers and workers in the private manufacturing sector and in the public service sector is on such a scale and is increasing at such a rate that it threatens not only the well-being of individuals and their families but the very social cohesion of many of our communities. In fact, it is a threat to the survival of some of them.
That is why my right hon. Friend and hon. Friends and I were proud to march last Monday in the demonstration in Cardiff, where people of South Wales showed their strength of feeling. Indeed, in some ways it was a pity the Secretary of State could not have been there. He would have learnt and got a better idea for himself of the depth and strength of feeling on this subject. What those people demonstrating last Monday were asking for was not the moon or anything tremendous but that the Government should realise that this is 1980 and not 1930, and they were saying that we in Wales will not be treated by a Conservative Government in 1980 as we were in 1930. That is the truth of the matter.
Sir Raymond Gower: Will the right hon. Gentleman explain why they did not march last year, when unemployment in Wales was well over 90,000 and at one time over 100,000?
Mr. Jones: If the hon. Gentleman will wait, he will get a good answer to that question. The answer is that last year they had at least realised that they had a Government who were trying to bring down unemployment, whereas now they know that they have a Government who are willing to sit on the touchline and watch unemployment rise.
We are talking of the size of the problem. The question has been raised: is there really a crisis, and, if so, how serious is it?
The present level of unemployment is 90,900. We know that the direct and indirect unemployment in Shotton is

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likely to add about 9,000 to that figure. We know that the proposals for Llanwern and Port Talbot will add about 11,337, directly. We know, despite what the Secretary of State says, that if the foreign coking coal is imported as BSC wishes there will be a loss of 15,000 jobs in the South Wales coalfields. The Secretary of State may not know that, but everybody else concerned with the industry in South Wales does. To that figure we have to add about 6,850, a figure which was calculated by the standing conference on regional policy in South Wales. That conference consisted of representatives from the county councils of the three Glamorgans and Gwent. The conference added a note of caution, saying that it was a preliminary figure which was rising considerably the more the problem was examined.
On my adding up, the total figure comes to 133,087. That is not far from the estimated figure of the Wales TUC of about 140,000.
I believe that the Government have a duty to provide us and Wales with their calculations. The problem is far too grave for the Secretary of State to hide behind the convention that Governments do not forecast unemployment or disclose their forecasts. A whole range of organisations need to know the best possible estimate if they are to carry out their responsibilities. Those organisations include the Government and their agencies such as the Welsh Development Agency, the DBRW and the development corporation at Pontypool.
The industry and the trade unions involved have the right to know the figures. Local authorities have the right to know—so do the people of Wales. So far, there has been a deafening silence from the Welsh Office. If the Western Mail is to be believed—I confess freely that I have never been a lover of that newspaper—it suggested on 29 January that various projections had been produced inside the Welsh Office and that the worst of them suggested a figure of 160,000 unemployed towards the end of 1981. Whatever may be the figure, the problem cannot be faced and tackled unless all parties concerned know its size.
Therefore, we have the right to know the Government's assessment of total redundancies in South Wales. More than
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that, what time scale do the Government envisage before the redundancies take effect? We know that the BSC wants 11,000 redundancies at Port Talbot and Llanwern to take effect by August of this year. I understand that in Shotton the redundancies are to be even earlier. Presumably, the National Coal Board and other organisations will be forced to implement any of their redundancies no later than the end of the year. Therefore, in less than one year South Wales faces an increase of 40,000 in unemployment in the organisations I have mentioned.
I do not believe that a problem of that size can be settled or dealt with in a short time. Certainly it will not be solved by a Government who are abdicating all responsibility for the BSC's actions, who are refusing to act on the import of foreign coking coal and who are refusing financial support for industrial investment. In spite of today's announcement, the Government, since they came to office, have cut the budget of their own agencies such as the Development Agency and the DBRW.
In the past, Wales has learnt several lessons from the experience of high unemployment. One particularly encouraging development was the Ford plant at Bridgend. About 2,500 jobs are to be created there at a considerable cost to public expenditure. However, we would need about 16 Ford developments to deal with the redundancies that we face. I do not belive that anybody expects 16 Fords to appear suddenly on the horizon.
The publication "Welsh Economic Trends", No. 5,1978, indicates that it has taken 10 years to provide 32,000 jobs in industrial South Wales. I do not believe that the people of South Wales should be expected to wait that length of time before the redundancies that face them are dealt with. There must be a halt to the redundancies to provide time for the Government—any Government—to make plans for alternative employment to be developed.
If the Secretary of State believes that we can cope with the scale of redundancies in the time available, I hope that he will take us into his confidence and tell us how he sees that being done. However, if he shares our view that South Wales cannot cope with the redundancies in the time scale, again he should take us into his confidence and tell us the

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advice that he is giving to his colleagues in the Cabinet about the problem. Is he advising his colleagues that industrial South Wales can be written off? The right hon. Gentleman is not only the Secretary of State but he represents a Welsh constituency and a duty and responsibility towards Wales. If the Cabinet, by its blind obstinacy over the break-even date for steel and its refusal to consider a subsidy on coking coal imports, prevents the Secretary of State from discharging his duties to Wales, I wonder why he bothers to serve in the Government.
I believe, as do my right hon. and hon. Friends and the vast majority of people in Wales, that the right hon. Gentleman should now be supporting the demand for a two-year delay on any steel closure proposal. Only a delay of that scale will relieve us of the impossible pressures that we face because of the unemployment figures. We must have more time. That is the reasonable demand of the people of Wales. The time can be bought only if the Secretary of State exercises whatever little muscle he has in the Cabinet.
The time can be bought only at a cost. I am glad that the Secretary of State for Industry is here today. If that cost is an extra Government subsidy provided by taxpayers, that would be a fairer sharing of it than to expect the steel workers and miners of South Wales to bear the brunt of the exercise on their own.
The Secretary of State for Industry (Sir Keith Joseph): Does the right hon. Gentleman realise that, two years further on, the steel industry will be even less competitive in relation to its rivals than it is today? The cutback that will have to occur then will be even fiercer than it may have to be now. Even the right hon. Gentleman is contemplating only two years' delay. Let the right hon. Gentleman meet that argument.
Mr. Jones: I am grateful to the right hon. Gentleman for getting to his feet. Last week we requested that he should take part in the debate and, perhaps, reply to it. We would have loved to have him with us on that occasion. We believe that the two years is at least a reasonable request. All the evidence including speeches made—
Sir K. Joseph: Answer the question.
Mr. Jones: The right hon. Gentleman is an expert at the Dispatch Box; at least let me learn from him.
The evidence is that we are rushing the contraction of our steel industry at a far greater speed than our competitors in Europe. That point was brought out clearly in the correspondence from the EEC that we discussed earlier.
Sir K. Joseph: Will the right hon. Gentleman address himself—he is being helped by his right hon. Friend the Member for Ebbw Vale (Mr. Foot)—to the serious question whether the steel industry in South Wales will be far worse off in two years—after a delay of two years—because our competitors will be even further ahead? Let the right hon. Gentleman answer that.
Mr. Jones: I do not have the exact figures, but I recall the preliminary statement of the British Steel Corporation. It clearly indicated that some of the threatened steelworks in South Wales, are now making a profit. The British Steel Corporation paid tribute to the others which will have done so well to approach that figure. We are simply repeating that which was indicated to us by Sir Charles Villiers.
One of the factors influencing decisions about closures in South Wales and other parts of the country was the unrealistic break-even date that had been imposed on the BSC by the Secretary of State for Industry and by the Government. If time can be found, a whole range of options will become available to the Secretary of State. Judging from the remarks of the Secretary of State for Industry, the Government will refuse that time. If no time is given, serious economic, social and political consequences will follow.
We are not discussing only the steel industry. The South Wales coalfield faces the consequences of the steel closures. The closure proposals of the BSC will mean the loss of 7,500 jobs in the coalfields. In addition, the determination of the BSC to buy imported coking coal will cost another 7,500 jobs. The Secretary of State for Industry and the Secretary of State for Wales will argue that that is the managerial responsibility of the BSC. However, the implications are so grave that we have a right to

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know the type of contracts that BSC has made, the length of those contracts, and the quantities and prices involved. The consequences of those contracts will be felt not by those who work in Steel House but by those who live in the valleys and communities of South Wales. If the National Coal Board and miners are expected to face the consequences alone and unaided, it will mean the loss of 15,000 jobs in the South Wales coalfield and the closure of about 20 collieries. Those collieries will never be reopened.
Mr. Nicholas Edwards: I do not know the plans of the National Coal Board, but surely the right hon. Gentleman is not suggesting that the reduction in consumption of coking coal that was pointed out by the BSC could possibly lead on its own, without closures that have arisen from other causes, to the loss of 15,000 jobs.
Mr. Jones: I am sorry if I have misled the right hon. Gentleman. I thought that I had made the position clear.
Two factors affect closures in the coalfields of South Wales. First, the closure proposals of the BSC will lead to 7,500 jobs being lost. Secondly, the import of coking coal will lead directly to a further loss of 7,500 jobs. We base those figures on information that has been given to us on numerous occasions. When one adds the two figures of 7,500 togther, the total is 15,000.
Mr. Edwards: If the right hon. Gentleman looks at the figures, he will see that the total production of coking coal by the South Wales coalfield is only a quarter of its total output. Not all of that coking coal goes to the BSC. About 28,000 people are employed in the coalfield. It is, therefore, difficult to see how the right hon. Gentleman arrives at his figures.
Mr. Jones: The figures were provided by the National Coal Board. If the right hon. Gentleman is in possession of figures that dispute what I have said, or he believes that my estimate of 7,500 is an overestimate, no one will be more pleased than I. However, there is no doubt that the figures that we have been given total 15,000 job losses in the coal industry.
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Despite the difficulties of previous years, the South Wales coalfield made an improvement of 7 per cent. in its output in 1978–79 as compared with the previous year. There was an overall improvement of 9·3 per cent. in productivity, including an improvement of 17·7 per cent. at colliery faces. Its losses fell from £27 million to £8·9 million. The National Coal Board has made considerable strides. As this is a debate on Welsh affairs, the Secretary of State must have known that questions concerning Margam and the Phurnacite plant at Aberaman would be raised. It is insufficient to say that those questions are the responsibility of another Department.
The Margam development would have provided 900 job opportunities. That development proposal has been lying in a Government Department long enough and a decision should be made. The tripartite report pointed out that the replacement of sets at the Phurnacite plant could determine the future of five pits and 5,000 men. It pointed out that the investment needed would amount to about £25 million. It is not good enough for the Secretary of State for Wales to say that the matter will be dealt with in due course. We need to know a lot more now.
Turning to the subsidy of coking coal—
Mr. Ioan Evans: My right hon. Friend has mentioned that 15,000 jobs may be lost in the coal industry. The five pits that he has just mentioned must be in addition to his previous calculations. The closure of those pits will result from the doctrinaire approach of the Government. They will not give investment to the plant. Smokeless fuel will now have to be imported because of that attitude.
Mr. Jones: It is clear from the tripartitie report that if the plant at Aberavon ceases to operate we will not have the capacity in Britain to supply the smokeless fuel needed in South Wales and in most parts of the United Kingdom. Hence the Government's need for urgency in coming to a decision.
As regards coking coal imports, the National Coal Board has requested a short-term tapering subsidy. It has now put a figure on that subsidy. It has suggested a subsidy of £8 million in the first year, £6 million in the second year,

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£4 million in the third year, and £2 million in the fourth year, subsequently tapering to nothing. The National Coal Board suggests that that would enable it to compete on equal terms with imported foreign coking coal. That means a total subsidy of £20 million—spread over four years—that will taper to nothing. That would save about 7,500 jobs. It would retain the collieries and keep the men for future need.
Pure arithmetic shows that that must be preferable to making redundancy payments. Redundancy payments would cost about £24 million in one year if they were paid to such a large number of men. Therefore, apart from anything else, arithmetic shows that the Government are considering some form of short-term subsidy. I assume that the Secretary of State was expressing the Government's view when he said in the Welsh Grand Committee on 21 November:
"As a Government, we have made it clear that we see the need for a massive continuing investment in the industry."—[Official Report, Welsh Grand Committee, 21 November 1979; c. 13.]
He was speaking of the coal industry. That investment is necessary to retain jobs.
"Subsidy" is a dirty word only to this Government. Our European partners do not believe that it is. In West Germany in 1978 the coal industry was subsidised by over £1,000 million whereas our industry received a subsidy of only £125 million. In a recent statement outlining West Germany's energy policy and her plan to save oil, Chancellor Schmidt said:
"the first priority in West Germany in the 1980s will be the use of German coal. The coal industry's already heavy subsidy will rise to more than $3 billion a year."
The Germans are always paraded in front of us as the great experts. If they find it necessary to have such subsidies, surely our coal industry's request for short-term tapering subsidies should be accepted.
The steel industry and the coal industry have a right to expect at least a two-year halt in steel plant closures and a subsidy for coking coal. The Conservative Party's election manifesto for Wales stated that it would continue the modernisation of the coal and steel industries, I do not know what it meant by
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that. If it had already planned the savage butchery of those industries, it should have had the guts to say so. If it was a genuine declaration of intent, the Government should prove it by accepting the two-year halt and financing the modest coking coal subsidy. It would give us some time to cope with unemployment in Wales and plan for the future.
We need an urgent review of Government policies, and all plans must be co-ordinated. Regional policies need to be re-examined, which includes the question of development and special development area status. The Secretary of State's remark that proposals for such areas will be examined merely indicates that the Government's decisions in July were premature. I hope that any review will not be done on a piecemeal basis. We know from experience that such a problem can be dealt with only on a broad basis.
Mr. Delwyn Williams: Is the right hon. Gentleman aware that north of Merthyr there exists an area called Mid-Wales, and beyond that an area called North Wales? This is a debate on Welsh affairs and not on South Wales. Will the right hon. Gentleman, during the following 30 minutes, deal with Mid-Wales and North Wales?
Mr. Jones: I seem to recall that I said that it was an all-Wales problem. I mentioned Shotton, which faces severe problems. I do not withdraw my statement that at present South Wales is the area under most bitter attack by the Government. If Mid-Wales is being forgotten, that is the fault of the Government, who are removing almost all regional assistance from that area.
In July, when the Secretary of State for Industry announced changes in regional policy, he said:
"there is no evidence whatsoever that in net terms, taking the country as a whole, there is any change in the number of jobs."[Official Report, 17 July 1978; Vol. 970, c. 1309.]
Even if that is true, it is not acceptable to the people of Wales. Whether in South, Mid-Wales or North Wales, we cannot accept massive job losses, even if those jobs will be created elsewhere, such as in South-East England. It would mean the migration of our young and active men and women and the decline and collapse of our communities. We would return

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to the position in the 1930s—and some of us lived through those times.
Mr. Best: I do not remember the 1930s, but is the right hon. Gentleman not in an awkward position in talking of Government records? Between June 1970 and June 1974, under a Conservative Government, 24,900 jobs were created in Wales. Between June 1974 and March 1979, 54,500 jobs were lost in Wales.
Mr. Jones: At the end of 1973, having tried all the measures that are now proposed, the Conservative Government were obliged to take a U-turn, which achieved those results. I do not believe that the people in Anglesey are prepared to return to the situation of the 1930s—and I have lived there for two years. In the parts of Wales that we on these Benches represent, that is certainly so. The measures proposed in July were opposed for that reason.
Following the July measures, the Welsh counties committee said that it would be increasingly difficult to attract new industry to the area. The Gwynedd county council said that its economic future appeared extremely black. The regional director of the CBI, who is not a card-carrying member of my party, said that the Government's scalpel had cut too deeply. I welcome a review of those policies, which is not before time.
We set up the Welsh Development Agency, despite Conservative opposition. Under this Government, £3 million has been cut from the programme this year and next year the proposed reduction is from £45 million to £32 million—29 per cent.
We welcome the £48 million announced today, but it is a mere drop in the ocean compared to the task that faces us in South Wales. We are not prepared to accept that as a crumb thrown to a starving man. We need to know the time scale, the areas covered and other details. The alarm bells are ringing throughout Wales as cuts take effect.
The Glamorgan county council was told by the WDA that no new schemes for the reclamation of land should be embarked on in 1980–81. In these areas, if we do not reclaim derelict land there will be no land for industry. It is as simple as that. If we do not have land, we do not
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have factories, and that means that there will be no hope of reducing the length of the dole queues.
In the county of Dyfed there has been no progress on the WDA advance factory programme which was announced early last year. The county's industrial development officer, Mr. Ray Edwards, said that that programme
"promised Dyfed 150,000 sq ft of factory space over an 18-to 24-month building period, but so far not a brick has been laid."
If the timetable of the current programme cannot be met without a much more significant increase in the WDA's budget and resources, I do not believe that the agency can get on with any additional work that it should be doing.
Governments can stimulate and have stimulated regional development by dispersing Government Departments and agencies to development areas. I realise that this is not always popular with hon. Members. The previous Labour Government dispersed the Royal Mint to Llantrisant, and that has been a success story. Not only does the Royal Mint employ a high proportion of local labour but it has acted as a focal point for other industries in the area. That is why the Government's decision to abandon our plan to transfer 7,000 Ministry of Defence jobs to St. Mellons is a serious blow to the economy of South Wales. If the Secretary of State does not think that this is so, he should have a word with some of the Conservative Members in the Cardiff authorities.
We are afraid that the same thing will happen to Inmos. We do not think it is sufficient for the Secretary of State to repeat that no decision has yet been taken in this matter. My right hon. Friend the Member for Swansea, West (Mr. Williams) played a major role in the Labour Government's determination that the production units of Inmos should be located in assisted areas. We fully expected to gain at least one of those units in South Wales. Now, we find that the first production unit will go to a non-assisted area. We are now using public finance to establish a publicly owned factory in an area which, by the Government's own standards, does not qualify for any form of regional assistance.
The Secretary of State referred to training. It is not good enough to tell

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us that he will keep in touch with members of the Manpower Services Commission. The proposed closures must not take place. For the Manpower Services Commission to make a decision on 25 March which will lead to the closure of the skillcentre at Llanelli, without replacement, and closures of the annexes at Tremorfa, Treforest and Blaenau Gwent must surely be the act of a madman at this time.
In my view—and I believe that I have the support of all my hon. Friends and perhaps one or two Conservative Members—we are facing a crisis in Wales, particularly in South Wales. It is a crisis of the Government's own making. On 4 July the Secretary of State told us that he had taken over an economy which was
"if not in actual decline, certainly stagnant".—[Official Report, Welsh Grand Committee, 4 July. 1979 c. 4.]
Government actions since then have pushed the economy into accelerating decline. The Government's regional policies are such as to be incapable of meeting the current and future employment problems in Wales. By 1982–83, £35 million of regional development grants will have been lost to Wales and there will have been an annual loss of selective assistance of £1·6 million. Whole areas of the country—in the north, the south and Mid-Wales—will be denied any form of regional assistance by the Government. Despite the lip service that the Government pay to the Welsh Development Agency, it has experienced cuts, and even today's announcement is not sufficient to replace the shortfall.
By insisting on an unrealistic break-even date, the Government expect the British steel industry to do better in a shorter time than any other steel industry in Europe. Far from being modernised, the coal industry is being crucified. We shall need those pits which are to be closed and we shall need the men in them when some hon. Members are still Members of this House.
We have the right to ask the Secretary of State what he has been doing. Perhaps he is just a lightweight in the Cabinet—I think he seems more like a featherweight being blown from one folly to another—
Mr. Donald Anderson: My right hon. Friend asks what the Secre-
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tary of State has been doing. Surely the answer was provided in his speech 10 days ago when he made clear that he favoured lower public expenditure and lower taxes. That is what the Secretary of State has been urging in the Cabinet.
Mr. Jones: From what the Secretary of State has said in this House and from his speeches outside it, it seems that he is in favour of higher unemployment—the basic subject of today's debate.
In the debate in the Welsh Grand Committee on 21 November, the Secretary of State said:
"The pessimists who point only to closures and to ever-rising unemployment seem blind to the very encouraging industrial progress we are making".—[Official Report, Welsh Grand Committee, 21 November 1979; c.15.]
If there is a question of blindness I do not believe that the miners, the steel workers and those threatened by redundancies as a result of the present Government's policies are the ones who are blind. They see quite clearly what is happening That is why, if one wanted to describe the prevailing mood in South Wales, it would be one of disillusion, dissatisfaction and discontent. It is not only the question of the number of unemployed being created by this Government; it is the effect on communities, and that affects the very social cohesion on which our society in Wales depends.
There is one ray of hope in today's speech by the Secretary of State. At least on one subject he has changed his mind. I still do not agree with him, but at least it has shown that he is willing to bend to pressures exerted on him by someone else. Therefore, I hope that there will be further changes of mind and that he will reverse his direction and revise his policies, or the time will soon come when he must face rejection at the hands of the people of Wales.
5.17 pm
Sir Raymond Gower: It is only natural in present circumstances, as the right hon. Member for Rhondda (Mr. Jones) has intimated, that this general debate on Welsh affairs should tend to turn largely on economic and industrial issues. This is not because we see no importance in agriculture, tourism or environmental matters but because the bulk of our population is, unfortunately, concentrated in the industrial areas of

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South and North-East Wales. This is the kernel of our problems and has been for many years.
Nor do I complain that the right hon. Member for Rhondda seemed unduly pessimistic about the state of the Welsh economy. After all, pessimism is a kind of seed corn for the Opposition, with exaggeration as its handmaiden. I noted with some amusement the readiness of the right hon. Gentleman and his colleagues to march about these issues. Too little marching was done when the Labour Government had such an appalling record. After all, since the oil crisis in 1973 we have had to live in a world economy full of difficulties for exporting countries. Several of Britain's industrial rivals have coped better by methods that are quite different from those favoured by the last Labour Government.
My right hon. Friend the Secretary of State and his colleagues at the Welsh Office took over a bed of nails. We have heard much from the Opposition about the misfortunes that have befallen us in a relatively short time. But during the term of the last Labour Government Welsh unemployment rose from 38,000 in 1972 to 91,000 in February 1979. At one stage, in August 1978, it reached more than 101,000. Some of this increase, we were constantly reminded, was due to world causes. Some was not. Last month, the figure of Welsh unemployed, I confess, was at the high level of 90,864, yet this was fewer than in January in the previous two years. I wonder why the right hon. Member for Rhondda did not comment on that. After all the so-called dreadful deeds, Welsh unemployment last month was less than in either of the previous two Januaries under the Labour Government.
Mr. Dan Jones: The hon. Gentleman is deliberately dodging the issue. It is the prospects that matter. It was the future to which my right hon. Friend was referring.
Sir R. Gower: The right hon. Gentleman was talking not only about the future but also about the immediate past. I am not evading the issue; it is the right hon. Gentleman, I am afraid.
I am willing to confess that all hon. Members deem the present situation to be serious. I do not deny that. I am
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entitled to put in some of the factual material that the right hon. Gentleman omitted from his speech. Despite the increased variety of the Welsh economy since 1945 and the arrival of new industries, new firms and new processes, we still suffer from severe structural imbalance. There is still excessive dependence on a few basic industries, notably coal, iron and steel, and tinplate. Proportionately, too many of our people, for several generations, have had to look to too few industries for their jobs and opportunities.
It was said two weeks ago in this House, during a debate on the Northern region of England, that when the South-East of England had a chill, the North-East caught pneumonia. That graphic illustration has often been true of the economy of Wales, though slightly less so in recent years. Without being too optimistic, I venture to suggest that what has been remarkable since the oil crisis of 1973 has been the resilience and powers of survival of some of the newer industries. I feared that some of them would not show this resilience and power of survival. It has also been encouraging to note the ability of many employers in Wales to learn new skills in new processes.
I should like to refer briefly to the difficulties of the iron and steel industry that have occupied so much of this debate. There must be major changes. That must be obvious to any reasonable and objective person. Such changes are prescribed not only by technical and technological innovation and by the present state of world markets for steel but also by the emergence of new producers of steel in the Third world and elsewhere.
Some of the painful changes prescribed or planned by the British Steel Corporation are almost inevitable if we are to have an effective and successful industry. I shall say nothing about present strikes, particularly the iron and steel strike. I hope, like others, for a reasonable solution and that a settlement will be arrived at very soon. Britain cannot afford strikes and industrial stoppages. Wales cannot afford them. I look forward to the day, in the near future, I hope, when those overseas will have no occasion to use the term "British disease". It is an appalling phrase. I have heard it frequently in other countries. It is a sad

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commentary on our system that other countries should use such a phrase.
Mr. Dan Jones: I apologise for interrupting, because, although I am a Welshman, I do not represent a Welsh seat. The hon. Gentleman gives the impression that the unfortunate situation in the steel industry is contributing to economic decline. That is not the case.
Sir R. Gower: I am not saying that at all. I made an observation that Britain cannot afford strikes. Wales cannot afford strikes. I stick to that. Surely it is obvious.
The impact of these proposed changes, whatever the difficulties and the nature of them, is proportionately more severe in Wales than elsewhere in the United Kingdom owing to our undue reliance on this industry. One faces the choice proposed by the Opposition of a reappraisal of the timetable set by the BSC or, alternatively, the provision of industrial retraining and steps to encourage new industries on a bigger scale than anything contemplated before. If these unpleasant changes are delayed, a more difficult situation may be encountered in a year or two. I am encouraged by what my right hon. Friend has said about further money becoming available. But we must now think in bigger terms about industrial retraining and methods of introducing new jobs. I am not complacent about the matter.
The right hon. Member for Rhondda and other Opposition Members seem to envisage a Wales of the future in which the major industries will remain as the chief employer. That is what they seem to say. I may be doing them an injustice. I should like to see a Wales in which more people are employed in new industries.
Mr. Dan Jones: The hon. Gentleman should come into our Lobby tonight.
Sir R. Gower: That would be wrong. Opposition Members want to see these industries continue to employ the same numbers as now. I do not think that that is practical. I want to see more people employed in new industries, smaller, perhaps, in size, but more numerous—
Mr. Wigley: Where are they?
Sir R. Gower: If the hon. Gentleman does not believe that we have to change I am afraid that I must differ.
Mr. Roy Hughes: The hon. Gentleman talks about change related to steel. Is he not aware of what has been happening in South Wales in regard to the closure of East Moors, a loss of 6,000 or 7,000 jobs in Ebbw Vale and the closure in North Wales of the great Shotton works? Is he not also aware of the latest proposal of the British Steel Corporation for major reductions in the modern plants at Port Talbot and Llanwern? Does he recognise that the BSC has abdicated from the export market and talks now in terms of a target figure of 15 million tonnes production annually when not long ago there was talk of 30 million tonnes?
Sir R. Gower: Indeed I do. That is why I stress to my right hon. Friend that steel closures are having a disproportionate impact on the Principality.
In the context of our efforts to contain inflation and restrict excessive expenditure, there must be substantial economies, but I ask my right hon. Friend to consider—and he may have to fight some stern battles, even in the Cabinet, on this matter—that economies must be avoided, as far as possible, in communications within Wales.
I was encouraged by what my right hon. Friend said about the motorway programme, but there will be serious temptations to slow down some road improvements and to defer others. If a new road is not built there will be complaints, and if other roads are not properly repaired there will be moans from irascible motorists, but such action does not cause the sort of violent reactions that usually emerge from economies in health, local government or education. Consequently, there may be a temptation to cut down on road and other communications. Denying existing and potential industry in Wales the communications that it needs and deserves could inflict incalculable long-term damage on our economy and on industrial growth in the Principality.
As I have said, we must also contemplate increasing incentives, particularly in areas affected by steel closures, to bring in new industries. There is evidence that other countries, including the Republic of Ireland, have had great success in this

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sphere and certainly more success than has attended our efforts. I hope that the Welsh Office and other Government Departments are studying the methods employed in other countries.
I am still not quite satisfied with the degree of encouragement and help being given to smaller industries. Taxation changes have helped some of those firms and others acknowledge that efforts are being made to reduce the work involved in making returns and answering inquiries from Government Departments. They appreciate that, but they still face a number of problems.
I have spoken to several industrialists and smaller employers and they recognise the difficulties involved in trying to contain inflation. They are prepared to suffer as much as they can afford to, but the cost of borrowing and servicing interest charges bears harshly on them, especially those who do not have great resources on which to call.
Against the difficult economic background in Wales, I hope that the cooperation between the Welsh Office, the Welsh Development Agency and private industry will continue. I am not as pessimistic as the right hon. Member for Rhondda, but I recognise the difficulties facing Wales and, indeed, the whole of the United Kingdom.
Wales has additional difficulties, based on its geography and the siting of its industries, and a peculiar dependence on a few older industries. The problems are greater than those in many other parts of the United Kingdom. That is why my right hon. Friend the Secretary of State faces such an enormous task. I wish him well.
5.34 pm
Mr. Ifor Davies: Our debate is overshadowed by the grave situation confronting our basic industries of steel and coal. The Secretary of State acknowledged that, as did the hon. Member for Barry (Sir R. Gower). The topic dominates the hearts and minds of our people. It certainly dominated the hearts and minds of the thousands who on Monday attended the greatest protest rally some of us have seen in Cardiff.
The hon. Member for Barry mentioned the steel industry. I wish to refer to the
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comments of the chief executive of the BSC in a recent issue of Steel News:
"We cannot afford massive increases in costs at a time when we are fighting for survival."
The truth is that the whole of Wales—North, South, East and West—is fighting for survival.
I also draw the Secretary of State's attention to the Conservative manifesto at the last election, which said:
"Of course, government can help to ease industrial change in those regions dependent on older, declining industries. We do not propose sudden, sharp changes in the measures now in force."
Yet within two months of that assurance it was broken. You have appealed, Mr. Deputy Speaker, for short speeches, but it would be interesting, if time permitted, to recall the occasions when answers to questions in the House have led to serious consequences.
I shall quote only one—the written reply from the Secretary of State for Industry on 1July, barely two months after the general election. The right hon. Gentleman announced the targets that he had set for the BSC and from that reply has stemmed the industrial crisis facing us, for, in quick succession, we have had further announcements of closures and cash restrictions.
Wide sections of the population have regarded the break-even target as an impossibility from the beginning. The BSC has given clear warnings. Its important and informative document "Prospects for Steel", written in 1978, says:
"The Corporation is not at present able to sustain its activities without substantial external financing, but it is taking the steps necessary to return to viability."
I ask the House to note that the document also said:
"In the face of extremely depressed market conditions, however, this must be expected to take some years."
My right hon. Friend the Member for Rhondda (Mr. Jones) pleaded for time to deal with the problem and mentioned a period of two years. The Secretary of State for Industry intervened to challenge him on that point. The right hon. Gentleman has insisted that he is not the management of the BSC, though he acknowledges that, for the time being, as he says, he is the representative of the owners. The right hon. Gentleman is

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not prepared to accept even two years, but the BSC management confirms that the return to viability will "take some years".
The BSC document also says:
"the Corporation will be far from self-financing in the next five years".
Those who manage the industry are pleading for time, but, despite their warnings, the Government have intervened with financial limits and a break-even date. The result has been to force the industry into making what we consider to be unreasonable decisions with disastrous consequences for steel communities.
The hon. Member for Barry said that we were pessimistic. In fact, we feel even worse than that. We are in despair when we consider the consequences of what is to happen. Because of past errors of judgment, a loss of confidence has crept in. The latest cutback of capacity to 15 million tonnes a year has shocked the steel industry and has increased the loss of confidence. Some semblance of equilibrium in the short-term balance sheet of supply and demand might be achieved by cutting capacity, but the ability of the steel industry to survive in the wider international economy would be greatly affected.
The Secretary of State for Industry boasted this afternoon that there was a record demand for steel in the world market last year. That is a warning and an indication that there are markets to be won.
The decisions taken in the steel industry will inevitably affect the coal industry. They will lead to the eventual closure of many South Wales pits because of the important connection of coking coal with the steel industry.
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. I urge that an immediate subsidy be granted to bridge the current gap in prices and thereby ensure that the BSC does not need to bear additional costs. If our European competitors can subsidise coking coal, as Belgium does at £24 a tonne, France £14 a tonne and Germany £11 a tonne, what possible reason
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can there be for Britain to refuse to subsidise our coal industry?
The coal industry has known resources of over 200 million tonnes and is a vital source of energy. It would be economic madness to contemplate pit closures that would mean the loss for ever of many of these assets. It would be a severe blow to our energy resources.
Another significant issue in Wales is the recent announcement by the BSC of the formation of BSC Holdings Limited. It is a management group that comprises most of the corporation's large profit centres that are currently managed within the BSC manufacturing division. The largest of the profit centres is BSC Tinplate, in terms of both employees and turnover, and part of which is in Velindre in my constituency.
The danger is that the separation of the profit centres may prove to be a further blow to the viability of the manufacturing division. The tinplate turnover represents more than half of the total turnover of the new group. The BSC Tinplate turnover is £382 million out of a total of £700 million, which is 54 per cent. of the total.
As South Wales is the home of the tinplate industry, I hope that there is no intention to remove the headquarters from Wales. I urge the Minister to take note of the strong feelings that exist among tinplate workers about that issue.
My right hon. Friends have been accused of ignoring economic realities. It is the Government who are ignoring the danger signs. Labour Members are facing up to the spectre of a disastrous economic and industrial position that will threaten the whole of Wales, including Mid-Wales. If present proposals materialise, we shall be confronted with 50,000 job losses in steel, coal and associated industries over the next few years. I accept gratefully the proposals suggested this afternoon to help industries in Wales, including the grants mentioned by the Secretary of State. However, it will be quite impossible, and there are no means whatsoever, to find jobs to cope with this situation in the short term in Wales.
The social consequences will be immense. I urge the Government to reconsider—even at this stage—their attitude and to give the BSC greater flexibility and a longer breathing space in

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which to cope with its financial difficulties. I ask not for charity but for common sense in order to sustain an industry that is vital to Britain as an industrial nation.
Mr. Delwyn Williams: The hon. Gentleman asks for Government intervention. Why did he not ask for union intervention in the past few years, when unofficial strikes did so much damage to the steel industry? Will he comment on the 1969 position when 250 blast furnacemen were on unofficial strike? Unofficial strikes in 1973 cost the steel industry £10 million. At Port Talbot an unofficial strike cost £131 million. Why did he not ask the trade unions to intervene at that time? He should ask the trade unions to put their houses in order.
Mr. Davies: The hon. Gentleman has chosen a bad example. It is the first time that the steel industry has been forced to strike in its history—
Several Hon. Members rose—
Mr. Deputy Speaker (Mr. Bryant God-man Irvine): Order. Only one hon. Member can occupy the Floor at one time.
Mr. Donald Coleman: Is my hon. Friend aware that on each occasion that unofficial action has been taken in the steel industry it has been condemned out of hand by the Iron and Steel Trades Confederation executive?
Mr. Davies: Strike action is a last resort on the part of the steel industry. The union has done everything possible to avoid the dispute. We ask for greater flexibility, not out of charity but to sustain a vital industry.
Conservative Members say that the taxpayer cannot afford to help. The taxpayer cannot afford to have the strike continue any longer. The industry is the basis of our economic wealth, with more than £10,000 million of fixed assets and more than £4,000 million turnover per year.
If the Minister does not accept my words, let him accept the words of the BSC management. In its document, "Prospects for Steel", it states on page 20:
"The large borrowing which is required to finance it through this difficult period should be seen against the estimated £10,000 million replacement value of its fixed assets, and the
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importance to the country of retaining a business which makes possible a favourable trade balance in a commodity as central to the economy as steel."
Those are not my words; they are the words of the management. I urge the Government, even at this late hour, to respond to that appeal from the BSC. If they do not want to respond to our appeal, let them respond to the appeal of the BSC and save the country from economic and industrial suicide.
5.50 pm
Mr. Tom Hooson: It is appropriate that the main subject matter in this Welsh day debate today should be the economy and that it should be to industry that the larger segment of our discussion is devoted.
Since the early 1920s, Wales has always had an unemployment figure which has been more severe at any point than that of Great Britain as a whole. My hon. Friend the Member for Barry (Sir R. Gower) was quite right to draw a parallel with the problems faced by the South and the North of England. When the South coughs, the North or Wales catches pneumonia.
The tragedy that Wales suffered, particularly in the 1920s, was the great decline of the steel and coal industries. We can at least be grateful—although it is not something in which I rejoice—that while the relative importance of these industries in Wales has declined, it has also meant that to that extent the Welsh economy is now on a rather more sound basis than formerly.
I remind Labour Members that it was the unemployment of the 1920s that gave the Labour Party dominance in Wales for such a long time. It was, clearly, the despair of Welsh workers at the growth of unemployment after the First World War that gave the impetus in 1924 that led to Labour being dominant for so long in Wales—a dominance that is now clearly declining.
We have already heard the figures showing the rise of unemployment which occurred under the previous Government. Unemployment more than doubled. That is remarkable from the party that is supposed to be the party of labour. The depression that we are facing in this country as a whole—and Wales is suffering from it, along with the rest of the

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country—is very largely the result of the policies and mistakes of the Labour Party. It cannot be said that it is possible for a Government to create such a decline in seven months. The truth is that we inherited the incompetent policies of the years of Labour Government.
I draw particular attention to the great failure of the Labour Party to explain economic truths, not least to its supporters and members of the trade unions.
Mr. Anderson: Could the hon. Gentleman go to a place such as Ystradgynlais in his own constituency, and to other parts of Wales, and credibly say that the prospects for the Welsh economy are better now than they were last May?
Mr. Hooson: I say to the hon. Member for Swansea, East (Mr. Anderson) that there was no prospect of hope for the British economy, following as it was Socialist policies which were making industry a highly unprofitable proposition—to such a degree that there was very little incentive for money to be invested in industry. We must look for the gradual defeat of inflation, and after that we must find true incentives to make it possible for there to be investment in new jobs in Wales.
Mr. Alec Jones: I find it somewhat difficult to marry the hon. Gentleman's words with those of the Secretary of State, who emphasised that there are now 18,000 or 19,000 jobs in the pipeline. If there was this great lack of confidence when we were the Government, where did those jobs come from?
Mr. Hooson: It is true that there are about 18,000 new jobs in the pipeline. There are always new jobs in the pipeline. If we look at the net figures that have come through in the past 10 years, we see that a considerably larger increase in such net new jobs has been achieved under the Conservative Government than under the previous Administration.
We must look for an incentive for capital to be invested. This is crucial to the growth of productivity. One fact that is too little understood is the remarkably small amount of capital that is invested per worker in this country. It is about £8,000 per worker, whereas in Japan the
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figure is £38,000. It is only when we make it profitable for such sums to be invested that we shall be able to see significant increases in the productivity of British workers. Labour Members are perfectly aware that this is the truth. I wish that they were more willing to educate their own party in economic realities.
A remarkable feature of the Labour Party has been its failure to educate its members. We saw this under the leadership of the right hon. Member for Huyton (Sir H. Wilson) when he ran away from trade union reform in 1969. The present Leader of the Opposition gave an impressive speech at the Labour Party conference at Blackpool in 1976 about all the things that were needed to fight inflation. He dropped those needs about a year later, once the IMF had left us to manage our own economy. The former Chancellor of the Exchequer, the right hon. Member for Leeds, East (Mr. Healey) did the right things for a while, and we then saw the best growth rate of the British economy in the whole period of Labour Government. The Labour Party has on occasion started to do the right things, but it has never kept on with them.
The great need from now on is that we should carry on with the economic policies that we have started. In the coming years we must encourage new small firms in Wales. The evidence that we see from other countries, such as the United States of America and Germany, in relation to the proportion of new jobs coming from small businesses is impressive. In the United States, 80 per cent. of the new jobs created in the 1970s have been in firms in which fewer than 20 people are involved.
A considerable number of jobs can be created with relatively small investment. This applies especially to some of the service industries. In Wales, particularly in tourism, there is an opportunity for a considerable increase in the number of jobs. Indeed, the Wales Tourist Board has pointed out, in its most recent report, that already the value of tourism to Wales runs at £425 million a year.
Mr. Ednyfed Hudson Davies: On a point of order, Mr. Deputy Speaker. There seems to be smoke coming out of the ventilation vents.
Mr. Deputy Speaker: I am sure that the Serjeant at Arms has heard about it and that the matter is in hand.
Mr. Best: Further to the point of order, Mr. Deputy Speaker. The smoke seems to be coming only from behind the Government Benches.
Mr Hooson: I wrote to The Times not long ago about the excessive heat in this place. Possibly I am receiving retribution for making such remarks.
I was about to point out that the Wales Tourist Board projects the total number of new jobs that can be created in Wales by 1985 at 25,000.
I should like to make one or two comments on the position concerning industry within Powys. One worrying feature is the decline in orders coming to the largest employer in my constituency, Smiths Industries in Ystradgynlais. The company has been unfortunate because of two developments in recent years. One has been the considerable problems of British Leyland, which have affected Smiths clocks operations. There has also been a weak tendency meanwhile in the world clock market, and orders from the United States, from Sears Roebuck, have dropped considerably. We are therefore very concerned about the position in Ystradgynlais.
What is remarkable, however, is the number of small firms which have no complaints at all and are satisfied with the trend of business, which is adding to the number of employees every year. I pay a warm tribute to the help that the Development Board for Rural Wales has given to these firms. It is impressive that once firms have been attracted to rural Mid-Wales they have been pleased with what they have found. That is an impressive feature for the future. The element in the development board's facilities that I find is most appreciated is the advance factory. I should like an assurance from the Government that they will continue a generous level of funding for such factories. I hope that they can make it possible for companies that wish to do so to purchase those factories. I hope that the sum that is realised from such purchases will be earmarked for a rolling fund, so that further investment in factories can be made.
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I conclude by referring to one of the most important Welsh industries—agriculture. This industry has an impressive record of improving its productivity compared with other basic industries in Wales. To the great credit of farmers in Wales, and in England, the annual improvement in productivity in agriculture has been about 4 per cent. The farmers know well the bad effect of inflation on businesses such as theirs. Their costs are rising, typically, by about 25 per cent. a year, but their incomes have been declining in the past few years. The price paid for lamb and mutton has been appalling during the past year, and the market for beef has not been strong.
Mr. Geraint Howells: Does the hon. Gentleman agree that it is the Government's fault that prices on the sheep market have been so depressing during the past year?
Mr. Hooson: I can hardly accept responsibility for such matters as the refusal of the French Government to play fair under the Treaty of Rome regulations. I remind the hon. Member for Cardigan (Mr. Howells) that my Government increased the livestock allowances. He should note the generous remarks made by Mr. Myrddin Evans on behalf of the Farmers Union of Wales, which were of help to the farmers. The Aberystwyth department of agricultural economics—which is within the constituency of the hon. Member for Cardigan—has published figures showing that the real income of an average Welsh farmer is 19 per cent. lower than it was in 1974.
I hope that during the coming year or two the Secretary of State will promote the marginal land survey. It was a blot on the record of the previous Government that they took so long to initiate the land survey. It was initiated within their final few weeks of office. That is a reproach to the Opposition. It was a matter about which they had spoken for a long time. I realise that it is a complex subject, but more land in Wales is in this potential category than is the case in England. For that reason, we are looking for results from the study.
6.4 pm
Mr. Geraint Howells: This time last year many Conservatives in

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Wales said "Let us lead you in the 1980s, and Wales will be a prosperous country in which to live." Alas, the new decade has begun badly for Wales, and we are now facing one of the gravest crises in our history. I join many of my hon. Friends today in protesting at the Government's apparent indifference. The role of the Welsh Office is being devalued, since the feelings of the vast majority of Welsh people and the plight of our industries are not being relayed to the Government. The Ministers at the Welsh Office appear to have washed their hands of any responsibility in the matter.
It has been estimated during the past few weeks that there will be about 130,000 jobless people in South Wales by the end of the year, as an indirect result of the BSC closures. It is no comfort to those laid off or to their families to be told that in some dim, distant future the British economy will improve and their fortunes with it. They will not believe it in any case. They have been promised too much, too often. They are suffering—through no fault of their own—from the failure of successive Governments to make long-term plans for industry, which failure has now resulted in short-sighted panic measures in the steel industry and will probably mean the closure of productive coal mines and the extinction of numerous ancillary industries. I hope that this time the BSC management will do its utmost to bring the present strike to an end. In my view, the management should make the first move to bring it to an amicable end.
What is needed, if it is not already too late, is thorough research into the industrial and economic options—as suggested in an excellent article in the Western Mail recently—so that Governments can base their plans on realities rather than on ideological prejudices. The Government's approach so far, based as it is on monetarist theories, spells doom for Wales.
Mr. Nicholas Edwards: The hon. Gentleman is pleading the case of economic planning. Is he encouraged by the fact that previous Governments made long-term plans about the future market for steel which proved to be disastrously and completely wrong? What encouragement is there from that experience to follow the same path?
Mr. Howells: I do not believe that either major party has been successful in its long-term planning to help the British steel industry to survive. There is an urgent need to look at the industry in its present climate.
I shall not elaborate further on the problems of the industrial areas of Wales which will, no doubt, receive attention from other hon. Members during the debate. As a Member for a rural area, I draw to the attention of the House a similar, if less dramatic, decline in the fortunes of rural Wales.
The recession now affecting rural Wales is also having repercussions on the rural economy. For example, the wickedly high rates of interest, coupled with VAT increases, are proving disastrous for small businesses, which are the backbone of the economy in rural areas. There is also concern about the recent proposals to cut down on DHSS business in post offices, which would lead to the virtual closure of thousands of village shops that coexist with sub-post offices. Apart from the economic aspect of such closures, the whole scheme will probably cause additional hardship to the old, the sick and the needy. In their desire to appear efficient, the Government are creating new and serious problems.
On the other hand, the Government are unwilling to act positively on the oil companies' decision to restrict their sales to the smaller petrol stations. Thousands of petrol stations in North, South and Mid-Wales are faced with closure because the oil companies want to maximise their profits, without a thought for the social consequences. That is what the market economy means: let big international corporations have their way, and forget about the rest.
I am interested to note that even economists of monetarist inclination have now begun to express alarm at the rigid policies of the Tory Government—and they need only look at the economic state of Wales to see their worst fears confirmed.
It is time that the Government's attitude softened. Massive incentives are needed to bring new industry to the traditional and rural areas of Wales. I was very pleased when the right hon. Member for Rhondda (Mr. Jones) mentioned the problems that we have in Dyfed, which

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consists of my constituency, that of the Secretary of State for Wales—Pembroke—and the constituencies of the hon. Member for Carmarthen (Dr. Thomas) and the right hon. Member for Llanelli (Mr. Davies). They are worried that the advance factories programme envisaged by the Welsh Development Agency will not be fulfilled in the next year or two years due to many other parts of Wales calling on the services of the WDA.
Alas, the Government's insensitivity to Welsh needs is reflected in ways apart from their economic policies. Despite overwhelming support for Welsh language broadcasting exclusively on the fourth television channel, and Tory promises at the election and subsequently, we are to be denied this. I wish to make yet another plea to the Secretary of State to try to persuade the Home Secretary to show some civility towards majority opinion in Wales on a very important issue.
Together with the hon. and learned Member for Denbigh (Mr. Morgan) and the hon. Member for Merioneth (Mr. Thomas), I had the privilege of leading a deputation to see the Home Secretary and the Under-Secretary of State for Wales. The Home Secretary told us that he, not the Secretary of State for Wales, was responsible for that decision. He said "I take the blame myself. "It is a great pity that today the Secretary of State for Wales should be a little puppet to the Home Secretary by saying that he is not in favour of the fourth television channel. He was during the election. He represents the Welsh people. Why will he not stand up for the will of those people against the wish of the Home Secretary, who lives at the other end of England and does not understand the problems of Wales?
Mr. Nicholas Edwards: I should make it clear to the hon. Gentleman that it was a collective decision in which I took part. I fully agreed with the decision. It was a decision taken not by the Home Secretary alone but by all the Ministers concerned, and I fully supported it.
Mr. Howells: It is a matter for the conscience of the Secretary of State for Wales. However, I am sure that the hon. and learned Member for Denbigh will agree with my earlier sentiments about the Home Secretary alone being responsible for that decision. Indeed, it has
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been confirmed by the hon. and learned Member for Denbigh.
I should also like to ask the Government to institute a public inquiry, before any steps are taken, to investigate areas in Mid-Wales for use for the dumping of highly dangerous nuclear waste. There is a growing militancy in this area, as in many others, about the way in which plans of this kind are made without any prior consultation with those who would be most affected.
Mr. Delwyn Williams: Does the hon. Gentleman agree that the militancy in Mid-Wales is inflamed by irresponsible statements by members of the Liberal Party—in particular, a Liberal peer who said that he believed that in Russia nuclear waste had exploded? Do not such irresponsible statements inflame public opinion?
Mr. Howells: I was not at the meeting. According to what I have read, no one made irresponsible speeches. I am sure that the hon. Member for Montgomery (Mr. Williams) will catch your eye later, Mr. Deputy Speaker. If so, and if he wants to accuse that Liberal peer, he will have the glorious opportunity of doing so on the Floor of the House. Again, it is a question of sensitivity—a virtue that the present Government have yet to show in relation to Welsh affairs in general.
Finally, I should like to mention agriculture. According to the Secretary of State and the hon. Member for Brecon and Radnor (Mr. Hooson), things are very rosy in the garden. I was surprised that the Secretary of State did not mention the ban on imports of lamb into France and the sheepmeat proposals now before the Commission in Brussels. I should like an assurance from the Under-Secretary of State later that he will pass on to the Minister of Agriculture, Fisheries and Food the fact that Welsh sheep producers are in favour of the present guarantee deficiency payments scheme. We are not unduly worried about either the French or the New Zealand markets. The Government had a glorious opportunity last August to help the sheep sector by increasing the guarantee price for lamb by 20p a kilo. That internal problem could have been solved by the Government, but they were

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not willing to give encouragement to the sheep industry.
Mr. Best: The hon. Gentleman has been grudging. He said that everything in agriculture seemed rosy if one listened to my right hon. Friend the Secretary of State for Wales. Does not the hon. Gentleman also listen to the president of the FUW? On 5 November last year he welcomed
"the strong vote of support given to agriculture by the Government which was implicit in the industry's success in surviving the Government's spending cuts."
It is not only my right hon. Friend who has said that the Government have given significant aid to agriculture.
Mr. Howells: With respect, I am discussing not a statement issued by the president of the Farmers Union of Wales but the sheepmeat proposals—and there is a big difference. I am a little worried that the Secretary of State knew very little about the problems of Welsh agriculture front until today. Many Welsh farmers are expecting a lead from the Secretary of State. It may come in the years ahead, but we do not know.
No mention has been made of the co-responsibility levy about which dairy producers throughout Wales are concerned. I hope that the Under-Secretary of State will say something about that matter in winding up the debate.
Reference was rightly made by the Secretary of State to the rate support grant. The right hon. Gentleman has been given more power over local government money than any previous Secretary of State because of the proposed separate Welsh rate support grant settlement. However, the Government have set a maximum threshold of a 119p rate poundage. Authorities will be penalised financially if they spend over the odds. Seventeen local district authorities in Wales are already spending more than that. In recognition of the already existing grave difficulties in Wales, will the Secretary of State increase the threshold for Wales as has been done for London? The problems facing Wales are equally as serious as those in London. Wales has not enjoyed the preferential treatment that London and other metropolitan areas have enjoyed over the past few years.
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If we are to overcome our present crisis, and if Wales is to survive as a nation, I believe that decision-making must be devolved to the people of Wales so that they in turn will be able to solve their own political and economic problems without having to rely on the whims of politicians who neither care nor worry about the future of Wales as a nation.
6.19 pm
Mr. Donald Coleman: Debates on Welsh affairs are like mystery trips. In the past we have all enjoyed travelling up the hills and down the valleys and going all over the place. Today, however, is an exception, because Labour Members are determined to concentrate their minds on the problems of the steel and coal industries in South Wales.
I agree with the hon. Member for Cardigan (Mr. Howells) that problems will be created for people who work in sub-post offices, and I fully appreciate the difficulties that will result from petrol station closures. Such stations often provide employment for younger people in rural areas who cannot find other satisfactory employment.
There is also the important issue of the closure of the skillcentres. It is strange that the Government are suggesting the closure of skillcentres while at the same time highlighting the need to develop small factories and small industries in Wales as a means of providing employment. I do not disagree with that latter policy, but it is ludicrous that skillcentres are to be closed, since they are the means of training the people who will work in the factories and industries that the Government wish to see developed.
This debate is overshadowed by the fact that 6,883 steel workers at Port Talbot and 4,454 steel workers at Llanwern will lose their jobs if the BSC and the Government get their way. That is an undeniable fact. It is a certainty that we fear, and we also fear that those job losses will not be the end of the matter.
The coal mining industry will suffer. We have been told that at least 20 pits will close, half of them as a consequence of the closures proposed by the Government and the BSC in Wales. Those pit closures will add another 15,000 to the list of the unemployed in Wales. I use

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the word "unemployed", not the word redundant. Unemployment is an emotive word, but I make no apology for using it because I know what the effect of unemployment will be on the men, women and families who are afflicted by it.
The difficulties will not stop there. Unemployment in the associated service industries will add another 21,000 to the growing list of those out of work in Wales. That is the result of the so-called ripple effect. The BSC proposals will devastate whole communities and create an unemployment problem that will not be resolved for generations. The workers of Wales understand that only too well, and, understanding it, they are determined to prevent this Government—or anybody else—from perpetrating such a crime against the people of Wales. If anyone doubts that, let him recall that the feelings of the people of Wales were demonstrated last week in the great march in Cardiff, organised by the Wales TUC.
Mr. Delwyn Williams rose—
Mr. Coleman: cannot waste my time helping the hon. Member for Montgomery (Mr. Williams) to avoid unpalatable facts. I shall not give way.
Mr. Williams: Will the hon. Gentleman give way?
Mr. Coleman: No, I will not. The hon. Member is wasting his time. He had better sit down.
Mr. Williams rose—
Mr. Deputy Speaker (Mr. Richard Crawshaw): Order. The hon. Gentleman is obviously not giving way. The hon. Member for Montgomery (Mr. Williams) must resume his seat.
Mr. Coleman: I have no time to waste on Tory Party Central Office handouts. The hon. Member for Montgomery can forget about attempting to intervene.
A meeting was convened on that day in Cardiff by the county and district councils of South Wales and a meeting held on Saturday in Swansea was attended by representatives of local authorities, trade unions, Members of Parliament and others. That demonstration and those meetings expressed the feelings
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of the Welsh people about what is happening.
Let me give some advice to both the Government and the BSC, and they had better heed it, because they have a tiger by the tail. The mood of the people of Wales is that they are not prepared for jobs in the steel industry to be sold, and they will not allow the industry to be destroyed. It has been said that the reason why the decision was taken not to do anything more at present to the steel industry in Scotland was that it would be politically unwise. Let the Government get this clear. It is equally politically unwise to proceed with the decisions announced for Wales. There is now an awareness in Wales that if this blow is struck we shall be destroyed economically and industrially.
If the Government, even now, do not understand the mood in Wales, and if they continue to stand aloof from the problem that threatens to engulf us, they will have abrogated their social responsibilities. That abrogation will be interpreted as a twin act of political vengeance and economic folly that will unite the people of Wales in their fight against the Government and the BSC.
The opposition of the people of Wales will be such that it will destroy the Government and their supporters who propose to perpetrate such a crime upon the Welsh people. Such a blow, struck at the coal and steel industries and the economic survival of Wales, will be a crime against Wales.
6.27 pm
Mr. Keith Best: It was inevitable that much time in this debate would be spent in discussing the steel industry in Wales and the effect of its problems upon Wales and its economy. It is right that we should have a long debate on that aspect because, obviously, it concerns hon. Members on both sides of the House. It concerns them whichever part of Wales they represent. It does not concern merely the areas about which some hon. Members feel obliged to make constituency speeches, such as that just made by the hon. Member for Neath (Mr. Coleman), who is now disappearing from the Chamber.
I wish to look to the future of the steel industry. We should concentrate today on where future jobs will come

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from. It is not particularly productive to cry over spilt milk—unless we propose to learn a lesson from what has happened—nor is it particularly productive to score party points. However, I must admit that when some Labour Members make their points I find it hard to restrain myself.
In 1973 the document entitled "Steel: British Steel Corporation: Ten Year Development Strategy" outlined plans for a massive investment in the future. That investment was to be £3,000 million worth of resources over the ensuing 10 years. The document said:
"The strategy is not free of risk."
With the benefit of hindsight, we now know that that prediction was correct, and the level of demand has not been such as was postulated when the document was published in February 1973.
The intention at that stage was to raise the corporation's capacity from 27 million tonnes to about 33 million to 35 million tonnes of liquid steel by the late 1970s and to about 36 million to 38 million tonnes during the first half of the 1980s.
That probably seems rather strange in relation to the present planned capacity of 15 million tonnes, but it was not just the last Conservative Government who thought that the future would hold a brighter prospect for British steel than has proved to be the case. Under the Labour Government, in an interim report published on 4 February 1975, Lord Beswick suggested an acceleration of the British Steel Corporation's strategy towards the upper capacity limit suggested in the earlier plan. Thus, even at that stage, although it was becoming apparent that world demand would not be in correlation with the plans adumbrated in 1973, there was still a plan for increased capacity.
Perhaps the greatest tragedy of the British steel industry is the fact that labour productivity in 1978 was no higher than it was in 1973. The failure to improve productivity has, most regrettably, allowed import penetration and increasing competition from the private sector to deprive the corporation of nearly half the British market.
It is instructive to look at the Labour Government's White Paper "British
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Steel Corporation: the Road to Viability", in which it was said on page 4:
"The Government accept that BSC should seek to negotiate closures at such plants in close consultation with the TUC Steel Committee and local workforces."
Thus, the Labour Government had a sensible attitude towards the British Steel Corporation, although I suspect that some Opposition Members would prefer to forget some of the things said at that time.
Mr. D. N. Campbell-Savours: In consultation.
Mr. Best: Indeed, in consultation. But is it not a tragedy that, unlike what happened in British Leyland, there was not a secret ballot of British Steel Corporation employees on whether they wanted to take industrial action? I suspect that we might have seen a situation very different from the present.
Mr. Ioan Evans: Does the hon. Gentleman think that a secret ballot on the first offer of 2 per cent., with inflation at 17 per cent., would have resulted in the response that he suggests? Further, as he is talking about the public sector of the industry, may I ask him to pay attention to the announcement today by the chairman of Had fields, the private sector company in Sheffield, which, because of the way this Government have mishandled the whole steel problem, is threatening not to pay taxes? That is the view in private industry.
Mr. Best: The hon. Gentleman misinterprets the situation. As I understand it, the distress being felt in the private sector is at the unreasonable attitude being taken towards it in secondary picketing by the workers in the public sector. That is the great tragedy, and the hon. Gentleman cannot get away from the certainty that that will destroy the British Steel Corporation faster than anything else.
The Labour Government said on page 8 of their White Paper:
"Over the last three years, BSC produced about 100 tonnes of liquid steel per man year, as compared with 1976 figures of 150 tonnes in Germany and 120 tonnes in France. The differences"—
I emphasise that this comes from the last Labour Government—
"cannot be explained away only by differences in the pattern of plants or products. They are

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due more to management and manpower practices…Management, the trades unions and the local workers' representatives have a major role to play in helping to achieve this"—
that is, greater productivity—
"and so convince the consumer that he can rely on BSC to deliver on time. The TUC Steel Committee have made it clear that they are committed to the development of the Corporation into a profitable, high-wage, high-productivity industry comparable to its major European competitors."
I wonder whether the hon. Member for Aberdare (Mr. Evans) would care to comment on the question of high productivity, when the whole basis of the wage negotiation thus far has been that there must be greater productivity.
Mr. Campbell-Savours: Does not the hon. Gentleman realise that all these statistics have been totally discredited in a number of documents, and does he recognise that hon. Members on both sides are becoming increasingly sick and tired of listening to figures which people know are not true? As a Member of Parliament, does the hon. Gentleman acknowledge that he has a duty to present statistics which are accurate?
Mr. Best: I do not wish to do the hon. Gentleman a disservice—I know that he was not in the House when that White Paper was published by the Labour Government in March 1978—but I note that he will not believe any other such document that comes from his side in future. That is very wise.
The facts of the situation in the British Steel Corporation have been corroborated by a disinterested observer, Dr. J. M. Kay, who until the mid-1970s was in charge of the corporation's strip mill division capital investment programme. He was quoted in the Western Mail recently as saying:
"You have got a totally defeatist top management. I do not blame the Government for putting the financial screws on them—after all, in recent years they have lost some £4,000 million of taxpayers' money."
It is all very well for hon. Members to talk about the situation of British steel in isolation. My right hon. Friend and his colleagues have a responsibility also to the taxpayer, and that is the point which they have endeavoured to get across during the past few days. I wish—this is where I shall leave the affairs of the British steel industry—that the Opposition would concentrate less on the closures
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which were contemplated by their own Government and a little more upon what might be the one valid question to investigate, namely, whether the timetable up to March this year is too early. I make no comment about it, but I suggest that they might well concentrate on that and find it more productive in the light of the timetable going to 1981 of our European competitors.
I wish to look now to the future rather than at the present and the past. In looking to the future for Wales, one has, first, to identify the nature and the incidence of unemployment, secondly, to decide what industries or enterprises will provide jobs, and, thirdly, to decide in the light of that information how best those industries and enterprises can be encouraged and how people can be equipped to exercise themselves within them.
That is the logical approach, and it calls for a lot of valuable hard work to ascertain the answers which meet those criteria. At this point, I pay particular tribute to my own borough council, the Ynys Môn borough council, for having gone to the trouble—I think that in so doing it is unique among local authorities in Wales to employ independent consultants to look at the employment and unemployment situation in Anglesey.
The consultants came to Angelsey and over quite some time amassed their evidence by questionnaire, by direct questioning and by compilation of statistics already available. They ended by producing a number of interim documents, culminating in the publication of their final document—I have it here—entitled "Employment and Unemployment in Anglesey". This is a comprehensive review and analysis of the statistics of unemployment, of its incidence and of ways by which it can best be remedied.
I suggest that that is something that other local authorities might seek to do in Wales, and perhaps it is something that my right hon. Friend and his colleagues also could consider carefully, with a view to seeing whether some good elements could be drawn from an analysis of that kind.
Mr. Anderson: How can local authorities plausibly set about that task unless they have some idea of the total Welsh dimension, which relies on their knowing what are the Welsh Office projections?

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How can the hon. Member justify the Welsh Office not disclosing for public debate in Wales the assumptions on which it is working in respect of unemployment?
Mr. Best: I do not know whether the hon. Member was aware of whether the previous Government published figures—
Mr. Anderson: Answer my question.
Mr. Best: I am answering the hon. Member's question. There were two parts to it. That is the answer to the second part. The first part contained a perfectly valid point, which was that a local authority cannot operate in isolation. Of course, it cannot do that. It must be part of a comprehensive review. But what a local authority can do, perhaps better than the Welsh Office, is to ascertain, on a parochial basis, the patterns of employment and unemployment within its area, and it can decide the priorities thereafter within the life of the macroeconomics of Wales as a whole. I accept that it is within that ambience. Of course, it cannot be looked at in isolation.
The disturbing fact which appears from that report—and I intend to quote some figures relating to the whole of Wales, and not just Anglesey, although the lion's share of the report appertains purely to Anglesey—is that the worrying trend is in the growth of the long-term unemployed. In January 1976, 16 per cent. of those unemployed had been so for more than 52 weeks. In January 1978, that percentage had grown to 23 per cent., and in July 1978 it had grown to over 30 per cent.
When one goes to local employment offices and talks to employment officers, one realises that there is an ever-increasing hard core of long-term unemployed. The tragedy is that these are the sort of people who, by the nature of their long-term unemployment, are less likely to be offered the jobs that will be available in the future—for a very simple reason. If someone has been unemployed for a long time, obviously his ability to work within a particular environment is impaired by the passage of that time. To a certain extent, he falls into a rut of unemployment. That means that when a firm wants to take on labour and notifies the local jobcentre, the jobcentre will almost certainly refer to the firm concerned some-
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one who has been unemployed for only a short time and who has in recent memory the knowledge of what it is like to be in a working environment. This is something that we must accept and examine extremely carefully from the point of view of the long-term unemployed, because they are the people who will become unemployable if we are not extremely careful.
Having said that, I come to the question of where the jobs are to be found in the future. My hon. Friend the Member for Brecon and Radnor (Mr. Hooson) mentioned tourism. Before Opposition Members leap up and say "You are not seriously suggesting that tourism is the panacea for the unemployed in Wales", let me reassure them. I am not saying that it is a panacea, but I am saying that at very low cost in public expenditure it is a good way to provide employment.
About 90,000 people are now employed in tourism in wales. The creation cost per job is only £1,800, which compares favourably with the creation of jobs in other sectors, particularly the high-cost investment manufacturing sector. The Wales Tourist Board's claim is that the present revenue—my hon. Friend quoted a figure of £425 million in 1978, and it is estimated at about £500 million for last year—can be raised to £1,000million by 1985 and create some 25,000 new jobs, over 10,000 of which would be in the valleys of South Wales. I am sure that hon. Members who represent constituencies there will take particular note of that.
Tourism is particularly important for the economic survival of Wales. The inherent natural beauty of Wales is obviously the main factor in this industry. Tourism not only creates jobs at low cost per capita but supplements the income of those who sometimes find themselves on low incomes. I am sure that the hon. Member for Cardigan (Mr. Howells), who spoke about agriculture, will accept the estimate that about 4,000 farmers in Wales supplement their income through the medium of tourism.
Mr. Hudson Davies: The hon. Member is right in saying that there is enormous tourism potential in Wales, in the valleys as much as anywhere else, but does he agree that a successful tourist industry depends on a successful economy? Does he agree also that many of the visitors to North Wales have

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been the steel workers of South Wales? How does he see the success of the tourist industry in Wales equating with the kind of decline that the Government would like to bring about in the basic industries of Wales and other parts of the country?
Mr. Best: It is wholly misleading and thoroughly naughty for the hon. Member to say that the Government wish to bring about an industrial decline. I do not believe that he is seriously putting forward the view that the Government would try to work towards an industrial decline in Wales. If the hon. Member is saying that, I am forced to hold his views in less respect than I have in the past.
Mr. Hudson Davies: Intentions may surely be interpreted on the basis of actions.
Mr. Best: I do not think that the hon. Member is in a particularly strong position to speak, bearing in mind the recent history of Wales and an unemployment figure of over 101,000. I quoted some figures of the number of jobs created by the previous Labour Government as compared with the number created by the previous Conservative Government. I do not think that the hon. Member is on strong ground.
Perhaps I might deal with not the farcical point that the hon. Member made but his serious one, namely, whether tourism depends upon a successful economy. To a certain extent the hon. Member is right, in so far as people who are not enjoying the benefits of a successful economy are less likely to take holidays. However I remind him—he knows this from his experience in connection with the Wales Tourist Board—that although large numbers of people who come to Wales as tourists come from the rest of the British Isles, a significant proportion come to Wales and other parts of the United Kingdom from abroad. Another reason why one should seek to stimulate the tourist industry—I am sure that the hon. Member would agree with me—is that, apart from anything else, it enhances the balance of payments. It is a very good way of bringing foreign money into this country.
I do not wish to say any more about tourism, other than that it is something
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that we should look at very carefully from the point of view of creating jobs. I welcomed the speech of my hon. Friend the Under-Secretary of State, the hon. Member for Conway (Mr. Roberts), at the Park hotel in Cardiff on 11 January of this year. I visited the Wales Tourist Board only a few days ago. Certainly the people to whom I spoke there were greatly heartened by the news conveyed in my hon. Friend's speech. Among many other things, he made two major points. The first was that the Government are to maintain the Wales Tourist Board's grant-in-aid in 1980–81 at the same level as in the current year. That offers great succour to those employed by the Wales Tourist Board.
The other point, of perhaps greater significance and with ramifications for the future, was the statement that the Government were considering introducing a scheme of interest relief grants under section 4 of the Development of Tourism Act 1969. That should have been brought about some time ago. For far too long tourism has not been regarded as an industry. Whereas manufacturing industry has received interest relief grants for some time, tourism and those involved in the stimulation and development of tourism have not received such help. I welcome my right hon. Friend's statement, which indicates the Government's realisation that tourism should be treated like other industries and have the same advantages and availabilities as other industries.
At the beginning of my speech I said that we must ascertain the incidence of unemployment and the sort of industries that could take the place of those in decline. It is important also to try to gauge exactly why employers move to particular areas. Unless we can gauge that, many governmental incentive schemes will be nugatory because they will point in the wrong direction. The report that was commissioned by my local authority dealt with the problem in some depth. A number of employers were interviewed. In the manufacturing firms, the reasons that they gave for siting their firms in Angelsey were, in order of frequency, first, the availability of premises, secondly, the availability of labour, thirdly, the availability of grant, fourthly, local associations of the owner, fifthly, particular geographic factors and, lastly,

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local demand. In the service industries, the priorities were serving the local need and the purchase of existing business.
I should like to concentrate on the manufacturing firms. The report shows that the availability of premises is extremely important. The Government should concentrate on stimulating the Welsh Development Agency to provide advance factories rather than go into the more turbulent water of investment in particular firms. I make one particular plea. The Welsh Development Agency and local authorities should consider far more the provision of premises for the smaller business man, who may require only a lock-up garage. He needs that garage to expand from the cottage industry that he may have started in his own garage or home. Local authorities and the Welsh Development Agency can be of great help in that way.
I conclude by making four points. I shall be brief because I realise that other hon. Members wish to speak and there is not sufficient time to develop those points.
Mr. Geraint Howells: I know that the hon. Gentleman has been carried away in the debate, but is he aware that he has been on his feet for nearly half an hour?
Mr. Best: I was unaware of that, and therefore I shall draw my remarks to a close succinctly.
First, I welcome what was said by my right hon. and learned Friend the Chancellor of the Exchequer about the establishment of an enterprise zone. I hope that my hon. Friend the Under-Secretary of State will deal with that matter when he winds up the debate. Secondly, I believe that it is manifest from investigations of employers that the greatest incentive is the alleviation of taxation. Thirdly, I hope that the Government will look into the question of fuel costs for industry. Fourthly, I know that my hon. Friend is aware of the need for training. My right hon. Friend the Secretary of State has said something about that, but I hope that my hon. Friend will also deal with the subject in his closing remarks.
Several Hon. Members rose—
Mr. Deputy Speaker: Order. Before I call the next hon. Member, I should point out that another 11 hon. Members wish to speak. Long speeches do not help. Anybody who speaks for more than 12 minutes between now and 9 o'clock will prevent other hon. Members from speaking.
6.54 pm
Mr. Roy Hughes: I assure you at the outset, Mr. Deputy Speaker, that I shall not abuse the time of the House in that respect.
There is no doubt that the life and the economy of Wales are overshadowed by the national steel dispute. As I see the problem, there are two aspects to it. First, there is the wages issue. I believe that the steel workers' claim is perfectly justified, bearing in mind the level of inflation in the economy. Steel workers' wives in Newport will continue to purchase their goods in the same supermarkets as housewives with husbands who are employed in other industries, Certainly, steel workers will not stand idly by and see their wage and living standards eroded.
The other aspect of the dispute is far more significant—the job losses in the steel industry. They will spill over into coal and other ancillary industries. I believe that BSC's proposals for Llanwern and Port Talbot are catastrophic. Over the years, I have had a fair bit to do with BSC. From the chairman down, its members have always been perfectly courteous to me. However, I would be less than frank if I did not say that many people are questioning the judgment of the executives in the BSC. It is not necessary to read the columns of Private Eye to come to that conclusion.
Not so long ago, the BSC was pressing the Government for an investment of £800 million at Port Talbot. Now, not so long after that, it has proposals to decimate the works—even one proposal to close it. In recent weeks, I have taken part in illustrating the fiasco of the limestone contract at the Llanwern works. That is a 15-year contract for which the BSC currently pays £300,000 annually for materials that the works does not require. The figure is index-linked and, presumably, it will escalate each year until the contract terminates in about 1987. I have been trying to find out how much of the limestone has been delivered to the works over the years and how much has been paid for.
I intervened in the speech of the Secretary of State to refer to the conundrum over the coal imports into Llanwern. Imports of dear German coal and cheap
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American coal will now be going to Redcar. The House is entitled to more explanation about these matters. Added to that, there are a charge of nepotism in the BSC and the existence of what we know to be a Yorkshire mafia who have permeated the top positions in the South Wales industry. The least that can be said is that the BSC has not come up to our expectations of public ownership.
Perhaps there will be easement of the corporation's redundancy proposals as a result of the talks going on between the unions and the corporation—particularly the redundancy proposals that will affect the two principal works in South Wales, Llanwern and Port Talbot. What we must face up to is that it is no good producing steel simply to stack it up on the mountainside. It has to go into manufactured products such as motor cars, washing machines and other consumer durables—to use that posh economic term. The case for import controls is therefore overwhelming. That is the answer to the challenge made by the Secretary of State to my right hon. Friend the Member for Rhondda (Mr. Jones). For many years I have seen the situation.
It is a pity that many of our key industries have been dragged down. I hate to say it, but it is particularly vexing to me that the Labour Government of 1974–79 took little, if any, action. Is it any wonder that we now have these so-called ideological differences in our party? The prerogative of the leadership is now being questioned on important policy issues, particularly those affecting employment in Wales.
Imports are rising so quickly that the revenues from North Sea oil cannot prevent a serious balance of payments crisis in the near future. When such a crisis arrives, it is areas such as Wales, particularly South Wales, that will suffer most, if experience is anything to go by.
Last year the United Kingdom had a trading deficit of £2 billion, despite the fact that Britain is virtually self-sufficient in oil. What other country would have allowed the import penetration of motor cars to reach 60 per cent. without taking action? Is it any wonder that our steel industry in South Wales is now suffering? The Treasury and the previous Labour Government have a case to answer.

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A distinguished school of Cambridge economists has for some time courageously called for import controls. It believes that only that aspect of economic policy can prevent the de-industrialisation of our country. The Western Mail, the daily newspaper of Wales, carried a report last Friday in which The Economist Intelligence Unit came to the same conclusion, namely, that import controls are essential. The intelligence could not have been all that good, because it has taken the unit so many years to catch up with reality. The volume of imports of manufactured goods must be checked and then reduced.
If people bought British and Welsh goods, production would expand. People would be taken out of the dole queue, and unit costs would be reduced. Such a policy is tailor-made for our principal steel plants in South Wales—Llanwern and Port Talbot. Millions of pounds have been invested in those two major plants. They must be operated at full strength if they are to be economic and profitable.
In the leading article in the business supplement of The Observer yesterday, William Keegan stated that such policies are now being discussed behind closed doors. Those policies would bring the country into a certain amount of conflict with the Common Market. However, most people realise now that it is membership of that organisation that has brought us to our present plight. Wales is not part of that golden triangle that was brought into focus during the referendum debate. The leader writers of financial columns have had to eat their words and the advice that they gave to the British people at that time.
Roy Jenkins and Shirley Williams were prepared to split our party from top bottom on that issue. The people of Britain were kidded, with the full backing of the media. A week or two ago I was on the picket line at the Llanwern steelworks. One of the pickets came up to me and said:
"Mr. Hughes, I voted for us to stay in the Common Market, but if we could come out you could take my right hand off tomorrow."
That is the extent of feeling now, and it is particularly manifest in the steel industry.
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There is no doubt that EEC membership has done immense damage to the economy of Britain, and particularly to that of Wales. That view is broadly shared. We know of the appalling budgetary costs. They are apparent for all to see. Even the Prime Minister has had to make bitter complaints about our net contribution of £1 billion. It is pretty obvious that she has not been able to do much to rectify the situation.
The damage to our industry is even more significant, as we in Wales are learning from our own experience. The economy of the United Kingdom deteriorated at a more marked rate throughout the 1970s. During that time our economy was opened up to our European competitors. Soon the shutters will have to be put up. From a Welsh point of view, the sooner the better.
7.06 pm
Sir Anthony Meyer: Whatever happens, this country has to live in a competitive trading world. Import controls would not make it any easier for us in such an intensely competitive world. However, I do not propose to continue along the lines of the hon. Member for Newport (Mr. Hughes) or to tread on the bitter family quarrel that he referred to earlier. It has been a sombre debate and I shall speak briefly and sombrely.
Whatever happens, unemployment in Wales will rise to a terrifying level. The underlying reason for that unemployment is that the industries which provide so high a proportion of jobs in Wales have become uncompetitive. Too much of British industry is unable to compete in world markets; too high a proportion of that uncompetitive industry is in Wales. More serious still, we have now sunk to the point where a further increase in unemployment is inexorable—either through this Government's policies of forcing those industries to become competitive or through the policies now, I believe, advocated by the Labour Party of allowing industry to become still more uncompetitive. Either way, unemployment will follow inexorably, because the rest of industry does not produce enough work to subsidise those uncompetitive industries and firms.
However, whatever the real reasons for unemployment, it will be under a Conservative Government that unemployment

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in Wales will reach—and may well exceed—the estimate of 130,000 that was predicted by the Wales TUC. Naturally, the Labour Party will make the fullest political capital out of that. We Conservatives cannot complain. We made political capital enough out of the fact that the Labour Government, which came to power with the slogan
"Back to work with Labour",
doubled the number of people out of work in Wales. I hope that the Labour Party, in its understandable glee, will be as careful as I hope that we were not to promise any magic cure for the ill of unemployment.
In Wales the situation has gone well beyond charges and counter-charges of Government inefficiency and misguided policies. There is no mistaking the bitterness and fear. The nightmares of 50 years ago are recurring. It is natural that workers, faced with an erosion of their living standards or with the far worse prospect of redundancy, should turn to industrial action to safeguard their living standards or jobs.
Right hon. and hon. Members on the Labour Benches are clearly under intense pressure to support or even take the lead in industrial action. Except for the comparatively small number of extremists, the strikers are their own people—their friends, workmates and political associates. Those people are in conflict with the policies of a Conservative Government. If they so choose, hon. Gentlemen are perfectly entitled to support the call for a general strike, which is being urged by the Wales TUC to force the Government to change their policies. The right hon. Members for Cardiff, South-East (Mr. Callaghan) and for Ebbw Vale (Mr. Foot) have chosen to do so. No doubt, in urging the TUC to initiate a general strike, language such as we heard from the hon. Member for Neath (Mr. Coleman) will prove powerfully emotive.
It is perhaps futile and impertinent for me to beg the Labour Party to think again, but I have to say this. The Government have a substantial majority that will see them through this Parliament, however many by-elections they lose—and they will lose many by-elections. That majority is quite astonishingly united and resolute. We believe that, however unpalatable may be the consequences of some of the Government's policies—and
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those of us who accept the idea of State intervention and believe passionately in the ideal of one nation find the consequences unpalatable indeed—the alternative of putting off cruel decisions will no longer buy even a few months' reprieve for living standards or jobs. We believe that we have reached the point where a massive confrontation with the unions in Wales is less dangerous, even in the short term, than using taxpayers' money to pay wage increases unearned by higher production or postponing indefinitely the move towards competitiveness.
That being so, the unions cannot force the Government to change their basic strategy, but they can bring Wales close to total collapse. They cannot govern Wales, but they can make it ungovernable. I beg the Labour Party to think deeply and calmly before it travels down that dangerous road. The Labour Party is a great democratic party, and Labour Members are, I know, great Welsh patriots. If they encourage the Wales TUC to plunge Wales into chaos, and if they make it so unattractive to incoming industry, particularly industry from overseas, what eventual inheritance are they preparing for themselves?
The Labour Party is in a strong position. Although it cannot force the Government to change their policies, it can ensure that those policies do not succeed. What is more, I believe that the crisis facing Wales is so grave and urgent that we are entitled to ask the Labour Party for a limited but priceless degree of co-operation—that it should actively discourage the unions from political strike action.
If the Labour Party does that—and I am aware that I am asking a lot—the Government must give something in return. It cannot be pressure on the nationalised industries to concede wage increases unmatched by higher production. It cannot be a guarantee to shelter any section of the community against falling living standards. However, we can and should give an even firmer commitment than hitherto to providing jobs for the people of Wales in so far as it is within the power of the Government to do so.
We have to admit that private enterprise, which we still firmly believe is the long-term salvation for the country, is so debilitated after years of buffeting from both sides that it is not capable of providing enough jobs, or providing them

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soon enough, to replace the jobs being lost in the public sector. For that reason, I was particularly glad to hear what my right hon. Friend said about the direct action that the Government are taking to provide additional jobs in Wales.
We have to accept a degree of direct responsibility on the Government and the agencies of the Government to provide jobs. We may have to continue with job creation programmes that are barely cost-effective. We may have to envisage a more direct and expanded role for the Welsh Development Agency and the Development Board for Rural Wales. We may have to spread our programmes of closures, including steel closures, over a longer period than is desirable in the industry's interests. In short, we may be obliged, in the interests of what the right hon. Member for Rhondda (Mr. Jones) called social cohesion, which is now gravely threatened, to accept a slower pace of advance towards industrial competitiveness and a slower move towards those higher living standards, improved social services and decent levels of pensions that we all aim to achieve.
We must be quite clear about the concessions that we may be forced to make in order to induce the Labour Party to co-operate in urging restraint on the unions. It amounts to sharing out the available work. In a static economy, that means sharing out the available earnings. The price of cutting unemployment without raising production is lower living standards for all. I am prepared to pay that price if the Labour Party is, but we must pay it with our eyes open.
If we pay it, it must be only in part and for a time. The Government may be forced, in order to retain social cohesion, to slow down their progress towards efficiency and prosperity. What they must never do is start marching in the other direction. If that is the price that the unions and the Labour Party demand in return for not plunging Wales into temporary chaos, the answer must be "No".
7.18 pm
Mr. Ednyfed Hudson Davies: This is a time of suffering. The country is suffering from the doctrines of a Government who are bent on pursuing
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their monetarist policies. What is bad for Britain is always worse in an area such as Wales. In addition to cyclical economic problems, we have underlying secular economic problems.
The Secretary of State should seek to ameliorate in Wales the effect of the policy of disincentives to industry. The Government have engineered a minimum lending rate that makes it unthinkable that industry will wish to invest risk capital in Wales. There are no signs of the entrepreneurial rebirth that was to flow from cuts in higher levels of income tax.
I ask the Secretary of State whether there has been any substantial fall in the number of applications for Government aid to industry. There is no buoyancy in Wales. The right hon. Gentleman will probably claim that he has made aid to industry more selective and, therefore, more beneficial, but in fact he has reduced it. I raise the question of the criteria of applying section 7 of the Industry Act to aid. This kind of aid has become so discretionary that firms cannot calculate what they are likely to get and, therefore, cannot use it as part of their planning in areas like South Wales where cuts in public expenditure merely compound the evil effects of Government policy.
What kind of growth can possibly come from this contraction? It is rather like the silly tale of the tinker who wanted to train his donkey to live without food. Step by step he reduced the donkey's diet, until he got to a point where the donkey was living without food. Then, for reasons that the tinker could not understand, the donkey died. The Government are performing an absurd exercise on the economy of Britain as a whole and Wales in particular.
The hon. Member for Flint, West (Sir A. Meyer) talked of the possibility of further contraction. With nothing left in the end except a tiny profitable residue, everything is being sacrificed in the interests of that residue. In the meantime, the whole of the economy has died as a result. This Government, who have taken away so many supports of industry, are none the less obsessed with the notion of profitability in the steel and coal industries, regardless of the astronomic social costs of the contractions that they envisage.

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Is the Secretary of State not aware of what the threatened steel closures will mean in real terms to Wales? The Government have not been given a mandate to close down the whole economy. The contraction in the steel industry will lead to contraction in the coal industry and the whole of the economy that is supported by those activities.
In my constituency I have the National Smokeless Fuel ovens at Nantgarw, and even without the cuts and steel closures Nantgarw's coking plant and the pits supplying it are being put in jeopardy by the BSC's purchase of foreign coal, which is very often subsidised at source. In the present economic climate it is nothing less than criminal for the Government to fail to intervene in the BSC's purchasing policy. We cannot have one nationalised industry pursuing a policy which is so destructive to another nationalised industry. When the BSC's commercial policies blight the coal industry, the Government should intervene.
I do not believe that industrial action should be undertaken lightly. I certainly do not believe that it should be undertaken vindictively. However, we have come to the point in Wales where the Government have so abandoned responsibility for the real needs of the economy that creative industrial action is called for. This is the only way to compensate for the Government's failure to intervene. Selective refusal to handle certain kinds of goods is becoming more and more necessary.
I have listened to my hon. Friend the Member for Newport (Mr. Hughes) talking about import controls and the need to introduce them. In the past I have been opposed to import controls, but we are now getting to the point where, in certain areas, we must think in these terms. If the Government will not intervene in the purchase of foreign coal and steel, it is the duty of the dockyard and transport workers of South Wales to carry out their responsibility for them—[HON. MEMBERS: "Disgraceful. "In the present predicament, I urge that not one tonne of foreign coal should enter South Wales. We cannot afford to sacrifice our economy in the interests of exporters in Germany, Australia or the United States.
The Secretary of State would have benefited greatly from attending the TUC rally in Cardiff a week ago. He would have
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seen a strength emerging from the people who, in the end, will not allow these things to happen. The dockyard and transport workers of South Wales may well do the Government's work for them in certain areas where the Government are unwilling to take action themselves.
Does not the Secretary of State comprehend the importance of a coal industry for the future? While he is prepared to allow the coal industry in South Wales to be run down as a direct effect of the kind of steel policy that he envisages, does he realise that at the same time Germany is building and subsidising a coal industry as an investment for energy needs of the future? Either we must prohibit the importation of foreign coal or we must introduce subsidies, as other countries have done, in order to make South Wales coal competitive.
We complain that our coal is uncompetitive against that of other countries when, as part of their energy policies, they are subsidising their coal industries. If we allow our coal industry to decline, we shall throw away all the work done in recent years, by investment and by other means, to increase its efficiency. We are getting to the point at which our coal industry could reach a high level of competitiveness, and if we were to subsidise it we would see the South Wales coal industry to the end of this period of improvement.
Judging by his performance, if it were left to the Secretary of State he would be happy to think of the memorial to his tenure of office as being the fact that he had presided over the decline of the steel and coal industries in South Wales.. But the people of South Wales will not allow that to happen. If he pursues these policies, he will have on his hands an indusstrial battle of his own making which he cannot hope to win. Let him take heed.
7.28 pm
Mr. Geraint Morgan: I shall, of course, apply to myself that self-denying ordinance in respect of time that you have called for, Mr. Deputy Speaker.
I wish to make a few observations about one of our basic industries, agriculture, and then turn to a completely different subject which is at present highly topical but which is not often raised in Welsh debates, namely, the

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future of the Welsh language with particular reference to bilingual broadcasting in Wales. My right hon. Friend the Secretary of State touched briefly on that subject.
I should like to begin with agriculture. There is much on which the Government deserve congratulation, despite the remarks of the hon. Member for Cardigan (Mr. Howells). The position that the Government inherited was hardly rosy. Under the previous Government, farming income had declined steadily in real terms by no less than 11 per cent. in 1978 alone. The same sorry story was reflected in the decline of animal and poultry stocks. By June 1979, the pig herd in Wales had fallen by about one-third compared with 1973. The number of cattle had been reduced by about 100,000 and the poultry flock by upwards of 1 million in the same period. The area of total tillage fell by nearly 10,000 acres.
Against this sombre background, my right hon. Friend the Minister of Agriculture, Fisheries and Food announced, towards the end of last year, substantial increased payments for hill farmers in the form of considerably increased allowances for hill cows and hill sheep. These were especially welcome. So was, if I may quote the words of the president of the Farmers Union of Wales,
"the industry's success in surviving the Government's spending cuts."
Not least, the industry is grateful for the three devaluations of that old ogre, the green pound, since the Government came to office—5 per cent. in June last year, 1·2 per cent. in November and 5 per cent. again in December. The former yawning gulf between the green pound and the pound sterling has largely been bridged. We now have the prospect, unbelievably distant a year or two ago, of positive MCAs being payable in the next few weeks if the strength of sterling persists.
Having said all that, I would not like Ministers to suppose that Welsh agriculture is now one big garden of total contentment. On the contrary, Welsh farmers are becoming increasingly concerned about the time being taken over the Government survey of marginal land—a very important issue in the Principality, as may be assessed from the fact that, of Wales's total hill and upland
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acreage used to rear sheep and cattle, no less than 30 per cent. is rough grazing. The last Government dragged their feet on the matter and failed to come to any decision. They have now been gone for the best part of a year. I was hoping, in view of the growing criticism among farmers, that this much-needed survey would be speedily completed.
The announcement by my right hon. Friend today that this will not be achieved until next year will be received with great disappointment in Welsh agricultural circles. I wonder whether something cannot yet be done to expedite this decision. I hope that my right hon. Friend will consider that possibility and discuss it with my right hon. Friend the Minister of Agriculture, Fisheries and Food.
I should like to turn to the future of the language and to broadcasting policy. The Government deserve commendation for one thing, at any rate. Despite the atmosphere of public expenditure restraint, their provision for the Welsh language has been consistently generous. I take two examples: the specific grant of £500,000 for bilingual education embodied in the Education Bill, now in Committee, and the highest grant ever—£70,000 in this financial year—made to the Mudiad Ysgolion Meithrin. In this respect, the Government have adhered loyally to the promise given in the Gracious Speech at the commencement of this Parliament.
I only wish that my judgment on the other aspect of the Government's linguistic policy, namely, broadcasting, could be as favourable. Unhappily, it cannot. There has been a violent U-turn—I must say bluntly—in total breach of the undertaking given in the Conservative Party's Welsh manifesto. I am referring, of course, to the fundamental change of policy regarding the fourth television channel. As long ago as November 1974, the Crawford committee recommended to the then Government:
"The fourth channel in Wales should be allotted to a separate service in which the Welsh language programmes should be given priority."
The report added:
"This should be introduced as soon as possible without waiting for a decision on the use of the fourth channel in the rest of the United Kingdom."
The then Government apparently accepted the decision in principle there

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and then, although I am bound to add that four and a half years and two working party reports later, when they went out of office, they had taken no positive step in this regard. However, that Government still adhered to the policy and, so far as I am aware, that is still the official standpoint of the Opposition, although I am aware that at least two non-conformists on this policy are present in the Chamber.
The political position, in short, was that until last September, when the Home Secretary suddenly announced a basic change of policy, all the parties represented in the House substantially supported the recommendations of the Crawford and Annan committees for a predominantly Welsh fourth channel, although there were differences about the means whereby this would be achieved. Moreover, this solution had gathered the support of such august bodies as the University of Wales and the Welsh Broadcasting Council.
I note that my right hon. Friend the Secretary of State told the House this afternoon that he had changed his mind. I feel bound to add that I got the clear impression a fortnight ago today, when I led a deputation to discuss this matter with the Home Secretary, that this was most definitely the Home Secretary's decision, and his alone. He said so with great clarity at the time. That is perhaps not a matter of great moment, but it is only fair that I should record it.
I am at a loss to understand why this seemingly generally accepted policy has been abruptly changed. I can fully understand the arguments for retaining and trying to improve the status quo, which, I suppose, in effect, is what the new policy is. I freely confess that at one time I was opposed to the idea of a fourth channel myself. It was only at a comparatively late stage that I became convinced that it was undoubtedly the most satisfactory solution.
It is arguable that Welsh language broadcasting benefits to some degree by Welsh programmes being left on the two majority channels, for example, from the undoubted audience that a Welsh programme such as "Heddiw" inherits from a preceding programme with countrywide popularity such as "Nationwide". It seems to me, however, that such advantage as that may be is heavily out-
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weighted by two important factors in particular. First, there is the divisive influence of the present arrangement upon us as a nation, creating undoubted antagonism towards the language on the part of non-Welsh speakers, both English and Welsh, caused by their being deprived of favourite English programmes at peak viewing times. This antagonism has caused many, where possible, to turn their aerials towards English stations, with the result that they avoid not only Welsh language programmes but also Wales-based English programmes with Welsh associations.
Secondly, the maintenance of the present arrangements would not allow for any meaningful expansion of the present output of Welsh language programmes. That would only increase the sense of deprivation and viewing resistance of non-Welsh viewers beyond what would be tolerable.
In short, what I might describe as the fourth channel solution would have four outstanding merits that no other solution would possess. First, it would go a long way towards satisfying an existing need among Welsh speakers in Wales. Secondly, it would be entirely fair to Welsh speakers and to non-Welsh speakers alike. Thirdly, it would release the other Welsh-based services of the BBC and HTV from having to accommodate Welsh language programmes and so enable English-speaking viewers to be recovered and their need for Wales-oriented programmes to be adequately met. Fourthly, and perhaps most important, the service would make a contribution to the survival of the Welsh language, which, if that task is to succeed, needs urgently the assistance of so powerful an influence in the home.
Mr. Delwyn Williams: Is my hon. and learned Friend not aware that 80 per cent. of the people of Wales are English-speaking? Is he aware that the people of east Montgomery shire actually oppose the Welsh channel in the strongest manner? Is he aware of the outstanding patience of English-speaking Welsh people who finance a national eisteddfod in which they are not allowed to participate, put up with signs being daubed, houses being burnt and English-speaking broadcasts being interrupted by vandalism? I assure my hon. and learned Friend that he is not speaking for the majority of the

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Welsh people, who, despite what I have said, want the language to survive and prosper. However, in order to prosper, the language needs the support of English-speaking Welshmen.
Mr. Morgan: Of course it does. I hope that I had made the point that the solution that I support is fair to Welsh and non-Welsh speakers alike. Of course, no hon. Member condones any of the activities that my hon. Friend rightly condemns. Indeed, I would go further in punishing such crimes than does my right hon. Friend the Home Secretary, as I have proved by my votes in the House.
The argument that I adduced just before my hon. Friend intervened is probably the strongest of all. I personally would regard it as conclusive. It is powerfully reinforced by the fact that the development of the two indigenous radio services in Wales, one English and one Welsh, has been a considerable success.
As I have said, I appreciate the strength of some of the counter-arguments, but I must add that some others are specious in the extreme, notably, for example, the one that there is public misconception about the fourth channel proposal, including, for instance, the belief that the service would be entirely in Welsh.
That may be one of the misconceptions and there may be others, but there was no such misconception on the part of the Annan and Crawford committees or on the part of the university or the broadcasting council—bodies for which I hope my hon. Friend the Member for Montgomery (Mr. Williams) has respect—which nevertheless gave their support to the project. And this argument completely overlooks the potential for expansion of Welsh programmes that such a service would afford.
We must face the brutal fact that the Welsh language is fighting for its life. The next two decades to the end of this century will be more fateful for it than any previous two centuries in its history, and the decision that we make in this respect must be the right one.
In pressing the Government to change their mind, I do not regard myself as a party rebel. I have been a party rebel in my time, but I am not on this issue. The rebels are on the Government Front
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Bench and have been festooned along it from time to time during the day. I ask only that the policy most clearly set out in the party's manifesto should be implemented and that, even at this late hour, this new and unsatisfactory alternative should be rejected.
7.43 pm
Mr. Barry Jones: I am a witness to the long-term rebellions of the hon. and learned Member for Denbigh (Mr. Morgan) and I listened with interest to his shrewdly phrased and powerful speech.
My hon. Friend the Member for Newport (Mr. Hughes) mentioned import controls. I suspect that the Government are looking, perhaps secretly, at some form of controls, if only because £1 billion worth of foreign steel entered the United Kingdom in 1978 and nearly 900,000 motor cars were imported into Great Britain last year. If those cars had not entered Britain, the production of one extra steelworks would be needed here.
The hon. Member for Flint, West (Sir A. Meyer) mentioned the Wales TUC. I understand that it is not calling for a general strike. After the demonstration in Cardiff last Monday, it will need to say little in the near future, because that demonstration emphatically said a great deal.
A British Government practising statesmanlike policies should surely aim for the maximum fairness and the least political tension. By those criteria, the Government have failed miserably. Wales knows that it is suffering unjust policies and is clearly a tense and unhappy land.
There is no doubt that there are resentment and indignation in the coal and steel towns. The most famous coalfield in Europe is in uproar, largely because of the insensitive handling of the need for coking coal subsidies. In addition, Britain's most moderate union in heavy industry is in its sixth week of a solid national strike.
Fear stalks the valleys, much of Wales dreads the dole, and the people of the Principality sense a swift slide into mass unemployment. My home area is a good example of some of our fears, because nearly 8,000 people there will be on the dole by Easter. I have to ask how and when 8,000 new jobs will be delivered to my area at a time when there will be

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a demand for 50,000 new jobs throughout Wales.
To us on the Opposition Benches, the Secretary of State—I do not speak in a personal sense—appears to be a collaborator in the execution of brutal policies and he will appear as the Welsh apologist for a policy that can only toll the death knell of the coalfield and sanction an irresponsible rundown of our strategic steel industry.
In the past 150 years, southern Britain has grown sleek and rich on the backs of the miners. The pleasant environment and privileged life style of much of southern Britain contrasts grimly with the harsh realities of life in the coalfields. When our oil reserves expire we shall need miners, but I believe that the Government's approach to the coking coal problem will have created a scarcity of mining skills when that time approaches. That applies as much to North Wales as to South Wales. The steelworks in my area has consistently been supplied with coking coal from the Wrexham area.
It is a truism that steel is vital for our industrial strategy and for the hopes that we all have for industrial regeneration. It is certainly required for national defence. The BSC's losses of £300 million are infinitesimal compared with an annual defence budget of more than £8 billion. There is no defence without steel.
We could advance a case for BSC's deficit being charged to the defence budget. Which is worse, a temporary financial deficit in a cyclical demand industry or long-term and minuscule national steel capacity of a beggarly 15 million tonnes per annum, and with it potentially massive social consequences and even, as some of my hon. Friends have said, considerable political unrest in parts of our country?
I wish to abide by the rules for the second half of the debate, and shall conclude by saying that it would be a foolish, blind and arrogant Government who did not draw conclusions from what occurred in South Wales a week ago. That was a genuine expression of fear and concern by many of the communities in South Wales. Any honest observer of that mighty turnout will agree that what emerged from that march was a vivid and distressing memory of the industrial war years.
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We fear greatly that there will be a return to mass unemployment. It is that which fuelled the indignation, the fury and the sense of unfairness throughout the length and breadth of Wales. The Minister must return to the Cabinet room and reopen the fight. He must argue, argue and argue again with the Secretary of State for Industry and those who support him in the Cabinet that there must be intervention to save our steel industry before it crashes to the ground and becomes irreparably damaged. The Minister has a duty to return to the Cabinet and fight again.
7.51 pm
Mr. Dafydd Wigley: It is tempting to follow the hon. and learned Member for Denbigh (Mr. Morgan) on the question of the fourth channel. It is important: to find a right solution to that problem, on which the Welsh can be united. I agree with everything that the hon. and learned Gentleman said on that issue.
We are facing an even greater crisis, namely, that of the future of the whole economy of Wales. At the end of the day, if there is no work available there will not be communities, and without communities there will be neither language nor culture.
In the few minutes that are allotted to me on the only day that we have for debating Welsh affairs, I wish to address myself to the economic crisis that is facing Wales. Some hon. Members, including the hon. Member for Flint, East (Mr. Jones), referred to the 1930s. I am not old enough to remember that period of depression, but, with my hand on my heart, I say that in all of my life I cannot remember such a feeling of anger, disillusionment and resentment in Wales as there is today. That is true not only in the coal mining valleys and the great steel towns of South Wales and Clwyd, but also in areas such as Gwynedd, because they are all dependent on each other.
Gwynedd is suffering the shock waves from Shotton. Our employment will reduce as a direct result. Not only will we lose jobs, but we will find it more difficult to attract alternative industry to replace the jobs lost. The same is true in Dyfed, where the effects of the steel industry work their way through the area of the old Carmarthenshire and into the

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rest of Dyfed. It is not a problem that affects a few areas only.
The only practical solution to the steel problem is one that, instinctively, does not appeal to me. It is a solution that I turn to because there is no alternative, namely, the need to limit the imports of steel and of steel-using manufactured goods.
I should prefer to have an economy that could trade with all countries and reap the best of all parts of the world for Wales. However, there comes a point in time when one has to consider the real position as it exists and ask "Can we afford what we are trying to do?" In the context of one's household, it would be nice to have the best decorator in town to paint or paper the walls, but if one cannot afford that one has to do the job oneself. That is the reality of the current position on imports, especially of manufactured goods. There is a tremendous imbalance in trading in motor cars with the EEC, Japan, Sweden and other countries.
The steel industry has faced problems for a number of years. Everyone recognises that there is a role and a place for greater productivity and greater output. However, it is unrealistic to expect to negotiate and obtain greater productivity without securing an increased share of the market. If we do not get increased production levels but achieve higher productivity, the employment in the industry will collapse. The only way in which we can realistically achieve a greater market is by substitution of steel imports. We will not be able to compete in the overseas steel market with countries such as Venezuela, Korea and others that have new steel industries.
If there is to be a greater future for steel and an opportunity for higher productivity, and therefore, greater output and higher wages—which the men deserve—it must be, and can only be, by virtue of using our capacity to meet the demand for manufactured goods that come from overseas.
Some say that that would reduce standards dramatically. From the information that I have, it is my belief that although a few years ago there were serious quality problems in home manufactured steel, they have been largely overcome. From time to time, there has been a differential
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in price, and that differential can be easily overstated. On my calculations, in an industry that I know well, the difference on the selling price of a washing machine would be ½ per cent. on the retail price. That is not a large price to pay for securing the future of an industry on which whole communities depend.
If the Labour Front Bench argues for another two years to sort out the problems in the industry, those two years must be used effectively to ensure that after those two years the steel industry continues on a steady basis. That basis must be on the lines that I have suggested.
There have been recent changes that are ominous. There is the change of control in the tinplate industry that may lead to the denationalisation of that profitable part of the British Steel Corporation's operation. That would be a greater justification for a more rapid rundown of the remaining part of the BSC that would appear to be more unprofitable. That is an ominous threat, and I hope that assurances will be given on the future of the tinplate industry that is so important to Wales.
I refer to steel because it is important to Wales. It is an example of what can happen when there is the botched management that there has been in recent years. The Government cannot escape the ultimate responsibility for that. They claim that they do not wish to intervene, and so far they have not intervened, but at the end of the day the responsibility in a private enterprise lies with the shareholders, and in a public enterprise it must lie with the Government.
The solidarity that has been shown by steel workers in South Wales, and in other parts of Wales, on that issue arises not only from the industrial action about a wage settlement which could well bring about a real reduction in their standard of living but because they are concerned about the future survival of their industry.
That is the reason for the solidarity that was seen in the march in Cardiff last week. It is a solidarity of those who are desperately concerned about the future of their industry and their communities.
Without political action and initiative in relation to this problem, there will be a vacuum that will be dangerous in real

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political terms, a vacuum that is developing in other areas in response to non-initiative from the Government.
The problems of the economy do not relate to the public sector only, although we are facing those at present. In my constituency last week there was an example of some of the worst elements of the free-for-all economy—the economy of the takeover and the asset-stripper, the economy that can close down a manufacturing plant without concern for those working in it or the communities dependent upon it.
In Caernarvon there is the Bernard Wardle company, which manufactures PVC. That company has grown largely from the efforts of the Caernarvon factory in the post-war years. It is now a large group and it is being taken over. Either as a result of this takeover or to make way for the takeover, it was announced, with no negotiation with the trade union—and without even consultation with the director in charge of the Caernarvon plant—that it would be closed at minimum notice, with 322 people put out of work.
The sting in the tail of the announcement was that anyone who wanted a job might be able to transfer to a factory which had been bought 18 months ago in Lancashire. That is the working of the free market economy—unless it is bridled. It is the responsibility of the Government, in relation to that sector as well, to take initiatives to safeguard people such as my constituents, who will be thrown on the scrapheap at a time when the Government have chosen to withdraw regional incentives from industry in the area.
These are all areas of Government responsibility. They cannot get away from it. Unless they take initiative in this whole realm of the economic problems now facing Wales, there will be such a large vacuum that something is certain to come in and fill it. I give this warning to the Secretary of State. Although I do not want to see things going in that direction, I believe that we shall move towards a greater extremism in politics, because it is not possible, apparently, to answer the problem by initiatives from the Government in whom power has been vested.
Mr. Delwyn Williams: Shame.
Mr. Wigley: I hear the hon. Member for Montgomery (Mr. Williams) shouting "Shame". I am not condoning extremism or calling for it; I am giving a warning. Surely he can read the portents that are facing us all over Wales and see the political vacuum and the depth of feeling that people have, whether it is in relation to their jobs in steel or in coal or in the manufacture of PVC and so on. Surely he can appreciate the frustration at the impossibility of securing housing and a job and all the other problems facing young people in Wales at the moment. If he cannot read these things, he is blind to what is happening. Worse still, if the Government are blind, the Government will be paying a price. I would much rather that the Government took the action that is needed to solve the problems than have to pay the price later.
8.2 pm
Mr. Delwyn Williams: I take this opportunity to amplify my intervention in the speech of my hon. and learned Friend the Member for Denbigh (Mr. Morgan). The Welsh language needs every friend that it can get at this moment. I speak as one whose father speaks Welsh fluently and whose daughter is currently learning the language. The English-speaking Welshman's money and good will are vital to the language of my country, but those who claim to further that language most often unknowingly play the greatest part in its destruction. The English-speaking Welshman should be taken into cultural partnership with the Welsh-speaking people. An English-speaking day at the National Eisteddfod would be a tremendous step in the right direction. We must not be coerced. That is why, when a Welsh language programme is transmitted on one channel, there must be an alternative on another channel. That is the way to win friends and not alienate those who are most needed in one's support.
I wish to draw the attention of the House to the concern felt by the people of Mid-Wales about the proposed exploration and drilling into hard rock in North Powys, the purpose of which few people properly understand because of the lack of public information. The residents' understandable anxieties are

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being inflamed in the most irresponsible manner by Plaid Cymru and the Liberal Party. I wish to make it clear that there are no specific proposals to dump nuclear waste in Powys or, indeed, anywhere else in the United Kingdom. The drilling is part of the investigation of hard rock, which is part of a European Community research project, with the United Kingdom and France investigating hard rock, Germany investigating rock salt formations and Italy and Belgium investigating clay. Although it is true that Britain is also undertaking an independent study of salt and clay formations, hard rock disposal is only one of three methods being researched, the other two being the depositing of the wastes on the ocean bed or in drilled holes beneath the ocean bed. It should be noted that America, France and Australia are working on synthetic rock storage, and other forms of waste immobilisation are being researched as well.
I believe that the drilling should be allowed to go ahead as soon as possible, for it may well prove Mid-Wales to be totally unsuitable, and that would be the end of our anxiety. For the declining Liberal and Plaid Cymru Parties, it will also be the end of what they regard as a political weapon. Perhaps that is why they object so vociferously and irrationally to the drilling process.
Mr. Wigley: I am grateful to the hon. Member for giving way. I realise that he has a speech to make here tonight that he failed to make at Machynlleth on Saturday. If, on the other hand, the drilling shows that the rock is suitable, will he then welcome that as a site for dumping nuclear waste?
Mr. Williams: Certainly not, and if the hon. Gentleman will be patient I may be able to explain the reason.
It has to be remembered that both minority parties wish to suspend our nuclear energy programme. I wonder whether the hon. Gentleman realises the enormity of that policy and the effect that it will have on the lives and standards of working people. In America, the National Association for the Advancement of Coloured People supports the nuclear energy programme because it realises that it is the less-well-off who will suffer most from the lack of nuclear energy. The people
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who supported the hon. Gentleman at Machynlleth the other night were middle-class drop-outs who can afford the privilege of objecting to nuclear energy programmes. It is a fact of life that 451 nuclear reactors are in existence or in the course of construction in 35 different countries. They exist because nuclear energy is relatively cheap and avoids the blackmail of oil-producing countries, which are already speaking in terms of $40 a barrel.
Having said that, I accept that we have a duty to make the disposal of nuclear waste safe. If waste escapes, it can be harmful if ingested or inhaled. It cannot explode on its own, as a Liberal peer alleged in my constituency on Saturday evening. That shows the depth to which the minority parties are prepared to stoop to whip up the emotions of honest people.
Many people believe that the current options for disposal are not wide enough. It is generally accepted that the glass vitrification process will not be perfected for another 10 years, and that even then it will have to be stored in water on the surface for another 30 years before it is dumped anywhere. Surely this in itself lends force to the suggestion that nuclear waste should be stored on uninhabited islands in an artificially purpose-built environment, where it could be monitored and, indeed, where it could be immobilised as and when scientists produced the answer.
It is rather spurious for people to argue that it must be disposed of below ground because of danger from meteorites, earthquakes or even nuclear attack, for all those threats will be present for the next 40 years in any event. Mid-Wales is totally unsuitable for any form of storage, because it is a watershed for so many tributaries which serve the water needs of huge civilian populations. There are no rail facilities for transport, and it would adversely affect the tourist trade.
I believe that an international agreement could be reached whereby, in the unhappy event of nuclear war, these surface sites would be regarded as non-target areas. That is why they should be situated on the surface in non-strategic and completely uninhabited areas.
I express the hope that all Welsh Members—and, indeed, all Members of the House—will join me in pressing for

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a more realistic nuclear waste disposal policy at the earliest possible moment so as to allay the fears of ordinary people—whether those fears be real or imagined.
8.9 pm
Mr. Ray Powell: I make no apologies for representing my constituency interest.
Part closure of the Port Talbot steelworks would mean 4,000 steel workers, who are my constituents, being thrown out of work. Coupled with that, 3,000 to 4,000 miners in my constituency would be thrown out of work. Let me say to the Secretary of State for Wales that I am not aware of what Mr. Weekes of the NCB has stated to him, but I know what he stated to me. This was only two weeks ago, when he named the four collieries in the Ogmore constituency that would close—the Wyndham Western colliery, the Faldu colliery, the St. John's colliery and the Coegnant colliery, all producing coking coal.
In addition to the effect on the steel workers and the miners in my constituency, that would create redundancies in transport and among those engaged in the supply of services to collieries and steel workers. Mr. Weekes informed me that £42 million is spent by the NCB in Wales for these services. Therefore this fight is not only for jobs but for the survival of our communities.
In May of this year, when I was elected to this House, Bridgend was considered by the electors, and by most of Wales, to be one of the growth areas. We have the Ford factory being developed in Bridgend to employ a staff of 2,500. Because of that development we were considered to be a growth area, but within nine months of the Tory Government taking office we find that we are not even a development area. In addition, I am concerned about the hundreds of millions of pounds that have been invested in Port Talbot, and the millions of pounds that have been invested and created a demand for coking coal. The collieries that I mentioned produce the best coking coal in the world.
No one can accuse the steel workers and the miners of irresponsibility. They have been party to thousands of job losses to ensure the economic and financial viability of their industries. The facts are clear. The steel closures that have
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been announced in Wales could mean the loss of 11,000 steel jobs by August, followed by at least 11 colliery closures and 9,000 redundancies in the mining industry. Nationally, that adds up to 50,000 steel workers' jobs, 15,000 miners' jobs and 21 colliery closures.
The domino, or ripple, effect will put out of work about a quarter of a million people. During the period May to October 1979, 80,926 people were made redundant. In October and November a further 15,000 men were made redundant at Corby and Shotton. A formidable number of firms have shed staff—25,000 workers this month alone, excluding Civil Service staff. In six months a total of 120,000 people have been made redundant.
We are given to understand by Mr. Weekes and the staff of the National Coal Board that in Wales alone we have sufficient coal to last for 300 years. We have spent millions of pounds on investment in the coal industry. We are throwing thousands of skilled workers out of work. Many communities are dependent on the coal and steel industries. I ask the Government to reconsider their actions in order to ensure the future stability of the mining industry, because I and a number of my hon. Friends have more confidence in the miners than we have in the Arabs.
Coking coal imports should be carefully examined, particularly subsidies. Other countries allow substantial subsidies. In 1978 Belgium provided a subsidy of £24 a tonne, France £15 a tonne and West Germany £12 a tonne, while the British subsidy was a meagre £1 a tonne.
Why will the Government not listen to reason? Not only the Opposition and the TUC are telling them that their policies are wrong. Even their friend, the CBI, is pleading now, yet still they turn their backs on the facts. Workers involved will not stand back and see their industry savagely raped and 50 years of work and struggle decimated in 10 months by this reactionary Government's policies.
We are all aware of what happened when the Wales TUC called a one-day strike. It was led by 15,000 workers in Wales and was one of the best demonstrations since the war. It has been referred to by many Labour Members. Next month a call will be made for a national

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strike. It is the responsibility of the Government to do everything possible to avoid such a catastrophe. I call upon Cabinet Ministers and the Prime Minister to convince themselves that this matter is serious and that the consequences, not only for Wales but for the whole of the country, are serious.
What is the Secretary of State for Wales doing to try to convince his Cabinet colleagues? He speaks for Wales in the Cabinet. The Secretary of State for Industry seems to favour Michael Edwardes. Why is he not reminded of the other Edwards, who needs as much support as, if not more than, British Leyland? The voice of Wales needs to be heard. If it is not, the workers in Pembroke and in the whole of Wales will remember. The Secretary of State's declaration that workers must be taught a lesson, and that pay increases must be earned by better performance should also apply to Ministers. That could mean many redundancy cheques almost immediately, especially for some Cabinet Ministers.
There has already been a U-turn on regional aid by the Secretary of State for Industry. Surely another on his break-even dictates to the BSC could easily be explained. He has made his point. Why is he not prepared to allow a breathing space?
I ask the Prime Minister to intervene, because even her so-called allies and friends are spelling out how wrong are her policies. Only weeks after eating peanut butter with the President of the United States, Mr. Carter now says how idiotic, stupid and irresponsible it is to run down the steel industry simply to pursue this ailing, failing monetarist madness. Cannot anyone change the Prime Minister's mind?
The right hon. Lady has gone to some lengths to establish that her nickname of the Iron Lady is only a cartoonist's phrase and that she is not an extremist. Her Dublin effort totally disproves anyone's claims that she is in any way an Iron Lady. The policies that she has pursued as Prime Minister prove that she is an extremist and someone with whom Britain could well do without in our modern society.
I recall the right hon. Lady's speech outside 10 Downing Street when she took
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office. She quoted from St. Francis of Assisi:
"Where there is discord, may we bring harmony.
Where there is error, may we bring truth.
Where there is doubt, may we bring faith.
Where there is despair, may we bring hope."
Will the right hon. Lady tell the 10,000 workers in my constituency who are under a threat of redundancy where is the harmony, faith, truth and the hope that she forecast?
The facts show the opposite to be true. Where harmony existed, there is discord. Where there was truth, there are now only error, lies, half-truths and blatant indifference. Where there was faith, there is now disillusion. Where there was hope, there are total despair, disappointment and dejection.
In Wales now there are disturbances, arrests, and even doubts about the fairness of British law. All this has been created by the ruling of a geriatric judge. If we were to bring back hanging, someone's neck could be stretched by such irresponsibility. Is it not high time that we set a retirement age for the judiciary?
Len Murray warned the Government about restricting the rights of trade unionists. I repeat that warning, which my right hon. Friend the Member for Rhondda (Mr. Jones) so ably emphasised. Trade unionists in the 1980s are not the trade unionists of the 1930s. They will not tolerate the aggression that workers endured in the 1920s and 1930s. If the Government want confrontation and anarchy, let them continue in their pursuit of this madness. Men devoted to the workers' cause of caring and sharing will fight them with every sinew and will win. We must win for our children and grandchildren.
The Government, prior to the election, presented the Conservative manifesto, which clearly stated their policies. I shall quote one paragraph of that document. It might be a repetition of what was stated by my right hon. Friend the Member for Rhondda, but it needs to be repeated:
"We shall continue to see that adequate resources are found for the public sector, particularly the productive public sector. We shall continue the modernisation of the coal and steel industries that are still so important in Wales."

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The Government were elected on policies which they promised the electors. I say to the House and to my trade union friends that if a Government, elected on firm manifesto commitments, abdicate their pledges, they forfeit the right to expect the usual support within a democracy.
Where is the mandate for the Government's policies? They demand trade unions to vote for or against strike action. They claim to be democrats. If they persist in pursuing policies for which they have no mandate, it is not anarchy, revolutionary or against the law to call for their resignation and for them to present their policies to the electorate. If they are prepared to do that, and if they get a mandate, they will not only be democrats but will deserve the full support of the House and the country.
8.21 pm
Mr. Tom Ellis: The two hon. Members who most captured the gravity and impending seriousness of the situation were the hon. Members for Caernarvon (Mr. Wigley) and for Flint, West (Sir A. Meyer).
The hon. Member for Flint, West spoke about this sombre situation. His speech was sombre, but the House listened intently, appreciating the great seriousness with which the hon. Gentleman spoke.
I should like to explain why I think the sombreness is even more profound than the hon. Member for Flint, West realised. The hon. Member for Caernarvon, at the end of his speech, touched on the serious political situation that is slowly building up.
I should like to give some hard facts of economic life. They are facts that I have trotted out at a number of meetings recently, but I shall keep pushing them out because they deserve to be engraved on the hearts of all hon. Members, and certainly all members of both Labour and Conservative Governments. I have not been a member of a Government, so I can say what I think in this respect.
The first fact is that in 1975 there were 15 per cent. more Welshmen out of work than in 1965. The situation has deteriorated even more since then. That is a hard, stark fact of economic life, and there is no getting away from it. If one wanted to broaden the picture, one could
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point out that, according to a White Paper published in 1975, if the North of England, Scotland and Wales had retained the 42 per cent. of total employment of the United Kingdom that they had in 1965, in 1975 those areas would have had 370,000 more jobs than they had. It is interesting that that loss of 370,000 jobs was matched almost to the job by an increase of the same amount in the South-East and the Midlands. That is the measure of our regional policy regarding jobs.
Another simple fact of life concerns gross domestic product per capita. In Wales, GDP per capita is about 25 per cent. of what it is in England, although, surprisingly, if one takes it on persons employed, it is a fraction above the figure for England. That is another reflection on the serious unemployment position.
There is another simple fact that deserves hammering home. Wales produces about 5 per cent. of all scientists in the physical and biological sciences in the United Kingdom. At some time or other about half of those scientists carry out research, because that is the job to do. There are 99 Government research establishments in Britain employing 15,700 graduates in the physical and biological sciences. There is not one in Wales. There are 26 nationalised industry research establishments but not one of them is in Wales. Not one of the 36 industrial research establishments is in Wales. In 1977, 485 advertisements appeared in the magazines Nature and New Scientist. Not one concerned Wales.
That means that a young Welsh graduate anxious to pursue a career in research in the physical and biological sciences has to leave his country. He must emigrate. Wales is my country first and foremost. I am a Welshman—an aboriginal. This kind of problem is reflected in the infrastructure.
I told an anecdote the other day about a 100-mile journey that I took from Genoa down the leg of Italy to Lerici. After we left Genoa we travelled through wine-growing country for the whole journey. That was a wonderful road, a dual carriageway of motorway standard that went straight through a mountainous area. We went for a mile into the mountains and came to an enormous ravine which was crossed by a beautiful bridge. We came to another mountain, travelled

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another mile and came to another bridge. It was like that for100 miles and, despite the mountains, the road was absolutely straight and true.
At the end of that journey I told my companions that we could not have a road from Colwyn Bay to Cardiff because the mountains were in the way. We have been conned. I cannot get BBC Wales and I cannot get Harlech Television. The mountains are in the way. It is not West-minister, Whitehall or the Government that stand in the way. It is mountains; at least, that is what we are told. I believe that we have been conned for too long.
I could quote statistics stretching back 40 years to show how London government has conned the people of Wales, and I am sure that I speak for hon. Members on both sides of the House. That gave rise to a demand—which had a disastrous result—for devolution. I quote what the Secretary of the Wales TUC, Mr. George Wright, said at the time:
"We are seeking a Wales where we can have growth from within. We are not carrying a begging bowl into the next century."
All of us agreed with him and applauded him.
The only institution in Wales that speaks for Wales with a strong political voice is the Wales TUC. It is a measure of the disaster of the referendum that the Welsh people were led by false prophets in their own country. That is the tragedy, because we certainly need a political voice now. However, the tragedy goes further. Our problem is not simply a matter of establishing a voice for Wales, because our problems are now on a United Kingdom scale.
Considering the problem from the Welsh angle, the whole point of original policy—the standard answer of Governments—is that such policy should have an objective. We were led to believe that the objective of regional policy was to achieve economic parity across the regions. But despite the grants, the depreciation allowances, the regional employment premiums and the IDCs, the poor regions have never quite caught up with the rich regions. People have subsequently asked whether the Governments were serious in their regional policies or were merely trying to keep a problem within manageable proportions.
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I could catalogue the failures of regional policy, but because of the lack of time I cannot quote a host of statistics. Regional policy has not worked. A great many authoritative economists, such as Gunnar Myrdal, Hirschman, Peroux and even my hon. Friend the Member for Vauxhall (Mr. Holland), have questioned the accepted wisdom of these policies, some of them going so far as to say that rich areas need poor areas alongside them for their own sustenance. I do not have time to go into this further, though I wish that I had. I spoke at greater length on the subject at the Industry Committee, but I cannot develop the theme now.
I must emphasise the sombre nature of our present situation, and I hope that the Minister appreciates that there are those who speak with high seriousness as did his hon. Friend the Member for Flint, West and the hon. Member for Caernarvon. There are those who speak sincerely and seriously, not wanting a political catastrophe but recognising that there is something wrong in Britain—there is something rotten in the State of Denmark.
That is the truth of the matter, and what has made me so depressed is that, somehow or other, we ourselves are following the same old way as we were 30, 40 or 50 years ago, not appreciating that this very place needs looking at seriously, that the whole of our political structure calls for re-examination. I have my views on what should be done, but I do not have the time to go into that now. I shall end with a quotation.
There is a beautiful line in a Welsh book which, roughly translated, is to the effect that the novelist who is all lies captures the truth better than the historian. I shall end by quoting something from a novel of Raymond Williams published last year, "The Fight for Manod". This is how he ends, and the man speaking is a senior civil servant:
"The whole of public policy is an attempt to reconstitute a culture, a social system, an economic order, that have in fact reached their end, reached their limits of viability. And then I sit here and look at this double inevitability; that this imperial, exporting, divided order is ending, and that all its residual social forces, all its political formations, will fight to the end to reconstruct it, to re-establish it, moving deeper all the time through crisis after crisis in an impossible attempt to regain a familiar world. So then a double inevitability: that they will fail, and that they will try nothing else."

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That, I believe, is the tragedy of this Government and, indeed, of previous Governments—that they will try nothing else. There is a profound need in this country for radical change in our political structures, let alone economics—the economics will follow from the politics—and until we begin seriously to contemplate exactly what we have to do we shall carry on with our "Yah, boo"—"What is happening with steel is your fault"—"No, it is not"—without realising that both sides of the House have their responsibility. Both sides have shown irresponsibility, too. The present Government have been highly irresponsible, but we must: take our share of the blame.
It is time that the House of Commons recognised what is needed. It is not leading the British people, let alone the Welsh people. The people are looking for a political lead, and it is simply not coming from this Chamber.
8.34 pm
Mr. Tristan Garel-Jones: I start by apologising to the House for not being here at the beginning of the debate, but I have been able to listen to eight speeches from the Opposition Benches, the majority of which—I except the hon. Member for Wrexham (Mr. Ellis)—seemed to me to be sad speeches.
I heard the hon. Member for Flint, East (Mr. Jones) talking about the demonstrations in Wales last week, saying that 250,000 people had attended and there was a sense of bitterness and unfairness. I say at once from these Benches that anyone in my party who believes that a demonstration of that magnitude can be manipulated by one or two extremists is gravely mistaken. But, equally, I say to right hon. and hon. Members on the Opposition Benches that I am a little disappointed to find that they seem to regard their role in life as fanning the flames of that feeling of unfairness and bitterness. I should prefer to see them trying to co-operate in ways which I hope to outline.
I was saddened by the speech of the hon. Member for Caerphilly (Mr. Hudson Davies), who made a grossly irresponsible call to the people of Wales to do what he chose to call their duty—to take unilateral action against the State. I do not believe that that is the way
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that the people of Wales should be asked to conduct themselves by any party in this House.
The hon. Member for Newport (Mr. Hughes) spoke of the magic triangle. Speaking as a Member who does not represent a Welsh seat but who regards himself first and foremost as a Welshman, and whose seat in a sense could be argued to stand at the apex of the magic triangle, I hope that, speaking from that apex, I may make a short contribution.
I would not argue that my constituents in Watford lie awake at night worrying about the fate of the people of Wales. That would be a gross exaggeration. My constituency is reputed to have the lowest rate of unemployment not only in the United Kingdom but in the whole of Western Europe. Therefore, hon. Members will appreciate that we look upon the world in a slightly different way. But I think that each and every one of my constituents, if he paused to reflect, would appreciate that the prosperity of Wales, Scotland and the other regions of the United Kingdom is linked with our own prosperity and that the industries of Watford will not survive and prosper unless areas such as Wales prosper.
In his very interesting speech, the hon. Member for Wrexham made the point that all parties in this House must take some responsibility for the situation in Wales. In debates on regional policy, I have been struck time and again by the fact that every Member who speaks in them says "This has been going on for 40 or 50 years", and reference is made to the depression of the 1920s.
I say to Opposition Members, with the greatest respect, that the Government are making an effort to change direction of economic thinking and policy. Of course, I accept that there will be many things that the Government do with which Opposition Members will disagree. But I ask them to consider whether they would not be wiser, from the point of view not only of Wales and Great Britain but of their own party political interest, to associate themselves with some areas, at any rate, where they believe that the Government might be on the right track.
After all, what are the Government aiming to do? They aim to conquer inflation and to regenerate British industry.

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In the meantime, of course, it is inevitable that some social spending will be cut back. But this must be seen in its perspective. I should have thought that Opposition Members would have some experience of that. I should like to give a quotation which seems to sum up the Government's approach:
"Our future prosperity lies in conquering the problems of inflation…This has meant action to limit the growth in public expenditure. The latter course is, of course, unwelcome to those of us who wish to improve our social fabric, but the recent limitations must be put in their right perspective."
That is a quotation not from someone defending the present Government's policy but from the right hon. and learned Member for Aberavon (Mr. Morris) when he was defending the cuts of £4 billion, I think it was, made by the previous Labour Government.
The ultimate accolade for the present Government's policies came from the right hon. Member for Cardiff, South-East (Mr. Callaghan), the former Prime Minister, who once said:
"With regard to public expenditure, it ought to be reduced over a period as a proportion of GDP."
Therefore, I hope that the people of Wales, when they read these speeches, which in many cases seem to be destined for the local "Ogmore Times" or whatever it may be, will discount a good deal of the more synthetic rage which seems to be coming from the Opposition Benches and will listen with more care to the more thoughtful speeches of the hon. Members for Caernarvon (Mr. Wigley) and for Wrexham.
It would not be right for a Member who does not represent a Welsh seat to go at any length into matters of policy in Wales. Suffice it to say that as a rather poor Welsh speaker I have been particularly gratified in the steps that the Government have taken in support of the Welsh language. My hon. and learned Friend the Member for Denbigh (Mr. Morgan) mentioned them in passing, but I do not think that he mentioned that the grant made to the National Eisteddfod of £70,000 this year and £120,000 next year is the greatest grant ever made to that body.
If you are prepared to indulge me, Mr. Deputy Speaker, I should like to transmit
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to my right hon. Friend the Secretary of State a message on behalf of Welsh speakers in Welsh: Os ydych chwi am gadw ac am nerthu'r iaith, bydd pob mynydd a phob bryn, bob afon a phob glyn yng Nghymru, yn canu'n iach eich moliant am byth. For the benefit of hon. bers who do not speak our language, that means that if the Secretary of State is able to nurture and preserve our language, every mountain and hill and every valley and river in Wales will sing his praises for evermore.
My hon. Friend the Member for Anglesey (Mr. Best) referred at length to the possibilities of the tourist industry in Wales. I shall not repeat in detail what he said, but it seems to me that the sort of thing that we should be looking for from Opposition Members is not carping criticism of what the Government are doing but suggestions about how Wales should meet the challenges of the future. I have not found any such thing, and I found that extremely disappointing.
I hate to quote again, but the feeling that I had in listening to the Opposition is, in the words of Alexander Pope, who, I am afraid, I have quoted before in the House:
"All seems infected that th' infected spy, as all looks yellow to the jaundiced eye."
I am afraid to say that the Opposition seem to be infected by the failure of the Labour Government. Their opinions are jaundiced by that failure. They are not giving the sort of lead that a democratic Opposition should be giving Wales at this difficult time.
8.41 pm
Dr. Roger Thomas: I reject the temptation offered by Conservative Members to debate an issue such as the fourth television channel. It is far more important for the House to be concerned with the jobs and employment in Wales in 20 years' time than to discuss the language and television service that our young people will be watching. It is patently clear to all but the Government economic strategists that it is the expansion, training and retraining facilities that are needed in Wales rather than the closure or the threat of closure of industry.
I am disappointed with the Manpower Services Commission's rationalisation plan. It talks about rationalisation and

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an improvement of the skillcentre network while, in the same breath, referring to savings in public spending. The first part is totally cancelled out by the second and the second part makes total nonsense of the first.
Following upon the revised, more realistic secondary school curriculum, what we need is to equip our young workers with market skills into which up-to-date technology has permeated smoothly. Increasingly, we are faced with providing discarded experienced workers with opportunites to develop new skills. The current situation with regard to the young and old is clearly inadequate. In the past year, there has been a sharp fall in the ability of local economy to absorb school leavers.
Here in Wales the increased birth rate in the 'sixties has been translated into the significant rise in school leavers across the 'seventies. Sadly, this glut of work-searching school leavers was probably further swollen by a corresponding fall in the proportion of young people after 16 years settling down to three or more years in full-time education and ending with qualifications destined to secure for them good wages and good living standards in early adult life.
The adding of an extra 1 million married women in the United Kingdom into the labour market hardly eased the position of school leavers of either sex. Employers facing a downturn in demand and seeking to avoid compulsory redundancies have reduced their labour force by discriminating against school leavers and young workers in general. Many firms regard young workers as a marginal source of labour. We face a hard and severe recession in Wales, and there is hardly a glimmer at the end of the tunnel. Such a recession would have a disproportionately adverse effect and would keep our young people under-occupied. When they get work, they are underpaid.
As the Secretary of State knows, and, we pray, fully appreciates, huge tracts of Dyfed will be relegated to summer congestion and winter desolation. In Dyfed alone, in the next 10 years we need 30,000 jobs. This time last year new factories were on their way, but they have now vanished into thin air. Perhaps the Secretary of State will tell us whether there is a fallback in the dual carriageway. It was
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promised that that dual carriageway would go deep into West Wales beyond the termination of the M4. Our county plan—the Minister should react to that possessive adjective as proudly as I do—talks in terms of the need for village factories.
One must consider whether the overall policies of the Government will entice and attract private investment, so alleviating the black spots in Wales. At one time we had a wizard in Wales called Myrddin. At the moment a wizard from Leeds appears to be that legendary figure. We need new factories, warehouses and stores for just under 2,500 acres that have been set aside for development.
Large geographical tracts, such as the Teify valley, were once the centres of large textile industries, but such areas are now far removed from the main centres of economic activity in a United Kingdom and Euro context. Those areas will carry on unrecognised and poorly compensated. However, apart from illustrating on a minor scale that service jobs are destined for women rather than men, Dyfed reflects a lack of skill that is predominant in Wales. Our skilled people are moving out and we are left with a pool of ageing, unskilled labour. That pool unfortunately accepts the retirement that has come to them far too prematurely.
Forecasts and prognostications are uniformly gloomly. In the last quarter of 1979, 20 per cent. of those unemployed were under the age of 25. That proportion is expected to grow sharply. The Government must not cheapen the true value of our young people, as extra jobs are created for them, with unscrupulous employers who cash in on cheap labour.
Against a background of unexpected and callously engineered economic disasters—suffered since the summer—the problem of the over-supply of poorly qualified young people, the solution to which should be the predominant consideration of our policy-makers, has appeared less disastrous and less imperative when compared with the blows of the past six months.
Many of those aged over 55 have developed a lifetime of continuing leisure and interests, but the young unemployed have their working lives ahead of them. Over and over again it has been shown

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that a bad start will have serious long-term consequences. In the deep shadows of the economic hammer blows that have recently hit us, we need to develop a policy for the increasing numbers of young unemployed. Such a policy cannot be left and put on one side until better times are with us.
8.49 pm
Mr. Ioan Evans: I shall be brief, as my hon. Friend the Member for Swansea, East (Mr. Anderson) also wishes to say a few words. The debate has rightly concentrated on the coal and steel industries.
The Government are unfolding a five-pronged attack on the people of Wales and the rest of Britain. They have launched a major attack on the Welfare State, local authorities, public industries—in their commitment to rolling back the frontier of public industries—the trade union movement and living standards. In the light of that fivefold attack, we are prevented from co-operating with the Government in this critical situation.
The appeal of the steel and coal workers in South Wales has fallen on deaf ears. The workers are asking, first, for an inquiry into the administration of the steel industry. In passing, let me say that I strongly object to the Government's attacks on working people. Our working people are as good as workers anywhere. Apart from an inquiry, the Government are being asked to phase redundancies over two years. In that time, I believe that they will begin to realise that they are cutting jobs in the steel industry too severely. The major closures at Port Talbot and Llanwern will mean that we cannot meet future demands. Policies will then have to be revised.
The National Union of Mineworkers and the trade union movement in Wales are right to ask the Government to stop the importation of coking coal. We have mountains of coking coal in Wales, yet the Government are allowing the BSC to import it. The excellent pits that produce high-quality coking coal will disappear for ever and we shall not be able to produce that same quality.
Mrs. Elaine Kellett-Bowman rose—
Mr. Evans: I should normally give way to the hon. Lady, but I have only a few minutes.
Mrs. Kellett-Bowman: It is an important point on coking coal.
Mr. Evans: I should also like to mention Phurnacite. In Aberavon, we have a plant that produces 18 per cent. of Britain's smokeless fuel. From the tripartite report on the coal industry in Wales, it is obvious that a Labour Government would have provided the backing for the ANCIT process. The Government have been in office since May, and no decision has yet been reached. The Government are forcing a 29 per cent. increase in the price of gas, and I believe that people will look to other fuels. Without the investment in the smokeless fuel plant at Aberavon, we shall lose 18 per cent. of our national production. We shall be in the ludicrous position of importing not only coking coal but also smokeless fuel.
I regret that the Secretary of State did not make a statement on the Government's proposals over the flooding in South Wales immediately after the Christmas Recess. We have had to wait for a Welsh debate, and now, at long last, we have had a statement.
We must look at the need for a national disaster fund. In the valleys of South Wales and in Cardiff, people were seriously affected by the recent flooding. They lost their personal possessions and had great difficulty in getting aid from social security, from which one would have expected ready and willing help to be forthcoming. We must try to avoid a recurrence of that situation by establishing some sort of national disaster fund.
It is interesting that, while the Government are so rigid, dogmatic and determined in some of their policies, when it comes to the fourth television channel they are willing to change their mind. If only they would change their mind about their monetarist policies and their nonsensical attitude to public expenditure. I hope that they will change their mind again about the fourth channel. There was all-party agreement that the fourth channel should be devoted to the Welsh language, and I hope that when the Secretary of State considers it again he will have another change of heart.

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that extra funds will be given to the
We have had the announcement today Welsh Development Agency. I welcome that. The Conservatives did not agree with the Welsh Development Agency when it was set up, but now it is the only means in investing in industry in Wales, and, by God, that is what our industry needs at the moment. I hope that the Government will put aside their doctrinaire dogma of Milton Friedman and the monetarists. Their policies are not working—we can all see that they are not working. I hope that Conservative Back Benchers will tell the Government to open their eyes and change direction. The Government are heading towards a precipice and the Conservative Back Benchers are following them like lemmings. But the people of Wales will not forgive easily or forget. After the next election, there will be very few Conservative Members representing seats in Wales.
8.57 pm
Mr. Donald Anderson: What can one reasonably say in such a short time about the alarming industrial picture in Wales? A little while ago we were boasting about the diversification of our economy, but over the past few months we have had our vulnerability exposed to us.
Had the Secretary of State and his colleagues been in Cardiff last Monday, they would have seen the frustration of so many workers in Wales because they feel that they are at the receiving end of policies initiated by people who do not understand, or do not want to understand, the effect of such policies.
It was sad to hear the Secretary of State's speech 10 days ago in which he attacked public expenditure when he must know how dependent Wales is on public expenditure. While he takes that attitude, he cannot really fight the cause of Wales in the Cabinet. No reasonable person would suggest that our problems began last June, but it is not unreasonable to accept that the totality of Government policies as they affect Wales has substantially exacerbated our problems.
In our last Welsh Grand Committee discussion on 21 November, I wondered whether the Government were really aware of the crisis or of the chain effect of the decisions that they have made.
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They must have known, because of cash limits imposed on the nationalised industries, and particularly on the BSC, that the BSC was reaching a financial crisis. They must have known that their decisions would not bail the BSC out of the crisis but would, in fact, lead to substantial job losses. They must have known of the chain effect of that from steel to coal and rail and other services that are interdependent in the Welsh economy.
In the Welsh Grand Committee on 21 November the Secretary of State affected a mood of optimism about the Welsh economy. Yet only a day later we had 1,000 job losses at Port Talbot and a few weeks later we received the shattering news of 50,000 job losses over the country as a whole. Were not the Government aware of the effect of their policies? If not, they really need to undertake a substantial reappraisal.
Many estimates have been made, some more alarmist than others, about the extent of likely unemployment in Wales. The Government should give some indication, in order to promote public debate in Wales, of the figures on which they are working—the counties' figure, the TUC figure or any other.
To what extent are the Government prepared to allow de-industrialisation to proceed apace in Wales before even they are forced to intervene? I accept that Governments cannot wave magic wands and that there are limits to what Governments can achieve in an economy interdependent in the world. The Government can take initiatives within the EEC. We understand, however, that the Government are refusing to do so because of the public expenditure implications.
The Government can examine their own interest rates and their effect on private investment. How can the Government reasonably expect industry, despite all the talk of incentives, to invest at the current prohibitive 20 per cent. interest rates?
On public investment, Inmos is the litmus test of the seriousness with which the Government view the task of bringing jobs to areas like South Wales that desperately need them. It is said that this decision has not yet been made. The Secretary of State should use his influence in the Cabinet in favour of South Wales.

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It is known that no Civil Service jobs are going to South Wales. The Government are depriving themselves, by their ideology, of the only weapons that can help solve a problem largely of their own making. They are incapable of providing solutions in the Welsh Development Agency. Will they really allow these new sums which are available to the WDA to be spent on investment in new industry? Will they allow the WDA to use that money to overcome the standstill in investment in derelict land? What about a new package for any Ford-type development that may be on the horizon? Can the Government, with their current ideology, put together a package, as the previous Government did, to attract Ford to Bridgend? Will there be any attempt to promote new public works in view of the considerable number of construction workers who are unemployed?
When we approached the Department of Industry about new investment in our coking industry, the reply by the Under-Secretary of State, the hon. Member for Arundel (Mr. Marshall), was:
"I am sure you are aware that the Government's policy in such matters is one of non-intervention. To this end, and particularly in view of the strict financial limits within which BSC has to operate, I consider that the corporation must be allowed the commercial freedom to purchase raw materials where they judge the maximum advantage can be achieved both in terms of cost and quality."
That is the financial yardstick. It will be carried out, no matter what the cost socially, industrially and politically in South Wales. May that be the epitaph of the Government. Sadly, it may be the epitaph of Wales.
9.3 pm
Mr. Alan Williams: This has been a serious debate. It has reflected the genuine concern on this side of the House for the future of those industries that have provided the basis not just for the industrialisation of Wales but for our communities in Wales. It was this fear for the communal and social structure, as well as the employment structure, of South Wales that led to the massive and impressive demonstration that most of us attended in Cardiff last Monday. The meeting was very good-natured but I was, nevertheless, disturbed at the hardening of attitude and the greater bitterness
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that has developed over the past few weeks.
For the Government to have induced a national strike in an industry that has not seen a national strike since the 1920s is an incredible achievement. The tragedy is that, having developed the psychology that goes with strikes, it will take the industry some time to think harmoniously and constructively again in future.
For that reason, I particularly protest at the fact that the Secretary of State for Industry is not participating in the debate. I suppose that it is yet another example of his policy of non-intervention, though during the speech of my right hon. Friend the Member for Rhondda (Mr. Jones) the right hon. Gentleman intervened several times because he thought that there were points that he ought to clarify. Surely, that is why he should have taken part in the debate. It is an affront to Welsh Members that, after our requests, he has failed to do so.
We know that the Secretary of State for Wales is the Cabinet's statutory Welsh Member. I am sure that the people of Wales look with some longing to the days, not so long ago, when Welsh Members held the positions of Prime Minister, deputy Prime Minister and Leader of the House of Commons and Secretary of State for Wales and when we had Ministers of State in key Departments such as the Home Office, the Foreign Office, the Treasury and the Department of Industry.
In our annual debate on Wales, the man most responsible for our crisis and the man whose policies on steel and the regions and regional incentives are leading to the destruction of the Welsh industrial background has not been a participant. It is less a case of Hamlet without the ghost than of Sweeney Todd without the barber.
We like the Under-Secretary who is to reply to the debate, but he does not have decision-making powers. The Secretary of State has sent in the casual labour to do the sweeping up.
I welcome you, Mr. Speaker, to our Welsh debate.
Mr. Speaker: Order. I was here at the beginning.
Mr. Williams: Then I welcome you back. I am sure that this is one of the few occasions during the year when you

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hanker for your previous role in the House.
We are not debating just the record of the Government in the past six months or even the next 12 months that face the people of Wales. We are debating the future of Wales for the next generation and the rest of the century.
The Government's industrial policy will have a unique impact on Wales, because we are especially dependent on public expenditure and because the policy will mean the destruction of communities. They will have their industrial and commercial hearts torn out, their young people will be driven away and the shadows of the 1930s will fall over our valleys again. The policy will have a unique impact, because in Wales, more than in other parts of the country, the fortunes of our coal and steel industries are indivisible.
Our miners provide the coking coal for our steelworks. I understand that in the event of coking coal not being needed by Scottish steelworks the Scottish electricity boards will be glad to take most of the supplies. In the North of England a substantial amount of the coking coal is imported and cutbacks in steel will therefore be reflected in cuts in imports, but the situation in Wales is different.
The halving of the output of Llanwern and Margam will cost not just 11,000 jobs in the steel industry but the closure of 11 pits and the redundancy of 7,500 coal workers. We also face the possibility—I appreciate that it is only a possibility, but we must beware of it—of a further 7,500 redundancies in the coal industry in the event of the worst predictions in relation to coking coal being fulfilled. Let us remember that the temptation of imported coking coal is a short-term price advantage and for that the Government are willing to fritter away the long-term assets of our coal resources in South Wales, at a time when the world is talking of entering an energy crisis. It is not only that we will lose up to 35,000 jobs directly in the coal and steel industries of Wales, but that those jobs are in concentrated areas. Fifty per cent. of the Margam workers live within five miles of the steelworks.
The coal industry, by the nature of our Welsh valleys, is a community industry.
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One cannot tear the earning power from those communities without risking the destruction of those communities. Because the industries and the employment are concentrated, the secondary impact is bound to be greater. The fear is that as many jobs again could be lost in support and service industries.
We are speaking of a scale of between 30,000 and 60,000 lost jobs. The hon. Member for Flint, West (Sir A. Meyer) admitted that unemployment could rise by 50,000 or more in Wales as a result of the Government's policies. They are to be implemented unnecessarily because the Secretary of State for Industry has decreed the impossible, namely, that, although losing £300 million a year, the BSC must—not should—break even next year. The right hon. Gentleman knows well that "must" is virtually meaningless. Despite all the cuts, there is no way in which the steel industry could break even next year.
The right hon. Gentleman has berated the steel industry for the loss of orders. It is his Government who have produced the economic framework in which we shall see a decline of 2 per cent. in economic activity over the next 12 months. It is his Government who have pushed up the minimum lending rate way above the level that we were taunted with as being the usury level when the Labour Party was in office. The record levels of minimum lending rate are forcing destocking in the steel-user industries. That is another reason why British Steel is not selling to those industries.
It is the right hon. Gentleman's Government who have produced the policy of soaring sterling. How the Conservative Party attacked us when sterling fell when we were in office! How they attacked us when sterling rose! A Labour Government can never win: whatever happens to sterling, the Conservative Party will always find that it is to someone's disadvantage.
It is universally agreed that at its present level sterling is harmful to all industry. The right hon. Gentleman had the cheek to say that there is higher import penetration into Britain. If the Government allow sterling to soar to levels where British products become uncompetitive, not only do we have to

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abandon the 2 million tonne market overseas but we see our domestic market eroded because we cannot compete with the cheap steel coming from the Common Market.
There he sits, in his dome at Ashdown House, a latter-day Abenaza without his magic lamp. Because no one dares to tell him that he does not have a magic lamp, he sits there wishing his little wishes, casting his little spells and dreaming his little dreams. While he is doing that, the Prime Minister sits and fiddles as the fires go out throughout the British steel industry—the private sector as well as the public sector. While they perform their disastrous duet, the way of life of people and communities is being destroyed.
Only last week, the county clerk of my authority, West Glamorgan, said that the 6,800 steel redundancies that are envisaged for Margam will cancel out all the new manufacturing industry that has come to West Glamorgan in the past 11 years. By one arbitrary, unjustifiable and unattainable whim, the right hon. Gentleman has written off a full decade of progress in this part of South Wales.
I suppose that the Secretary of State for Wales can take a certain solace from the situation created by his right hon. Friend. At least, he can now go on to Welsh platforms, hand on heart, and boast of fulfilling one election pledge—or at least one election pledge for 50,000 people. They certainly will be paying no income tax in future.
But think of what this means for those who are already in the dole queue. Only a week ago we were told that one-third of the people in the dole queue had been there for six months or more. If a further 30,000 or 50,000 people join those queues, seeking the dwindling jobs, what hope do they have? It must mean hardship for all. Without jobs, they will face higher rents and higher mortgages. They will have to meet higher electricity and gas costs. Those who are unfortunate enough to be out of work are now being threatened with lower unemployment benefits and social security benefits in real terms. This, as the hon. Member for Anglesey (Mr. Best) expected, will mean particular privation for the long-
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term unemployed, because they will be running out of earnings-related benefits; they will be going on the new sub-subsistence level social security system.
It is an obscene proposition that supplementary benefit, which is geared to the minimum necessary to sustain a household, should now fall in real terms so that it will not cover the cost of living increases. We were told recently by the Prime Minister that she believes in inequality. One must give her credit—what she believes in, she puts into effect. She made the rich richer in the last Budget, and she intends to make the poor poverty stricken in the next Budget.
Is it not paradoxical that Ministers should preach to us that the need in British industry is higher productivity and that workers must be willing to give up their jobs in order to make their firms more efficient? What hope do they have of persuading workers to accept redundancy when in the next Budget they intend to penalise unemployment and penalise the loss of that very same job?
There has been a lot of not very meaningful talk about the importance of productivity. I have referred to this previously in debates. The Secretary of State and I have crossed swords on this issue when we were on different sides of the House. At this stage, because investment is falling, Ministers talk about the labour role in relation to productivity, but what about the investment role? Those countries which have high productivity have higher investment. But now, as in 1970, the Government have repeated their achievement of turning back the rising tide of investment achieved under a Labour Administration. Yet, again, investment is falling.
The right hon. Gentleman has never understood the difference between unit labour costs and productivity. He does not understand that productivity can be discussed only in relation to the cost that has to be paid to get that productivity. Although our productivity is lower in this country, because our labour costs are so much lower, the loss per tonne of United Kingdom steel is actually lower than the loss per tonne on German steel. But the German Government are giving massive subsidies to enable their industry to capture the market that British Steel so desperately needs.

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During his last Question Time the Secretary of State wept hypocritical crocodile tears about unemployment in Wales last winter. In typically generous fashion, there was no mention of the fivefold increase in oil prices. There was no mention of the world recession. Despite the tears and despite his breaking heart, when he was asked about the high level of unemployment he flatly refused to give an assurance that the Government would set it as their prime duty to ensure that unemployment never again reached such levels. We know that he cannot give such a promise. How he can stand at the Dispatch Box and pretend that he cares about unemployment when part of his Cabinet's strategy is an increase of one-third of a million unemployed in the next 12 months is beyond comprehension.
In fairness to the hon. Member for Flint, West, I should mention that he said that he feels that unemployment in Wales will reach terrifying levels in the near future. Most hon. Members would agree. As a result of the changes in regional policy that have been introduced by the Government, the greater part of the new unemployment will arise in the assisted areas, including Wales, while the greater part of new job creation will arise outside the assisted areas and outside Wales.
In this context it is disturbing that 70 per cent. of electronics companies are in Southern England. Wales is about to lose its employment based on the first Industrial Revolution, and it is to be denied its participation in the high technology industries of the second industrial revolution.
I particularly object to the proposition that the Inmos production unit may be sited in Bristol. When the Labour Government were in power, my right hon. Friend the Secretary of State, my fellow Ministers of State and I received categoric assurances from the National Enterprise Board that if the laboratory was sited in Bristol there was no reason why the production unit should not be sited in an assisted area, and that that was the policy of the NEB. I shall shortly lead a deputation to the Secretary of State for Industry.
I am glad that an IDC has not yet been issued and that no decision has
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been taken on further financing. I should like to emphasise, so that there is no misunderstanding, that Labour Members are not opposed to Inmos continuing its logical development. We ask that that logical development should be carried out in fulfilment of commitments made to the previous Administration.
At this time of crisis for Wales, the Government have virtually abandoned regional policy. They have descheduled and downgraded massive areas of Wales. They have cut the grants, so that, even where assisted area status remains, that status is of minimal value. They have effectively scrapped the industrial development certificates outside the assisted areas.
I should like to explain to hon. Members who do not know how the system works that, when an IDC application comes before a Department of Industry Minister, his officials make the regional Ministry offices aware of the IDC project, and the Secretary of State for Scotland or the Secretary of State for Wales thus have an opportunity to make bids for those projects. Now the Secretary of State for Wales will be unaware of expansion programmes and of new projects. Surely, at a time when the Secretary of State is scrapping IDCs, we need higher, not lower, inducements to encourage industry to move to Wales.
In February last year the Secretary of State, appearing on HTV, gave the people of Wales an assurance that a Tory Government would not cut regional aid. I was accused of fabricating the story—scaremongering. Yet we have the same man ruthlessly presiding over the destruction of Welsh industry.
It is no use the right hon. Gentleman quoting, as he tried to do earlier this afternoon, the new industry that is in the pipeline. When five of us went to see the Secretary of State for Industry, the Secretary of State for Wales and the Minister of State, Department of Industry—my successor in industrial location work—the Minister of State admitted that much of the development taking place in Wales now was due to the "momentum" of the previous Administration. When we see that Ford's 2,500 jobs are still to come, how can that be doubted?
The Government were crowing about getting the Japanese company Aiwa to

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come to Wales. I had been negotiating for 12 months, first, to get Aiwa into Britain and, secondly, on the question of which part of Britain it woud eventually settle in. The Secretary of State for Wales took over the negotiations when the company showed an interest in going to Wales as opposed to any other part of the country.
The right hon. Gentleman should not really talk about work that is possibly in the pipeline, because much of the work that is pending is due to companies rushing to beat the deadline for the ending of regional assistance later this year. We brought in what was called the accelerated project scheme. The idea was to set a deadline and to try to get a rush of applications to beat that date. That is exactly what is happening now. When that date falls—"falls" is the operative word—and it cuts into the incentives on offer, it will completely cut off the flow of new industry into Wales.
Sir Anthony Meyer: The right hon. Gentleman is arguing cogently that many of the good things that may be about to happen in Wales by way of incoming industry stem from policies of the previous Labour Government, and I do not disagree with him. However, with his customary fairness, will be admit that the decision to accept British Steel's slimming down of capacity also stems from decisions taken at least a year ago?
Mr. Williams: The hon. Gentleman is fully aware of the situation. My right hon. Friend refused to apply any absolute requirement that the steel industry should break even. He said that it was up to the steel industry to try to break even as early as possible. He did not want to impose a deadline, because he did not think that such a date was attainable. That is a fair statement of the situation.
The Secretary of State for Wales is strong on promises. We have heard about the fourth television channel today. But, as that shows, the right hon. Gentleman is lacking in performance. He said that there was no battle in the Cabinet; he just capitulated.
We have had ballyhoo about an extra £48 million that he has conjured up today for press release purposes. If anyone should doubt whether it has gone out from his press office, I have a copy.
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We remember the right hon. Gentleman's grand words about Shotton. Money was going to flow so freely from the Government. What happened? We know that £2 million came from BSC Industry without its even being asked, and virtually all the remainder came from the existing budget of the Welsh Development Agency. Therefore, the Government merely took money from other parts of Wales and channelled it towards Shotton. I do not begrudge Shotton the money. It needed the finance. But the pretence that it is extra money does not bear examination. Therefore, when the Under-Secretary of State replies to the debate, we shall want to know a little more about this £48 million.
The Secretary of State, in the press handout, states;
"I can now tell the House that, within the reduced public expenditure programme we have been discussing, the Government are planning to make available some £48 million over the next two years for remedial measures of this kind."
So they are within the existing programmes, as far as one can gather. We want to know whether that is so. [Interruption.] It is not that we were not listening. The right hon. Gentleman blabs on a lot. We listen as closely as we can, but we are not shorthand experts. That is how the right hon. Gentleman managed to sleight-of-hand his last effort through the House. We want explanations on this one, and I am sure that the Under-Secretary will provide the answer that we seek.
But even with the new cash there will be little new industry because of the 2 per cent. cut in our national output over the next 12 months. That is a 2 per cent. cut from a Government some right hon. Members of which lectured us time and again on the need for growth and on the need for the tax cuts that were to set private enterprise free to invest. Here we are with a 2 per cent. cut in output and at least a 4 per cent. cut in investment.
Already areas such as Bristol, Slough and Swindon are campaigning to grab whatever new industry there may be. In their post today some hon. Members will have received a copy of the Estates Times. Dealing with the Bristol area, it says:
"It is difficult to believe that Britain is wallowing in the mire of an industrial depression when agents in areas like Avon

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begin reeling off figures showing last year's progress. Rents were up 60 per cent.…while take up more than doubled.…Yet Avon is getting more than its fair share of imported firms and this trend is likely to continue…Perhaps the most immigrants to Avon are the microchip companies. These are the greyhounds among the firms racing for growth".
While we are being starved of new industries, these areas are taking advantage of the fact that reduced incentives debar us from attracting new industry. Even if those areas miss the new industry, Corby will almost certainly get it before we do. Already there are complaints from the Midlands that Corby, because of its assisted area status, is sucking in new industry at such a rate that firms are relocating.
What does that mean in terms of Welsh opportunities for capturing firms that wish to go to assisted areas? Most insiduously, our skilled workers are being wooed by English authorities and English employers. Yet again Wales will have a young generation of workers, its skilled workers stolen, at a time when the number of elderly people in our population is increasing, on the admission of the Government, at the rate of 2 per cent. a year. Able people will have to leave Wales if they want jobs.
A recent education survey showed that Wales came out best in educational development. However, Wales is now to become the educational stud farm for English industry. By contrast—dependent as we are on small firms which are unable to train their own workers—even our skillcentres are threatened with closure.
In rural Mid-Wales, North and South-West Wales the industrial headstone has already been inscribed. It was inscribed by the right hon. Gentleman last July.
For too much of the remainder of Welsh industry, bankrupts' graves are being prepared and the murderers of our Welsh hopes are sitting on the Government Front Bench.
9.33 pm
The Under-Secretary of State for Wales (Mr. Wyn Roberts): Welsh day debates normally range far and wide, covering a variety of subjects. Today's debate has been no exception. We have even had some words of Welsh from my hon. Friend the Member for Watford (Mr.
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Garel-Jones). I congratulate him on his Welsh.
Those who are called upon to answer these debates are expected to be omniscient in the affairs of the Principality. The right hon. Member for Swansea, West (Mr. Williams) referred to me as a casual sweeper called in to do the sweeping up. I hope that he is not implying that all those who spoke in the debate talked rubbish. I would not go so far as to say that, even of speeches from the Opposition Benches.
Mr. Alan Williams rose—
Mr. Roberts: No, I will not give way. The right hon. Gentleman spoke at considerable length—rather more than he has allowed me time for—and I have noticed in these debates that he has the habit of intervening in my speeches. I hope that he will remain verbally continent for a few minutes.
The main theme of the debate has been economic, with special reference to the steel and coal industries. Although I hope to deal with other topics raised by hon. Members, I must first comment on steel and coal.
I do not think that there is anyone who would not rather have a profitable steel industry than a non-profitable one. All right. We agree on that. The same is true of coal and other productive industries. We recognise that profit—or surplus, as the Opposition may prefer to call it—is essential to prosperity, and we recognise all that that means in terms of secure employment, better social services and so on. We know also the consequences of failure to achieve that surplus. Losses have to be paid for somehow or other, and when they are recurrent and extensive the country's economy slips into decline and our standard of living is adversely affected. So there is no difference between us on our hopes for the steel industry.
On 22 May 1978, the right hon. Member for Chesterfield (Mr. Varley) said in the House that
"the financial objectives of the BSC should be to break even by the financial year 1979–80."
I emphasise to the hon. Member for Gower (Mr. Davies) that that objective was set by his own Government, and for this year.
Mr. Alec Jones: Will the Minister give way on that?
Mr. Roberts: No; let me finish the point. It has not been achieved this year, but it still stands as an objective and it is common ground between the last Government and the present one. We cannot disagree on that. So far as I am aware, the Opposition have not reneged on that objective.
Mr. Alec Jones: There is an enormous difference between an objective which the BSC sets for itself and an objective enforced upon it by the present Government's financial policies.
Mr. Roberts: I have quoted the words of the right hon. Member for Chesterfield, the previous Secretary of State for Industry, that
"the financial objectives of the BSC should be to break even by the financial year 1979–80."[Official Report, 22 May 1978; Vol. 950, c. 1105.]
All that we have done is follow the target set by the right hon. Gentleman, and we have required the BSC to break even during 1980–81.
Mr. Ifor Davies: Since the Under-Secretary refers to me, does he recall—I think that he was sitting there at the time—that I quoted from the document published by the BSC as recently as 1978 in which it talked about the prospects for steel? The corporation said that it would require five years before it would become self-financing. That was the BSC, and that is a fair comment coming from the corporation.
Mr. Roberts: I am not disputing what the BSC said. I am referring to what the previous Government said was Government policy.
Mr. Denzil Davies rose—
Mr. Roberts: No; I must get on.
Where we differ, I think—it has become clear in the debate—is in our views on the pace at which the break-even point and profitability can be reached. The right hon Member for Rhondda (Mr. Jones) pleaded for time, and he totally failed to answer the point put to him by my right hon. Friend the Secretary of State for Industry. Time is not on our side. It is very much against us in this matter. We have tolerated losses for far too long and delayed necessary change again and again.
Mr. Denzil Davies rose—
Mr. Roberts: Other countries have had the will and the courage to change.
To give them their due, the previous Government accepted some necessary changes. They did not resist the closure at East Moors or of steel-making at Ebbw Vale. This is now seen to have been too little, too late. Nothing happened about overmanning generally. On all experience, Government involvement slows down and delays the process of change. That is one of the reasons why my right hon. Friend the Secretary of State for Industry has steadfastly resisted the temptation to intervene. Intervention by the Government would lead only to further costly delays and to more job losses later.
Mr. Denzil Davies rose—
Mr. Roberts: The right hon. Gentleman has not been present for the greater part of this debate. I do not see why I should give way to him.
Of course, we recognise that politics is the art of the possible and that we must push hard at the limits of possibility or there will be worse to come. Of course, there will be social consequences if the BSC's planned rundown at Llanwern and Port Talbot takes place. As my right hon. Friend the Secretary of State for Industry said in the debate on 17 January:
"It is right for the Government to take action to mitigate the social consequences…The Government have shown, in the announcements made by them about Shotton and Corby, that they do not wish to avoid that obligation in any way. Of course we shall fulfil it."—[Official Report, 17 January 1980; Vol. 976, c. 1891.]
My right hon. Friend the Secretary of State for Wales confirmed today that £48 million will be available over two years for remedial measures, most of it going to the Welsh Development Agency. This reflects the best estimate that the WDA has been able to make about what it can do in the next two years.
Mr. Wigley: Surely the hon. Gentleman accepts that this £48 million is an utterly bogus figure. The WDA has a pool of finance at its elbow, far in excess of £48 million, which it has not called upon. It could have used that £48 million immediately. It is bogus money.
Mr. Roberts: It is not bogus at all. The hon. Member will recognise that

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when I tell him squarely that this £48 million is additional money for the WDA—[HON. MEMBERS: "Where is it coming from?"]—and other agencies for industrial development. I am asked where the money comes from. It is taxpayers' money—
Hon. Members: Oh.
Mr. Alec Jones: Will the hon. Gentleman indicate whether this £48 million—and we all know that it is taxpayers' money—
Mr. Garel-Jones: Now you are getting somewhere.
Mr. Jones: If the hon. Member for Watford (Mr. Garel-Jones) had been here earlier, he would have heard that I admitted this and accepted the consequences. Will the Minister indicate whether the £48 million is additional money, additional to the Welsh Office budget, or is it coming from somewhere else within the Welsh Office?
Mr. Roberts: It is additional money coming afresh to the Welsh Office budget.
Mr. Rowlands: Is it on top of the £30 million? Will the hon. Gentleman give way?
Mr. Roberts: I am not giving way, I have said enough. I have said that it is additional money, fresh to the Welsh Office.
I shall not comment at any length on the current dispute in the steel industry when hopes of a settlement are reviving. It is essentially a dispute about an increase in pay for workers in a bankrupt industry.
The Government have not been hardhearted. About £4,000 million of taxpayers' money will have been invested in the industry by the end of this financial year, as my right hon. Friend the Secretary of State for Industry has said more than once. About £1,800 of every steel worker's average salary of £5,500 is contributed by the taxpayer.
Mr. John Morris: We have heard it all before.
Mr. Roberts: In that case, it is time that the right hon. and learned Gentleman listened to it again.
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Furthermore, the taxpayer will contribute £450 million in the next financial year in addition to the £700 million in this financial year.
It is fair to ask who is being hurt by the current strike and who was hurt by the one-day strike in South Wales last Monday. Of course the economy of the United Kingdom as a whole and of Wales as a part of it has been damaged. That means that the people who work with steel products, such as the 1,000 Metal Box workers at Neath, have suffered. Although I listened to the speech of the hon. Member for Neath (Mr. Coleman), I do not believe that he referred to the Metal Box company and the 1,000 workers who have been laid off as a result of the steel strike.
No one has been hurt more than the steel workers themselves and the other participants in the strike action.
Mr. Garel-Jones rose—
Mr. Roberts: I have a great deal to say and I hope that my hon. Friend will forgive me if I do not give way.
We must all hope that a settlement will soon be reached so that we can staunch the self-inflicted wound and get on with the job of regenerating the steel industry and the economy in Wales and the United Kingdom as a whole.
There has been mention of the losses at Llanwern and Port Talbot. Both have suffered substantial losses in the past and continue to make losses this year. It has been argued that there were encouraging signs in the first half of 1979–80 and that the rate of loss was being slowed down. However, since then the BSC has had to face a massive down-turn turn in demand. The loss rate will not slow down unless manning in both plants is substantially reduced.
The hon. Members for Newport (Mr. Hughes) and for Caerphilly (Mr. Hudson Davies), among others, referred to import controls. The imposition of import controls on steel is, to our mind, no solution. About three-fifths of our steel imports come from Common Market countries and any restriction on those would be illegal and could be overturned in court. Imports from non-Community sources are already the subject of voluntary restraint agreements between the European Community and the main sup-

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plying countries. The United Kingdom is exporting about half a million tonnes more than it imports. The only sure way to recapture a large share of the domestic market is to be competitive in price, quality and service—as the BSC itself recognises.
Mr. Roy Hughes rose—
Mr. Roberts: I should like to finish this point. How can the BSC be expected to achieve that unless it has the commercial freedom to buy the quality of coal it needs at the lowest possible price? If the BSC and the NCB can reach a sensible commercial accommodation, that would be the best possible solution.
Mr. Rowlands: On a point of order, Mr. Speaker. The hon. Gentleman has referred to the quality of South Wales coking coal. Not even the BSC has used that argument.
Mr. Speaker: Order. The hon. Gentleman knows as well as I do that he has made a debating point, not a point of order.
Mr. Roberts: Quite rightly, much of the debate was concentrated upon the future of the South Wales coalfield. I shall highlight three points. First, looking at the estimates of possible threats to jobs in the industry—
Mr. Roy Hughes rose—
Mr. Roberts: I shall not yet give way. I have announced that I shall make three points. If the hon. Gentleman—
Mr. Hughes rose—
Mr. Speaker: Order. The Minister has indicated that he does not wish to give way. He has been called to speak and he must be allowed to do so.
Mr. Roberts: Thank you, Mr. Speaker.
Looking at the estimates of possible threats to jobs in the industry, it is wrong of the Opposition to exaggerate losses due to the downturn in demand from the BSC. Estimates range from about 8,000 to about 15,000, but they do not relate to the downturn in demand from the BSC. At best, only a small part of that loss would flow from the BSC's proposals for the future of Llanwern and Port Talbot.
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Other job losses will depend upon the phasing out of high-cost pits and on the extent to which there is increasing dependence on imports from abroard. No decisions have yet been taken on those last two areas. Secondly, the same is true of new investment at Margam. That is a matter for the National Coal Board, and as yet it has expressed no view whether a new development, as originally proposed, would make economic sense.
Thirdly, my right hon. Friend the Secretary of State has already referred to the Phurnacite plant at Aberavon. He has indicated the difficulties and the importance of both the job and environmental considerations. National Smokeless Fuels is still considering its future strategy. One thing is certain. Whatever happens, there will be no overnight change.
A number of hon. Members have referred to regional—
Mr. Alec Jones rose—
Mr. Roberts: I have already given way—
Mr. Speaker: Order. Two hon. Members cannot address the House at the same time.
Mr. Roberts: I have given way a great deal. A number of complete subjects have been debated, to which I shall not have time to refer.
We are committed to a strong regional policy—[HON. MEMBERS: "Oh."]—but it must be selective and it must concentrate on the areas of greatest need. The reduced coverage of assisted areas will benefit those remaining, particularly special development areas, as their relative attractiveness increases.
The need for new employment in Wales has been kept in mind. Of the employee population of Wales, 94 per cent. will continue to be covered by assisted area status. Proposals to downgrade assisted areas in South Wales will be reconsidered in the light of current threats to jobs in the steel and coal industries. I expect that to be done as a matter of urgency well before August, when the changes are scheduled to occur.
We are well aware of the problems of North Wales and of the constituency of the hon. Member for Caernarvon (Mr. Wigley), including the impending closure of Bernard Wardle. As my right hon.

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Friend said, representatives of the company today met Welsh Office officials.
Mr. Alec Jones: What happened?
Mr. Roberts: I am not in a position to say what the result will be.
My hon. Friends the Members for Barry (Sir R. Gower) and Brecon and Radnor (Mr. Hooson) mentioned the importance of small firms. There are problems for many firms, and small businesses cannot be isolated from the grim situation that much of industry faces. They cannot be exempt from the stern measures which the Government are taking to get the economy right. However, I believe that small business men take a more long-sighted view than do many hon. Gentlemen. They can see that the Government are sticking firmly to their policies to control inflation, to encourage and not penalise enterprise, to get bureaucracy off their backs and to bring about a new climate for success. I assure my hon. Friend the Member for Brecon and Radnor that the provisions for factories, finance and advice available to small firms in Wales are second to none in the United Kingdom. My right hon. Friend is giving those services a further impetus by asking the Welsh Development Agency to concentrate investment on the small firms sector.
There is a recognisable natural and all-too-human tendency on the part of those who have recently been in office to paint as gloomy a picture as they can, as soon as they can, of the deterioration that is alleged to have taken place under their successors. An essential talent in that artistry is a gift for instant amnesia. Right hon. and hon. Gentlemen are well blessed with that capacity. They came into office in 1974. In April of that year there were about 38,000 registered unemployed in Wales. During their period in government that figure rose to over 100,000. When they left office, over 84,000 were on the register, with a worsening trend becoming clearly visible. That was not the worst part of the legacy
that they left us. The worst part was the inheritance of a failed political philosophy and the failing policies that ran from it into every sector of our national life.
Mr. Alec Jones: Will the hon. Gentleman give way?
Mr. Speaker: Order.
Mr. Jones rose—
Mr. Speaker: Order. I have said before that once I am on my feet I must say something. It is clear that the Minister is not giving way.
Mr. Roberts: The Labour Party never admitted its failure, although I see from this morning's press that it is divided on that as on so much else. The Labour Government deluded themselves with false estimates of economic growth and of what the country could afford to spend. The growth that they foresaw was never in prospect.
I am all for optimism in politics, as in life, but it must be based on a realistic appraisal of the future and not on wild dreams that will never come true. The British electorate—and I include Wales—saw through that approach and rejected the Labour Party. They voted for us and a new political approach—the right approach, personified by my right hon. Friend the Prime Minister. We do not offer an easy path. It is a hard road, but it is the right one not only for the United Kingdom as a whole but for Wales. For too long we have been dangerously over-dependent on Government support for an ailing public sector in industry. We have a new opportunity to stand on our feet. That is what the Government want and that is what the people of Wales want for themselves.
Question put, That this House do now adjourn: —
The House divided: Ayes 246, Noes 300.

Division No. 152]

AYES

[10.00 p.m.

Abse, Leo

Atkinson, Norman (H'gey, Tott'ham'

Booth, Rt Hon Albert

Adams, Allen

Bagier, Gordon A. T.

Boothroyd, Miss Betty

Allaun, Frank

Barnett, Guy (Greenwich)

Bottomley, Rt Hon Arthur (M'brough)

Alton, David

Barnett, Rt Hon Joel (Heywood)

Bradley, Tom

Anderson, Donald

Beith, A. J.

Bray, Dr Jeremy

Archer, Rt Hon Peter

Benn, Rt Hon Anthony Wedgwood

Brown, Hugh D. (Provan)

Armstrong, Rt Hon Ernest

Bennett, Andrew (Stockport N)

Brown, Robert C. (Newcastle W)

Ashton, Joe

Bidwell, Sydney

Brown, Ronald W. (Hackney S)

Brown, Ron (Edinburgh, Leith)

Hart, Rt Hon Dame Judith

Palmer, Arthur

Callaghan, Jim (Middleton & P)

Hattersley, Rt Hon Roy

Park, George

Campbell-Savours, Dale

Haynes, Frank

Parker, John

Canavan, Dennis

Healey, Rt Hon Denis

Parry, Robert

Cant, R. B.

Heffer, Eric S.

Pavitt, Laurie

Carmichael, Neil

Holland, Stuart (L'beth, Vauxhall)

Pendry, Tom

Carter-Jones, Lewis

Homewood, William

Penhaligon, David

Cartwright, John

Hooley, Frank

Powell, Raymond (Ogmore)

Clark, Or David (South Shields)

Horam, John

Prescott, John

Cocks, Rt Hon Michael (Bristol S)

Howell, Rt Hon Denis (B'ham, Sm H)

Price, Christopher (Lewisham West)

Cohen, Stanley

Howells, Geraint

Race, Reg

Coleman, Donald

Huckfield, Les

Radice, Giles

Concannon, Rt Hon J. D.

Hudson Davies, Gwilym Ednyfed

Richardson, Jo

Conlan, Bernard

Hughes, Mark (Durham)

Roberts, Allan (Bootle)

Cook, Robin F.

Hughes, Roy (Newport)

Roberts, Ernest (Hackney North)

Cowans, Harry

Janner, Hon Greville

Roberts, Gwilym (Cannock)

Cox, Tom (Wandsworth, Tooting)

Jay, Rt Hon Douglas

Robertson, George

Craigen, J. M. (Glasgow, Maryhill)

John, Brynmor

Rodgers, Rt Hon William

Crowther, J. S.

Johnson, Walter (Derby South)

Rooker, J. W.

Cryer, Bob

Jones, Rt Hon Alec(Rhondda)

Roper, John

Cunliffe, Lawrence

Jones, Barry (East Flint)

Ross, Ernest (Dundee West)

Cunningham, George (Islington S)

Jones, Dan (Burnley)

Ross, Stephen (Isle of Wight)

Cunningham, Dr John (Whitehaven)

Kaufman, Rt Hon Gerald

Rowlands, Ted

Dalyell, Tam

Kerr, Russell

Ryman, John

Davidson, Arthur

Kilroy-Silk, Robert

Sandelson, Neville

Davies, Rt Hon Denzil (Llanelll)

Kinnock, Neil

Sever, John

Davies, Ifor (Gower)

Lambie, David

Sheerman, Barry

Davis, Clinton, (Hackney Central)

Lamborn, Harry

Sheldon, Rt Hon Robert (A'ton-u-L)

Davis, Terry (B'rm'ham, Stechford)

Lamond, James

Shore, Rt Hon Peter (Step and Pop)

Deakins, Eric

Leadbitter, Ted

Short, Mrs Renée

Dean, Joseph (Leeds West)

Leighton, Ronald

Silkin, Rt Hon John (Deptford)

Dixon, Donald

Lewis, Arthur (Newham North West)

Silkin, Rt Hon S. C. (Dulwich)

Dobson, Frank

Lewis, Ron (Carlisle)

Silverman, Julius

Dormand, Jack

Litherland, Robert

Smith, Rt Hon J. (North Lanarkshire)

Douglas, Dick

Lofthouse, Geoffrey

Snape, Peter

Douglas-Mann, Bruce

Lyon, Alexander (York)

Soley, Clive

Dubs, Alfred

Lyons, Edward (Bradford West)

Spearing, Nigel

Duffy, A. E. P.

Mabon, Rt Hon Dr J. Dickson

Spriggs, Leslie

Dunn, James A. (Liverpool, Kirkdale)

McCartney, Hugh

Stallard, A. W.

Dunnett, Jack

McDonald, Dr Oonagh

Steel, Rt Hon David

Dunwoody, Mrs Gwyneth

McGuire, Michael (Ince)

Stoddart, David

Eadle, Alex

McKay, Allan (Penistone)

Stott, Roger

Eastham, Ken

McKelvey, William

Straw, Jack

Edwards, Robert (Wolv SE)

MacKenzie, Rt Hon Gregor

Taylor, Mrs Ann (Bolton West)

Ellis, Raymond (NE Derbyshire)

Maclennan, Robert

Thomas, Jeffrey (Abertillery)

Ellis, Tom (Wrexham)

McMahon, Andrew

Thomas, Mike (Newcastle East)

English, Michael

McMillan, Tom (Glasgow, Central)

Thomas, Dr Roger (Carmarthen)

Ennals, Rt Hon David

McNally, Thomas

Thorne, Stan (Preston South)

Evans, Ioan (Aberdare)

McNamara, Kevin

Tilley, John

Evans, John (Newton)

McWilliam, John

Torney, Tom

Ewing, Harry

Magee, Bryan

Varley, Rt Kon Eric G.

Field, Frank

Marks, Kenneth

Wainwright, Edwin (Dearne Valley)

Fitch, Alan

Marshall, David (Gl'sgow, Shettles'n)

Walker, Rt Hon Harold (Doncaster)

Flannery, Martin

Marshall, Dr Edmund (Goole)

Watkins, David

Fletcher, Ted (Darlington)

Marshall, Jim (Leicester South)

Weetch, Ken

Foot, Rt Hon Michael

Martin, Michael (Gl'gow, Springb'rn)

Wellbeloved, James

Ford, Ben

Mason, Rt Hon Roy

Welsh, Michael

Forrester, John

Maxton, John

White, Frank R. (Bury & Radcliffe)

Foster, Derek

Maynard, Miss Joan

Whitlock William

Foulkes, George

Meacher, Michael

Fraser, John (Lambeth, Norwood)

Mellish, Rt Hon Robert

Wigley, Dafydd

Freeson, Rt Hon Reginald

Mikardo, Ian

Willey, Rt Hon Frederick

Garrett, John (Norwich S)

Millan, Rt Hon Bruce

Williams, Rt Hon Alan (Swansea W)

Garrett, W. E. (Wallsend)

Miller, Dr M. S. (East Kibride)

Williams, Sir Thomas (Warrington)

George, Bruce

Mitchell, Austin (Grimsby)

Wilson, Rt Hon Sir Harold (Huyton)

Gilbert, Rt Hon Dr John

Mitchell, R. C. (Soton, Itchen)

Wilson, William (Coventry SE)

Ginsburg, David

Morris, Rt Hon Alfred (Wythenshawe)

Winnick, David

Golding, John

Morris, Rt Hon Charles (Openshaw)

Woodall, Alec

Gourlay, Harry

Morris, Rt Hon John (Aberavon)

Woolmer, Kenneth

Graham, Ted

Moyle, Rt Hon Roland

Wrigglesworth, Ian

Grant, George (Morpeth)

Mulley, Rt Hon Frederick

Young, David (Bolton East)

Grant, John (Islington C)

Newens, Stanley

Hamilton, James (Bothwell)

Oakes, Rt Hon Gordon

TELLERS FOR THE AYES:

Hamilton, W. W. (Central Fife)

Ogden, Eric

Mr. George Morton and Mr. James Tinn.

Hardy, Peter

O'Halloran, Michael

Harrison, Rt Hon Walter

Orme, Rt Hon Stanley

NOES

Adley, Robert

Arnold, Tom

Banks, Robert

Aitken, Jonathan

Aspinwall, Jack

Beaumont-Dark, Anthony

Alexander, Richard

Atkins, Robert (Preston North)

Bell, Sir Ronald

Alison, Michael

Atkinson, David (B'mouth East)

Bendall, Vivian

Amery, Rt Hon Julian

Baker, Kenneth (St. Marylebone)

Benyon, Thomas (Abingdon)

Ancram, Michael

Baker, Nicholas (North Dorset)

Benyon, W. (Buckingham)

164

165

Best, Keith

Gower, Sir Raymond

Moore, John

Biffen, Rt Hon John

Gray, Hamish

Morgan, Geraint

Biggs-Davison, John

Greenway, Harry

Morris, Michael (Northampton, Sth)

Blackburn, John

Grieve, Percy

Morrison, Hon Charles (Devizes)

Blaker, Peter

Griffiths, Eldon (Bury St Edmunds)

Morrison, Hon Peter (City of Chester)

Body, Richard

Griffiths, Peter (Portsmouth N)

Mudd, David

Bonsor, Sir Nicholas

Grist, Ian

Murphy, Christopher

Boscawen, Hon Robert

Grylls, Michael

Myles, David

Bottomley, Peter (Woolwich West)

Gummer, John Selwyn

Neale, Gerrard

Bowden, Andrew

Hamilton, Hon Archie (Eps'm& Ew'll)

Needham, Richard

Boyson, Dr Rhodes

Hamilton, Michael (Salisbury)

Nelson, Anthony

Braine, Sir Bernard

Hampson, Dr Keith

Neubert, Michael

Bright, Graham

Hannam, John

Newton, Tony

Brinton, Tim

Haselhurst, Alan

Normanton, Tom

Brittan, Leon

Hastings, Stephen

Onslow, Cranley

Brocklebank-Fowler, Christopher

Hawksley, Warren

Osborn, John

Brooke, Hon Peter

Hayhoe, Barney

Page, John (Harrow, West)

Brotherton, Michael

Heddle, John

Page, Rt Hon Sir R. Graham

Brown, Michael (Brigg & Sc'thorpe)

Heseltine, Rt Hon Michael

Page, Richard (SW Hertfordshire)

Browne, John (Winchester)

Hicks, Robert

Parris, Matthew

Bruce-Gardyne, John

Higgins, Rt Hon Terence L.

Patten, Christopher (Bath)

Bryan, Sir Paul

Hill, James

Patten, John (Oxford)

Buchanan-Smith, Hon Alick

Hogg, Hon Douglas (Grantham)

Pattie, Geoffrey

Buck, Antony

Holland, Philip (Carlton)

Pawsey, James

Budgen, Nick

Hooson, Tom

Percival, Sir Ian

Bulmer, Esmond

Hordern, Peter

Peyton, Rt Hon John

Burden, F. A.

Howell, Rt Hon David (Guildford)

Pink, R. Bonner

Butcher, John

Howell, Ralph (North Norfolk)

Porter, George

Butler, Hon Adam

Hunt, David (Wirral)

Prentice, Rt Hon Reg

Cadbury, Jocelyn

Hunt, John (Ravensbourne)

Price, David (Eastleigh)

Carlisle, John (Luton West)

Hurd, Hon Douglas

Prior, Rt Hon James

Carlisle, Kenneth (Lincoln)

Jenkin, Rt Hon Patrick

Proctor, K. Harvey

Carlisle, Rt Hon Mark (Runcorn)

Jessel, Toby

Pym, Rt Hon Francis

Chalker, Mrs. Lynda

Johnson Smith, Geoffrey

Raison, Timothy

Channon, Paul

Jopling, Rt Hon Michael

Rathbone, Tim

Chapman, Sydney

Joseph, Rt Hon Sir Keith

Rees, Peter (Dover and Deal)

Clark, Hon Alan (Plymouth, Sutton)

Kaberry, Sir Donald

Renton, Tim

Clark, Sir William (Croydon South)

Kellett-Bowman, Mrs Elaine

Rhodes James, Robert

Clarke, Kenneth (Rushcliffe)

Kershaw, Anthony

Rhys Williams, Sir Brandon

Cockeram, Eric

King, Rt Hon Tom

Ridley, Hon Nicholas

Colvin, Michael

Kitson, Sir Timothy

Ridsdale, Julian

Cope, John

Knight, Mrs Jill

Rifkind, Malcolm

Cormack, Patrick

Knox, David

Roberts, Wyn (Conway)

Corrie, John

Lang, Ian

Rost, Peter

Costain, A. P.

Langford-Holt, Sir John

Royle, Sir Anthony

Cranborne, Viscount

Latham, Michael

Sainsbury, Hon Timothy

Critchley, Julian

Lawrence, Ivan

St. John-Stevas, Rt Hon Norman

Crouch, David

Lawson, Nigel

Scott, Nicholas

Dean, Paul (North Somerset)

Lee, John

Shaw, Giles (Pudsey)

Dickens, Geoffrey

Lennox-Boyd, Hon Mark

Shaw, Michael (Scarborough)

Dorrell, Stephen

Lester, Jim (Beston)

Shelton, William (Streatham)

Douglas-Hamilton, Lord James

Lewis, Kenneth (Rutland)

Shepherd, Colin (Hereford)

Dover, Denshore

Lloyd, Ian (Havant & Waterloo)

Shepherd, Richard(Aldridge-Br'hills)

du Cann, Rt Hon Edward

Lloyd, Peter (Fareham)

Shersby, Michael

Dunn, Robert (Dartford)

Loveridge, John

Silvester, Fred

Durant, Tony

Luce, Richard

Sims, Roger

Eden, Rt Hon Sir John

Lyell, Nicholas

Skeet, T. H. H.

Edwards, Rt Hon N. (Pembroke)

McCrindle, Robert

Smith, Dudley (War. and Leam'ton)

Elliott, Sir William

Macfarlane, Neil

Speller, Tony

Emery, Peter

MacGregor, John

Spence, John

Eyre, Reginald

MacKay, John (Argyll)

Spicer, Jim (West Dorset)

Fairbairn, Nicholas

McNair-Wilson, Michael (Newbury)

Spicer, Michael (S Worcestershire)

Fairgrieve, Russell

McNair-Wilson, Patrick (New Forest)

Squire, Robin

Faith, Mrs Sheila

Madel, David

Stainton, Keith

Farr, John

Major, John

Stanbrook, Ivor

Fell, Anthony

Marland, Paul

Stanley, John

Fenner, Mrs Peggy

Marlow, Tony

Steen, Anthony

Finsberg, Geoffrey

Marshall, Michael (Arundel)

Stevens, Martin

Fisher, Sir Nigel

Marten, Neil (Banbury)

Stewart, Ian (Hitchin)

Fletcher, Alexander (Edinburgh N)

Mates, Michael

Stokes, John

Fletcher-Cooke, Charles

Mather, Carol

Strading Thomas, J.

Fookes, Miss Janet

Maude, Rt Hon Angus

Tapsell, Peter

Forman, Nigel

Mawby, Ray

Taylor, Robert (Croydon NW)

Fowler, Rt Hon Norman

Mawhinney, Dr Brian

Tebbit, Norman

Fox, Marcus

Maxwell-Hyslop, Robin

Temple-Morris, Peter

Fraser, Rt Hon H. (Stafford & St)

Mayhew, Patrick

Thatcher, Rt Hon Mrs Margaret

Fry, Peter

Mellor, David

Thomas, Rt Hon Peter (Hendon S)

Gardiner, George (Reigate)

Meyer, Sir Anthony

Thompson, Donald

Gardner, Edward (South Fylde)

Miller, Hal (Bromsgrove & Redditch)

Thorne, Neil (Ilford South)

Garel-Jones, Tristan

Mills, Iain (Meriden)

Thornton, Malcolm

Gilmour, Rt Hon Sir Ian

Mills, Peter (West Devon)

Townend, John (Bridlington)

Glyn, Dr Alan

Miscampbell, Norman

Townsend, Cyril D. (Bexleyheath)

Goodhart, Philip

Mitchell, David (Basingstoke)

Trippier, David

Goodhew, Victor

Moate, Roger

Trotter, Neville

Gorst, John

Monro, Hector

van Straubenzee, W. R.

Gow, Ian

Montgomery, Fergus

Viggers, Peter

166

167

Waddington, David

Warren, Kenneth

Williams, Delwyn (Montgomery)

Wakeham, John

Watson, John

Winterton, Nicholas

Waldegrave, Hon William

Wells, John (Maidstone)

Wolfson, Mark

Walker, Rt Hon Peter (Worcester)

Wells, Bowen (Hert'rd & Stev'nage)

Young, Sir George (Acton)

Walker, Bill (Perth & E Perthshire)

Wheeler, John

Younger, Rt Hon George

Walker-Smith, Rt Hon Sir Derek

Whitney, Raymond

Wall, Patrick

Wickenden, Keith

TELLERS FOR THE NOES:

Waller, Gary

Wiggin, Jerry

Mr. Spencer Le Marchant and Mr. Anthony Berry.

Walters, Dennis

Wilkinson, John

Mr. Anthony Berry.

Ward, John

question accordingly negatived

EUROPEAN COMMUNITY (CONSTRUCTION PRODUCTS)
10.13 pm
The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg): I beg to move,
That this House takes note of European Community Documents R/3289178 and 9056/79 containing a proposed EEC Directive and Resolution on the approximation of the laws of the member states relating to construction products; and endorses the Government's intention to ensure that satisfactory procedures are included for the adoption of implementing Directives under this framework directive.
The documents that we are considering represent a complicated piece of legislation by Community standards. The complications are compounded by the difficulty of translating often highly technical concepts from one language to another. It may therefore be convenient to hon. Members if I spend a few moments explaining what the proposal sets out to do.
The major part of the first document—R /3289/78—is a proposal for a directive on construction products under article 100 of the Treaty of Rome, which provides for the harmonisation of regulations and procedures in member States of the Community in the interests of trade.
It would be a framework directive—that is to say, in our terms, enabling legislation. It would be implemented by a series of specific directives, which would each relate to a particular type of building product. They would set technical standards for that product and lay down agreed methods for testing examples of the product against that standard. Attached at the back of document R/3289/78 is a draft resolution for adoption by the Council listing the products that are considered worthy of priority attention. We must watch that word "priority", though, because there is no doubt that if a list anything like as long as the present draft were adopted it would take many years to give effect to the whole of it.
The proposal is intended to facilitate intra-Community trade in products which meet the specific standards. The draft framework directive therefore contains a series of certification procedures which
170
may be adopted for demonstrating to potential customers, to regulatory authorities and to any other interested party that the product is up to the agreed standard. There are three certification procedures, and each specific directive would indicate which of the three was to be applied. It would obviously apply to the product covered by that directive.
The three procedures will be familiar to those who have had previous dealings with article 100 directives, because they are all familiar features of such directives. In descending order of vigour we have, first, type approval. Under type approval, the Government of a member State certifies that a product submitted to it meets a certain standard. Then we have type examination, where the certificate is issued by a non-Government body approved by the Government for the purpose. Finally there is self-certification, under which a manufacturer is allowed to make his own declaration that his product meets the standard. In the present draft there is no indication of the criteria that will be adopted in deciding which procedure to use in which directive. I wish to return to that point in a moment.
The certification procedures occupy a very large proportion of the text because they are set out in great detail. Much of the remaining text is filled with the workaday provisions which accompany any legislation—definitions, extent of application, financial arrangements, safeguards if certification subsequently proves to have been misguided, and so on. These are well-known basic provisions that have been used many times before. They are all important, of course, but I do not think that they need occupy the House for long this evening. I wish to dwell just for a moment on two other technical provisions of the proposed directive, because I think that it is important that their implications should be understood.
Both of these provisions are contained in single articles of the draft. First, article 5 deals with the place of agrement under the proposed system—that is,
"Technical approvals issued by approved bodies".
The draft says that certification may be temporarily based on such assessments. In other words, the situation envisaged is much the same as we have domestically

171
in the United Kingdom at present. Recourse will be had to agrement when a product is not yet the subject of an agreed standard. Some see that as implying a major role for agrement under the directive. I do not wish to pour cold water on that idea entirely, but I wish to temper it slightly.
Agrement will be able to be used only where a specific implementing directive specifies that it should be and lays down appropriate guidance. In other words, there will have to be agreement between member States—no doubt based on work done by the European Union of Agrement or possibly by some other international body—about the method of assessment and tests to be adopted. That having been said, it remains clear that this article provides scope for speeding up the application of the directive and also for enhancing the value of the agrement function. I hope that the Agrement Board will derive benefit from this aspect of the proposal and play a positive part in its implementation.
The other article to which I wish to draw the attention of hon. Members is article 30. This article states that, where a specific directive has not yet been adopted in relation to a particular product, an importing country must accept the results of tests carried out to satisfy the regulations of that country by a Government-approved body in the exporting country.
The potential importance of this provision should not be underrated. It could have an immense impact. It would apply to all construction products the moment the framework directive came into effect and continue to apply until specific directives were adopted; in many cases, where no specific directive was envisaged, it would apply indefinitely. In theory, it should prevent any member State erecting barriers to trade by requiring tests to be carried out on its own soil sometimes at great expense to the manufacturer.
I know that there are those who will say that if a country wants to be awkward about imports it will find a way, whatever the letter of Community law, and no doubt those who say that have some justification in experience. But it will at least be more difficult to erect such barriers and that will apply here as it will abroad.
Mr. Tam Dalyell: There was considerable argument about this when I was a Member of the previous indirectly elected European Assembly. Does one understand that an importing country could, if it wanted to, raise all sorts of difficulties about rather esoteric points of research and make things extremely difficult if the Government wanted to use this as a kind of protective device?
Mr. Finsberg: No. I think that what I have said indicates exactly the opposite. In fact, I am certain that what I said was that until a specific directive was envisaged the position would be that an importing country would have to accept the results of tests carried out to satisfy the regulations of that country by a Government-approved body in the exporting country. The position is exactly the opposite of what the hon. Member said.
Mr. Dalyell: The facilities for testing can be extremely expensive. To have to set them up almost from scratch would create great difficulties, would it not?
Mr. Finsberg: No, because, again, the tests would have been carried out in the exporting country until such time as the specific directives had been implemented. The general position is that if a product satisfied a test here and there was no specific directive applying to it elsewhere, that product would have to be accepted with the certification given by whatever non-governmental body we had in this country. I think that it provides exactly the safeguard that the hon. Gentleman was trying to put.
Mr. Tony Marlow: I am grateful to my hon. Friend for giving way. I may well be anticipating some of the things that he intends to say. I should be grateful if he would say whether the standards that he envisages coming through this legislation will be higher than existing standards within the United Kingdom. If so, would they necessarily be higher to advantage? Secondly, what would be the cost to industry? Thirdly, are we currently having problems in exporting these items to the European Community, and, if so, to what extent? Fourthly, I am sure that my hon. Friend has discussed this matter with the construction industry. If so, is the industry in favour of the legislation going through?
Mr. Finsberg: Perhaps I might ask my hon. Friend to be patient. If at the end I find that I have not dealt with his points, I shall, with the leave of the House, endeavour to pick them up when I reply to this brief debate.
I shall return in a moment to the very far-reaching procedural innovation proposed in this directive. First, though, I ought to explain the second document referred to in the motion, 9056/79. This contains a set of amendments to the original proposal formally tabled by the Commission for consideration by the Council at the same time as the original proposal. The amendments take account of the opinions delivered by the European Parliament and by the economic and social committee, which was consulted on the proposal as required by the Treaty. At the same time, the Commission took the opportunity to amend the priority list in the accompanying resolution in some respects.
Our general reaction to the draft directive is one of welcome for its intention of removing barriers to trade. That is what the European Community is all about.
There are certainly advantages to be gained for our manufacturers in some product areas, which we must seek to maximise by ensuring that the priority list contains the right items. We must then look very hard at the case for each implementing directive when it is brought forward.
That is not to say, however, that we have no qualms about the details of the procedures proposed. There are many points that we wish to see changed or made more explicit. I have already mentioned that there is no indication of the criteria which will be used in selecting certification procedures in particular cases. The industry naturally has fears about the efficacy of self-certification in maintaining the agreed standards. That applies, above all, in relation to products coming into the Community from outside—a problem which is being considered separately by the Community. Those fears are particularly potent because self-certification is not described as fully in the text as the other procedures. On the other hand, self-certification is at least cheaper than the other procedures, both of which involve a great deal of costly Government administration.
Mr. Donald Thompson: Is my hon. Friend saying that a foreign country may deliberately set a standard lower than the British standard, so that its goods can be exported to Britain at a price below the going rate for British goods?
Mr. Finsberg: There are two spheres. First, there is the standard product within the Community. Secondly, there is the problem of products from non-Community countries. That matter is being examined separately by the Community, and it is not part of the directive that we are discussing tonight.
The exact terms of the safeguard clauses need to be examined carefully. The details of the priority list certainly need amendment if that title is to be meaningful. We need assurances about the degree of vigour with which directives will be implemented—the so-called "optional versus total harmonisation" issue. There is an important point of principle to be settled about the types of body that the Government may approve for type examination.
I do not want to say any more now about these largely technical issues. They do not appear to present insuperable difficulties. Hon. Members may wish to raise some of them again in the course of the debate. If necessary, I will, with the leave of the House, comment further at the end of the debate.
I now want to draw the attention of the House to the last part of the motion. This debate represents the final stage of the initial parliamentary scrutiny process in respect of this proposal. My Department is in close contact with representatives of the industry in Britain and is aware of the reactions of the industry to the technical aspects of the directive. It is fitting that we should look most closely tonight at the one aspect of the proposal which would affect parliamentary control.
I refer to articles 27 and 28 of the original text, together with article 28(a) in the Commission's amendments. Those articles lay down the procedure for the adoption of the subsequent implementing directives. If those articles were not in the text of the framework directive, the implementing directives would be adopted in the usual way in accordance with article 100 of the Treaty, the article which

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governs the adoption of harmonisation directives. That is to say, the Council of Ministers would see proposed implementing directives and adopt them by unanimous vote or not at all.
Articles 27 to 28(a) of the current proposal, however, invoke article 155 of the Treaty, which empowers the Council to delegate specific functions to the Commission. Those articles provide that implementing directives shall be considered first by a committee chaired by the Commission and referred to the Council only if the committee cannot reach agreement. Time limits will be imposed at each stage and weighted majority voting will be used, so that a measure will pass if 41 of the possible 58 votes are cast in favour. What is more, it will be adopted automatically if neither committee nor Council can agree in the time allowed.
The Commission states in its preamble to the proposal that its aim is to simplify and accelerate the adoption of implementing directives. There has been considerable pressure from various quarters within the Community over the past few years to speed up the harmonisation programme. The Government broadly support that aim wherever there is a potential gain from harmonisation. Nevertheless, we must look extremely closely at the procedure which is proposed for achieving that additional speed. It has aroused universal objections in Britain. The industry collectively has expressed its very considerable disquiet at meetings with my Department. Individual organisations have written to register their protest. The Select Committee on the European Communities in another place attached great emphasis to this aspect of its report, and the ensuing debate was much concerned with this issue. The Consumers' Association, in evidence to Select Committees of both Houses, offered a detailed critique of the proposed procedure and its implications.
One might ask why this issue has aroused such concern. After all, the procedure is not totally new. It is an extension of the recognised method of "adaptation to technical progress"—that is to say, directives which include technical standards sometimes have provision for technical amendments to that standard to be promulgated through a revised directive adopted by a committee. But,
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once the requisite technical amendment has been agreed—which is properly the work of a technical committee—there is no likelihood of dispute about putting it into directive form. When one is starting a directive and standard from scratch, that is a rather different matter.
Perhaps the aspect which troubles people most of all is that the implications go much wider than this directive. If the Commission's proposal is accepted in this case, it may be extended to other framework directives in other fields. The House will wish to bear this in mind in considering the objections to this procedure in the present case.
Mr. Douglas Jay: The hon. Gentleman said that the House will wish to bear this in mind, and he has made clear the objections to this procedure. Can he say that the Government will not agree to this going forward—at least, without further discussion in the House?
Mr. Finsberg: I think the right hon. Gentleman will find that I have anticipated much of what he said. I was about to give the House the reasons for the objections.
First, the proposal derogates essentially from the authority of Parliament and leaves decisions to officials. In the case of detailed technical adaptation, that might be acceptable. The dimensions of a building component and its resistance to fire or to moisture are seldom matters for political judgment. But in the present instance what is proposed is the delegation of power to decide the whole content of a directive—even whether there shall be a directive in a particular case. Such a decision could have ramifications for trade and could even cause a small ripple on the great ocean of the balance of payments. I believe that it is imperative that Parliament and Ministers retain control.
The second consideration is closely related. The accelerated procedure could mean that there is less than adequate time for the sort of considered parliamentary scrutiny which we give to Community proposals. The value of the scrutiny process has been demonstrated in relation not just to specific proposals but to the wider issues which are sometimes thrown up for discussion. Where the proposal is a major one—and I would

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certainly include some of the directives likely to arise under this framework directive—the scrutiny process rightly takes time. The new procedure might well not give us enough time. Let us make haste by all means, but only when we are totally sure that the destination is the one to which we want to get and that the route is the one we want to go by.
Mr. Dalyell: As a member of the so-called Scrutiny Committee—the European Legislation & c. Committee—I can say that some of us are under no illusion at all that the only job of that Committee is to decide whether these directives should or should not be debated in the House. It is an illusion to imagine that the Committee upstairs, for all the hours that we spend there, does any proper scrutiny job. That should be put on the record, because we find a great deal of misunderstanding. Many of our colleagues think that, because directives go to the Scrutiny Committee upstairs, somehow their merits are scrutinised. Alas, that is not so.
Mr. Finsberg: I am grateful to the hon. Gentleman for, as he said, putting that fact on the record.
Thirdly, we need to be sure that proposed directives, when they are brought forward, are acceptable to the United Kingdom. There must be adequate scope for consultation. Our island situation means that the interests of our industry may be different from those of its Continental counterparts, and we must ensure that its voice is heard. The Commission has recognised this need and tried to meet it by prescribing in article 28(a) that there shall be prior consultation with the economic and social committee. But that is not enough. We shall need to consult our own industry, and for that we shall need time. The Commission's accelerated procedure may not give us that time.
Finally, the proposal would reduce the amount of control which each member State would have over the final form of a directive. We could finish up with a rushed directive which we did not find technically or otherwise acceptable, but we could fail to prevent its being carried. Such a directive would still be binding in this country. The Government of the day would have to implement and en-
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force it, even if they were opposed to the contents. That would be an intolerable position.
It would not be so bad if we had had a reasonable chance to achieve satisfactory amendments before the directive was adopted. But the combination of accelerated procedure and weighted majority voting is impossible to accept. There are, of course, proper occasions for majority voting, but its combination with the accelerated procedure is not acceptable in this case. The proper interests of the British construction industry must be protected.
I believe that for all the reasons I have given we must oppose the procedure for adoption of implementing directives which has been put forward by the Commission and press for acceptable alternative arrangements. My officials who are attending the sessions of the Council's economic questions working group in which this proposal is being discussed have clear instructions. They have made our views known in Brussels and have found a fair degree of concern among other member States.
As I say, we shall continue to oppose that aspect of the proposal. We shall also continue to seek clarification of other aspects—
Mr. J. Enoch Powell: Before the hon. Gentleman leaves that major point, will he comment on another aspect which may be even more serious than those that he has brought to light—namely, that this appears to be a method whereby the Treaty itself is, in effect, being amended by directive? If that is so, not only is it a serious constitutional point but any directive might, otherwise than as he said, not in fact prove to be binding upon the member States but to be capable of being challenged and overthrown in the European Court.
Mr. Finsberg: The right hon. Member puts forward an interesting point, though I am not certain that it necessarily follows from what I said. It would be wrong to ignore the point, and, if I may, I will look at it and perhaps come back to it during the debate.
Mr. Powell: The Minister said that but for this directive the procedure laid down by the Treaty in article 100 would

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have applied. It is upon that proposition that my submission turns.
Mr. Finsberg: I would query whether it actually amended the Treaty in what I would call the legal sense, but I will certainly have a look at the point.
Mr. Marlow: My hon. Friend has spoken eloquently about the procedure which he says the Government do not wish to accept. In the fullness of time, things happen and the Government may be persuaded that they want to accept that procedure. If we support the motion tonight, can my hon. Friend say that before any such procedure could be introduced the House would have the opportunity to vote on it?
Mr. Finsberg: I think that if my hon. Friend looks at the motion he will see that our intention is to ensure that satisfactory procedures are included in the adoption of implementing directives under this framework directive. I would have thought that that was the sort of thing that he wants, coupled with the very strong terms in which I have said that we find parts of this and parts of the procedure quite unacceptable.
Mr. Jay: The hon. Gentleman used the word "intention". Does he agree that if the House accepts the motion the Government will not be at liberty to agree to these directives without, at any rate, further consultations with the House?
Mr. Finsberg: Yes, I would. I thought that I had perhaps said that, but I am glad to make it totally clear.
Subject, therefore, to satisfactory progress in the negotiations—and that is a serious and important proviso—I hope that the House will agree that we should give the proposal a cautious welcome. I commend the motion to the House.
10.40 pm
Mr. Gerald Kaufman: We are grateful for the tone of the Under-Secretary's remarks, but it would be undesirable for the House to give these documents any kind of welcome, cautious or otherwise, for reasons which I shall explain, one of them being the extremely important point raised by the right hon. Member for Down, South (Mr. Powell) in his intervention.
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It must not be forgotten that when the Ministerial Council of the Communities agrees to acts which are not within the vires of the Treaties it automatically amends the Treaties de facto, and, that being so, it is a most serious course for our Government to permit. I hope that the hon. Gentleman and his colleagues will ensure that no such action is followed, for the reasons which I shall now try to explain.
Mr. Tom Ellis: Does my right hon. Friend agree that that course of action—that is, amendment of the Treaty in the way he suggests—has happened on a number of occasions already?
Mr. Kaufman: My hon. Friend is right. This is the sort of thing that is attempted, but whenever it is attempted it should be resisted. It was attempted, for example, on regional steel aid, and the Labour Government resisted that. Unfortunately, the present Government have not been so strong on the matter. For better or for worse, the House assented to the Treaties in 1972. It is the assent of the House to an Act which is the governing matter, and de facto amendment of the Treaties by assent to dubious practices in the Ministerial Council is not something that the House should countenance.
Mr. Ellis: I am sorry to press my right hon. Friend, but the whole concept of veto, surely, is an amendment of the Treaty; in other words, the fact that the veto now exists was not intended in the original Treaty.
Mr. Kaufman: There certainly has been case law of that kind, too—I do not disagree with my hon. Friend—but we must not ignore something else. We have discovered—I certainly discovered it when I was a member of the Government—that one of the few defences we have against empire-building by the Commission is the fact that the veto has now been accepted as a practice of the Communities.
The Under-Secretary quoted, quite rightly and with some validity, from opposition and objections made by the Consumers Association on this matter. They are valid and important objections, but they are not the most serious kind of objections since the objection to these documents is not simply to their content but to their method. This is a matter not for interest groups, though they obviously

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have a right to comment. This is a serious matter for Parliament.
There is here a major matter of principle for Parliament. These documents are another example of the tendency of the Commission, unless restrained, to build itself an empire. I wish to make clear that the documents are unacceptable to Her Majesty's Opposition, both because of what they are designed to do and because of the way in which they are designed to do it. I shall be grateful if the Under-Secretary can let us know what kind of timetable is envisaged to deal with these documents. It will be helpful to know that, because the House will, I think, want to decide its attitude in the light of that timetable.
First, we regard the very proposal for harmonisation of these materials as undesirable. There is simply no need to have harmonisation of these materials within the Community. It is an example of what my noble Friend Lord Thomson of Monifieth in the debate in the other place last October called the tendency of the Commission to say "If it moves, harmonise it". There is no need to harmonise these materials. What is more, not only is there no need for it to be done but it is really not possible for it properly to be done.
The Under-Secretary has rightly pointed out the opposition from the industry to these proposals. The industry will have seen by now what Lord Hinton of Bankside said in another place last October. Besides being a very eminent person in his own right, Lord Hinton has been responsible for more acts of harmonisation in practice than almost anyone else in the country. He pointed out that the British Standards Institution has a staff of 23 working on standardisation of construction materials, and in addition to that technical staff of 23 there is a supporting staff of about 40, but he pointed out that that staff merely supports and services the committees which do the standardisation and that the number of members of the committees which are considering standardisation within the construction industry is between 2,000 and 3,000 people. That is in this country, for our industry.
As Lord Hinton pointed out, if a working force of 2,000 to 3,000 people fails to do full standardisation of building construction materials for our coun-
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try, one must seek to imagine the kind of organisation which would be needed to bring about standardisation for all the nine countries of the EEC. I could well understand that the Commission would be perfectly happy to acquire that kind of additional staff to carry out additional funds, but it would be an intolerable incubus.
I do not believe, therefore, that we should accept the proposition. The Minister was already going somewhat down that road when he said that what the Government were seeking to obtain was acceptable alternative arrangements. But seeking to obtain such arrangements is an acceptance of the proposition that there should be any arrangements at all, and, therefore, we are immediately arguing on the ground that the Commission has chosen. What we ought to tell the Commission is that we do not want any arrangements, that this is not an area in which it should seek to intervene and that this is a matter for national Governments and industries to arrange themselves.
My right hon. and noble Friend Lord Thomson of Monifieth gave the strongest warnings about this matter when these documents were debated in another place last October. The House will not need me to remind it that Lord Thomson was himself a Commissioner and that he is a person whose dedication to the ideals of the Community is second to none. But what he said in another place was that, looking at this directive, he was worried that it showed a tendency on the part of the European Commission towards an excessive degree of zeal for an excessive degree of harmonisation in terms of daily life within the European Community. He took the view that this was out of place in this instance.
My right hon. and noble Friend quoted the very relevant evidence of the Consumers Association to the Select Committee of another place:
"We think the European Community is on a most dangerous road. We understand the desire to remove barriers to trade, but this must not be done by giving the bureaucracy the right to impose statutory requirements."
As for the procedures proposed by the Commission on this matter, my right hon. and noble Friend said that the proposals in this particular directive for decisions being taken by a qualified majority within the Commission, with the Commission in the chair and without any previous

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publication of the papers, was a thoroughly dangerous proposal. That was said by an ardent advocate of the ideals of the Community, and I hope that the House and the Government will take full account of those most serious warnings.
In another place, Lord Bellwin made statements very much along the lines of those which the Under-Secretary has made this evening and which we welcome. But I should like to make this clear. The Prime Minister has been saying lately that if we do not get an agreement on the contribution that is acceptable to the House, the Government will prove difficult in their relations with the Community. I am sure that the House supports the Prime Minister in that approach. I hope that the Under-Secretary will pass on to his right hon. Friend the Prime Minister that, if the Government decide that it is appropriate for them to adopt a tough stance, the directive is an ideal opportunity for that. The Opposition are worried not about the details of the procedures but about the principles, about which the hon. Gentleman spoke at greater length.
Mr. Selwyn Gummer: Is it not important to make a distinction between objecting to things because they are inherently wrong and using objections as a means of achieving another end? Many of us feel that things are wrong, but we would not want to use them as a general stick with which to beat the Commission.
Mr. Kaufman: Of course, one must be selective in what one does. There have been occasions when I have welcomed certain acts of the Commission—for example, the measures that it took to defend the steel industry against outside competition. That was a proper use of the machinery of the Community, although that was done only when the Council of Ministers responsible to its constituent Parliaments approved the matter. I am saying that this is a basic facet of the activities of the Community.
Some of us believe that the basis of any democratic participation of the House in the activities of the Community is by the control of the House—in so far as it is able to have any control—over the Ministers whom it sends to the Council. If our Ministers assent to the
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abandonment of powers to a non-elected, non-responsible Commission, our Ministers are handing away to that Commission powers which are properly those of this Parliament.
Although this is a small directive on construction products, we regard it as an important constitutional matter and not just a matter of modalities. Indeed, the Government have shown that they are aware of the matter. Therefore, the directive is unacceptable to the Opposition. We believe it inappropriate that harmonisation should be pursued in this sphere and we regard it as utterly intolerable that the procedures proposed by the Commission should be acceptable. Indeed, the Government have pointed out that they are not. I do not criticise the Minister for the motion that we are debating. I regard it as a weak motion, but it does not commit us to much and, therefore, we shall not divide against it.
However, the timetable of the directive is important and we shall watch carefully what the Government do. We are grateful to the hon. Gentleman for the commitment that before decisive action is taken the Government will come back to the House. We will support the Government if they hold firm, but if there is any weakening we shall have to come back to the matter and do our best to ensure that the Government take a tough stand.
10.53 pm
Mr. Donald Thompson: I have three short questions to ask my hon. Friend the Under-Secretary. First, how does the wodge of documents differ from the one we discussed a few days ago, Cmnd 7657, the GATT agreement on standard codes, which appears to cover all the points on the harmonisation, publication and agreement of standards between countries, apart from various specific directions for the labelling and stamping of good that are mentioned in these documents? If, for example, people in the building trade stand by the recently accepted GATT code of standards, they will be able to trade under the procurement agreement. If they gain local approval, there can be no further need for this complicated legislation.
Finally, is there any hope that British standards—we have heard of the thoroughness with which those standards

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are scrutinised and implemented—will suddenly be accepted throughout Europe? Many manufacturers in my constituency and elsewhere fear that, having seen British standards, manufacturers in other countries will get approval for lower and cheaper standards. They fear that those manufacturers will then dump or export their goods to other countries, having used our standards as a yardstick to aim beneath. Those are real fears and I shall be grateful if my hon. Friend will reply.
10.56 pm
Mr. Tom Ellis: I listened carefully to the Minister and my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman). However, I think that my right hon. Friend has overstated his case; he weakened his position a little.
The directive has been considered by a Select Committee and by a Committee in the other place. A great deal of evidence has been given by interested parties, such as the Consumers Association, the building industry and so on. Having read much of the evidence, and having heard what has been said tonight, I think it would appear that objections to the proposals fall into four main categories.
First, there is the objection that no one wants the directive anyway. The Consumers' Association cannot see any purpose for it. The building industry does not want it. However, there has been a demand for it from other quarters. During the course of several years the Commission has been prodded strongly on several occasions by the former delegated Parliament. The European Parliament spent a great deal of time considering it, and it was not irresponsible. It was seriously concerned about the issue. The construction industry represents 15 per cent. of the GNP of the Community. That constitutes a substantial chunk of the Community's economy and of our own. The raison ďêtre of the Community—or perhaps one raison ďêtre—is the need to improve trade.
One assumes that we are not frightened of entering the sphere of competitive trade. Whatever bungle may have been made in producing the document, it was produced for a serious and genuine reason—namely, the need to improve trade in that substantial area of our economy. Therefore, I cannot accept
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without serious question the first objection.
The second objection seems to be that the procedures are not suitable and that they might interfere with sovereignty. Under normal conventional procedures, discussions have gone on for five or six years without result. The whole point of politics and administration is to get things done. I do not mean that things should be done faster than is appropriate. However, when it is obvious that things are not being done, it is inevitable that there should be suggestions about modification of procedure. Perhaps this particular suggestion to modify procedure will not find favour with everybody. However, at least one can understand its origin.
The third objection is that there has been no consultation and that the proposal should have been outlined in a Green Paper. In the Community, a directive is a Green Paper. In this House, the Government first publish a Bill. Having done that, they have taken up an entrenched position and are reluctant to change anything. That is not the procedure in the Community. First, a directive goes to the interested parties, and usually to the committee concerned,, on a semi-confidential basis. There is no entrenched position. The Commission frequently substantially changes the content of directives. I do not believe that the third objection is valid.
My right hon. Friend the Member for Ardwick drew specific attention to the possible bypassing of democratic procedures, which is a fundamental issue and one that we shall have to face. If each national Parliament had to ratify each piece of legislation, this would involve nine Parliaments. However much time we may take, we have to multiply that by nine. It is not a practical proposition. Members of all the Parliaments should consider how democratic controls can be best applied to the Community. I do not believe we can do it by insisting that measures should pass through each Parliament.
I recall the furore about the proposed legislation to limit noise from lawnmowers. It was considered to be a terrible thing. Not only was the noise to be limited, but lawnmowers could not be used on Sunday afternoons. In this country 20,000 people are employed in that

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industry, so it is not irrelevant. Secondly, the noise level of British lawnmowers was the lowest in the Community. That legislation would therefore have suited us.
Mr. Kaufman: My hon. Friend's experience and knowledge of the Community is far greater than that of myself and many other hon. Members, and he will know that the demand for harmonisation of lawnmowers arose because a Commissioner had a noisy neighbour. That is not a satisfactory way to achieve harmonisation of industry in the Community.
Mr. Ellis: I am merely trying to demonstrate the need for a new system of democratic scrutiny.
I was coming to the point raised by my right hon. Friend. I like a quiet Sunday afternoon. If I wanted to see lawnmowers banned in my village, I should turn to my parish council. It is not a matter for this Parliament or the Community. Each parish should decide it in its own little way. I am talking not of a specific issue but of the framework wherein democratic decisions are made.
We still appear to insist that there is only one ultimate fount of responsibility, authority and knowledge—this place. That is manifestly absurd in a modern society. Change is rapid. For example, construction materials will change in five years.
The figure of 20,000 raises another paradox. In this country we are employing 20,000 people, but it is suggested that it cannot be done in the Community. However, that is another argument.
We should consider the larger issue and do so much more positively than in the past. By all means, let us object to the immediate practical document. I agree with my right hon. Friend that it is not right to give bureaucrats carte blanche to go full steam ahead. Having said that, we must not allow our prejudices to blind us to the need for radical alteration and—I go further—to some practical undermining of the so-called sovereignty of this House. One of the most serious dangers facing this country is the concept that sovereignty is some monolithic entity. It bears no relationship to the demands of a modern technological society.
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I agree that we should not agree to this measure because of the faults that have been demonstrated by my right hon. Friend. I hope that we can begin to approach the whole question on a more positive and more constructive basis.
11.5 pm
Mr. Robin Squire: I shall be brief, partly because I hope to catch the eye of the Chair tomorrow afternoon in another debate but also because there appears to be general agreement among speakers from either side of the Chamber about the Government's motion. As a strong and unrepentant pro-European, I should nevertheless like to put one or two matters on the record.
The hon. Member for Wrexham (Mr. Ellis) has rightly pointed out that concern still exists among manufacturers. This has been recognized by the Government in the wording of the motion. I am sure the hon. Gentleman accepts, notwithstanding the size of the industry, that it is right for manufacturers, concerned about their interests and those of their employees, to make representations. If, ultimately, it proves impossible to find a solution to which we can readily accede, it must be right for them even to contemplate being outside such an agreement and to deal with trade abuses under other articles covered by the legislation.
My hon. Friend the Under-Secretary of State has referred to qualified voting. I was delighted to hear his reservations. There are fears in the industry about possible low standards and the high costs that a major change would involve. The industry is in the best position to inform us about its attitude.
I should like my hon. Friend to indicate whether the approved bodies mentioned in the draft directive will include the United Kingdom research associations. I am advised that much of the expertise within the building industry is to be found in the research associations. We would sorely miss that advice if the associations were not included.
I gather that some attempts are being made, in conjunction with the Department and the manufacturers, to reduce the long list of what are termed priority products. Given that an attempt has been made to create priorities, the list is long. I am advised that some agreement has been reached between the Government

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and manufacturers. I welcome that. If it is true, I hope that we may be able to influence our colleagues in Europe to concentrate on the essentials and not necessarily every product that occurs to them.
My hon. Friend the Member for Sowerby (Mr. Thompson) mentioned standards. I emphasise that the standards we want should be those that are recognised—the CEN standards or the ISO standards in which we have expertise. It is probable that these are the standards that will be fixed. But the wording, I am advised, is open, and I hope that it may be tightened.
11.9 pm
Mr. Tam Dalyell: Like the hon. Member for Hornchurch (Mr. Squire), I speak as an unreconstructed pro-Marketeer. But many hon. Members have the gravest doubts about these innocent-looking documents. When one lifts a stone or two, one finds underneath all sorts of problems that were possibly not suspected.
As this debate lasts only one and a half hours, I shall confine myself to certain factual questions. Lord Thomson, in his speech in the other place, asserted that decisions in the directive were taken by a qualified majority within the Commission. Is that true? Is it also true that, as the Consumers Association has said, there was no previous publication? That would be a thoroughly dangerous development. Those of us who spent four years watching the Commission would be extremely concerned if there had been no previous publication. My experience of Lord Thomson is that he does not make statements without factual backing, and I therefore tend to assume that what he said is true.
On the issue of optional versus total harmonisation, why is there any question of total harmonisation in this case? Surely optional harmonisation, if we must have harmonisation at all, is desirable. I listened carefully to the Minister, but I did not quite understand what was the reason given for the accelerated procedure in this instance. What is all the hurry about?
Some of us endlessly and ad nauseam in the former indirectly elected European Parliament politely and seriously pleaded with a series of Commission officials not
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to introduce harmonisation, given that it was fundamentally and, by definition, inappropriate.
Let me explain what I mean. The documents deal with sanitary equipment, for example. The sanitary equipment that may be needed in Sicily is a bit different from the equipment needed in Shetland. The documents also cover ceramic tiles, and the tiles needed in hot areas such as Bordeaux with little snow are different from those needed in, for instance, Northern Germany—in Bremen—or in various parts of Britain. Another product included in the documents is heat installation material. I left home this afternoon in a blizzard of major proportions, and the heat installation material needed in Edinburgh is different from what would be needed in Athens.
Why do we talk about harmonisation? I do not want to be too glib, but the Commission is in danger of being killed by ribaldry and those of us who are pro-Europeans find life increasingly difficult, because the ribaldry that can be thrown at us has some basis of fact. That is why some of us greatly resent this sort of document unless it is demonstrated that it is absolutely necessary.
For time reasons, I should like to ask just two more factual questions. Document R/3289/78 says that the directive
"offers potential benefits to those sections of the industry who at present face barriers to trade. The measure could however also impose considerable costs on the industry, since Article 36 provides for all test and checking costs to be borne by the applicant, and a serious administrative burden on both the industry and central government."
All of us can think of higher priorities than this for public expenditure.
As a former member of the budget committee of the European Parliament, I know that time and again Commission officials, when they were tied down to the costs of a programme, either politely shook their heads and said that it was impossible to quantify the cost and that we should know that or came up with figures that were often much more than any elected politician thought that they would be. Let us have some figures tonight. If the Minister shakes his head and says that he cannot give the figures, that is an added reason why some of us become very vexed indeed. My hon.

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Friend the Member for Wrexham (Mr. Ellis) had a similar experience on the energy committee. Unless we have a rough estimate of what we are letting ourselves in for, it is not right that these things should be passed.
On page 6, document R/3289/78 states:
"This procedure, which is similar to that used for the adaptation to technical progress of directives, is implemented by a Committee on Rules, chaired by a representative from the Commission, which takes its decisions by a qualified majority vote weighted as set out in Article 148(2) of the Treaty.
Since the power to adopt implementing directives has been confered on the Commission by the Council, there is no longer any need to distinguish between this procedure and that applied for adoption to technical progress, the latter procedure being entirely subsumed in the former."
That is not immediately obvious. It is a non sequitur. If I am wrong, doubtless the Minister and his advisers will put me right.
The next paragraph continues:
"It must be stressed that this proposal, relating to recourse to the fourth indent of Article 155, is in line with the suggestions made by the Commission, at the request of the Ministers for Foreign Affairs at their meeting at Villers-le-Temple, in its note to the European Council of 5–6 December 1977."
I have been longing to ask of this Parliament, as I have asked on a previous occasion at either Strasbourg or Luxembourg—and received no answer—precisely what was agreed at that meeting at Villers-le-Temple. Whenever one is in an archaic argument on these matters, "Ah", it is said, "Go to Villers-le-Temple". I am asking what on earth took place at Villers-le-Temple. When and where and what was agreed? I suspect that I am not alone in not knowing what transpired at Villers-le-Temple.
My hon. Friend the Member for Wrexham, who knows everything in these matters, may be able to put us right, but I bet that the Minister does not know.
11.18 pm
Mr. Selwyn Gummer: I shall not detain the House for long. There have been a number of comments during the debate which leads one seriously to question the purpose of this sort of debate. When a matter of this sort is presented to the House it is vital that we seek to
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discuss the issue and not so to blow it up that we fail to see the problems.
I, like many other hon. Members on both sides of the House, have considerable reservations about these proposals. It does not help sensible discussion if we start suggesting that this would be a suitable occasion on which to show our mettle to the Commission on some different issue. It does not help if we make too much of a major constitutional issue.
If we are to make changes that will lead to greater trade between the countries of the Community, there are many issues that could easily be debated in this House or in any one of the nine Houses of the European countries. We know that that applies to matters at home. The right hon. Member for Manchester, Ardwick (Mr. Kaufman) made a point of the work carried out by the British Standards Institution. We do not spend much of our time discussing the impact of each and every standard that it raises. Nor would it be sensible to suggest that we could seriously discuss—and the way that the right hon. Gentleman suggested was almost a part of the Treaty—the way in which standards might be implemented throughout Europe.
It would help if in these important debates we tried not so to blow up the issue that we fail to make serious points about the matter before us.
Mr. Kaufman: I believe that the hon. Gentleman is falling into a serious trap. He says that we ought to discuss the ways in which these standards will be implemented throughout the Community. What he is saying, therefore, is that we ought to look at alternative solutions to the problem that is being discussed. What I say—and it is, I contend, an important matter—is that it is incumbent upon this House sometimes to reject not only the solutions but the problem. That is what I was seeking to do.
Mr. Gummer: I am sure that the right hon. Gentleman will follow me when I come to my second point on that issue. I was suggesting, first, that we are more likely to come to a sensible answer to that question if we start within a framework of addressing ourselves to the issues and not constantly blowing them up on to a world or European-wide stage of great statesmanship. We are concerned here with the construction industry and with

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how best to serve that industry within the Community.
Having said that, the question that can reasonably be asked is whether we should have standards at all Europe-wise. Certainly we should not bilk that issue, but we should not act as though it were a matter of assaulting the integrity of the treaties. We should not get ourselves into that mix. We should not, either, get too het up about it in the sense of its being part of the Prime Minister's strategy for dealing with the British budgetary contribution. Those matters seem to me to be far too large to raise on the Floor of the House on this issue.
The issue is whether we should have standards Europe-wise. I do not think that we can throw this out with the abandon that the right hon. Member for Ardwick suggested. The fact is that we have standards at home, we know those standards to be valuable, and in certain specific areas of the construction industry European-wide standards might well improve the opportunity for British industry to compete with our fellows in the rest of Europe, and the opportunity for mainland European industries to compete with ours in this country. That is perfectly reasonable. Our objections, therefore, are not to the principle of the matter but to the way in which the document sets out the means of implementation.
My third point relates to the means of implementation. Clearly, many of us are worried that it might be possible, under these terms, to carry the harmonisation policy way beyond the necessary harmonisation which I believe we have and which most people in the industry would think we have. It might be easy, because of bureaucratic desire, and because of the natural desire to continue one's power throughout every part of Europe—a desire and a tendency that we have noted in Governments in this country as well as in the European Commission—to think that this technique could be used to carry out all kinds of harmonisation that we do not want and do not need. The hon. Member for West Lothian (Mr. Dalyell) made a good point in referring to the ribaldry to which we are all subject when we support the idea of the European Community but are faced with one or two of these issues which make it look silly because so many minutiae are introduced.
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But that should not lead us to think that no standardisation is necessary. We have to get a reasonable and sensible balance here. I suggest that we should support the Government in seeking to make sure that in our negotiations and discussions over this matter we emphasise the British interest, which is to have a sensibly run Community, harmonising where harmonisation is necessary, and not where it is not. That is not an unreasonable position, but also it is not a terribly vast and weighty matter.
Fourthly, I support what was said by the hon. Member for Wrexham (Mr. Ellis). Every time we discuss this kind of issue we deceive ourselves if we do not realise that the present structure in Europe must be changed and altered as the various issues arise and the pressures upon old structures become great.
This House and our system of running things are not the be all and end all of government. Having been out of the House for four years, and having been able to look at it from the outside with the experience of having been inside, I can say that some of those faults become more and more clear. We have a great deal to learn from the open government of the European Community, as also we have a great deal to teach that Community. To suggest that we cannot deal with any of these issues without a perpetual and continuous emphasis on our way of doing things is to stop the Community from attending to matters to which it should attend.
I therefore beg the right hon. Member for Ardwick to look at these matters perhaps a little more philosophically and a little less with the desire to say that the British method is the only way, and to seek a solution to the real problem. If the members of the Community wish to work together, they must grow together. In so doing, all our institutions will be affected and changed. If we want to make the Community work, we must not constantly demand precise and detailed acceptance of the way in which we work in Britain. If we can be a little more open and learn from others instead of constantly pressing our experience upon them, they may learn a little more from us.
Mr. Kaufman: Our proposition is not that the way in which we do things is

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necessarily best. Of course it is not. If it were, Britain would be more successful than it is in many ways. What is incontrovertible and important is that the fount of authority in Britain is this Parliament. That is the point that my hon. Friend the Member for Wrexham (Mr. Ellis) was seeking to make. He referred to parish councils. Parish councils exist because this Parliament decided that they should exist. We are members of the European Economic Community because this Parliament decided that we should be members. There is no fount of democratic authority in Britain other than this Parliament. That is why it is essential that this Parliament's authority should be protected.
Mr. Gummer: I do not think that any hon. Member would disagree with the hon. Gentleman's general statement, but if he then says that on all issues and in all matters we must so constantly refer to that fount that we are unable to make any decisions, however minute, without the stamp of his vote and the vote of other hon. Members, it is a prescription for no movement in the Community. He cannot have it both ways. On the one hand he says that the Community is not doing things that it should be doing in the interest of Britain and other countries, and on the other he says that we must so support it that we can do nothing. We must find a way through the problem, without constantly demanding that this House discusses everything so much ad nauseam that we are unable to make any decisions.
11.27 pm
Mr. Geoffrey Finsberg: I shall endeavour to reply to as many of the points that have been raised as possible in the time available.
The right hon. Member for Manchester, Ardwick (Mr. Kaufman) pointed out the danger to parliamentary supremacy and asked about a timetable. There is to be a further meeting in March, and there will be progress in the following months. However, it will almost certainly be a year or two before we reach a final stage. The building material production industry is divided on that. Some sections feel that they can welcome the proposal because they can identify barriers which could be removed. We are examining all the issues that they have raised.
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Both the right hon. Member for Ardwick and the right hon. Member for Down, South (Mr. Powell) raised the question of the Treaty. The right hon. Member for Down, South suggested that the proposal involved amending the Treaty of Rome by directive. I agree that it involves a major change to the procedure that is normally used under artcle 100. That is the intention of the Commission's proposal. It would operate through existing provisions of the Treaty—through article 155, which requires the Commission to exercise the powers conferred upon it by the Council for the implementation of the rules laid down by the latter. Article 148 allows for majority voting. There is thus no question of amending the Treaty. However, I note the right hon. Gentleman's point. I made it clear that we do not like this method.
Mr. Tom Ellis: Is it not the argument that article 155 is being used for purposes for which it was not intended, or for purposes for which it is not appropriate?
Mr. Finsberg: As I tried to say earlier, we do not believe that it is appropriate within the framework that has been put forward.
I was puzzled by one thing said by the right hon. Member for Ardwick. He attacked the vires of the directive and suggested that it was basically unacceptable to the Opposition. There was no hint of that in the explanatory memorandum presented by his right hon. Friend the Member for Brent, East (Mr. Freeson) to the Scrutiny Committee. I do not think that the right hon. Gentleman meant to go quite as far as he did, because basically I do not think that there is any difference between what he is saying and what the Government are saying in the motion.
My hon. Friend the Member for Sowerby (Mr. Thompson) asked about the GATT code. This is a general agreement to be signed by all the signatories to the general agreement. The proposals before us make formal provisions for standards, codification, and so on, for application within the Community in the one specific field, namely, construction products. They are much more specific, and indeed limited, in their effect than the GATT code, but they are compatible with it. Secondly, they are not only about

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standards. They are also about the use of the standards in regulations.
I think that one can hardly expect other European countries necessarily to adopt our standards. Each country has its own standards, and each will want to apply its own standards. I am fairly certain that my hon. Friend's opposite number in another member State will be asking the same sort of question about his country's standards and their use in the rest of the Community. Where my hon. Friend is right is in saying that without some sort of Community catalyst it could take a long time to reach agreed standards from that starting point. We believe that it would be in the interests of British industry if we could reach that sort of situation.
Mr. Dalyell rose—
Mr. Finsberg: I hope that the hon. Gentleman will allow me to continue, otherwise I may not get to all his points. I have a fascinating answer to his question six.
My hon. Friend the Member for Northampton, North (Mr. Marlow) asked whether the United Kingdom construction industry was happy, and I indicated that there was a degree of dissatisfaction on some of the questions that were under consideration. We are closely in touch, and we are keeping it in touch, with developments in Brussels. It is fair to say that it doubts the need for the directive, and I have some sympathy with that view.
I do not think that it is realistic to resist the directive as such, and that is not what we are asking the House to do. We are aware that our industry meets barriers to trade in only a small number of products. We shall want to look very closely indeed at the proposals for implementing the directive. We shall need to look closely also at the costs, to which my hon. Friend and the hon. Member for West Lothian (Mr. Dalyell) referred. The difficulty is that they are likely to vary widely from case to case, and it will be extremely difficult to generalise. I take on board the point made by the hon. Gentleman, and I shall come back to it.
The hon. Member for Wrexham (Mr. Ellis) pointed out the realities of the situation and gave what I would call a cautious welcome to the philosophy that lay behind the motion and the way in which I introduced it.
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My hon. Friend the Member for Hornchurch (Mr. Squire) asked about research associations. We have made it clear in Brussels that we shall wish to be able to appoint research associations as approval bodies. I am not sure that the amendment as it has been drafted is clear on this issue, but we have given notice that we wish to propose a further amendment to clarify the situation. I think that there is not much now between the Commission and ourselves on this matter.
On priority products—a matter that was raised by my hon. Friend—I said that we were trying to get the list down to a sensible size. If we were to put a mass of products on the list and call them all priority we would get nowhere. The hon. Member for West Lothian fairly spoke about the qualities of tiles in hot and cold climates. He is right. We have to try to assess what is a priority product and what really needs harmonisation and could be in common use, whether in Athens, Aberdeen or Bordeaux.
The hon. Member for West Lothian, who brought a heavy dose of common sense to the debate, asked me a series of questions. I can give him some answers, but I confess that I cannot answer all his points, mainly because I am not sure that I understand the first point that he made about the qualified majority. I shall, if I may, look at what he said and, in the light of how I understand it, write to him on the issue.
The hon. Gentleman spoke about total harmonisation. The Commission has said that implementing directives would normally be optional. It seems to envisage that total harmonisation might be necessary for products where there is a strong safety argument. The Government have reservations on this matter and will want to look carefully and closely at any such proposals.
The hon. Gentleman then asked whether I could give any reason for the accelerated procedure suggestion. The proposal and the pressure to hurry come from the European Parliament and apply to a much wider range of products than construction. But that does not remove the fact that I said that we did not believe that it was in the interests of the construction industry and of the House that we should be bounced, as it were, into the kind of pressure that is being asked for in the proposal.

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The hon. Gentleman asked about cost. I said that it would not be possible to give him figures of cost, because the fact that we are dealing with a variety of products, suggestions and directives means that it is almost impossible to generalise. We shall go on trying to to get some figures, but until we know how many implementing directives there will be and what products and procedures will be used, it is not possible to give the information that the hon. Gentleman wants. I accept that we must try to get the Commission to realise that if there are cost implications, which there are, we want to know its estimate of the situation.
The last question was about what was agreed at that delightfully sounding French resort. I do not know, but I shall find out if I can.
Question put and agreed to.
Resolved,
That this House takes note of European Community Documents R/3289/78 and 9056/79 containing a proposed EEC Directive and Resolution on the approximation of the laws of the member states relating to construction products; and endorses the Government's intention to ensure that satisfactory procedures are included for the adoption of implementing Directives under this framework directive.

COAL INDUSTRY (SOUTH WALES)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Berry.]
11.37 pm
Mr. Jeffrey Thomas: It is in some ways unfortunate, but perhaps in more ways fortunate, that the subject matter of this Adjournment debate should have been touched on in the main debate today. I shall, of course, try not to cover ground already covered by my right hon. and hon. Friends, but if I do my apology will be muted, for the future of the coal industry in South Wales in the wake of the British Steel Corporation's announcements relating to Llanwern and Port Talbot is of the highest possible importance. We are debating not only the very life expectancy of a great industry but the future of thousands of men employed in
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that industry and of whole communities dependent—and in many respects solely dependent—upon it.
I believe that if the BSC's proposals in their present form are implemented and, further, that if no measures are taken to prevent the import of foreign coking coal, the coal industry in South Wales will be decimated. Literally, the effect on South Wales will be catastrophic. The Secretaries of State for Wales and for Industry—I am delighted that the Under-Secretary of State for Energy is to reply to the debate—will be remembered in Wales as the men who not only passed the death sentence but were the executioners.
South Wales has literally the best coking coal in the world. I say that because earlier today some of us heard what the Under-Secretary of State for Wales said about the quality of that coal. I want to emphasise that we have the finest coking coal in the world and that we have the most experienced and the most responsible miners in the world, 80 per cent. of whom have never known any other job. These men are now at the mercy of a bunch of bungling incompetents at the head of the BSC, aided and abetted, it seems, by a Government who not only lack compassion but are devoid of common sense and even business sense.
I reiterate what was said by my right hon. Friend the Member for Rhondda (Mr. Jones) at the beginning of the Welsh debate. What the NCB in Wales is asking for is £24 million spread over four or five years. In terms of redundancy and other payments if these plans go ahead, we are talking about £24 million a year. I emphasise to the Under-Secretary the fact that the NCB in Wales is injecting £47 million into the Welsh economy each year. That is why, without hesitation, I say to the Government that to go along with these proposals is inconsistent with economic common sense and good husbandry.
I quote from an article in the Western Mail for 21 January. It was written by its industrial editor, Garrod Whatley, and in many respects it sums up the difficulties and dangers that now confront us. He said:
"It is likely that few aspects of Welsh life will be unaffected by the ripples of cuts set off by 11,300 steel job losses—with mines,

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transport, local authority services and shops all at risk.
The sheer scale and speed of the planned British Steel Corporation reduction are breathtaking, with 6,883 jobs to go at Port Talbot and 4,454 at Llanwern Steelworks near Newport…
The spin-off effects in Wales, where steel and coal are still the economic cornerstones, are hard to assess in detail at this stage. Some estimate that as many as 50,000 jobs could be lost in total…
At the moment the BSC employs about 46,000 people in Wales. But as important is that steelmaking is a major customer for a vast range of other businesses.
The future of South Wales pits is highly dependent upon the area's steel industry. About a half of the 36 collieries in the area produce coking coal…
Much of this coal is for Llanwern and Port Talbot steelworks and the corporation's decision to halve production capacity would have a swift and harsh effect on the coalfield.
In the current financial year the BSC in Wales used 3·3 million tonnes of coking coal, most of it from South Wales pits."
The article continues:
"If the corporation goes over totally to imports, it means about 20 pits and 15,000 jobs will be axed in the coalfield. Like the BSC, the mining industry is a major buyer for services such as engineering and transport…
Spin-offs could include less cash in the economy so shopkeepers, restaurants, cinemas and other leisure time activities will be hit.
Local authority rate incomes will fall as pits and factories close, and this could cause lowering of standards of services and fewer public sector jobs.
About a third of the 800 firms which are South Wales members of the Road Haulage Association depend heavily on carrying steel products. Some companies rely entirely on the BSC for work.
The South Wales ports are linked with the steel industry. Iron ore made up a half of total imports in the first 10 months of last year. Steel formed about a ninth of exports.
About a third of British Rail's freight in Wales is generated by steelworks and this is important in the economics of running all routes in the region."
I hope that that gives some indication of the depth of the problem stemming from the corporation's latest announcement.
I wanted to highlight that because at certain stages of the earlier debate some doubt was cast on the figures of the number of pits which would be adversely affected and, indeed, the number of men who would be made unemployed. No figures were produced by the Government as to what they understood, and nothing was given in answer to our challenges on
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how many men would be put on the dole, but aspersions were cast on the figures given by my right hon. Friend the Member for Rhondda.
The Western Mail referred to the National Coal Board, and I am authorised by the area director of the National Coal Board in Wales to say—I quote from a letter which I received today:
"We could lose as much as 2¾ million tonnes of business for coking coal.…As a rough guide, each 0·2 million tonnes is equivalent to a pit and about 700 men."
I hope that that spells it out, and I hope, too, that it puts the matter beyond dispute, because we are not making a party or partisan point. We are trying to put these extremely serious facts before the House for the Government's attention.
The spectre of the 1930s has been revived. I venture to say that the situation will be far worse even than the 1930s when Gwyn Thomas could say that the gravestones in the cemeteries of the Rhondda were marked "Not dead but gone to Slough Today there are no Sloughs left. There are no other jobs to go to elsewhere in the country. Indeed, if Welshmen went to other parts of the country they could not afford to buy houses because of the way house prices have risen. They could not afford a mortgage or the outrageous interest rates, and of course they could not obtain council houses because they would have been sold off on the instructions of this Government. The prospect is stark. It means that if these proposals are accepted men anxious and able to work will be condemned to a lifetime on the dole.
Will Ministers, please, ask themselves certain questions? How really cheap will imported coal be in three or four years? To put it another way, how cheap in real terms is the foreign coal if we add the cost of closed collieries, the decline of our communities, the social and economic cost of unemployment and the loss for ever of millions of tonnes of coal reserves? It is estimated that in North Gwent alone there are some 35 million tonnes of reserves of coal.
What will happen when the oil runs out, which, of course, it inevitably will? It would be folly of the highest order to sacrifice the long-term energy needs of this country and the future of the South Wales coalfield on the altar of Tory

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dogma and in the hope that the BSC will be able to balance its books.
As a matter of urgency, the Government and the NCB should consider refurbishing nuclear power stations and converting them to coal. That is one practical thing which they could do at once. As a start, they could let the proposed Portskewett power station be a coal-powered instead of a nuclear one. What are the Government and the National Coal Board doing about research into obtaining oil from coal? I understand that a system is already well advanced in South Africa.
We must have an inquiry into the British Steel Corporation and, in particular, its commercial management, which leaves a great deal to be desired. The cutback proposals are plainly not only unacceptable but unreal and impracticable. We say that any decision about imports of foreign coke must be held up for at least two years while discussions are going on.
I do not want to develop this matter at this stage, but one of the things that worries me is that there is some confusion and conflict between the views of the Department of Industry and those of the Department of Energy. I look forward to hearing the Under-Secretary in a few moments, because perhaps he can clarify the position and make plain what is at present somewhat confused.
It is vital for the Government to look again at the whole question of coking coal subsidies. In his winding-up speech earlier this evening, the Under-Secretary of State for Wales referred to Gemany. Not only do the German Government give massive help, subsidy and support to the German coal industry, but they restrict the importation of foreign coke. When we hear about the success of the German industry, we must bear these matters very much in mind.
I realise that time is passing. However, I should like to refer briefly—and I hope that I shall not be accused of being selective if I so do—to certain parts of a letter written to The Times of 17 January by the hon. Member for Canterbury (Mr. Crouch), in which he said:
"As a mere politician, I confess to wondering if the management of the BSC is fit to solve the problem after such an inept approach. But the Government has said they are on their own and they will not intervene.
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Not intervene? But that have intervened in the strongest way possible. They have tied the hands of the BSC with a rigid cash limit of £450 million. Rationalise or bust is the Government's message.…
It would be easy if we could leave it to the management and the unions. But can we? How can we stand aside and watch a harsh economic plan take its effect on the loyal workers of a great industry? They have not been on strike for over 50 years. There are no other jobs to offer them. This is not just an economic problem with an industrial answer. It is a social question in which the Government will have to play a major role. It is a vital industrial relations question that will determine the climate of government-union dealings for the decade."
The hon. Member went on to refer to Disraeli, saying:
"When Disraeli saw the gulf between the owners and the workers, he did not stand aside. Rather, he hoped that toryism would 'rise from the tomb … to announce that power has only one duty; to secure the social welfare of the people'."
I hope that the Conservative Party will bear those words in mind, because never were those words more apposite than at present, particularly concerning the South Wales coalfields.
The Government cannot stand idly by in this situation. There is all the difference in the world between non-intervention and non-involvement. We are all involved, including the Secretaries of State and the Prime Minister, whether or not they like it. The Government are meant to represent the whole nation. Unfortunately, at the moment, they choose to turn their backs and abrogate their responsibilities to the people of Wales. Far from cutting a firm figure, the Secretary of State for Industry appears as a Nero-like figure, fiddling while the country burns.
The policy now being deployed by the BSC, with the horrendous and catastrophic effects that it will have on the Welsh economy, is economic and social madness. I look forward to hearing what the Under-Secretary has to say on this vital matter.
11.54 pm
The Under-Secretary of State for Energy (Mr. John Moore): The whole House must be grateful to the hon. and learned Member for Abertillery (Mr. Thomas) for raising this issue. He need make no apology for reiterating points which, quite rightly, were made earlier in the day. No one can mistake the importance of this issue to the life of South

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Wales, above all in the communities directly affected. For my part, I welcome the opportunity to explain our position and perhaps, even at the end of a long day largely devoted to these very issues, to clear up a few points.
I want to make clear at the outset that we are not debating the need to protect individual workers and their families from hardship. That point is not at issue between the two sides of the House. I, my right hon. Friend the Secretary of State for Energy and, indeed, the whole Government understand how harshly inevitable social changes can bear on the individuals who are caught up in them, and we mean to do what we can to soften the blow. My right hon. Friend the Secretary of State for Wales has already spoken in today's main debate of the range of remedial measures which the Government might take in South Wales. Apart from that, in the context of the coal industry, we shall continue to work within the framework of special social aids which has been established by successive Governments and, I think, welcomed on both sides of the House.
What we are debating is the need for us to face reality and to adapt productive capacity to meet changing circumstances. In that matter the coal and steel industries in South Wales are only an extreme example of the difficulties which face the whole country. There is no need for me to weary the House, at this hour of the night, by reminding it of the history leading up to the statement made just over two weeks ago by the board of the British Steel Corporation of its intention to seek the agreement of the steel unions to a "slim-line" operation at Port Talbot and Llanwern, which will reduce liquid steel output at those two works to about 2·8 million tonnes a year and lead to a consequent loss of rather more than 11,000 jobs.
I must, however, bring out three points which are essential if we are to understand the implications of that decision for the coal industry in South Wales. First, we all know that, while some of the NCB's coking coal is fully competitive, once account is taken of differences in quality—I am talking about quality for the whole of the United Kingdom, and I take the point that was made earlier—the NCB cannot supply the BSC's needs for coking coal at a price which can match that at
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which the BSC can import coal. In the light of this, both sides of the House have accepted that the BSC must not be handicapped in its struggle to put the industry on its feet by being denied access to the cheapest and most suitable raw materials.
Secondly, as the BSC's production of liquid steel has fallen, so has its need for coking coal—
Mr. Alec Jones rose—
Mr. Moore: I have a great deal to get on the record in my answer. I have only 14 minutes in which to speak, and I shall continue. The share of the NCB's output going to the iron and steel industry has now fallen. In 1970–71, the BSC bought 16·7 million tonnes of coal from the NCB, equivalent to 11 per cent. of its coal production. In the financial year 1978–79, of the 10 million tonnes of coking coal that it bought, 8·5 million tonnes came from the NCB, equivalent to 7 per cent. of NCB coal output. In 1979–80 the BSC is expected to take 7·8 million tonnes, about 6·5 per cent. of NCB coal production. In 1980–81, taking account of intended closures, its purchases may be about 5 million tonnes, assuming that its imports of coking coal remain at the level of its present commitments.
Thirdly, we cannot now expect this relative decline in the BSC's purchases of coking coal to be reversed in the foreseeable future. It is instructive to reflect that in the 1973 White Paper the BSC envisaged a liquid steel capacity of 36 million tonnes to 38 million tonnes by the early 1980s. Now it expects to achieve continuing profitable production at a level of no more than 15 million tonnes a year. Those few facts show how dramatic is the change in the BSC's position and prospects. What we have to realise tonight is that no supplying industry, nationalised or not, here or elsewhere, can possibly hope to be unaffected when one of its main customers meets with such an upheaval.
Both in this debate and in the main debate earlier this evening, hon. Members have quite reasonably asked for details of the impact of the BSC's planned cutbacks in South Wales on the coal in-industry and on their constituencies. The sort of detailed information necessary to satisfy their concern will be available only when the BSC has finally settled, in consultation with the steel unions, details

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of the reduction in steel-making capacity and when the NCB has been able to assess the change in demand and to take account of the possibility of redistributing coal, at present supplied to the BSC, into different markets.
The NCB is nowhere near the end of that process yet, and no decisions have been taken, although I recognise that the anxieties expressed by the NCB local management about the scale of the review that is necessary have given rise to speculation. Since 35 per cent. of deep-mined output from South Wales has been sold to the BSC for coking, the area is peculiarly dependent upon coking coal, and it would be idle to pretend that it will not suffer.
Even before this major decline in demand from a prime customer, the coal industry in South Wales faced formidable problems. The House will remember that, early last year, under the previous Government, a sub-committee of the coal industry tripartite group, formed from the Government, the NCB and the unions, examined the special position of the South Wales coalfields. It identified fundamental problems. The costs, as we know, are high. The geology is difficult and complex. The field is old, with one-third of the pits more than a century old. Many of the easiest and most accessible seams have been worked out.
In 1978–79—the latest complete year for which figures are available—overall productivity in South Wales was 1·37 tonnes per man shift compared with 2·22 tonnes for the NCB as a whole. Of pits in South Wales, 51 per cent. had an OMS below 1·4 tonnes, against 18 per cent. for the NCB as a whole.
Mr. Alec Jones rose—
Mr. Moore: These operating difficulties are reflected in the area's financial position. Operating losses rose from £15·2 million in 1975–76 to £41·7 million in 1977–78, although there was a welcome, if slight, improvement to a loss of £35 million in 1978–79. The low volatility of Welsh coal makes it difficult to burn in power stations outside Wales. Despite its valuable special properties, therfore, it is not easy to place in the general coal market.
Because of all those problems, even before the question of the BSC's cutbacks
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the sub-committee saw that it would be necessary to reduce the area's losses, although it pointed out that the position of the area could not be considered in isolation from that of the NCB as a whole.
When the Chancellor of the Exchequer and some of my right hon. Friends and I saw representatives of the TUC last week, a proposal was put forward under which the BSC's coking coal imports in 1980 would be held at the level of last year's commitments at a cost of £33 million, and £15 million of this, it was said, could be found by the NCB. The remaining £18 million, it was suggested, would have to come from the Government.
The Government do not accept that proposal. In the first instance, the price and quantity of coal sold to the BSC must be a matter for commercial negotiation between the NCB and the BSC. In this context, it must be for the NCB to decide how far it feels able to offset transitional support to the coking coal market, in the face of major reductions in the demands of the BSC, and especially in the light of any potential headroom that it may now see in its other markets created by the recent sharp rise in oil prices.
At the recent tripartite meeting between the Government, the NCB and the mining unions, it was clear that all were convinced that the coal industry could enjoy a prosperous future and make a crucial contribution to the country's energy needs, provided only that it could supply the amounts of coal—[Interruption.]
Mr. Alec Jones rose—
Mr. Deputy Speaker (Mr. Richard Crawshaw): Order. The Minister has not been allowed his full 15 minutes. The hon. and learned Member for Abertillery (Mr. Thomas) went over his time. The Government must have heard many things which they did not find acceptable, yet they did not intervene. I ask hon. Members to be a little better behaved. I appreciate their feelings, but it is discourteous to shout across the Table when the Minister is speaking. If the Minister does not give way, I have no alternative but to ask the right hon. Gentleman not to intervene.
Mr. Alec Jones: On a point of order, Mr. Deputy Speaker. I do not wish to be discourteous to the Chair or to the

209
hon. Gentleman. However, many of the decisions announced by the hon. Gentleman—
Mr. Deputy Speaker: Order. With the greatest respect, that is not a matter for me to decide.
Mr. Moore: I am trying to get on the record, in a short time, important comments from the Government.
The coal industry, as I said at the tripartite meeting, can enjoy a prosperous future and make a crucial contribution to the country's energy needs, provided only that it can supply the amounts of coal that we need at a competitive price.
To that end we have agreed an external financing limit for the NCB this financial year of £709 million, compared with external financing needs of £607 million in 1978–79 and £312 million in 1977–78. Of this year's £709 million, £255 million will be grants, as my right hon. Friend announced in a written answer on 13 December.
Within its substantial total, which is, as I say, higher than last year, the NCB must decide how to manage its affairs in the long-term interests of the industry. It may take such measures as it thinks right to maintain its sales of coking coal to the BSC and to assist the coal industry in South Wales. Indeed, to assist the NCB in directing aid to coking coal pits we
210
have said that we will make it a coking coal grant this year, within the fixed total of £255 million for grants and subject to ECSC rules.
It is within that framework and that level of support that the NCB has the opportunity to seek, as I indicated earlier, the extra fraction of 1 per cent. of its turnover, which it has been suggested might come from the Government. My right hon. Friend the Secretary of State for Energy and I today met the chairman of the NCB to assure him, once again, that the Government will support any solution that he is able to reach in the long-term interests of the industry within that framework.
There have been suggestions that, over and above the support given by the Government, the ECSC could provide some additional crock of gold that could be tapped to support the coking coal industry. That is not the case. ECSC rules provide for two sorts of coking coal aid. The first is sales aid from a fund of about £30 million—
The Question having been proposed after Ten o'clock on Monday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at seven minutes past Twelve o'clock.

HOME DEPARTMENT
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INDUSTRY
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NATIONAL FINANCE
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TRADE
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AGRICULTURE, FISHERIES AND FOOD
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SOCIAL SERVICES
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EDUCATION AND SCIENCE
  Assisted Places Scheme
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  Sutton in Ashfield Schools
NORTHERN IRELAND
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  Summer Schemes
  Written and Broadcast Material
  Written and Broadcast Material
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  Fair Employment Agency
SCOTLAND
  James Boyle
  James Boyle
  River Girvan
  River Girvan
  River Pollution
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  Planning Applications
  Planning Applications
  Blind and Disabled Persons
  Blind and Disabled Persons
  Teachers
  Teachers
  Psychiatric Patients
  Psychiatric Patients
  Housing
  Housing
  Robroyston Hospital
  Robroyston Hospital
  Housing Satisfaction
  Housing Satisfaction
  Houses (Tenure)
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  Prefabricated Houses
  Prefabricated Houses
  Sheltered Houses
  Sheltered Houses

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Salisbury.

AIR FARES WITHIN THE EEC
Lord LUCAS of CHILWORTH: My Lords, I beg leave to ask the Question which stands in the name of the noble Lord, Lord Greenway, on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a statement on progress in negotiation with Member countries of the European Community to reduce air fares within the Community and increase competition.
Lord TREFGARNE: My Lords, we have consistently advocated that air fares should be as low as possible while at the same time providing for the economic well-being of the airlines. In consultation with the Civil Aviation Authority, we shall continue to refuse unjustified increases and to press for the introduction of lower fares and new excursion fares where appropriate. This policy has already achieved considerable success.

CHARITIES AND THE CHARITY COMMISSIONERS: RECOMMENDATIONS
2.38 p.m.
The LORD BISHOP of LONDON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government when they expect to give their views on the recommendations of the Goodman Committee on Charity Law and Voluntary Organisations, and of the Expendi-
1080
ture Committee of the House of Commons on the Charity Commissioners and their Accountability.
The PARLIAMENTARY UNDERSECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, I must apologise for a long reply to the right reverend Prelate. On 24th January my right honourable friend the Home Secretary made the following announcement in reply to a Question in another place:
"The Government have considered the report by the Expenditure Committee on the Charity Commissioners and their Accountability published in September 1975 and have also taken into account the conclusions reached by Lord Goodman's Committee on Charity Law and Voluntary Organisations, which was set up by the National Council of Social Service and reported in December 1976.
"The Government appreciate the useful work done by both committees in examining a wide range of issues relating to charity law and administration. It is now over four years since the Expenditure Committee reported and three years since the Goodman Committee reported. Their proposals need to be viewed in the light of the Government's current policies.
"The Government recognise that charitable trusts occupy a special position in our law and that special privileges attach to charitable status. We believe that the concept of charity in the legal sense remains valid and useful since it both reflects and encourages a spirit of benefaction and public service whose continuance is of great importance to society. The Government do not consider that there is at present a need for changes in the law on charitable status or in the administrative practices relating to charities. We do, however, set great value on the contribution made by voluntary organisations and volunteers to the provisions of a wide range of services and facilities that are essential to the well-being of society. We are considering how best we may, within the present financial restraints, encourage the development of the voluntary sector as a whole, and in that context we are paying particular

1081
attention to the Goodman Committee's recommendations relating to fiscal matters."
The LORD BISHOP of LONDON:
My Lords, while I thank the noble Lord for his Answer, does he appreciate that it will cause very great disappointment to the charities and to the Churches which are looking forward to the implementation of the recommendations of these two committees; and will he, in particular, note the very clear and unambiguous recommendation on the subject of political activities in pursuit of charitable objects and try to clarify the situation, since there is grave difficulty in the way of well-known, extensive charities because it is suggested that they are indulging in political activities?
Lord BELSTEAD: My Lords, the right reverend Prelate did not mention the precise recommendations on which the Government had not announced particular action. If the right reverend Prelate had in mind fiscal matters, then, so far as the Goodman Committee recommendations on these are concerned, the Government are considering these and other proposals, including those put forward by a recent working party of the National Council of Social Service. So far as political activities by charities are concerned, in their annual report the Charity Commissioners have given guidance on the extent to which charities may engage in political activities; and the great majority of charities experienced no difficulty. I must say at this point that the Government do not believe that any legislation is required on that particular subject.
The LORD BISHOP of LONDON: My Lords, is the noble Lord aware that the Methodist conference at its last meeting in 1979 passed a resolution expressing concern at the Inland Revenue's reported refusal to allow covenant-giving to be used for the purpose of world development?
Lord BELSTEAD: My Lords, I was not aware of that. I should like to look at that point; and, if I feel that I ought to do so, to write to the right reverend Prelate about it.
Lord AVEBURY: My Lords, is the noble Lord not aware—he must be—that
1082
many organisations engaging in social welfare work find inevitably that there is a political aspect to their findings? To mention one such organisation, there is the Child Poverty Action Group. If one is concerned with case-work on behalf of families less well off than the average family, this must lead one to requests for political action which fall outside the allowed limits of charitable organisations. Is the noble Lord also aware that, conversely, organisations that are engaged in mostly political activities have found it possible, within the existing law, to form charitable bodies of an educational nature to fulfil part of their functions, and that in that manner a great deal of intellectual effort goes into finding ways around the present charity law—effort which might be diverted to more useful purposes if the Government had not a closed mind to changes of the kind that the right reverend Prelate has described?
Lord BELSTEAD: My Lords, if the Government have a closed mind they are in good company, for charities law in its present form has existed since 1601. The Government do not believe that any change in the scope of charities as a legal concept is needed at the present time.
Lord CRAIGTON: My Lords, is the Minister aware that charities are having a very difficult time and there is one recommendation in the Goodman Report that I feel sure could be acted upon very easily: that is the shortening of the periods of covenants in order to give relief from taxation? That would be a very simple thing that the Chancellor of the Exchequer could do in another place.
Lord BELSTEAD: My Lords, I am aware of what my noble friend said. It was for that reason, among others, that in reply to the right reverend Prelate I said that the Government are considering not only the Goodman Committee's recommendations but other proposals, including those put forward by a recent working party of the National Council of Social Service.
Lord BROCKWAY: My Lords, is not this problem largely one of the developing countries in Africa and Indo-China as well as immigrant populations in this country? Is it not extraordinarily difficult to draw a margin between what

1083
the Charity Commissioners consider charity and what others consider as political action? Will the Government reconsider the decision they have made?
Lord BELSTEAD: My Lords, I honestly do not know what the noble Lord is referring to. As a general reply, if the noble Lord has a particular case in mind and cares to draw it to the attention of the House now, or to my attention in writing, I shall look into it as urgently as possible.
Lord BROCKWAY: My Lords, the particular cases I have in mind are Oxfam, War on Want, and the Joint Council for the Welfare of Immigrants, all of whom are having some difficulties in these respects.
Lord BELSTEAD: My Lords, all I can say in reply is that the scope of charity is wide and my right honourable friend does not have the responsibility for the Charity Commissioners' handling of the individual cases. That makes it sound as though I believe the status quo is absolutely right. I believe that it is right, if I may say so, hearing in mind that the four heads for charitable purposes are very wide indeed.

ELECTORAL LAW AND PROCEDURES: REVIEW
2.45 p.m.
Lord UNDERHILL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they propose to introduce any amendments to the Representation of the People Acts and whether it is proposed to convene a meeting of the Home Office Electoral Advisory Committee.
Lord BELSTEAD: My Lords, the Government are conducting a general review of electoral law and procedures on the basis of which we shall consider what changes are needed and how best to proceed. Although the Electoral Advisory Committee, which last met in 1973, has been abolished as part of the Government's review of non-departmental public
1084
bodies, we intend to provide ample opportunity for public discussion of any proposals to emerge from the review of electoral law.
Lord UNDERHILL: My Lords, I thank the noble Lord for that Answer. In view of the general agreement—and there seemed to be sympathy in this House when I expressed this view only a few weeks ago—as to the usefulness and value of the Electoral Advisory Committee, is it not unwise to abolish it, particularly as it was only called together as required? Would it not be better to leave it to be called together because it has proved to be a most useful body for the widest possible consultation?
Lord BELSTEAD: My Lords, I read the noble Lord's speech with interest. Bearing in mind that the committee to which the noble Lord is referring had not met since 1973, it is perfectly reasonable for the Government to say that the Home Office will continue to consult the political parties, the local authority associations and the returning officers who mainly comprise the Electoral Advisory Committee. If I may give a concrete instance of what I mean, to show that the intentions of the Government are genuine in this matter, a Bill recently went through your Lordship's House that was sponsored by the noble Lord, Lord Lloyd of Kilgerran, and it was sponsored in another place by my honourable friend Mr. Cranley Onslow. It was called the Representation of the People Bill. It made two important alterations to electoral law. The Government are committed to consulting the political parties and the local authority associations on a draft set of regulations under that particular Act. So we intend to do what I have been saying to the noble Lord; namely, to consult, but on a basis of when needed rather than preserving a standing committee.
Lord BOSTON of FAVERSHAM: My Lords, does not the fact that some consultation process is envisaged by the noble Lord, Lord Belstead, in the answer that he has just given suggest that some machinery is in fact needed to carry out that consultation process? Would he say to the House that if, in the course of these consultations which the Government envisage having, it emerges, as my noble friend Lord Underhill has suggested, that

1085
the committee is still needed, the Government will at least keep an open mind about this?
Lord BELSTEAD: My Lords, I do not think that the Government's mind will be absolutely closed, particularly when the noble Lord from the Opposition Front Bench puts the point to me in such eloquent terms. The state of play is that at the moment the committee has been abolished. It had not met since 1973 and we believe similar consultations can be conducted on an ad hoc basis.
Lord ALPORT: My Lords, may I ask my noble friend whether the introduction of proportional representation is among the amendments being considered at the moment?
Lord BELSTEAD: My Lords, the review, as I think I said in my reply—or I was going to say—is wide-ranging and thorough. I can assure my noble friend that is is wide-ranging and thorough.
Lord UNDERHILL: My Lords, as the noble Lord stated that the body had not met since 1973 and had only been called together as required, would it not be best to leave it to be called together as required? Would he not agree that there is a great difference in consulting political parties or local authority representatives and calling together the conference where they can have the most valuable interchange of opinions?
Lord BELSTEAD: My Lords, we think not. Frankly, the number of nongovernmental or quasi-governmental organisations which had grown up caused a list which was costing a great deal of money. In some cases it appeared to be fulfilling no particular current function. This particular committee was one of those. When it met it did extremely valuable work and had on it people like the noble Lord who had great experience. But it is possible, may I repeat, to conduct those consultations once again, but in an ad hoc manner.
Baroness BACON: My Lords, since the committee last met in 1973, will the noble Lord say whether or not the object of closing it clown was financial? Would he
1086
not agree that, if it has not met since 1973, it has not cost much money?
Lord BELSTEAD: My Lords, that action was in pursuance of good management practices.
Lord HARRIS of GREENWICH: My Lords, is the noble Lord aware that many of us take the view that one of the most unsatisfactory situations at the moment is the disenfranchisement of British subjects resident in the European Community who are not members of the Armed Forces? Is this one of the issues that will be taken into account, and will there be a White or Green Paper?
Lord BELSTEAD: My Lords, I cannot say whether there will be a Government document. But when I said to my noble friend Lord Alport that we are, as I said in my original reply, conducting a general review of electoral law and procedures, on the basis of which we shall consider what changes are needed and how best to proceed, that was the literal truth.
Lord JACQUES: My Lords, is the Minister aware that, when management has an instrument which does not cost anything and is admitted to be useful, it is bad management practice to throw it away?
Lord BELSTEAD: My Lords, it was not currently useful even though it had great ornaments sitting upon it.
Lord UNDERHILL: My Lords, may I put one further question? As in Section 24 of the Report on Non-Departmental Bodies there are four questions about their use, if I put down a Question for Written Answer—because I know the noble Lord cannot answer this afternoon—will he tell us exactly how these four questions do not fall into line with the value of this body in past years?
Lord BELSTEAD: My Lords, if the noble Lord puts down a Question for Written Answer, of course I shall be replying to him.
Lord BANKS: My Lords—
The MINISTER of STATE, MINISTRY of AGRICULTURE, FISHERIES and FOOD (Earl Ferrers): My Lords, I

1087
wonder whether your Lordships would not think that we have let this particular Question run far enough.

INDUSTRIAL DISPUTES: AUTHORITATIVE STATEMENTS
2.53 p.m.
Lord BYERS: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether when major industrial disputes occur they will issue at the earliest practicable moment an authoritative statement of the relevant facts involved in terms which can easily be understood by the public.
The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie): My Lords, it is doubtful whether such statements could be prepared, since the facts relevant to a particular dispute are usually complex and often involve subjective judgments. Statements by the Government or other bodies not directly involved in the dispute tend to exacerbate the difficulties and make it harder for them to be resolved.
Lord BYERS: My Lords, while thanking the noble Earl for that Answer, may I ask him whether the Government would not reconsider this matter in view of the vital importance of the public's being properly informed of the facts in any major dispute? How many people know that a process worker in the steel industry today has a basic pay of £112 per week or nearly £6,000 a year? How can we find out what could be earned by the new productivity agreement? How can we find out what difference a new productivity agreement in such a dispute, if fully implemented, will make to the reduction of costs in the industry? Is it not about time that the Government did something to make the public aware of what is really at stake?
The Earl of GOWRIE: My Lords, I am in very considerable sympathy with what the noble Lord says, and I think it is particularly regrettable that we are tending to think of wages at the moment only in percentage terms—which are not always
1088
very meaningful—and not in money terms, which is the sensible way to proceed. Nevertheless, I still have some hesitation as to whether the Government is the appropriate body here. It could easily be represented that the Government were parties to the dispute or had direct interests in the dispute, and that, as I said in my original Answer, could exacerbate the situation.
Lord BYERS: My Lords, if the Government are not prepared to take the responsibility, would it not be possible to ask ACAS to do this so that we could get an independent and authoritative view?
The Earl of GOWRIE: My Lords, I will certainly consider that. However, ACAS might be in the same difficulty in that they have a vital function as arbitrators and it might be thought that they were coming down with some subjective interpretation of the situation. But I have said to the noble Lord that his point will be taken most seriously. I will see what can be done.
Lord AVEBURY: My Lords, where there is a difference of opinion about the value of a particular offer so that the interpretation of it is, as the noble Earl said in his original reply, subjective, would it not be possible either for the Government or for ACAS to publish the estimates both of the employers and of the trade unions, with a very short statement giving the reasons for reaching such conclusions, so that the public could evaluate the offer for themselves?
The Earl of GOWRIE: My Lords, there is much in what the noble Lord has to say. I see no reason, on the face of it, why employers or unions should shrink from publishing or releasing to the Press the information themselves. My only query is as to whether ACAS or the Government directly should be involved in that process.
Lord AIREDALE: My Lords, should not the Government at least urge the parties to a dispute to come together and themselves issue an agreed prepared statement on the dispute?
The Earl of GOWRIE: My Lords, the Government have an enormous interest in

1089
getting the parties in any dispute together and that is what we are continually seeking to do; so I take the noble Lord's point.

THE STEEL STRIKE
Lord PEART: My Lords, I beg to ask Her Majesty's Government a Question of which I have given Private Notice. The Question is as follows:
To ask Her Majesty's Government whether they will make a statement on the effects of the extended dispute in the steel industry.
Lord DENHAM: My Lords, with the leave of the House, at a convenient moment after 3.30 p.m., my noble friend Lord Trenchard will be answering this Question in the form of a Statement.

DEACONESSES AND LAY WORKERS (PENSIONS) MEASUKE
2.57 p.m.
The Lord Bishop of LONDON: My Lords, I beg to move, That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Deaconesses and Lay Workers (Pensions) Measure be presented to Her Majesty for Royal Assent. This is a very simple and entirely non-controversial Measure since it passed through all its stages in the General Synod without a single voice being raised in opposition or criticism of it. Indeed, I have some embarrassment in asking your Lordships to spend some time upon consideration of it. I have, however, to do so for this reason. The Church Commissioners are only permitted to disburse their funds in accordance with the directions of Parliament. Therefore, if they see a reasonable cause to which they should make their contribution they have to seek parliamentary approval to give them power to make such a contribution.
As things stand at the moment, the Church Commissioners have, under the Clergy Pensions Measure 1961, the power to make contributions to the Pensions Board, through whom pensions are paid to the ordained clergy. But as things stand at the moment the Church Commissioners
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have no power to make a financial contribution to the Church Workers Pensions Fund which is administered by the Pensions Board and is solely for the benefit of deaconesses and licensed layworkers. Therefore, the Pensions Board has no funds other than the very small and meagre funds available for paying the pensions of deaconesses and licensed layworkers.
There are at the present time some 600 deaconesses and lay workers in active service and about 350 deaconesses and lay workers who are in retirement, and after a lifetime of service to the Church they only receive a minimal pension. Therefore, it is the will of the General Synod and of the Church Commissioners that they should be empowered to make a suitablecontribution to the Pensions Board, and the Pensions Board will therefore be able to pay a proper pension to deaconesses and licensed lay workers. It is hoped that they should be put on the same standing and status as the clergy, which would mean they would receive a pension of £54 per annum for every year of service, with a maximum of 37 years; so that if a deaconess or licensed lay worker had served 37 years, they would receive a pension of about £2,000 a year.
Similarly, they would be entitled to a lump sum on retirement, and again the similar figure is £86 for each year of service, subject to a maximum of 37 years. So if a deaconess or licensed lay worker has served for 37 years they would be entitled also to a lump sum of something in the region of £3,000. These figures are, in these days, small enough, but they are a great improvement on the position as it affects deaconesses and lay workers at the present time because they are on a descending scale and there are some very old and senior retired deaconesses who are receiving little more than £1 per week as a pension.
This will cost the General Fund of the Church Commissioners approximately £600,000 per annum, but they believe that it is right and proper that the Church should be able to use its funds in this way in order to provide a reasonable pension for deaconesses and licensed lay workers who have served the Church so faithfully before their retirement. I therefore beg to move that this Motion be agreed to.

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Moved, That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Deaconesses and Lay Workers (Pensions) Measure be presented to Her Majesty for the Royal Assent.£(The Lord Bishop of London.)
On Question, Motion agreed to.

NEW HEBRIDES BILL [H.L.]
3.1 p.m.
Lord TREFGARNE: My Lords, I beg to move that the New Hebrides Bill, now before the House, be now read a second time. The essential purpose of this Bill, in the words of the Long Title, is to:
"… make provision in connection with the attainment by the New Hebrides of independence within the Commonwealth".
Before I describe the contents of the Bill, I should like to trace briefly the history of the New Hebrides and the developments leading up to its introduction. The New Hebrides is unique in its status as a condominium. It is administered jointly by Britain and France under a series of international agreements beginning with the protocol of 1914 which established the condominium. An archipelago of about 70 islands, the New Hebrides is situated in the South Pacific, roughly half-way between Australia and Fiji. The total population is about 120,000 of whom 115,000 are Melanesian in origin. There are long-standing political divisions between the Anglophone, mainly Protestant supporters of the Vanuaaku Party and the Francophone, mainly Roman Catholic supporters of a group of parties which have come to be known as the Moderates.
In July 1977, British and French Ministers announced a joint programme leading to independence for the New Hebrides in 1980. After a number of setbacks, the first major step in this direction was made in December 1978 with the formation of a Government of national unity upon which both sides of the political divide were equally represented. By the middle of last year, this new Government, assisted by a broadly based constitutional committee, had made considerable progress with the task of drawing up an independence constitution.
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A constitutional conference was held in Vila, the capital, in September under the joint chairmanship of my honourable friend, Mr. Blaker, the Minister of State, and his French counterpart, M. Dijoud, the French Secretary of State for Overseas Departments and Territories. The conference agreed a constitution, and it was confirmed that the New Hebrides should achieve independence in 1980. The conference also fixed 14th November, 1979 as the date for fresh elections to the Representative Assembly.
The constitution was formally adopted, and the decision to grant independence in 1980 established by an exchange of Notes between the British and French Governments, to which the independence constitution was annexed. These were laid before Parliament on 29th January as Cmnd. 7808.
The victors in the November elections proved to be the Vanuaaku Pati, which formed a new Government led by Father Walter Lini. At the first meeting of the newly elected Assembly, Father Lini and his cabinet were empowered by the Assembly to propose a date for independence during the period May to July 1980. The date is expected to be announced shortly. The Council of Ministers has since decided to recommend to the Representative Assembly that the new republic should apply for Commonweath membership.
I now come to the provisions of the Bill itself. It is not what might be termed the usual independence Bill in that it does not provide for the grant of independence. This is because the present status of the New Hebrides was established by international agreement and must therefore be terminated in the same way. This will be achieved by the exchange of Notes to which I have referred. The exact date of independence, when agreed with the French and New Hebrides Governments, will be appointed by Order in Council, to be made under this Bill.
As the Long Title suggests, this Bill contains, in the main, provisions consequent upon the intention of the New Hebrides to attain independence within the Commonwealth. Clause 1 modifies the British Nationality Act 1948 so as to confer the status of British subject and Commonwealth citizen on the citizens

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of the New Hebrides, with effect from independence. Clause 2(1) and Schedule 2 provide for the modification of certain United Kingdom enactments consequential upon the attainment by the New Hebrides of independence within the Commonwealth. Clause 2(2) and Schedule 2 provide for the repeal of a number of measures relating to the New Hebrides as a consequence of the change in its status. Clause 3 enables Her Majesty, by Order in Council, to make provisions regarding any appeals from New Hebrides courts which may be pending before the Judicial Committee of the Privy Council at independence. Clause 4 gives the Short Title, and provides that the modifications and repeals effected by the Bill will come into force at independence.
I should now like to turn to more general matters not covered by the Bill. The New Hebrides will, on independence, become a republic with an elected President as Head of State. The new republic will have a unicameral legislature, to be known as Parliament, and a Council of Ministers responsible to it, headed by a Prime Minister. The independence constitution provides, among other things, for the protection of fundamental rights and freedoms of the individual—citizenship, the judicature, and the public service.
The New Hebrides economy will depend for some time on external aid donors. The process of unifying the parallel British and French national administrations is now well advanced, but we and the French Government are aware of the heavy administrative burden which will be imposed upon the independent New Hebrides during the period when unification is taking place. We shall be sympathetic to their needs. A British aid mission is currently in the New Hebrides to discuss British aid after independence.
My Lords, in the past two years Parliament has granted independence to three British territories in the South Pacific—Solomon Islands, Tuvalu, formerly the Ellice Islands, and Kiribati, formerly the Gilbert Islands. When the New Hebrides becomes independent, the only remaining colonial responsibility we shall have in the Pacific will be Pitcairn, with its population of 65, so this Bill ushers in the end of an era. As with other parts of the Empire,
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our motives in acquiring territory were mixed: rivalry between European powers, the need to stop "blackbirding"—the raids on Pacific Islands for labour on plantations in Queensland and elsewhere—and the desire to propagate the Gospel, to mention a few. But Britain has never sought to make a profit from her Pacific dependencies. In the New Hebrides, in particular, we are providing aid at a level of about £6 million a year.
The condominium has posed unusual difficulties along the road to independence in the New Hebrides. I am sure your Lordships will wish to join me in congratulating the people and the Government of the New Hebrides on the considerable progress which has been made since the decision in 1977 that the territory should become independent this year. I am sure that our long association with the country will continue for many years to come.
I am pleased that it will be as fellow members of the Commonwealth that we shall have the prospect of continuing the close ties which already exist between ourselves and the people of the New Hebrides. I beg to move.
Moved, That the Bill be now read 2a—(Lord Trefgarne.)
3.10 p.m.
Lord GORON WY-ROBERTS: My Lords, we are all grateful to the noble Lord for explaining the contents of this Bill so fully. As he said, what makes this territory—and the Bill—unique is that for many years the New Hebrides have been a condominium administered by France and ourselves and, on the whole, very happily. The population of about 120,000, divided as it is linguistically and religiously as to about 55 per cent. Anglo-Protestant and about 45 per cent. French-speaking Roman Catholic, has on the whole proved amenable to compromise and co-operation. But, as the noble Lord said, the progress through the various stages of self-government and on to independence has not been easy. I was myself concerned with this for some years as Minister of State dealing with M. Dijoud and his predecessor M. Olivier. It is therefore the more interesting that this territory as a whole will on independence achieve that status within the Commonwealth.

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I have one question to put to the Minister which perhaps he may be able to answer at the end of this short debate. Is it the intention of the new State to apply also for membership of the French Union? In that case, would consequential provisions relating to citizenship be enacted in France so that the citizens of the new New Hebrides become not only British subjects and citizens of the Commonwealth as provided for by this Bill but also French subjects and French citizens? Perhaps the noble Lord may be able to clarify the position. It all arises from the unique situation of the condominium administration which has, has it not?, been going on for more than 60 years.
I was delighted to hear the date of independence confirmed by the noble Lord as being some time this summer. That is an assumption. It is no more a matter of negotiation—this will happen at some time between May and July, and therefore it is of the utmost importance that nothing should be allowed to happen on those islands between now and then to inhibit the smooth passage of the New Hebrides from its present status of self-government with a Chief Minister to full independence under a Prime Minister.
That brings me to one or two questions that I should like to put to the noble Lord. First, he referred to the entrenchment in the constitution of fundamental rights. I remember those negotiations, which I am glad came to fruition late last year under the present Minister of State, Mr. Blaker. Is there any specific reference to the position of the French language in the entrenching clauses? I am not urging that there should be if it is not there already. It is simply a question of information as to whether it was asked for—and I am sure that, if it was asked for, it was granted—or whether it was not asked for because there is total confidence among the French-speaking community on the islands that their position linguistically as well as in every other humane particular is firmly protected.
I thought from the start that much of the reservations expressed by our French compatriots in the New Hebrides arose from the fact that there was, not an extensive minority but definitely a minority with a strong feeling about their language and permanent concern lest somehow it
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might be eroded, officially and otherwise, by the omniverous presence of the English language, as we would put it in Wales. So I have sympathy with them, and nothing is lost by reassuring people about the status and the future of their own language. Indeed, a language is so personal a thing that often in negotiations of this kind, it takes precedence over even economics. Perhaps the noble Lord will be able to reassure us on this point. I am sure he can.
I pass now at once to ask for a similar reassurance about the position in the islands at the present moment. These days one hears reports and rumours about disturbances on one or two islands. Let me hasten to say that, like everybody else who has been concerned with this question, I feel a deep admiration for the democratic sophistication with which all elements in the New Hebrides, despite their differences of language, religion and, it may be, social interest, play their part in fair and free elections. When the results were announced—results which gave a decisive victory to the Vanuaaku party, as we have heard—they were accepted loyally in the traditional democratic manner. No doubt the influence of France and of this country in the New Hebrides accounts for this, to some degree, but I also think that the natural tolerance of these attractive people fed that tradition even before the French and the British ever touched their soil.
So we admire the way in which the elections were held and the way in which those who lost the elections accepted the results and co-operated loyally with Father Lini, who of course is the Chief Minister. All, that is, with one exception and I wish that I did not have to mention this exception. I refer to an individual—a Mr. Jimmy Stevens—who for many years has agitated for the secession of the Isle of Santo. It would be inaccurate, to say the least, to describe Mr. Stevens as a high-minded dissident concerned about the rights of his people. He is in fact an agent—some might say a tool—of adventurers who derive more from San Francisco than from Santo and who want to separate Santo from the rest of the New Hebrides in order to exploit it for their own dubious purposes. I am not saying anything more than the responsible leaders of the New Hebridean peoples have been saying for years, but I am bound

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to refer to it in order to ask whether, since the election results were announced, Mr. Stevens has created disturbances in Santo.
One hears that there have been such disturbances, that over the past few days his followers have set upon a Minister in Father Lini's Government and have also taken over official buildings in Santo, and that indeed Mr. Stevens has announced on behalf of his minuscule party, Na Griamel, his intention to secede—to separate unilaterally the Isle of Santo from the rest of the New Hebrides if and when, as he puts it, independence comes about. Of course, this cannot be allowed to develop. One of the great problems and great threats to the stability of the Pacific is that the new States emerging are archipelagos: they are groups of islands.
It is fatally easy to work up any number of particular, localised secessive movements in such aggregations of islands. We saw it in the Gilberts, and we have seen it in other parts of the Pacific as well. All Governments of this country have set their faces against encouraging in any way fragmentation of these new emerging States. We owe it to them. So with our friends and allies the French, I hope that Mr. Stevens' activities will not be allowed to develop so as to create a situation of disturbance, still less of secession in the time between now and the actual date of independence, and that we will act closely and completely with the French Government in taking any steps necessary to assure to the newly and democratically elected Government of the New Hebrides their right of tenure and of operation, and to assist them effectively to make it impossible for secessive movements, such as those again threatened by this individual, to succeed.
3.25 p.m.
Lord McNAIR: My Lords, we are talking this afternoon about a far-away country of which we know little, and that fact alone ought to put us on our guard. I am not playing the historical analogies game, which I believe to be more often than not misleading. I use those sadly unforgettable words quite literally. The New Hebrides are very far away from here and far removed from the present foci of international attention and tension, and if we are to judge only by the astonishing brevity of the speakers' list it does appear
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that we know very little about them. I hope we can show that however little we know we care more.
On 22nd November last year the noble Lord, Lord Trefgarne, in one of those protean performances that have won the sincere admiration of the House and I hope of the Government, found himself answering a Private Notice Question concerning some trouble on Santo island, trouble which I am informed is continuing to this day. In my brief contribution, I put this question to him:
"Does he agree that the granting of independence to the New Hebrides is a political process for which there are few, if any, precedents and that it will inevitably be a very difficult operation, much more difficult than the granting of independence to any of our own colonies?"—[Official Report, 22/11/79, Col. 296].
His answer to that question was:
"I can only say again that we really do not anticipate any great difficulty … because we shall be working in full co-operation and agreement with our French colleagues".—[Col. 297].
My first question to the noble Lord, therefore, is: Has that prophecy of full co-operation and agreement been fulfilled?
Before I come to my other questions, may I take a few moments to describe this condominium as I see it. I see it as a farce, and I read that a New Hebridean, accepting that definition, remarked, "This farce is our tragedy". My case for the word "farce" may seem to some of your Lordships exaggerated. Let us look at what we have given to the 120,000 Melanesians who happen to live in the New Hebrides, who in the first place, I imagine, did not ask us to give them anything and are not asking us to get out of the way and give them independence.
We have given them our two languages, English and French. We have given them as least two religions or denominations. We have given them two educational systems, Anglophone and Francophone, two legal systems, two police forces, two currencies. I may have misled the House in saying that we gave them two legal systems. It is in fact, I think, three; one for the French, one for the British and one for the indigenous population. Some of these divisive gifts should be examined in a slightly more detailed way. Our educationists and missionaries have seen to it that every little New Hebridean born into

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this world alive quickly learns that he is either a good little Catholic who speaks French or a bonny wee Presbyterian who speaks English, and, moreover, that those of his compatriots who have been denied the benefits bestowed on him are not altogether to be trusted.
The tensions arising from this cultural schism are very real, and, I believe, dangerous. They divide families, they divide the population, they distinguish the political parties one from the other. The two currencies are perhaps the least of their worries, perhaps no more than an irritant in daily life. As I understand it, goods are priced in the shops both in Australian dollars and in New Hebridean francs, and if you pay in one currency and are given your change in the other, you inevitably suspect that you have not been given enough, and you are very often right.
I have dealt, not I hope at undue length, with the linguistic, religious, educational and even financial legacies of the schism we are leaving behind. Even more potentially dangerous, it seems to me, is our failure to provide them before independence with either a unified administrative structure, a unified legal system or a unified police force owing clear allegiance to the Government of the New Hebrides and to no other. There are, I believe, two small armed and mobile police forces, one, of course, Francophone under French officers and one British. In the matter of the law, attempts have been made, as I am informed, to unify the legal codes. On the criminal side there is a document known as the Wallace-Mouredièn Report, which I only heard about too late to obtain a copy, but which I believe was not found acceptable by the New Hebridean Government. On the civil side, we have not even made that much progress.
Against this muddled and messy background, I now turn to the internal security situation, present and future. We heard about the rebellion of Mr. Jimmy Stevens in November, and I hope I can save some time of the House by bringing this affair up-to-date in the form of a series of questions. Is it a fact that Jimmy Stevens on the Island of Santo is still defying the Government of the New Hebrides? Am I right in thinking that he and his backers are seeking to further the interests of
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some large and non-indigenous landowners? Is it a fact—the noble Lord, Lord Goronwv-Roberts, referred to this—that his supporters are physically assaulting their opponents, driving them off the island, thereby altering the electoral role in Mr. Stevens' favour, while he pursues petitions for fresh elections, having lost the last one? Is it a fact that he is still operating an illegal radio transmitter? Am I right in suspecting that the reason why nothing has been done effectively about Mr. Stevens is that the two mobile police forces were unable to agree, and the British force was unwilling to act alone?
Highly relevant to that last question is my next. Is it the case that Mr. Stevens is a British citizen, subject to British jurisdiction and, if so, would not the British Resident have the power to deport him, after due process of law, if he felt that to be in the best interests of the territory?
I come to my last question on the distressing subject of Mr. Stevens. Is there really nothing that Her Majesty's Government can do—nothing more than what I am sure they have already done—to bring even greater powers of persuasion to bear on the people on the spot, to make a determined effort to bring this squalid bit of criminality to an end and so ensure that, when Mr. Lini assumes full responsibility, he will at least be spared this unnecessary problem?
I turn now to the future internal security of the territory. I fear that, even after the condominial settlement of Mr. Stevens' hash, for which I hope, it may happen that Mr. Lini and his Government may sooner or later find themselves in a situation in which they may need external help to preserve the peace and integrity of their country. I hope that that will not happen. but if it should it would clearly bedisastrous if such outside help were to be either British or French, as it would automatically alienate at least half of the population. I have been wondering whether Her Majesty's Government have considered, or would consider, the possibility of discreetly promoting some kind of understanding between the New Hebridean Government and our friends in Papua New Guinea. It may be that it would be reassuring for Mr. Lini if he could feel that, in an emergency, help would be on

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call from his fellow Melanesians in Papua New Guinea. I hope that the Government will give some thought to that suggestion, if—and, of course, only if—it commends itself first to Mr. Lini.
I should like to say a word or two about the territorial integrity of theNew Hebrides on which again the noble Lord, Lord Goronwy-Roberts, touched in his speech. The House will remember that in the Kiribati Bill there was, in Clause 7, a definition which said:
"'Kiribati ' means the territories which immediately before Independence Day constitute the colony of the Gilbert Islands".
Indeed, some noble Lords made extremely eloquent speeches in an attempt to have that definition altered. However, there is no such definition in the New Hebrides Bill. I appreciate, of course, that this is a very different type of Bill. Perhaps no similar definition is needed. However, I think that we should seek from Her Majesty's Government a clear and firm declaration that they will permit no fragmentation of the New Hebrides before independence. Whether that should be written into the Bill at the Committee stage is a matter of law and draftsmanship on which I would have to take advice. But, if it is necessary or desirable, I feel that it would come very much better from the Government.
My penultimate point concerns our financial and technical aid for the New Hebrides after independence. The noble Lord, Lord Trefgarne, has referred to this matter, but not in any detail. I should like to put this point to him. Normally, when we grant independence to a colony, we have already, before independence, provided it with what one might call the infrastructure of autonomous viability. In this case, as I have been trying to indicate, throughout my speech we have been unable to do that. Therefore, may I beg the Government to recognise this fact, and when considering our future aid policy towards the New Hebrides, to be more generous than usual for that reason.
Your Lordships will be relieved to hear that I now come to my final point: that is. what do we do about this Bill? My first feelings were that we ought to try to postpone independence for a short time, to have one more attempt to do some of those things which we have left undone.
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But. on further reflection, I arrived at the sombre conclusion that we have made such a mess of it that no matter how long we take, we are unlikely—for various reasons, some of which are perhaps best left unstated—to do very much better. Therefore, I conclude that the best thing that we can do—a poor best, Heavens knows!—is to get out as quickly as they want us to, and leave the New Hebrideans to face the daunting task of creating a nation almost from scratch. It will be a daunting task, but I am sure that they will face it with courage and ingenuity. From these Benches we wish them well. But if I was right to come to that sad conclusion—and I fear that I was—then what a terrible confession of failure it is.

THE STEEL STRIKE
3.37 p.m.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Viscount Trenchard): My Lords, with the leave of the House I shall now repeat a Statement being made in another place in answer to a Private Notice Question on the steel industry dispute. In reply to the Question,
"To ask the Secretary of State for Industry if he will make a statement on the effects of the extended dispute in the steel industry",
my right honourable friend replied as follows:
"The employees of the private steel companies have now been brought into the steel dispute although they have no quarrel with their employers. The loss of business arising from this action and from the continuing dispute in BSC is putting steel firms and the jobs in them at risk. So far steel users generally have been little affected by the dispute, but production and employment will be threatened on a much wider scale if and when steel supplies run out. It is in the interest of all who depend on steel for their livelihood that the BSC and the unions should end this self-destructive dispute quickly on terms which the industry can afford".
My Lords, that concludes the Statement.
Lord PEART: My Lords, I thank the noble Viscount, Lord Trenchard, for repeating the Statement. First, I should like to ask the Minister whether he can give an assessment, his best assessment, of the value of production lost as a result of this dispute? As regards that, the Government have responsibility as well as those employed in the steel industry. It has been suggested that there has been a conspiracy of silence with the CBI and the

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British Steel Corporation. Is that true? I should like to know and I think that the public would like to know what is really the situation.
As regards the contraction of steel demand, that is partly due to Government policy in other areas. In today's edition of The Times it mentions:
"Prospects for Britain's engineering industries have dipped alarmingly in recent months, to the extent that new orders this year could be as much as 20 per cent. down on 1979".
That is due to the Government's policy. I should like to know whether the Government are anxious to do something about that.
On a previous occasion when a Statement was made I raised the whole question of the effect of a cutback in production as a result of the strike, especially in our shipyards and as regards defence matters. This is a very important part of the argument. Engineering is one example and defence is another. However, we now hear that Her Majesty's Government have rejected £70 million worth of aid from the EEC, aid which was to help people who were being phased out of their jobs. Why are the Government so doctrinaire about this? After all, they must take some responsibility. More than that, Ministers must not act like Pontius Pilates, washing their hands. We want to know what they are doing. So far they are doing nothing; they are just waiting.
What about ACAS? The noble Lord, Lord Byers, Leader of the Liberal Party, today asked what I thought was an excellent Question. It referred to the need to inform the public. What is being done about the public? Are they being informed? What about ACAS?—which was set up to solve these disputes. Are the Government interefering or helping? So far nothing has happened; there has simply been a desire by some to let the strike go on and on until, as we have so often said, many of our industrial areas will be deserts.
Lord BYERS: My Lords, I must tell the Government that we on this Bench have very similar misgivings. Does the noble Lord think that the time has come for the Government to do something to get this dispute settled? Surely we cannot continue with this dialogue of the deaf for very many more weeks when we can see
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the fatal damage that is being inflicted on the economy of the nation. Do the Government intend to take any action in this dispute? Secondly, at the same time, do they intend to bring forward the necessary amendments to the Employment Bill in order to change the law on strikes so that this type of thing cannot happen again?
Viscount TRENCHARD: My Lords, on the last occasion when a Statement was made we nearly ran into a full-length debate, and I shall try very hard to avoid doing so today. The assessment of the value of lost production within BSC has been suggested by BSC as being of the order of £10 million sterling per week. That is an estimate because it depends on the second point which the noble Lord the Leader of the Opposition raised, namely, the level and the contraction of demand. However, that is BSC's estimate. Outside BSC, as yet the loss is extremely small, and as the Statement says, steel users have not yet felt any appreciable loss at all. Nevertheless, my right honourable friend has made it clear that very severe repercussions will develop in the future if the dispute continues.
On the noble Lord's point about Government policies being responsible for the contraction of demand, that argument will not stand up, and I shall reply to it only very briefly. The estimates of demand made by our predecessors as well as by ourselves are not very different and the amount of steel called for in the last two years is consistent with the policies that BSC is following in relation to demand. I am not well briefed on what the noble Lord called a refusal of aid, except that I an quite sure that we have not refused aid as such; we have taken decisions relating to the EEC which are to the overall benefit of the industry and the country.
Both noble Lords asked what we are doing and whether the time has come to intervene. We do not believe that Government can make a greater contribution here than the one they have already made on behalf of taxpayers. These terms—"Would we intervene, interfere or do something to get the dispute settled?" are euphemisms for "Would we give more cash from the taxpayer to settle this dispute and deny the use of that cash for other purposes?" Of course, that does not merely reflect the issues within the steel

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industry. If more tax is to be raised and given to areas of this kind rather than to other major and deserving areas, it will not only be in steel that the demand will arise.
The noble Lord, Lord Byers, raised a point about the employment laws. A number of opportunities to discuss this will arise fairly soon, but at this stage I would prefer to say that it is a matter for my right honourable friend the Secretary of State for Employment. Noble Lords will have seen his statements over the weekend. They seem to indicate that our position allows events to take place which, in my personal experience, do not and cannot take place in other industrial countries.
Lord PEART: My Lords, I want to raise a very short point. In view of what the Minister said, that he is not sure about certain matters, I would add that the question of aid from the Community was revealed in a Parliamentary Answer by Mr. Lester who is a Parliamentary Under-Secretary of State for Employment. I am rather surprised that the noble Viscount has not been briefed on this. It was an Answer on behalf of the Government.
Lord STRABOLGI: My Lords, the noble Viscount answers for the whole Government.
Viscount TRENCHARD: My Lords, I shall attend to my omissions here and communicate with the Leader of the Opposition.
Baroness BACON: My Lords, referring to the Minister's statement that the Government cannot afford to spend taxpayers' money on the steel industry, can the noble Lord tell us how much of the taxpayers' money will be spent and wasted if this strike continues for an interminable time?
Viscount TRENCHARD: My Lords, I cannot answer that question because it is hypothetical, but in relation to unemployment benefit and supplementary benefit within the industry, and taking into account people outside the industry altogether—some figures have already been mentioned—the bill will continue to rise. However, British Steel is now equipped
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with £2,000 million worth of modern capital equipment, and a further £2,000 million has been invested in it in the last four years to help it develop that capital equipment. That is the area of importance, and with that equipment there is no reason why the industry should not be able to stand on its own feet and pay much higher wages. It can be done. The stories about the port in Scotland and its use, and the stories of Llanwern, the new plant and its use, are known to the House.
I want to raise one other matter, because I failed to answer it earlier. I am not suggesting that these sums are large, because our salary and wage levels in this country are far too low, but we are dealing with a situation where last year the average wage of steel workers was £112 a week. We are talking about an increase, which has been on the table, and could probably be exceeded if productivity is improved and these new facilities were used, which would bring that average up to around the £130 mark. I understand that the two sides are in contact with one another; ACAS is still in contact with them; and the craft unions in the industry have had constructive talks. I suggest that it is the duty of the House to encourage them all to get back and settle as soon as possible within the budget which the taxpayer has given them.
Lord DAVIES of LEEK: My Lords, is the noble Lord aware that from today some of the private firms have suggested—and some are already doing this—that they withhold their contributions of VAT, et cetera, to the tune of £500,000 a week? That situation is getting uglier and uglier. The fact is that this non-militant steel union, which for 50 years has not caused trouble, said that what they wanted was a portion of the money that could be granted to increase productivity with the new tools and technology that are already within the firms and within the steelworks. Surely to God the Government cannot sit back and do nothing in a position like this!
Viscount TRENCHARD: My Lords, I think the noble Lord has mentioned two points. The second point I believe I have already fully answered, and I have nothing further to add. In relation

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to VAT, I too have heard the stories via the news media, whether they are correct or not. As I understand it, we are here dealing with an employer's threat that if their employees are going to be dragged out when they have no dispute with those companies at all, then VAT should be withheld. I am not, from this Dispatch Box, going to countenance law breaking of any kind, but I understand the emotions, and I have sympathy with the expressions of those employers that they are being dragged into a dispute which is none of their business.

NEW HEBRIDES BILL [H.L.]
Second Reading debate resumed.
3.51 p.m.
Lord TREFGARNE: My Lords, perhaps I may now conclude our debate on the New Hebrides Bill. I should like to begin by thanking the noble Lord, Lord Goronwy-Roberts, for what he said in his remarks, which were, as always, helpful. I am sorry that the noble Lord, Lord McNair, greeted this measure with less enthusiasm. I hope I may be able to allay his worst fears during the course of my short remarks now. Both noble Lords raised, quite properly, the question of internal security in the New Hebrides, and I shall comment on that.
Since the elections of November 1979 there have been sporadic acts of defiance of the New Hebrides Government on the islands of Santo and, to a lesser extent, Tana. The latest of these acts took place on the 28th January, when members of the Na Griamel movement on Santo led by Jimmy Stevens occupied the office of the representative of the central Government in Santo Town. Latest reports indicate that the situation is now calm, but the Customs movements on the islands continue to present some threat to law and order.
British and French Ministers, when they met in Paris on 8th January, reaffirmed their entire support for the New Hebrides Government which, on their side, expressed their intention to enter into a dialogue with the leaders of the Customs movements. I am pleased to say that the Chief Minister, Father Lini, has already had exchanges with Jimmy Stevens. And
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has expressed in a broadcast his conviction that the solution to the problem of the New Hebrides was peaceful negotiation until agreement was reached all round. This is the traditional Pacific way of resolving differences, and we and the French are doing all that we can to encourage both sides along that way.
The noble Lord, Lord GoronwyRoberts, asked me about the position of languages in the new nation. I can say that both French and English are to be official languages in the New Hebrides—in the "new New Hebrides", as the noble Lord called them—along with Bislama which is the local pidgin dialect. These languages will be entrenched for the purposes of education and general use. The noble Lord, Lord McNair, put a number of points to me. First of all, he asked me about our co-operation with the French, and reminded the House quite properly of remarks that I made when I made a Statement to your Lordships I think just before Christmas. We and the French are committed to bringing the New Hebrides to independence in peace and unity. When my honourable friend Mr. Blaker and his French counterpart M. Dijoud met Father Lini in Paris last month they reaffirmed their commitment and determination to counter all the threats to the unity of the new country. I hope that meets those points put by the noble Lord, Lord McNair.
The noble Lord also raised the question of the control of the mobile units both in the present and in the future. We and the French will retain ultimate responsibility for internal security until independence. Control of the police mobile units will remain in the hands of two resident commissioners who act jointly in such matters. The two units will be handed over to the New Hebrides Government on independence. Thereafter it will be for the New Hebrides Government to decide whether or not it wishes to retain the services of the expatriate British and French policemen who currently command the mobile units, or indeed the New Hebridean members. I hope that that satisfies the noble Lord, Lord McNair, at least on that point.
One other point that the noble Lord, Lord Goronwy-Roberts, put to me concerned the question of nationality. It may well he. and indeed we expect, that

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the new nation will apply for membership of the French organisation which is roughly equivalent to the British Commonwealth although very much narrower in scope. But I am advised that membership of that organisation has no implication for citizenship within French law, and thus the answer to the question specifically put to me by the noble Lord, as to whether they would be entitled to apply for French citizenship is, I think, no, they would not.
I think those are all the important points that have been put to me. There are two further points which the noble Lord, Lord NcMair, raised about the illegal radio station. I am afraid that that station is still transmitting. It is illegal in so far as it is unlicensed, and we are in close consultation with our French colleagues to decide how best to proceed about that. With regard to the position of Mr. Stevens' nationality, I am advised that he has on at least one occasion endeavoured to travel upon a passport that he issued himself. Beyond that I am sorry to tell your Lordships that his precise national status is not clear. I can say, however, that the question of his nationality is not one that need exercise us in connection with the question of whether or not he can be proceeded against if the necessity arose in the islands, because like everyone in the islands he is subject to the local laws. I think that that covers the points that have been put to me. I am obliged to some of your Lordships at least for your reception of this measure, and I hope that the House will now give the Bill a Second Reading.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

COMPETITION BILL
3.58 p.m.
Viscount TRENCHARD: My Lords, I beg to move that this Bill be now read a second time. The Bill, with its four main elements, is an essential component of the Government's overall economic strategy. Its very Title indicates not only the central features of the Bill but also the importance attached by the Government to a strong and effective competition policy. We believe in competition rather than control.
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I want to place competition policy in this Bill in the wider context of the economic policies of the Government as well as described in the Bill.
The importance we attach to competition is fundamental, and this is because we take the view that the free choices of the citizens should determine the pattern of economic activity. But choice and competition are the two sides of the same coin. Consumers are not free to choose unless suppliers compete. This means that economic freedom itself rests on competition, and monopoly is of course the denial of choice. We want to increase the citizen's choice, and the Bill will do that. Other legislation, for example on housing and employment, is also concerned with extending the citizen's freedom of economic choice.
Nowhere is competition more important than in the control of inflation. Previous Governments have put their faith in controls—statutory controls on prices, voluntary controls on pay and sometimes in various methods to enforce the voluntary controls. I have argued many times in the House that price controls, high personal taxation and the erosion of differentials have been adopted not really because Governments believed in them but because they were trying to placate or win favour from some sections of opinion in the trade union movement or on the Left Wings. Their reason for doing that was to try to make a pay policy acceptable and make it stick. It never stuck where it was meant to stick, and in the end it came unstuck altogether.
There is plenty of evidence for the assertion that price control, progressive taxation and the erosion of differentials were seen by Governments only as a means to an end; admissions that the effect on the RPI was negligible, agreements that taxes were too high but of course that it was never the right moment to alter them, and statements stressing the importance of paying attention to differentials which also, in the same paragraph, had statements pointing out the need to increase the pay of the low paid. Contradictions there were.
So the wealth-creating sector of the economy has been bludgeoned by all these means and gradually near strangled, and the start-up rate of new business, as

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we noted in the House the other day, has been reduced to probably half the levels of competitor countries, and all of that was in vain. The pay policy did not stick and inflation continued and prices more than doubled in the period of office of the last Administration. It will take time to correct all that, but we have started on a different track and this is one of the important measures along that track.
In my opinion, price control was actually worse than useless because it positively broke down competition; it changed the orientation of business from the market place, from new products and new designs, to one which at times reached near collusion to beat off the assaults of the Price Commission. The Price Commission, with its 500 staff and consultants to support it, was capable of asking enough questions to keep the minds of tens of thousands of managers away from wealth-creating in the sector that used so to create. So we are left with the inescapability of a very tough time and a long haul. Realism—I say this in the middle of the steel strike—aided by our yet very mild trade union reform, together with the correct control of the money supply and control of Government expenditure in the non-wealth creating sectors, are the necessary pre-conditions for the re-establishment of a healthy, wealth-creating, private enterprise-led economy. The re-creation of this economy must be along the lines of competition and freedom of choice, and the Bill is designed to strengthen those important elements.
The four main elements of the Bill are these: First, it strengthens the power of the Director General of Fair Trading and the Monopolies and Mergers Commission to deal with practices which restrict or limit competition in both the public and private sectors; secondly, it gives a new power to the Secretary of State to refer nationalised industries and other public bodies to the Monopolies and Mergers Commission to investigate their efficiency, costs and service provided to consumers and the possible abuse of monopoly power; thirdly, it creates a new procedure to enable the Secretary of State to ask the Director General to investigate prices of major public concern; and fourthly, it abolishes the Price Com-
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mission and repeals the associated legislation. That process is started in Clause 1.
The powers in Clauses 2 to 10 represent a significant strengthening of the powers to deal effectively and swiftly with anticompetitive behaviour, wherever it may occur, in the public or private sectors. The approach in the Bill represents an extension of the approach towards monopoly embodied in the Fair Trading Act. At the heart of this approach is the broad definition of an anti-competitive practice contained in Clause 2. This is coupled with a speedy, selective form of investigation.
The Director General of Fair Trading, who is already largely responsible for the selection of monopoly investigations under the Fair Trading Act, will have under Clause 3 the responsibility of carrying out a quick preliminary investigation where he thinks there may be an anti-competitive practice in operation. His task will be to see whether there is prima facie evidence of limited or distorted competition and, if so, to say whether it is appropriate for him to refer it to the Commission for a full-scale investigation. Where the Director General's own preliminary investigation reveals no cause for concern, the expense and trouble of a full-scale investigation by the Commission is avoided.
The Bill thus provides for a two-stage investigation of suspected anti-competitive practices, and I will put this in, so to speak, chronological order. Clause 3 provides for a short investigation and report by the Director General of Fair Trading, to make a preliminary finding as to whether an anti-competitive practice is in operation. Clause 5 then provides, in appropriate cases, for a reference to the Commission, but before we get to that stage there is a four-week period after the preliminary report in which the firm or firms concerned can propose undertakings to the Director General. There is then an eight-week period—a maximum of eight weeks—during which these proposed undertakings can be discussed. If satisfactory, the matter can end at that point, but if not satisfactory or if no undertakings are proposed, then Clause 5 provides for reference of such practice to be known as a competition reference to the Monopolies and Mergers Commission.

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The Commission is required by Clause 6 to ascertain whether the firm referred is indeed engaging in the practice referred to them, whether that amounts to an anticompetitive practice and, if so, whether it operates against the public interest. Next, the Commission is required by Clause 8 to report to the Secretary of State, who is to publish the report. Where there are adverse findings, the Secretary of State may, under Clause 9, ask the Director General to seek an undertaking from the firm concerned or he may, under Clause 10, make an order prohibiting the firm from engaging in the practice concerned or otherwise remedying its adverse effects.
What is new, therefore, is the fact that for the first time an individual practice by an individual firm can be throroughly investigated and stopped where it has anti-competitive effects and is found to be against the public interest, without involving every firm in the industry, without needing to find that there is a monopoly situation, and one must add again, without the delay of a full Monopolies and Mergers Commission investigation. Also new is the fact that the public and private sectors are treated exactly alike.
The definition of anti-competitive practice is in Clause 2, which refers to a course of conduct which
"has or is intended to have or is likely to have the effect of restricting, distorting or preventing competition …"
This definition has its antecedents in the 1965 Monopolies and Mergers Act and in the 1973 Fair Trading Act which replaced it. The Fair Trading Act defines uncompetitive practices as
"practices having the effect of preventing, restricting or distorting competition in connection with any commercial activities in the United Kingdom".
Similar words are used in the Treaty of Rome.
Clause 2 also provides exceptions and the power for the Secretary of State to make by order exceptions from the definition of anti-competitive practices. In particular, subsection (4) allows the Secretary of State to exempt businesses by reference to size. The intention here is to allow small businesses to be exempt from investigation. The Secretary of State has mentioned that he has it in mind to exempt businesses with a turnover of
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less than £5 million per annum unless they have more than a 25 per cent. share of a particular market. In addition, there is a general power to make exceptions, but the Government have made it clear that they intend to use this power very sparingly. They have indicated, however, that the most likely ground for exemption would be for areas involving questions of international jurisdiction—notably, for example, international shipping services.
We intend to bring forward amendments in Committee to ensure that car parks and holiday caravan sites are within the scope of this part of the Bill and that local authority purchasing, whether or not in the course of business, is within the scope of this part of the Bill.
The Bill is also concerned with the encouragement of competition in both public and private sectors. The investigation of anti-competitive practices will thus apply to both sectors. But in the public sector there is often little effective competition, and even where the body concerned does not have a monopoly, it is not subject to the full rigours of the market place. It is not liable to take-over or liquidation. Clauses 11 and 12 therefore provide a mechanism for scrutinising the performance of public bodies. The Secretary of State will be able to refer to the Monopolies and Mergers Commission for investigation any question concerning the efficiency and costs of, the service provided by, or any possible abuse of, monopoly power in a wide range of public sector bodies.
Under the new provisions the Monopolies and Mergers Commission may be asked either to make a factual investigation, or, in addition, to advise whether the body is pursuing a course of conduct which operates against the public interest. Where the Commission makes art adverse finding, Clause 12 provides powers to take corrective action. These include a power for Ministers to require an investigated body to prepare a plan for remedying or preventing the adverse effects which they consider arise from a course of conduct criticised by the Commission. Additionally, in consequence of an adverse report by the Commission, the Secretary of State may use the powers set out in Part I of Schedule 8 to the Fair Trading Act 1973, other than the power to control prices.

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These provisions are intended to improve our ability to scrutinise the effectiveness of the public sector within the overall framework established for it by broader policy considerations. However, the Bill provides that the Commission may not criticise the appropriateness of any financial obligations or objectives set by Ministers or under statute. These include financial targets in terms of profitability, guidance as to price levels, and external financing limits.
The Government believe that these new powers will mean a significant improvement in the scrutiny and accountability of the public sector, and they intend to make full use of them after Royal Assent. They have already referred the London letter post under the Fair Trading Act and have announced their intention of referring British Rail's London and South-East Commuter services under Clause 11, when enacted.
I have mentioned our views regarding the Price Commission and its abolition, but I should also mention that under Clause 13 the Government recognise that on occasion there may be a great public concern over particular price increases and in such cases there could be value in an independent and public scrutiny of the underlying reasons. The Government have therefore included a reserve power in Clause 13 allowing the Secretary of State to require the Director General of Fair Trading—and it is in that order—to investigate questions relating to prices and charges. I must emphasise that the Government do not intend to use this power in any but the most exceptional circumstances. The Bill accordingly provides that the Secretary of State may refer a price to the Director General only if he considers it to be of major public concern, and he must particularly consider whether the supply, or acquisition, of goods or services in question are of general economic importance, or the price is of special significance to consumers. No powers of control are attached to the procedure, since, as the Government have said on many occasions, we believe that prices are best contained, not by detailed controls, but by firm economic policies, complemented by an effective competition policy.
In conclusion, I repeat that there are four principal components of the Bill,
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and in addition there are a number of supplementary provisions and amendments to existing legislation in the later; clauses. The Bill therefore removes the ineffective and damaging price controls, and introduces new and useful complementary provisions aimed at curbing abuse of market power in both private and public sectors, as well as new means of investigation of questions of efficiency and standard of service in the public sector. My Lords, I beg to move.
Moved, That the Bill be now read 2a.—(Viscount Trenchard).
4.18 p.m.
Lord PONSONBY of SHULBREDE: My Lords, I should like to thank the noble Viscount, Lord Trenchard, for explaining the constructive parts of the Bill. If it were not for the fact that Clause 1 was included in the Bill, I could welcome it, but Clause 1 abolishes the Price Commission without proposing that its powers, responsibilities, investigative techniques and ability to act quickly be transferred to any other body, and the reserve powers under Clause 13, to which the noble Viscount referred, seem to be quite inadequate. That is most regrettable, particularly at a time of rising inflation. When the Second Reading of the Bill took place at the other end of this building the rate of inflation was 11·4 per cent. Today, it is edging up to 20 per cent.
The noble Lord has said that it is a central point of Government strategy to abolish the Price Commission and, by doing so, to do away with any form of price control. Inflation, as noble Lords know, is an enemy of full employment and an enemy of our competitiveness. It is an enemy of social stability itself. There is, indeed, no single cure for inflation, nor any single cause of inflation. A lot of it, such as oil price rises, is outside our control. But one area where the Government have some responsibility is that of price control, and that is the area which the Government are choosing to abandon. I would say that any hope of a pay policy working in the future will depend on some measure of control over prices.
My Lords, I am the first to acknowledge that the value of the Price Commission cannot be measured only by the yardstick of the specific prices which it froze. The mere existence of the Commission has had

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two overwhelming advantages. The first advantage was that its power to investigate prices acted as a deterrent. Firms did not apply for price increases as they did not want to be held publicly to account. There was a value in the number of times the Commission did not in fact have to use its powers. The second advantage was that the existence of the Commission demonstrated the Government's concern about prices and the fact that they were prepared to do something about them. However, the Government are choosing to abandon that responsibility, and are so abandoning any hope of controlling wages. In passing, one should note that the Commission staff was 536 last May, of whom 351 were directly employed, the remainder being civil servants on secondment. A resettlement unit has found jobs for 113, leaving, on my reckoning, something over 200 employees without a job to which to look forward. I hope the Government are concerned about this new area of unemployment which they have created.
My Lords, I indicated at the start of my remarks that one could welcome this Bill if it were not for Clause 1; and, certainly, in so far as it follows the recommendations of the interdepartmental group of senior civil servants under the chairmanship of Mr. Hans Liesner, it is to be welcomed, although I believe it could be, and can be, improved. Currently, of course, a monopoly situation exists where one quarter of goods or services are in the hands of the same person, so that no reference can be made to the Monopolies and Mergers Commission in respect, for example, of domestic television rentals, where the six leading firms control some 58 per cent. of the market and do not behave in a competitive way; or of footwear, where, according to the Price Commission, the British Shoe Corporation controls some 20 per cent. of the market; or of tea blending, where four firms possess some 85 per cent. of the market. However, under the proposals in the Bill such anti-competitive non-registrable practices can be referred to the Commission by the Director General of Fair Trading with a competition reference, and this, indeed, is to be welcomed. Likewise, the fact that a manufacturer refuses to supply a retailer with television sets because he knows that the retailer will undercut the price at which he is selling the goods in his own shops
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can also be investigated; and this, too, is to be welcomed.
However, I believe that the scope of Clause 2 is not wide enough. Competition references can be made by the Director General only; ministerial initiative is excluded. The ability of a Minister to make such references directly or via the Director General should be included. It is I think ironic that, although the Secretary of State cannot make a reference, financial objectives imposed by a Minister, however expressed, cannot be investigated. The noble Viscount, in explaining the Bill, talked about the private and public sectors now being treated equally. but then, later in his speech, referred to the fact that if a Minister imposed a particular financial directive on an industry that was not something which could be investigated by the Director General. So the fact that the Minister has imposed a directive on the energy-producing industries and has said that the prices of gas and electricity shall increase at such and such a rate is not something which the Director General will be able to investigate. Apparently, this does not constitute an anti-competitive practice. This seems a typical example of double-talk: on the one hand, we are saying that we are treating both sides of industry equally; on the other hand, we are excluding certain references from the Director General's orbit.
The present wording of Clause 2 would also seem to preclude a reference being made in respect of anti-competition practices being followed by a group of persons such as, for example, estate agents or solicitors in respect of their charges, and obviously it would be right that such practices should also be referable. I was glad to hear the noble Viscount say. when explaining and introducing the Bill, that the Government in fact intend to come forward with amendments which will make local authority purchasing an area which is referable. I hope that the amendment will also include hospital purchasing, and that that will be treated in the same way as local authority purchasing, because, of course, as we are aware, there is a considerable amount of purchasing done, by tender, by local health authorities, and that is another matter which we would certainly wish to see included in the Bill. There are,

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indeed, a number of points, as I have indicated.
Lord ROBBINS: My Lords, would the noble Lord confirm my impression that there are wide sections of restrictive practices which do not fall under the definitions in this Bill, and would he say whether or not he regrets their omission?
Lord PONSONBY of SHULBREDE: My Lords, the noble Lord, Lord Robbins, is quite right in saying that there are areas which are not included. I have indicated some of the areas which, in my view, have not been included in the Bill. I regret their omission, and, in fact, I hope that when we come to the Committee stage these areas will be included in the Bill. Indeed, the noble Viscount opposite has given a specific example of where he proposes to come forward with amendments, and I shall come forward with others.
Lord ROBBINS: My Lords, do I understand the noble Lord to say that he wishes all restrictive practices to be brought under this Bill?
Lord PONSONBY of SHULBREDE: My Lords, I think it will undoubtedly depend what particular restrictive practices the noble Lord is referring to, but certainly I would wish to see all restrictive commercial practices brought under the Bill.
My final point, my Lords—and it is the matter which we always appear to leave to the end of the Committee stage—is the question of the Title of this Bill. I do not think that it is a very descriptive Title. A number of noble Lords have asked me what the Bill is about and some noble Lords, I believe, have the impression that it was about pools, crossword puzzles, "Spot the Ball" and so on. I think that the Government could do better and think of a better Title than that which is given to the Bill at the present time.
I would say that for many years I was secretary of the Fabian Society and I spent a considerable amount of time arguing with authors of pamphlets about the descriptive nature of the titles of their pamphlets. I can remember that on one occasion I argued with the noble Lord, Lord Vaizey, who then supported a
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different political party to that which he now supports. He wished to call a pamplet of his, The Queen and her Horses Reign. It was about education in the class society; and I told him that that was not a descriptive title; it did not tell anybody what it was about. The title eventually came out as, Education in a Class Society. Perhaps I may give noble Lords opposite some suggestions about the Title of this Bill: Competition and Trade Practices; Price Competition; or, perhaps, to be absolutely realistic, The Abolition of the Price Commission and Related Matters. I hope that when we proceed into Committee stage we shall be able to amend the Bill; but, for our part, we very much object to the proposal to abolish the Price Commission.
4.32 p.m.
Baroness SEEAR: My Lords, we on these Benches give general approval to the objectives behind this Bill. My Party has a longer and more consistent tradition of opposing monopoly, wherever it is found, than can be claimed by any other party in this House. It is not surprising that a Bill which is intended to attack monopoly is one which meets with our general support. Unlike the Labour Party, we are perfectly prepared in certain circumstances to see the abolition of the Price Commission. At the time that the Price Commission Bill was going through this House, we suggested from these Benches that a prefereable procedure would have been to introduce a very much strengthened Monopolies Commission. We did not see any very great virtue—although we went along with it in the event—in having a Price Commission, a Monopolies Commission, the Restrictive Practices Court and the work of the Director General of Fair Trading. This seemed to be too much machinery to deal with problems which had a great deal in common and which would be better dealt with together by a smaller number of adequately-equipped and powerful institutions. The actual abolition of the Price Commission is not something which, in itself, we regret.
We also welcome the much wider definition of an anti-competitive practice which is given in Clause 2. I accept the point that has been made: that there are still some matters which are not covered by that definition. It would be our

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intention to see that that definition is sufficiently enlarged to have a much wider coverage than is at present apparent in the wording of the clause. Whether, when this is done, it will cover the point which is in the mind of the noble Lord, Lord Robbins, I have yet to discover. We also welcome the fact that, for the first time, the public sector is to be subject to investigation; although we would go along with the criticism made from the Labour Benches that the ministerial directive to the nationalised industries should not be excluded from the investigatory powers of the Monopolies Commission.
So far as the objectives are concerned, we would give our support to the Government and to this Bill. So far so good; but not very much further; because we do not believe that this Bill as it stands is going to be adequate to achieve the objectives which the Government declare that they wish to pursue. We believe it is inadequate because in our view it is based on false assumptions about how the system works, and it is not sufficiently extensive or sufficiently powerful in the procedures that it proposes to adopt. By "false assumptions" I mean—and this was said at the Committee stage in another place and said again here by the noble Viscount, Lord Trenchard—that the Government are entirely confident that they can get rid of monopolies, that they can control price increase, by competition through the measures which they propose in this Bill.
This seems to me to imply a somewhat naive view of the way in which monopolies operate in this country at the present time. The Government are totally converted to Adam Smith and to the free market. I am second to none in my admiration for Adam Smith; but I must say that the Government's attitude towards Adam Smith reminds me of Queen Victoria's attitude towards her late lamented husband. In neither case does it seem to have occurred to them that the beloved object, the beloved mentor, might as time went on have developed his ideas or even changed his mind. Adam Smith lived 200 years ago when the economy was far less complex than it is today. Monopoly had not developed, oligopoly had not developed. There are now a hundred and one ways in which competition is restricted by devices
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difficult to get at through any procedural inquiry. All this makes it a very much more difficult matter to control price through competition plus Government economic policy than the Government apparently are prepared to agree.
Therefore, we do not believe it is adequate just to leave it to the kind of investigation, and the control over investigation, which is proposed in this Bill. Nor, do we think, are the Government paying sufficient attention to the political and social importance of price increases which may occur, for example, through a quite small local monopoly which might not be the kind of thing which would attract attention—and which certainly would not come under the definition in Clause 13 of something "of major public concern"—and which in a particular area or region could be a matter of very great concern to a considerable number of people. Therefore, because of the extremely sensitive, political nature of price rises, even if they cover only a relatively small part of the country, we believe that it is very important that Parliament and Members of Parliament should be able to raise price issues which are of great concern to their constituents.
What we do not like about the Bill is the great difficulty of control over what goes on in the work of the Director General of Fair Trading and in the activities of the Secretary of State. We think that there should be more opportunities for Members of Parliament to challenge what is going on in the whole field of prices. It is not enough to say that you can merely leave it to market forces plus the work of the Monopolies Commission. There will be cases of price rises which cause great concern and which it ought to be possible for elected representatives to challenge and to get proper explanations or to demand that investigation take place. There is nothing in the Bill which makes it possible for a Member of Parliament who is greatly dissatisfied with what is happening over a particular issue in a particular part of the country to see that an investigation takes place.
Further, we are not happy about the procedure when the Director General of Fair Trading has extracted an undertaking from an organisation which, it has been shown, is conducting an anti-competitive practice. An undertaking has been given,

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and an organisation would be well advised to give an undertaking and thus avoid a competition reference. I have no doubt that will be the line which will be followed in the great majority of cases where an investigation is undertaken.
We believe that where there is a report which leads to an undertaking, that should be made public and that it should be possible for questions to be asked in Parliament about the progress of that undertaking. It is left to the Director General to follow up the undertaking. There are slight sanctions: the sanction I suppose ultimately is a competition reference. Even with the speed-up in the procedure in the Monopolies Commission that can be a pretty long-drawn-out business. We believe that much more publicity should be given to the outcome of undertakings and that there is a strong case for the possibility of action against people who breach their undertakings, and it should cost them something in terms of penalties. A middle way has been discussed between a criminal and civil liability. This is a matter for the lawyers to look into. It was put forward in the Committee stage in another place, and I believe that there should be undesirable consequences for people who treat their undertakings lightly.
If the Government really mean business about getting rid of monopoly and getting rid of uncompetitive practices, I wonder whether they think it is convincing to reduce the number of people employed in this whole area of work. May be it is reasonable to have some reduction in the numbers of people employed in the Price Commission: but I gather there is to be a saving of something between 400 and 500 people. Reference is made to this in the Financial Memorandum. If the Government really want this work done with all the complexity and difficulty of finding cases, of investigating cases, of following up undertakings—which is of the first importance—are the manpower and resources which are being devoted really adequate to this important and complicated work that has to be done? It suggests that the Government believe that it is a relatively uncomplicated matter. In our view, it is a complicated matter and one in which the cutting down of resources for dealing with it is a very false economy indeed.
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We are glad that it is proposed that procedures under the Monopolies Commission can be speeded up. That is a long overdue reform. We believe that, while the intentions of this legislation are excellent, it will be a pretty ineffective instrument. In another place, in Committee, again and again the Minister said that this was only a first stage in the Government's anti-monopoly policy and that a further instalment will come later. This, I suppose, can be regarded as something of a confession that the Government themselves recognise the inadequacy of the proposals which are put before us today.
May I ask the Minister when it is intended that the second stage will emerge? Is he going to tell us that we will wait and see how this Act develops, and only when it has been proved to be inadequate will they consider a second stage? Had the Minister some clear plan in mind when she stated repeatedly in another place that this was only a first instalment? If it is the only instalment, then regretfully I do not think it will get us very far.
4.45 p.m.
Lord TEVIOT: My Lords, Adam Smith or no Adam Smith, I fully endorse the principle behind this Bill, in that competition in general is the essential part of a thriving economy. I can understand also that it is an important safeguard for consumers and that the strengthening of competition policy will benefit many smaller businesses. In the context of business generally, all this is laudable. My brief intervention is to spell out certain misgivings that I have regarding the bus industry. In that context, it seems to me that this Bill, with respect, has been drafted without consideration of the practical need—and indeed the statutory duty—to provide services to the public in that the machinery will become more costly and in some ways counter-productive.
I refer particularly to the duty already imposed on the local government authorities and transport operators to provide a co-ordinated and efficient system of public passenger transport. This duty is imposed by the Transport Acts of 1968 and 1978 and it carries with it the need for agreements and arrangements between county councils, district councils and public

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passenger transport service operators. As the Bill is worded at present, all such arrangements could be subject to investigation by the Director General of Fair Trading and the Monopolies and Mergers Commission, although the Bill does make provision for the exclusion of a course of conduct, for the purposes of this legislation, by order made by the Secretary of State for Trade. My first question is therefore to ask whether the Government intend to exclude, by this means, all arrangements or agreements made under the Transport Acts 1968 and 1978 for the co-ordination and efficient running of public passenger transport services. That machinery, so far as I can gather, appears to be working adequately.
I should now like to draw attention to a broader issue concerning public road passenger transport. In Clause 11 the Bill provides that the Secretary of State may refer to the Monopolies and Mergers Commission any specified question relating to the activities of any body corporate which provides a bus service. My understanding of the Government's intention was that the larger bus undertakings in the public sector were to be included. As matters stand, any limited liability company or other body corporate which provides a bus service is included (and, as a matter of interest, a partnership which provides a bus service would not be included, I believe). Apparently the net has been cast wider than the Government's original intention. In any case, for reasons which I will give, bus undertakings seem to be out of place in this legislation.
Operators of bus services are already subject to a considerable degree of control. Except for the London Transport Executive (which is responsible to the Greater London Council), they are all subject to investigation by the Traffic Commissioners in the interests of the public, and they will continue to be subject to that control under the new legislation which the Government is debating in another place. In that legislation—namely, the Transport Bill—the Traffic Commissioners will be empowered in Clause 7(3) to attach fares conditions to road service licences—

"(a) to protect the public from unreasonable use by the holder of the licence of his position as such; or

(b) to regulate the terms of competition between stage carriage services on a route or routes".

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Each undertaking is also subject to control by its appropriate authority—the passenger transport executives have their passenger transport authorities, the district council undertakings have their councils in terms of the legislation by which they were established and they all, including the independent operators, are subject to "the control of the market place", in that they are subject to competition from other forms of public and private transport. All shire county councils prepare a county public transport plan annually. I have reiterated rather a lot of indigestible sentences and that makes it clear that all the machinery for this Bill makes it even more weighty. Therefore, in all the circumstances, it is illogical and burdensome that bus undertakings should be rendered liable to a further layer of control—particularly bearing in mind the Government's policy of reducing the burden of administration. I therefore ask my noble friend for some assurance that this additional weight will be removed from the shoulders of this vital and energy-efficient industry and that he will look into it again.
I have one final point; that is, that in any case where the competition policy impinges on transport policy it seems right that the consent of the Minister of Transport should be required before any investigation of road passenger transport services is undertaken. As the Bill stands at present, the "relevant Minister" is only brought into the picture after an adverse report has been made by the Monopolies and Mergers Commission. By then much time and effort will have been expended by the Director General of Fair Trading, the Monopolies and Mergers Commission and representatives of the industry in investigating something which, as I have already made clear, seems to be subject to adequate control. Surely the right course is to bring the Minister of Transport into the picture when the Director General of Fair Trading gives the Secretary of State notice of his proposed investigation.
4.52 p.m.
Baroness HORNSBY-SMITH: My Lords, I should like to join in thanking the Minister for the very clear and detailed exposition he gave of the Bill. Overall, I firmly support him in the intention under

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lying that Bill, but this afternoon I should like to outline some of the real fears of the retail trade—not so much in what we believe the Bill seeks to do, but regarding the manner in which some of the phraseology contained in certain clauses could be interpreted, to the detriment of reasonable trade.
I must confess I have the privilege of being a member of the all-party parliamentary group of the Retail Consortium. The trade, generally, warmly welcomes the abolition of the Price Commission which, as the noble Viscount, Lord Trenchard, said, was largely irrelevant and certainly ineffective in keeping down prices. That, as I say, is warmly welcomed.
At a time of rising costs and reduced sales, the retail trade really does not require at this time when many chains and stores are fighting for their existence, any spurs to be driven in to make it competitive. It has probably never been more competitive in trying to seek additional trade. Nevertheless, it is at one with the Government in its desire to seek and stamp out abuses, and it certainly agrees with anti-competitive practices being subject to control. As I understand it, this Bill seeks to fill the gap and to legislate for anti-competitive practices which are not at the moment covered by the Restrictive Trade Practices Act, the Fair Trading Act 1973 and the Resale Prices Act.
However, in relation to this Bill, there is very real concern over the lack of precision in the very, very woolly definition in Clause 2. I have repeatedly said in this House that I am no lawyer; but highly trained legal brains have studied this particular clause and have had quite a field day in suggesting what operations could be caught under it, which I do not think is the Government's intention or indeed would be in the public interest. I believe it is absolutely vital that industry, trade and the public should know what constitutes breaking the law, particularly for the hundreds of smaller trade groups, already overburdened by bureaucracy, who have neither lawyers nor accountants on their payrolls to sort out this latest governmental (as we think in paragraph 2) "lawyers' paradise."
May we take the phrase "restricting, distorting or preventing competition."
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Under that definition any firm of the permitted size closing down a branch is restricting competition. Within my memory, the International Stores and Woolworths, both of whom started with comparatively small shops when what they sold was more limited than today, over the past 10 years have, as a matter of policy, closed down those original small shops and have gone into larger shops with a larger area, and of course they cover far more brands and commodities among their sales.
If one of those branches is in a village where there is one other shop selling the same type of goods—say, two grocers or two butchers—and if a chain which is within the limits laid down by the Minister closes down one shop, it is not only reducing competition but, by leaving only one village shop, it is positively preventing competition. Under the clause, as we read it, closing a shop for whatever reason could be held to be preventing or limiting competition. Being monopolies, I suppose that British Rail, if they close down a station, or the Post Office, if they close a village sub-post office, would escape this scourge because they do not have any competition anyway.
Also, as Clause 2 reads at present, we believe that it could involve advertising. A firm that advertises could be held to be taking unfair advantage over the firm that does not advertise; at least, that is how we read it. Then there is, for instance, the fabulous sales bargain for which strong-minded men and women will sit up all night outside Selfridges to buy their own or their wife's first-ever fur coat—a fur coat being sold way below its cost. Selling below cost is unfair trading, according to Clause 2.
I now come to the promotion of sales for a new store or a new product. That would be unfair competition. I am old enough to remember that every time Woolworths opened a new store, all its first-day customers who spent a minimum of five shillings (and the maximum then was sixpence for everything) got a free galvanised bucket. I can remember seeing ladies pouring out of Woolworths when they first opened in East Sheen, all with their galvanised buckets and their purchases inside them. That, under this Bill, is unfair trading.

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Further, in another sphere—and I refer now to something which the women Members of your Lordships' House will know better than the gentlemen—one cannot go into the cosmetic department of a store or a sizeable chemist's shop where you will not see special offers. There are hundreds of items in cosmetics, pharmacy and household promotions which market a special introductory offer, where you buy an established product you know and at the same time take advantage of a trial offer for a new product, which is thrown in. Many firms think that this method of giving an item to the customer to try as a free sample is better than spending hundreds of thousands of pounds on advertising on the media or on television. Under this clause, those promotion samples, aligned to an established product for which one pays the full price, would be unfair competition according to our reading of this clause. But no one—not even the noble Baroness, Lady Seear—would say that such offers are not to the advantage of the consumer in being able to try something before deciding to buy it.
Going from the sublime to the ridiculous, if little Jimmy goes along to collect his mother's substantial grocery order from the village shop and Mr. Bloggs gives the likely lad an apple or a lollipop, is that unfair competition?—since the child might then be lured to say, "I will go and buy it at Mr. Bloggs' shop, mum".
May I now refer to the question of sales. As your Lordships well know, I am also involved in the textile trade, where fashion is a very wayward mistress. If you over-manufacture or over-buy for stock in the shops and the fashion changes, you cannot recycle the goods. You either clear them out below cost or you shoulder a total capital loss. The demise of the mini-skirt is a classic example. When skirt hems dropped dramatically, the garment industry was lumbered with millions of coats, dresses and slips, all of which were then unacceptably short. As they were prudent traders, these garments were sold, often below cost, as fast as they could be sold.
As I understand Clause 2, sales below cost would be unfair competition. May I therefore beg the Government to take
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another look at this clause. Could we have some definition. May the trade know when and how they are going to be "hooked" for breaking the law—if necessary, by an appendix to the Bill which sets out what constitutes an unlawful and uncompetitive practice.
Another aspect of the Bill which is somewhat alarming is the apparently unchallengeable power of the Director General of Fair Trading who, following a preliminary investigation, can order a competition reference which may involve the defending company in enormous expense without the Director General of Fair Trading having to show reasonable grounds as to why he believes the uncompetitive practice to be contrary to the public interest. If one is charged and brought before the courts, one has to know what the charges are. Is it justifiable that a company should have to go through all the problems of this investigation without clearly knowing what is alleged to be the uncompetitive practice? We feel that the Director General should be required to state the grounds upon which he is making the reference.
Also in Clause 2, the Government appear to be reintroducing the price control which both the noble Lord and I were so pleased to see abolished by the demise of the Price Commission. The Bill gives to the Secretary of State the power to make an order following a finding by the Monopolies and Mergers Commission prohibiting the offending practice. It is acceptable for him to prohibit the practice, but he is also given the power, by virtue of paragraphs 8 to 11 of Schedule 8 to the Fair Trading Act 1973, to put a control on the price. If the abuse is removed, we believe that prices should then be left to find their natural level. The introduction by the back door, as it were, of price control would, we believe, distort the free market economy and appears to be contrary to the declared policy of this Government.
Finally, may I refer to the practice by which our courts frequently endeavour to relieve persons wrongfully charged of the burden of their legal costs. Under this legislation, an investigation may involve highly-paid staff in weeks of work and, possibly, even in expensive legal representation. If at the end of the day the undertaking is absolved from having

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operated any uncompetitive practice, we consider it to be grossly unfair that the innocent party should have to bear the cost as well as the waste of time of this operation.
The retail trade therefore believes in the aim that the noble Viscount, Lord Trenchard, has set out in the Bill; namely, to curb abuses, but it is concerned with the interpretations which it believes could be put upon Clause 2 and which, in its opinion, could bedevil legitimate and prudent trading. I hope that, before we come to the Committee stage, the noble Viscount will study these points and see whether we can have something more definitive about what Clause 2 really means.
5.5 p.m.
Lord MOTTISTONE: My Lords, I must apologise for only just getting here in time to address your Lordships. I shall not keep the House long. I have just one point to make in relation to the Bill. First, may I thank the Government for the very understanding way in which they have listened to representations while the Bill has gone through another place in relation to one particular point; namely, the need for an opportunity to be given to those companies which are being investigated at various levels of the Bill, whether by the Director General of Fair Trading or by the Monopolies and Mergers Commission, to see the reports before they are made public. I think that this point has been taken care of in a very satisfactory way by an amendment that was made in another place just before the Bill left it so far as the Monopolies and Mergers Commission is concerned and so far as reports which are laid before Parliament are concerned.
What does concern us, however—and this is based upon experience with the Price Commision—is that when any public bodies like the Price Commission, the Director General of Fair Trading or the Monopolies and Mergers Commission have to investigate a company in any way, they obviously find it very difficult, in a relatively short period of time, to get a real grasp of how the company works. They were certainly required by the Price Commission legislation and, by implication, they are required by this Bill—although time is not specifically mentioned
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—to carry out these investigations quickly so as not to keep companies waiting, thus putting them in the position of not knowing what is going to happen for too long. If, however, they carry out these investigations quickly, they do not have time really to understand what is going on.
I am not concerned in this case with companies which are trying deliberately to adopt an anti-competitive measure. I am concerned with companies that on the whole are trying to do the right thing but which, for one reason or another, become subject to this inquiry system. It is very easy for the investigating body to jump to wrong conclusions when they are trying to carry out these investigations quickly, conclusions which people who have been working with the company for years can see at once are wrong. In the case of the Price Commission, to my certain knowledge this happened on more than one occasion. Therefore, we are concerned to find out whether it would be possible further to amend the Bill in order to give opportunities for companies to see reports that are made about them before they are passed on to the next stage.
I hope that there will be an opportunity to suggest amendments along these lines when the Bill reaches its next stage. If we find a reasonable way of putting forward our proposals, I trust that when it comes to that point the Government will be as understanding about them as they have been about representations during the earlier stages of this Bill in another place.
5.9 p.m.
Lord WALLACE of COSLANY: My Lords, the noble Lord, Lord Mottistone, robbed me of a little personal pleasure in that he robbed me of the opportunity of following the noble Baroness, Lady Hornsby-Smith. Members of this House may know that in the past we were very old rivals. She kicked me out of Chislehurst. Now we are together again. We are very good friends, apart from the fact that we do not agree politically except on the question of bargain offers. We ought to do something about the ridiculous situation which exists over bargain offers.
I welcome the fact that the noble Lord, Lord Trefgarne, is to wind up in his usual very efficient manner. The noble Lord bobs up in every conceivable debate and I am seriously wondering whether

1133
we shall have to refer this fact to the Monopolies Commission!
In winding up the debate for the Opposition, I speak as a consumer who has no direct involvement in investment or otherwise with any large company that is concerned with price fixing. I feel that I should declare my interest as one member of a large section of the population with a very modest income to whom the Government's income tax cuts are irritating and to whom rising prices, costs of services and cuts in social services constitute a constant factor of concern and anxiety. To us, the Prime Minister's election pledge to put more money into the pockets of people to spend as they choose is just a sick joke. To the average housewife the price of essentials—food, clothing, fuel, transport, social benefits and services—is the battleground of balancing the family budget and in abolishing the Price Commission the Government have committed a serious psychological error in their attempts to reduce inflation. I said "reduce inflation" whereas in fact their financial policies so far are adding to inflation.
The Price Commission was in fact set up by a Tory Government and was used by a Labour Government to provide a check and deterrent against price increases in a period of wage restraint. VAT was introduced by a Tory Government and by doubling the rate to 15 per cent. the present Government wilfully inflated a wide range of prices. So, my Lords, we have a situation where a Government pledged to reduce inflation virtually abolish any semblance of price control without a mandate to do so. True, there was a pledge to review the work of the Price Commission. In fact there was no review, only a short sharp statement by the Prime Minister shortly after the election, during the debate on the Queen's Speech.
Similarly with VAT, Labour's claim during the election that the Tories would double VAT was strongly denied by the Member who became the Chancellor of the Exchequer. The truth is that they came quite close to doubling VAT. Labour's legacy of 8 per cent. VAT was not multiplied by two but by one and seven-eighths—a pretty close call.
If I may, I should like to give a simple example of consumer choice. We talk
1134
about freedom and competition and the consumer deciding, but I want to talk about the question of VAT. Just before Christmas my wife and I went Christmas shopping in Woolwich High Street. It was rather cold at the time so we decided that before we started shopping we would have a cup of coffee. The only emporium available was one of those widely advertised on television—I will not mention the name—and we went inside. It was all very hygienic, neat, orderly and very attractive. I went up to the counter and I said "Two cups of coffee, please". The girl looked at me and she said "Are you drinking it outside?" I said "I beg your pardon? "She said "Well, if you drinks it here you pays VAT; if you drinks it outside, you don't".The difference was that the cost was 20p inside and 17p out, amounting to 6p extra for the two of us. My Lords, hearing in mind the necessity for main-taming the dignity of your Lordships' House and considering the spectacle of a noble Lord sitting on the pavement out-side to drink his coffee in order to save 3p. we gave up that idea and we preserved the dignity of the House. It is a small matter but it is six pence for two small cups of coffee—talk about consumer choice! You drink it here or you drink it there. It is a ridiculous situation and that applies in many other fields as well.
The main purpose of this Bill is the abolition of price controls. The only reference to the Government's capacity to control unjustified price increases appears in Clause 13. That gives powers to the Secretary of State to refer to the Director General of Fair Trading an unjustified price increase which he may investigate. But this is hedged about with qualifications. It has to be a matter of major public concern. It must be of general economic importance; an easy way out for the Secretary of State to avoid a reference, if I may say so. Even if he did decide to make a reference, there is little he can do if an unjustified price increase is discovered. True, publicity would be given to the finding of the Director General but in fact any power of the Government to control unjustified price increases is wiped out to a great extent.
What is more revealing—and here I touch on a point made by the noble

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Baroness, Lady Seear—is the statement of the Minister for Consumer Affairs at the end of the Third Reading of the Bill in another place. She stated:
"As a result of the abolition of the Price Commission, the distribution of responsibility among Ministers for issues concerning prices is affected".—[Official Report, Commons, 22/1/80; col. 355.]
She further stated that it meant that her right honourable friend had no responsibility for prices in future and she added—
"Prices issues will normally be handled by the Ministers responsible for the policies to which they relate".
What an admission! What do we want a Minister of Consumer Affairs for? Responsibility for issues—who is going to decide? Where is the poor Member of Parliament, duly elected by the people, to find out who to challenge in the House on a question of a price increase? Responsibility for price issues is so widespread that the puzzle will be to ascertain who does what and who is responsible for what. Now, my Lords, we know why it is called the Competition Bill.
In abolishing the Price Commission for doctrinaire reasons, the Government claim that prices can be magically controlled by returning to competition within an unbridled free market economy. They claim that price control is irrelevant in the battle against inflation. What has competition within a free market economy achieved as regards the growth of monopoly? In 1950 the top 100 manufacturing companies in this country represented about 20 per cent. of the output. Twenty years later the top one hundred manufacturing companies represented about half of the output and the trend is increasing. There is also a deliberate price fixing mechanism within companies and groups of companies. We all know this without having any association in any way with big business, and the Bill will have little effect on that situation.
The Government's monetary policy is fuelling inflation. High interest rates, penal VAT, deliberately inflated gas prices, increased prices for school meals and school transport, abandonment of price control and many other acts all increase inflationary pressures and wage demands. That view, in a general way, is held by no less a person than President Carter, because in his 1980 economic
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report to Congress he confirms my view. I quote from the Guardian of 31st January:
"The British economy is heading for a sharp and bitter recession, with a 2 per cent. drop in gross domestic product according to the forecast. This will be the worst performance among the Western industrial economies and is even more damaging in that inflation is forecast at least 15.5 per cent.—the worst in the West with the exception of Italy".
He continues:
"Blame for Britain's sharp recession is put fairly and squarely on the tight financial policy being pursued by Mrs. Thatcher and Sir Geoffrey Howe. The report says: 'The UK's fall in output does not derive principally from the rise in oil prices but from the very sharp shift towards restrictive monetary and fiscal policies instituted by the new government'."
It is a good job that Mrs. Thatcher has friends!
The Government place absolute faith in what they term the benefits of competition and its effect on reducing inflation but frankly admit that there will be no short-term effect—and, my Lords, short-term effects are urgently needed if we are to survive economically. Even if we had full, free and unfettered competition in industry, nationally and internationally, which we have not in the modern world, competition in a shortage situation leads to massive price increases. Furthermore, as I know full well from past experience, speculation in commodities for import into Britain is involved in the selling of shipping documents time and time again before even the ship arrives in this country, each time a margin of profit taken, not necessarily even in a time of shortage.
No, my Lords, this Bill enshrines a sacred cow of very doubtful parentage. In accordance with the customary practice of this House, we shall not call for a Division on Second Reading, but will deal with points of principle in Committee and at Report stage, when opportunities will arise to examine vigorously and in detail the Government's proposals. We shall, of course, when we feel it necessary, divide the House, possibly in a forlorn hope due to the overwhelming majority of Government supporters here, but nevertheless, a gesture of principle will be made, because we must preserve the right of the housewife to have some degree of protection. Under this Bill she has not.
5.22 p.m.
Lord TREFGARNE: My Lords, I was intending to open my remarks by saying

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that the quality of all the speeches in your Lordships' House tonight has reflected the importance of the Bill before us. I must confess, on reflection, that I liked some more than others. As my noble friend Lord Trenchard said earlier, this Bill lies at the heart of our proposals for restoring the health of British industry and hence the wellbeing of our economy. It cannot be stressed too strongly that improvement in social services and improvement in wage levels and standards of living, to which this Government are, of course, fully committed, depend absolutely for the fulfilment upon the success, the profitability, of British industry. There is simply no other way of finding the necessary resources. Our predecessors apparently took the view that unlimited public expenditure could be financed by borrowing on any scale and that the inevitable inflation which followed could be contained by policies which proved to be about as effective as those of King Canute in relation to the waves of the sea.
I had hoped, and indeed expected, that noble Lords opposite, and indeed noble Lords and Ladies speaking from the Liberal Benches, would have exhibited a little more humility today, having regard to the appalling legacy which we were bequeathed last year, but instead we have had a catalogue of complaints, which I will deal with in a moment, but which will not, I think, dissuade your Lordships from giving this Bill a Second Reading. I must confess that I remember only too well when the Price Commission legislation was going through your Lordships' House my noble friend Lord Mansfield was then leading from that Dispatch Box and I was assisting him—we did not enjoy the support of the Liberal Benches on those occasions. The Lib-Lab pact was in full cry, and indeed the majority which the noble Lord, Lord Wallace of Coslany, derided so strongly just now did not exist on those occasions, and we were unable to persuade your Lordships of the merit of our proposals. But Heaven knows! we have been proved right.
Let me now come to some of the points that have been put to me. First of all, on the general principles of price control, I think it is naïve to imagine that competition is of no account in relation to prices and profits. The truth of the matter is that both here and elsewhere
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in the world profits are a good deal lower just now than they need to be for industrial and commercial health, and I think in some cases this is very much in the consumers' interests, but in the long term adequate profits are absolutely essential. Although it is true that Adam Smith was with us 200 years ago at least, I do not think that his arguments have been entirely disproved by the passage of all those years.
Turning now to the Bill itself and to some of the points that have been put to me, I want first, if I may, to deal with an important point put to me by the noble Baroness, Lady Hornsby-Smith, which goes to the heart of some of the criticisms of other noble Lords about the question of anti-competitive practices and how in general we seek to deal with them. There are two main possible lines of approach to this question. On the one hand, one can attempt a legal definition of particular practices which are felt to be normally both anti-competitive and against the public interest, and we could prohibit them. Resale price maintenance is a practice of that sort, which is prohibited except in carefully defined circumstances by the Resale Price Act, and enforcement of such prohibition is then essentially a matter for the courts. The central arguments are legal ones as to whether the practice being followed is in fact a prohibited one. Some other systems of competition legislation, for example the French, allow firms to be fined for breaches of the prohibition. Such an approach is acceptable if you are reasonably certain that the practice is normally, or indeed invariably, harmful. The approach in this Bill, however, following the pattern set by the monopoly provisions of the Fair Trading Act, does not assume that any named practice is invariably harmful, that is to say, that it is both anti-competitive and against the public interest.
This is the double test in the legislation. Whether any particular practice is harmful will depend upon the circumstances in which it is practised, and the example given by my noble friend Lady Hornsby-Smith, about the little boy who gets a lollipop when he buys groceries at a shop for his mother, is one which I would say was clearly not harmful. These circumstances will vary from case to case and will depend upon the economic,

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as opposed to the legal, effect or intention of the practice. The approach in the Bill is thus essentially agnostic a priori about any particular practice; the effect of a practice will tend to depend on whether the firm who pursues it has real market power. This requires a case by case approach, the corollary of which is that there should be no sanction against a firm for having in the past pursued a harmful course of conduct. On the other hand, it is right that, following an appropriate report from the Commission, it should be required to stop a practice or otherwise to remedy the adverse effects.
It is obviously inconsistent with this approach to set out in the Bill a list of anti-competitive practices, as I think my noble friend was suggesting, since whether they are anti-competitive will depend on the circumstances in which they operate. But the sort of conduct which the Director General might be expected to investigate is conduct designed to raise, or which has the effect of raising, barriers to new entrants to markets. Powerful firms may try to exploit their power by, for example, insisting that wholesalers or retailers stock the full range of their products, which may mean that the wholesaler is unable to afford to stock some rival product; a manufacturer might try to insist that a stockist does not sell the products of a competing manufacturer; a manufacturer or importer may not allow a retailer to advertise his products except at a minimum price specified by the manufacturers. It will be up to the Director General to decide what practices to investigate, and anyone who feels that their interests, whether as businessmen or consumers, are adversely affected by what they regard as anti-competitive behaviour will be able to take their complaint to the Director General.
The noble Lord, Lord Ponsonby of Shulbrede, asked me about the people who would be displaced from their jobs as a result of running down the Price Commission. It is true that 200 of the former staff have not so far been found jobs through the Commission's resettlement unit, but that is not to say that they are still unemployed, for a good many of them have in fact found jobs through other channels. Lord Ponsonby also asked me about estate agents and he was disappointed that they were not covered by the provisions of the Bill. I can tell
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him that that is unnecessary because the difficulties of which he complained can be remedied by means of a monopoly reference under the Fair Trading Act. I can also say that the anti-competitive practice powers do apply equally to both the private and public sectors.
The noble Lord, Lord Ponsonby, and the noble Lord, Lord Wallace of Coslany, were highly critical of the present rate of inflation. However, I do not think that the situation is quite as black as they painted it. I think that the noble Lord, Lord Ponsonby, said that it was pushing 20 per cent.—it is actually 17.2 per cent. We inherited a rate of 14 per cent. and the once and for all increase in VAT added 3.5 per cent. to that. So, inflation—while I do not for one moment want to be—complacent—is in fact—
Lord WALLACE of COSLANY: My Lords, forgive me for interrupting, but did the noble Lord say that the Government inherited a rate of 14 per cent.?
Lord TREFGARNE: I did, indeed, my Lords. The figure in front of me is 13 per cent. to 14 per cent. If the noble Lord wishes I shall take the lower figure of 13 per cent. but certainly not the 8 per cent. or 9 per cent. that was bandied about at the time.
I turn to the speech of the noble Baroness, Lady Seear. I fancy that the tone changed somewhat with the demise of the Lib-Lab pact. I do not complain of that; I am grateful for it. However, the noble Baroness asked me some important points to which I shall endeavour to reply. She was particularly anxious about the undertakings that are a feature of the Act and about why there are no sanctions, for example, for a breach of an undertaking. There will be a sanction in the sense that, if an undertaking is broken, the firm can, of course, be quickly referred to the Monopolies and Mergers Commission. However, we think that to impose any other penalty for the breach of a purely voluntary undertaking would be going too far, especially as there would not at that stage be any finding that the practice is against the public interest. Undertakings will be published—and that is provided for under Clause 4(4)(a) of the Bill—so that any default can quickly be identified.

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I was also asked about whether there was to be a further phase in our competition policy. I can say quite clearly that the main bulk of our policy is contained in this Bill and there is certainly no intention of producing any further major alterations to the framework in this important measure. Various inquiries and consultations will, of course, continue and your Lordships will no doubt be asking and hearing about those in due course.
I should perhaps have referred earlier to another point mentioned by the noble Baroness, Lady Hornsby-Smith. However, I did deal, at some length, with the point she raised earlier. She was asking whether a number of practices, which she outlined, would be unlawful under the Bill. As has already been stated, and as your Lordships will have seen from the Bill, it is our intention to provide an exemption for small firms. We are also considering exemptions for areas such as international shipping where investigations under the Bill might raise problems of extra-territorial jurisdiction. But, in general, bearing in mind that the procedures under the Bill will be selective, and that investigations can be vetoed by the Government, we do not believe that there will be a need for extensive exemptions.
My noble friend Lord Teviot raised some points about the bus industry. I can say that the industry, as was intended, will not be exempt from investigation because there are a number of local areas where some firms have a monopoly, or near monopoly, and it is certainly our intention that those operations should be subject to scrutiny, if necessary. However, I can also say that we do not intend to use those powers particularly widely.
Those, I think, are all the important points that have been put to me. I shall certainly study Hansard and take up with noble Lords any points which I have failed to cover at this stage. But I wish to say finally that the last Government sought to contain inflation by trying to impose an iron grip on prices, at the same time ignoring the rise in costs, particularly wages. In other words, they sought to treat the symptoms of the disease without regard for the cause. This Bill, by contrast, strikes at the roots of our industrial
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malaise in the way described by my noble friend. Of course, the Bill will not by itself restore prosperity and success, but it is a vital and urgent step and I commend it to your Lordships with confidence.
Lord WELLS-PESTELL: My Lords, before the noble Lord sits down, will he allow me to make the following observation? If he were to look at the tape in the hallway this afternoon he would see that it says that the Retail Price Index has increased by 17.2 per cent. over the last 12 months, compared with a figure of 10.3 per cent. when the present Government took over.
Lord TREFGARNE: My Lords, I do not think that the noble Lord is comparing like figures with like. However, I shall certainly look at what has been said and if it will satisfy the noble Lord I shall write to him with some adjusted figure. As I have said, the fact of the matter is that the increase in inflation, since we took office, has been largely caused by the once and for all increase in the VAT rate.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

  MALAGASY REPUBLIC: UK AID
  MALAGASY REPUBLIC: UK AID
  CAP REGULATIONS FOR ANNUAL RENEWAL
  CAP REGULATIONS FOR ANNUAL RENEWAL
  RENTS: METHODS OF FIXING
  RENTS: METHODS OF FIXING
  DANGEROUS CARGOES IN THE CHANNEL: EXPERIMENTAL SCHEME
  DANGEROUS CARGOES IN THE CHANNEL: EXPERIMENTAL SCHEME
  THE FINANCE ACT 1976: DESIGNATION OF LAND
  THE FINANCE ACT 1976: DESIGNATION OF LAND
  SIMULATED CAR CRASHES: ANIMAL EXPERIMENTS
  SIMULATED CAR CRASHES: ANIMAL EXPERIMENTS
  QUESTIONS ON NATIONALISED INDUSTRIES
  QUESTIONS ON NATIONALISED INDUSTRIES