Welsh Affairs

Part of the debate – in the House of Commons at 12:00 am on 21 March 1974.

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Photo of Sir John Morris Sir John Morris Secretary of State for Wales 12:00, 21 March 1974

Anyone called to hold the office of Secretary of State for Wales must be deeply conscious of the honour of serving his nation in this way. I certainly am. Each Secretary of State has made a distinct and valued contribution to the life of Wales, and I pay particular tribute to the three of my distinguished predecessors who are in the House. The only assurance I can give is that, like them, I shall seek to act in the interests of the whole of Wales and not of a section of it, and I shall try in all my deeds to be guided by this principle.

I know that I speak for all my colleagues in Wales in congratulating the Chairman of Ways and Means upon his appointment. I know that he is now impartial, but he has led the Welsh Labour group with unparalleled zeal and drive for many years.

The House will want to know the balance sheet as I found it at the Welsh Office. In view of the reputation of my native county, the House will not be surprised that I took an immediate interest in the state of the books.

Having outlined this backcloth, it would be right for me then to outline the recent and current employment situation in Wales. Nothing is more important than the fundamental human right to work, and Governments must intervene where necessary to ensure that that right can be exercised in Wales itself.

I shall seek then to deal with some aspects of the condition of life in Wales. So varied and wide are my responsibilities that the House will forgive me if I do not cover all topics. To do so would be to deprive some hon. Members of the opportunity of catching your eye Mr. Speaker, and my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands), one of the Under-Secretaries in my Department, who will seek to wind up, will repair some of my omissions.

Lastly, I shall spell out in some detail how I view the constitutional development of Wales and how we will seek to implement the proposals which the people of Wales endorsed at the last election.

First, I turn to the books. The House will recall the severe public expenditure cuts announced by the last Government on 17th December. Capital expenditure was to be cut by 20 per cent. and procurement of goods and services by 10 per cent. Other than housing, each of the main fields of expenditure suffered a cut on its programmes for 1974–5.

It is right for us to look at these at the beginning of our endeavours. Expenditure on roads and transport was cut by £11.6 million, equal to 15 per cent. Spending on other environmental services was cut by £8·9 million, equal to 12 per cent., while expenditure on education, libraries, science and arts was cut by £6 million, representing a reduction of 4 per cent. Health and personal social services expenditure was cut by £5·5 million—equal to 3 per cent. These cuts amounted in total to £32 million—or 6·8 per cent.—of Welsh Office programmes excluding housing.

One cannot minimise the effects of these cuts. Undoubtedly we are in a serious economic situation, and, while I cannot anticipate the Budget, it is obvious that these cuts cannot now be reversed. But to all my hon. Friends and hon. Gentlemen opposite who, I am sure, would in the course of the year be making this and that suggestion for expenditure, I cannot help but underline the extent of the deferment of many valuable plans which has, and will, take place.

The economy of Wales is inextricably linked to the health of the rest of the United Kingdom economy. Anyone who advocates separatism is living in cloudcuckoo-land. Offa's Dyke has no economic relevance in the economic life of Wales.

The blunt truth is that the United Kingdom's economy—and the economy of Wales as part of the wider scheme—certainly has suffered recently, both as a result of the energy crisis and as a result of the previous Government's handling of industrial relations and other aspects of economic affairs.

My aim is to see that Wales is able to play its part to the full in the recovery operation. Unless Britain recovers, Wales will not prosper. It is obvious, therefore, that we must concentrate on our coal and steel resources, which not only provide over 100,000 jobs for men in Wales—one man in six in Wales is employed by the British Steel Corporation or the National Coal Board—but contribute in large measure to the strength of the United Kingdom economy. Beyond coal and steel, we must look to the further resource, oil or gas, which we hope will eventually come from the Celtic Sea.

Our overriding priority must, therefore, be to restore the strength of our economy, and we must continue to reduce the imbalance between Wales and the rest of the United Kingdom—indeed, our aim must be to eliminate it. I am particularly conscious here of the problems of such areas as North-West Wales, parts of Pembrokeshire and parts of the valleys such as Bargoed, to name but a few.

I should like to deal first with the economic situation bequeathed to us—an unwelcome legacy if ever there was one. Let us look first at unemployment.

It has been said many times by the Conservative Party that when it took office in June 1970 it inherited a deteriorating unemployment situation. The fact is, however, that from June 1970 till December 1970 the unemployment situation in Wales was remarkably stable, with the seasonally adjusted rate fluctuating only slightly between 3·6 and 3·8 per cent.

It was not until 1971, after six months of Tory Government, that the situation took a marked turn for the worse. Between December 1970 and April 1971, the seasonally adjusted rate increased steadily from 3·8 to 4·4 per cent. For the next three months it was static at 4·4 per cent., but it then rose steadily again to reach 5 per cent. by the end of 1971.

But even worse was to follow. In January 1972 it was 5·2 per cent.; in February 5·3 per cent.; in March 5·3 per cent., and in April 5·2 per cent. The record needs to be spelled out. As the House knows, an overall unemployment rate of 5 Der cent. means a male rate in excess of 6 per cent. Throughout the winter of 1971–72 the numbers unemployed exceeded 50,000, reaching a peak of nearly 56,000 in January 1972.

This deterioration was not due to some act of God. It was directly attributable to the policies of the last Government— in particular, their ill-fated decision to abolish the well-tried and successful policy of investment grants. We said at the time that it was a disastrous decision. Sadly, events proved how right we were, and the people of Wales suffered.

Like Saul on the road to Damascus, the last Government saw a blinding light, and in the spring of 1972 they reintroduced investment grants—although in an attempt to cover up their past folly they now called them regional development grants. Saul was re-named Paul.

With the application of this erstwhile Labour Government policy, and a flat-out race for economic growth, the situation in Wales started to improve, although it was not until late autumn 1972 that the seasonally adjusted rate dropped below 4·8 per cent. It continued to improve through most of 1973 with unemployment falling and the number of unfilled vacancies rising.

Even so, the writing was on the wall as the economy lost impetus and the boom spluttered to stagnation. This happened before the cut-back in oil supplies, before the miners' overtime ban, before the increase in oil prices, and before the full horror of the balance of payments situation was revealed.

In Wales it manifested itself in a sharp decline in the number of unfilled vacancies, and in a reversal in the downward unemployment trend, quickly followed by the grave effects of the energy crisis, which, in turn, was exacerbated by the Government's handling of the industrial relations situation.

All in all, it is a story of stupid changes in policy in 1970–71, a serious deterioration in unemployment, a death-bed conversion in 1972, an improvement in the unemployment situation in late 1972 and for the first three quarters of 1973, and then the deluge. One can only have wished that this was a nightmare, not the reality.

The publication earlier today of this month's unemployment figures only serves to underline the difficulties. Once again, they show an increase in the seasonally adjusted rate—from 3·4 per cent. in February to 3·6 per cent. now. In three short months, the rate has climbed sharply from 3·0 per cent. to 3·6 per cent.

The seeds of deterioration have been planted by our predecessors. We are faced now with the task of repairing the damage where this is a continuing threat to employment as a result of the traumatic experience industry has gone through in the last few months. It will not be easy, and it is only right to say that the prospect of a continuing deterioration in the unemployment position before we can pull the situation round is a very real one indeed. The damage of the past will take time to repair.

Turning to particular industries, the House will, I think, consider it appropriate that I should refer first to the steel industry. I do so with pride, having had the honour to represent one of the great steelmaking centres of Europe in this House for over 14 years.

Wales's importance was recognised in the British Steel Corporation's long-term investment strategy, which was made public over a year ago. There was much for Wales to welcome in that strategy. But there was also much which caused grave concern—the proposed closures at Cardiff, Ebbw Vale and Shotton, with the loss of thousands of jobs.

Our manifesto for Wales promised that Labour would halt these closures and undertake an immediate review of targets for the steel industry with the future viability of these works in mind. I can assure the House that this commitment will be carried out. My right hon. Friend the Secretary of State for Industry has already informed the Chairman of the British Steel Corporation that he will be carrying out a review of proposed closures of steel plants by the corporation arising out of planned developments as agreed with the last Government—although, as he made clear in the House on 18th March, without interfering with the present investment programme. In pursuance of this my right hon. Friend has asked Dr. Finniston to withhold any decisions or announcements on any individual closures until he has had the opportunity to review the case for them, after consultation in each case with the prinicipal trade unions and local authorities.

To remove any doubt in hon. Members' minds, I would make it clear that this request to Dr. Finniston extends to the closures at Ebbw Vale and East Moors, which have been confirmed by the corporation, as well as to those where consultation is still proceeding, such as Shotton. My Department will, of course, be closely involved in the review which is to be made.

I come to the question of coal. The first task facing the Government on taking office was to settle the coal dispute. We did so, and we got Britain back to work. The pundits of Reigate, Surbiton and Sidcup can say what they like about the attractions of the coal industry. The truth of the matter is that the miners were voting with their feet. In 1973, for example, there was a net loss of nearly 3,300 in the industry's labour force in Wales. All the signs now are that confidence is returning to the industry. Before the recent strike there were about 1,500 unfilled vacancies in Wales. The NCB has announced today that last week there were over 800 applicants in South Wales, which it has described as the biggest rush of applicants for a decade. The Welsh part of the industry will be a major factor in the Government's urgent examination of the future of the coal industry.

Let me turn now to the subject of Celtic Sea oil. As the House knows, drilling for oil or gas is now under way in the Celtic Sea. This initial programme will bring much-needed new employment, particularly to South-West Wales. But that is only a start. If there is oil or gas in the Celtic Sea in commercial quantities it needs to be exploited as rapidly as possible and on terms which will confer maximum benefit on the community.

It is vital that we do not repeat in Wales the errors of the first Industrial Revolution. We do not want our wealth to be exploited in such a way that Wales misses out on the higher-level and more congenial work. We must ensure that the education system is so geared that the young people of Wales have the maximum opportunities to exploit their skills, training and talents in the sophisticated industries ancillary to the oil industry itself.

Remembering the physical scars of the first Industrial Revolution, I hope that we shall be able to exploit any new discoveries so that there is the minimum damage to the environment. Our aim must be to reconcile or avoid potential conflicts between developmental and en- vironmental considerations in a way that combines practicality and sensitivity in right proportions.

There is considerable interest in the organisation of administrative work related to the Celtic Sea development. The right hon. and learned Member for Hendon, South (Mr. Thomas) raised the matter on Monday. I am considering several ways in which existing arrangements might be developed or altered. I have not yet come to a decision, but I am in no doubt that as the demands for the exploration work change and increase there will need to be a development in the means by which the Government oversee the work and bring their influence to bear.