I beg to move, That the Bill be now read a Second time.
This is an historic day for Wales. For the first time ever we are to discuss a wholly Welsh Bill on major economic and environmental questions. This follows from the Government's aim of ensuring there are in Wales effective instruments to tackle our real problems. In this Session we hope to secure the seal of parliamentary approval for this agency and also in the same period for the Land Authority for Wales. They are two major and badly needed organisations designed and tailored to meet the needs of Wales. In a matter of days, moreover, there will be transferred to the Welsh Office major industrial powers. These proposals add up to an unprecedented shift of power and effective machinery for decision-making to Wales.
It is against this background of transfer of power and the creation of new institutions that I ask the House to consider the Bill. We are breaking new ground in setting up an organisation in Wales devoted wholly to the development and reinvigoration of the economy and the environment. We are doing more. We are giving it the powers and resources necessary for success.
This historic day has been delayed by the actions of the hon. Gentlemen opposite who man the main Opposition Bench. It is recognised that the leadership of the Conservative Party in Wales today is as much out of touch with the needs and aspirations of Wales as were the dozens of English Conservative Members who trooped in to stand up in their support when the motion to send the No. 1 Bill to the Welsh Grand Committee was lost.
And the Scottish Tories, as my right hon. Friend reminds me.
The Conservative opposition are, of course, standing on their heads. In the last General Election their alternative to devolution was the development of existing institutions. Select Committees, the Welsh Grand Committee—all had a great future. But the moment we sought to use the Welsh Grand Committee they lost their nerve. They knew it would reveal how unrepresentative they are of the people of Wales and how unresponsive their philosophy is to its needs.
The Bill, despite the Conservative Party, has shown in the welcome it has received how Wales can be united. When I took office I said that one of my aims was to seek to unite the nation of Wales. This does not mean that we, who are traditionally contentious, should agree on everything—far from it—but there is more to unite us than to fragment us. The agency proposals are a practical demonstration of the way we can unite, and the overwhelming majority of Welshmen can be proud of this.
The Bill comes to us with the title "No. 2 Bill" after much discussion in another place. As a result, it differs in several respects from the Bill we originally put forward. There have been several improvements as a result of amendments which the Government were ready to accept—for example, on the size of the board of the agency and powers of entry. But I have to say—with real regret—that in the Bill's passage through the various stages in another place some substantial damage was done. I want to make it clear straight away that we intend to repair this damage fully during the Committee stage.
On two occasions the Opposition peers attempted to savage the Bill. They tried to get their teeth into two major questions: first, the proposal that the agency itself should carry on industrial undertakings and should be empowered to establish and carry on new undertakings; secondly, that the agency should have a responsibility to promote industrial democracy in undertakings which it controls.
Opposition peers sought to hack away at these proposals, mainly, I believe, because they have a parallel in the Industry Bill and were seen in the context of the Government's aim to establish a National Enterprise Board. Amendments were carried which, if allowed to remain, would have the effect of preventing the agency from establishing undertakings or promoting industrial democracy. I shall have more to say of this later, but let me say this now. The amendments introduced showed how far away Opposition peers and those who share their views are from the needs and thoughts of those who day by day by their work contribute to the Welsh economy.
The discussion in another place certainly did not reflect the wishes of the great majority of working Welshmen—whether in the steel complexes of South Wales and North Wales, the coal industries of the valleys, or the smaller but none the less important and growing manufacturing industries in rural Wales.
Despite the delays, I am determined to get the agency into operation by the end of the year. I am determined—and I am sure this view will be shared by all who have the best interests of Wales at heart—to see speedy progress on the remaining stages of the Bill.
It may be helpful briefly to remind the House of the background to the Bill. Earlier this year I published a consultative document setting out the Government's ideas for a development agency. We had long, purposeful and helpful talks with all interested organisations. As a result I was able in the light of the ideas expressed in these discussions, to go ahead and prepare the No. 1 Bill. In doing this, I knew that there was almost universal support for the establishment of a Welsh Development Agency. I know that the objectives I proposed for the agency were approved of within Wales. All consulted saw the need to accelerate the economic and industrial development of Wales and to seek to develop the environment in a way consistent with that objective.
Our environment is not to be further squandered and unnecessarily despoiled. So often history has taught us that the price of industrial advance was the rape of our fair country. Industrial advance there must be, but advance in harmony with the environment and this together with the urgent repair of the scars of the past. This is the bill that our generation has to pick up.
Against this background, there was approval of the further objective of bring- ing together in one organisation a group of functions concerned with industrial and environmental development.
There was, I regret to say, a little less unanimity on the proposals to give the agency new regional development functions analogous to those which the National Enterprise Board will have in England. I hope, however, that in time and after experience those who are still genuinely concerned about this aspect of the agency Bill will come to realise that it is an essential part of the scheme.
We are discussing these proposals at a time when the economic situation is very serious indeed. The economy of Wales as part of the economy of the United Kingdom is under strain, and much needs to be done by all concerned to reduce this strain. In the short term the proposals for an agency cannot be of direct help, but I have no doubt at all that once the agency is in operation it will bring powerful additional support to our battle for the health and the growth of the Welsh economy The fact that the Government are prepared to go ahead with this, and the comparable Scottish agency proposal introduced by my right hon. Friend the Secretary of State for Scotland yesterday, at the present time show the faith we have in the longer-term prospects of the economies of Wales and of Scotland.
It may be helpful in introducing the proposals if I mention by way of emphasis some of the more important points.
Clause 1 of the Bill gives the agency a clear responsibility to further economic development in Wales, to promote its industrial efficiency and international competitiveness, to provide, maintain and safeguard employment in Wales, and to further the improvement of the environment. These are broad, wide-ranging responsibilities.
There has been some fear that the agency is being given overriding—indeed, even dictatorial—powers. This fear is unjustified. It is in no way my intention that the agency will be in a position to carry out its responsibilities in any dictatorial way. On the one hand, the Bill provides me with powers of general and specific direction—controlling powers. On the other hand, the agency will carry out its responsibilities in ful partnership with existing organisations and local authorities. There is nothing in the Bill which would allow the agency to take over from or supplant any existing organisation—with, of course, the main exception of the Welsh Industrial Estates Corporation.
I see the agency—and I underline the word "agency"—as a strong executive arm, with the power to act for the benefit of Wales and with sufficient finance available to it. It is an additional piece of executive machinery, and I will ensure, and indeed I am certain the board of the agency will also ensure, that the agency carries out its activities in the fullest co-operation and partnership with others in Wales who have a responsibility for developing industry and for the environment.
As I indicated earlier, Clause 1 does not wholly reflect the Government's intentions. It is lacking in two specific and important powers. First, the Government believe that the agency must have powers to establish and carry on new industrial undertakings. It needs to have an interventionist rôle, and I make no apology for using the word "interventionist". The people of Wales have been crying out for more interventionist policies for decades. The existing division between industry and Government has not worked satisfactorily and there is the strongest case for bringing industry and agencies of the Government more closely together to their mutual advantage and particularly to the advantage of those whose employment prospects are at stake. It is the jobs of Welsh people that we are concerned with. It is providing the means so that the right to work can be exercised in Wales. I give a pledge to seek to restore this particular provision.
The hon. Gentleman will be aware that there were some facets of that board which were not popular. I regret deeply the opportunity lost because of a combination of people of Mid-Wales who should have known better. Mid-Wales has suffered because of that. I speak as a Mid-Walian. I deeply regret that it will be my responsibility now, many years later, through the agency and other means upon which the Government decide, to make up for the years lost and the real money that has been lost in Mid-Wales.
I am grateful to the right hon. and learned Gentleman for suddenly remembering his parliamentary courtesy, having named me. Does he not know that the people of Mid-Wales had no objection as such to a board, but they had grave objection to the violent powers of interference with the rights of the individual? People found this highly objectionable. Many of these objectionable features will not now, we hope, be found in this agency. There is a world of difference between the two things.
As the hon. and learned Gentleman is well aware—I made it quite clear, although I shall repeat it—opportunity and years have been lost in Mid-Wales. I understand fully the nature of the objection. But the truth of the matter is that years have been lost in Mid-Wales and millions of pounds have been lost. I understand the objection. I am not entirely obtuse. I want to make it quite clear that there is a grave responsibility, and the hon. and learned Gentleman shares this, for the years that have been lost. I shall seek to ensure that we get over these objections and satisfy the people of Mid-Wales that their objections are unfounded. But the problem that faces us is to try to repair and make up for the lost years, lost because of opposition from hon. Members on the Opposition side of the House, and from the Liberal bench primarily.
We shall also propose the restoration to the Bill of the agency's responsibility to promote industrial democracy in undertakings which it controls. I have no doubt that, following the precedent in another place, hon. Members will seek to argue in favour of the amendment—new Clause 1(3)(d)—with its weasel form of words about industrial relations. But they miss the point. The Government are concerned to improve decision-taking at all levels of industry—to involve the whole work force. There is an obvious need for changes in the class structure of industry and in the balance of power and responsibility within industry. That is what the Government seek to ensure in undertakings which the agency controls.
This is an important point, because the right hon. and learned Gentleman is dealing with the question of industrial democracy. Surely what happened in the other place was that it sought a definition of what that phrase means. If the Minister is attacking what has been put in its place, will he now tell the House, so that we clearly understand the Government's objective, what the phrase "industrial democracy" does mean?
On the Government side of the House that phrase is easily understood. I can quite appreciate how some parts of the Opposition side of the House have no idea what industrial democracy means. I am not surprised that this has been objected to in this way, but I shall return to this matter in the days ahead in Committee. I am sure that we can spend a little time in educating the hon. Gentleman further, or perhaps beginning to educate him, about the problems of industrial democracy.
This first clause has also given rise to heated discussion about parallels with the National Enterprise Board. There has been much misconceived and misdirected criticism, much of it based on political dogma. But, for those who are able to clear their minds of dogma, let it be explicit: the Welsh Development Agency will in no way be an arm of the National Enterprise Board. Where the powers to be given to the agency are similar to those of the National Enterprise Board, this is because these are sensible and appropriate powers. The agency will be a body separate from the National Enterprise Board and will be in a position to harness its industrial powers in a distinctive way to meet the special needs and circumstances of Wales.
The Government have sought to emphasise this in every possible way. There have been many statements as the Industry Bill has gone through its various stages. There has been much correspondence with the Ministers concerned and recently a speech by Sir Don Ryder to the Development Corporation for Wales, in Cardiff. But certain hon. Members will persist in their opposition on this score. However, I hope that, as this debate goes forward, and as the Committee stage develops, their minds will eventually be set at rest.
I have concentrated on the industrial and the employment aspects of Clause 1, but there is more still to that clause. The clause emphasises the agency's rôle on the environment. The agency will accept, carry on and develop certain existing activities and responsibilities—for example, on derelict land clearance—and it will take on new responsibilities, particularly in urban areas; and it will do all this not in competition but in partnership with local authorities and others equally concerned with the environment.
The agency will also have power to promote Wales as a location for industrial development. This is a rôle which the agency will certainly want to develop slowly and carefully so that it takes completely into account the existing work carried out by organisations such as the Development Corporation for Wales and local authorities. Much helpful work is already being done but more needs to be done, and to be done as a matter of co-operation between all concerned.
Yes, certainly. I think that the Bill makes it clear how the agency may act and the consents which are necessary when it acts outside Wales.
I turn now to Clause 2 which sets out the constitution and status of the agency. As Clause 1 makes clear, the agency has a big task. It will demand people of stature, strengh and wide experience to carry it out. I intend that the board shall be composed of people of outstanding skills and experience rather than simply representatives of particular groups. The board will, however, be able to call on additional advice and expertise. Clause 5 provides for the setting up of advisory sub-committees. For example, the board might wish to set up an economic sub-committee or one concerned with the environment.
I have not yet come to any decision on the location of the agency's headquarter offices or any out-stations. I have received proposals, well-argued proposals, from several areas of Wales,—for example, from Bleanau Gwent—in favour of Ebbw Vale and from both North-East and North-West Wales. I shall be discussing these proposals further. I want to look at all the needs of the whole of Wales and to make sure that the agency's all-Wales remit is reflected in its locations. At the same time we must bear in mind that much of the agency's work will be to carry out the responsibilities of the Welsh Industrial Estates Corporation. To that extent it will make sense for the agency to continue to use existing sites and premises of the estates corporation.
I will mention Clause 3 only briefly and refer specifically to the agency's power to carry out inquiries, investigations or researches. For example, the agency might well take over a derelict land survey of Wales and sponsor research into specific economic problems. To that end, the agency will need to have a specific research function and the staff to carry it out. But once again I want to make it clear that the task of the agency is to work in partnership. It would make no sense at all if it were to supplant the rôle of local authorities, for example in structure plants; and the overall responsibility for determining economic strategy for Wales in the context of the United Kingdom as a whole will remain with me.
I have spoken at several points about partnership. This is what is emphasised in Clause 4, in particular the interrelationship with local authorities and with the development corporations of new towns. I believe that as a result of the consultations earlier this year there is a full understanding by local authorities of the way they and the agency will be able to work in partnership. The agency will not be in a position to take over local authority powers. I would underline that. For example, the agency will have no special planning powers. These will remain with local authorities. In the same way the agency will not overlap or interfere with the operations of the new town development corporations. Rather, the way is open for them to work together.
I hope it is clear that rural Wales falls as much within the agency's remit as does urban industrial Wales. The agency's remit covers the whole of Wales, and I regard it as having a responsibility to contribute to developing rural as well as urban Wales. This naturally raises questions about the special needs of mid Wales and the concept of a Mid-Wales Development Board. I have made it clear throughout this year that we are giving priority in this Session to establishing a Welsh Development Agency with an all-Wales remit. But I have made it equally clear that we are giving the most careful consideration to what else may need to be done in rural Wales in the light of the developing rôle to be given to the Welsh Agency and the responsibilities of existing bodies.
I turn now to Clauses 6, 7 and 8, which transfer the work and responsibilities of the Welsh Industrial Estates Corporation to the agency and give the agency the important powers of providing sites and premises for industry and providing services for the development of industry, including, may I say here, any developments connected with the successful exploitation of the Celtic Sea.
The Welsh Industrial Estates Corporation has been a good servant of Wales since it was established under the Local Employment Act 1960. It owns 375 factories at an insured value of over £100 million. It has gross rents totalling almost £2·5 million a year. It holds some 2,600 acres of land and its annual expenditure in 1975–76, including a special provision for the support of the construction industry, will amount to almost £11 million. This is a sizeable responsibility and I wish to pay tribute to all those, both now and in the past, who have made the Welsh Industrial Estates Corporation such a successful part of the Welsh industrial scene.
The agency will now take over and I hope develop and expand the work of the estates corporation, and it will carry on this work as part of the agency's responsibilities to the Secretary of State for Wales. Hitherto, the main directions to the estates corporation have come from Whitehall as part of the overall central control of the three estates corporations in England, in Scotland and in Wales. There will, of course, be continued cooperation and links with estates corporation work in England and in Scotland, but from the establishment of the agency the main control of the estates corporation work in Wales will come from within Wales for Wales. It has already been announced that as from 1st July the Welsh Industrial Estates Corporation will be responsible to me and to the Welsh Office. This will be a most helpful transitional stage, a period of consolidation, before the formal transfer to the agency. I look forward to a further long period of successful estates corporation work.
Clauses 10 and 11 both refer to regional selective assistance under the 1972 Industry Act. As from 1st July these powers within Wales will fall within my responsibility and will be operated through the Welsh Office.
I am grateful to the right hon. and learned Gentleman for giving way. Before he leaves the point about vesting of the industrial estates, under which the new direction will come to the agency, is there any implication—I am merely asking for information—that there will be a degree of competition between the Welsh Agency and the Scottish Agency and the comparable body for England for new industry? This would appear to be an important change if that is the case.
In any powers regarding industry and the giving of assistance to industry, it is obviously necessary that one should be able to keep the various organisations which have facilities at their disposal in tandem wherever there are particular enticements. Therefore, in any responsibilities that I shall carry, or where an agency acts on my behalf, it is necessary for the left hand to know what the right hand is doing. I hope that that satisfies the hon. Gentleman.
I take this opportunity to welcome to the Welsh Office those staff of the Department of Industry in Wales who will transfer with the work. Their contribution in the past has been great and has been welcomed and respected by industry. I know that it will continue and expand and I am making sure that there will be a smooth transition with the minimum of disruption to staff and, equally important, the minimum of disruption to industrialists and others who use the services.
Hon. Members opposite, I know, are inclined to argue that the powers of the 1972 Industry Act are enough. Why go beyond these powers, they ask, in their forlorn attempt to oppose proposals in the Industry Bill and the Welsh Development Agency Bill. I hope that hon. Members will forgive me if I remind them of the comments I made on the 1972 legislation during our debate on Welsh Affairs on 21st March 1974, in the early days of my office as Secretary of State for Wales. I then criticised the deplorable economic performance of the previous administration and said:
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 renamed Paul."—[Official Report, 21st March 1974; Vol. 870, c. 1355.]
May I say,
By their fruits ye shall know them"—
and to the extent that I mentioned the 1972 Act, it was an improvement on their past performance. But the fact remains that the 1972 legislation is demonstrably not enough today. I must again emphasise that there is a need for more direct links between Government and industry of the kind which an agency can promote. This is one reason why the agency is so much welcomed by those whose day-to-day life depends on the health of Welsh industry.
Clause 10 provides for the agency in certain circumstances to act as a channel for regional selective assistance. How often this power will be used will be for determination by me in the light of individual cases. I think we may expect, however, that regional selective assistance will generally continue to be handled directly through the Secretary of State.
It may be argued that giving the Welsh Office control over regional selective assistance could weaken the agency's rôle. I do not accept this argument. The two rôles are as distinct as they are complementary. The agency will be expected to act on its own initiative to seek out opportunities and directly involve itself in industry. This type of enterpreneurial rôle is best performed by an agency. The agency will be able to give itself wholeheartedly to this rôle, since it will not have to bear the considerable burden of handling requests for assistance. I think that Parliament would feel it right that the major decisions on requests for assistance should remain directly under the control of a Secretary of State responsible to Parliament, especially since there are often in such cases most sensitive employment implications.
If, however, the powers in Clause 10 may be used only sparingly, it is certain that those in Clause 11 will be used regularly. As a result, I shall have available to me a statutory board replacing the present non-statutory board—to advise me on all Section 7 cases in Wales. This board will also have to develop a close contact with the agency, and there could well be a need for some overlapping of membership either with the agency's board or with one or other of its sub-committees.
Clauses 13 and 14 deal specifically with the environmental rôle of the agency. The agency will have a dual responsibility here—developing, redeveloping and improving the environment and grant-aiding local authorities in carrying out derelict land clearance work and carrying out such work itself. There is no doubt that this work needs to be done within Wales and that more resources, both of people and finance, must be devoted to it. It is no good developing industry unless at the same time the environment is preserved where it should be and developed where it needs to be. The agency will be in a position to help ensure this. The environment is a resource which must be as carefully husbanded as any other resource in Wales.
For the removal of any doubt, I should emphasise here that the agency will be expected to bring forward proposals for approval in full consultation and harmony with local authorities. It will take account of expert advice from bodies such as the Countryside Commission and the Nature Conservancy Council. The agency will have to obtain planning permission from the local planning authority on every occasion when this is required. There is no question of the agency being put in a privileged position.
Local authorities in Wales have won an outstanding reputation for their work on derelict land clearance, and, as I have said, their powers remain untouched. We are seeing a revolutionary change in that emotive title, "How Green was My Valley", from the past tense to the present. In many places the "was" is becoming "is"
The Bill emphasises that local authorities in Wales will continue to have a major role in land clearance schemes, whereas I note that in the Scottish Bill the emphasis is on the Scottish Development Agency itself undertaking derelict land clearance schemes and relieving local authorities of that responsibility. We shall not follow the Scottish pattern in Wales. Rather we shall build on what has so far been achieved. About 19 per cent. of the derelict land in Wales has been reclaimed in the past seven years—about 6,500 acres. If, as we all hope, the Welsh Development Agency will choose to give a priority to derelict land clearance and provide a substantial, accelerated rate of expenditure, we have some expectation that something approaching half of the derelict land in Wales might be cleared by the beginning of the next decade. I feel sure that it is the wish of all parts of the House that the agency shall give priority to this work.
As a further indication of the Government's support, the level of grant to local authorities will be raised to 100 per cent. of the net cost, and we hope that the full resources of the kind now provided by the Derelict Land Unit in the Welsh Office will continue to be available within the agency. Lest there should be any concern about delays as a result of the changeover from the Welsh Office to agency responsibility, I am making sure that there will be no halt in the on-going work on land clearance.
Clauses 15 to 18 set out the financial rôles for the agency. There cannot be criticism of the need for the agency to conform to specific financial obligations where this makes sense. For example, it is right that on that part of the agency's work which involves an industrial investment rôle it should have a specified financial objective. Equally, it is right that other activities of the agency—for example, on land clearance and environmental uplift—cannot be regulated by specific financial objectives. These would simply be inappropriate.
The agency will have an initial financial allocation of £100 million, which can be raised to £150 million. I recognise that there are arguments that this financial allocation is not enough. But what is now to be provided represents a heavy commitment by the Government at a time of strong competing demands on the financial resources available to them. It has to be emphasised that this £100 million to £150 million is additional to expenditure in Wales on selective assistance, regional development grants and the regional employment premium. The amount allocated—and there is no specific time period attached—will allow a start to new activities such as the agency's industrial development rôle and an increase in existing levels of spending on activities which the agency will take over—for example, the derelict land clearance work. At this stage, before the agency itself has had an opportunity to discuss its priorities, I am not in a position to indicate how rapidly the agency will recommend drawing on its financial resources. But I am sure it will recommend wisely and well.
Are there any guidelines to the time span over which the £100 million or £150 million can be drawn on? The question has arisen, and is sure to arise again, whether it would be reasonable to come back for more if the money were spent within, say, the first 18 months. Should the agency think of it as money to spend over three or four years? I ask in order to obtain guidance for those running the agency.
There is no time span and no time limit. It will be for the agency to make proposals to me and, within the limits laid down by Parliament, to ensure that it has the funds available to it. I am sure that the agency will make wise proposals. We are anxious to ensure that the needs of Wales are met. This is a significant tranche of money. I emphasise that it is in addition to at least £60 million a year at present spent in Wales on such matters as selective assistance, regional development grants and the regional employment premium. That is the scale of the Government's assistance to Wales.
Clause 19 sets out the agency's powers to acquire, dispose of and take over land. The agency, in carrying out its land development rôle, must have powers to acquire and dispose of land. But it is not being given powers which in any way conflict with local planning responsibilities.
The remaining clauses of the Bill are in a sense "bread and butter". These have been exhaustively discussed in another place and reflect amendments introduced there and accepted by the Government. These amendments—unlike those to which I have referred earlier—serve to improve the Bill and I, therefore, very much welcome this part at least of the hard work which went on in another place under the direction of that most distinguished Welshman, the Lord Chancellor, who led the Bill.
If we put all the clauses in the Bill together we have the basis of a complete and coherent agency. The agency, like the Bill itself, is an amalgam. It has the distinct merit of bringing together in one organisation a variety of powers all directly related to the industrial process—acquiring land, reclaiming land for industrial purposes, establishing industrial estates, constructing advance factories on these estates, attracting firms to Wales, helping firms with finance and advice and so on throughout the whole stage of the industrial development process—and doing this while throughout having an eye to the preservation and the development of the environment.
The agency will be an institution for Wales within Wales. As I have said, it will be established in Wales in the same period when new powers in the industry field are being transferred to the Welsh Office. Taken as a whole, these changes indicate a major shift of responsibility to the Principality. This gives us all in Wales a chance to show what we are made of as we involve ourselves directly day by day in the economic life of Wales.
I know that the people of Wales wish the proposals in this Bill to succeed and that they will wish the agency well. They know, as I know, that the proposals in this Bill represent a coherent and constructive way of helping to organise and sponsor industrial and environmental development in Wales where it is most I recommend the Bill to the House.
The Secretary of State said that it was a historic day. It is also, I think, the first day that Wales has had on the Floor of this House for more than 15 months—in fact, since March 1974.
It is not the traditional Welsh day debate in which Members can range widely and examine the performance of the Welsh Office in the previous year. It seems clear that the Government have little intention of giving us that debate this side of the Summer Recess. It seems that they find it appropriate that Wales should have to wait at least a year and a half before it can be given the time to which we believe it is entitled, and yet they grumble because we insisted that this debate, on a Bill that they claim to be of vital significance to Wales, should be held here and not upstairs.
Even more extraordinary, they tried to persuade us to hold this debate last week, before the Bill had completed its progress in another place, and they tried to fob us off with half a day. Even in the last couple of days, Labour Members have been queuing at the Opposition Whips' Office to try to arrange pairs after seven o'clock tonight, on the understanding that the debate is to be allowed to fold up at seven.
It is disgraceful that Wales should be treated with this kind of disrespect. Of course there is a place for Committee work. We should like to see a Welsh Select Committee set up without delay, but it will be a bad day for Parliament if this Chamber abandons the task of examining the principles of important Bills, and a bad day for the country it we are so casual about the planned expenditure of £100 million that we do not give an opportunity to all Members of this House to hear the Government of the day justify it and defend it against criticism.
It is because we have become so casual about this job of voting Supply or refusing to vote Supply that we are in our present mess. It is in the context of that mess, and against the background of the economic disaster that now confronts us, that we have to consider this measure.
The Secretary of State at times has seemed to wax euphoric about the Bill, but even he was forced to acknowledge, in the Welsh Grand Committee in May, that the heart of the matter is solving the problems of the United Kingdom as a whole. He conceded that the agency to be set up by the Bill does not offer salvation for the Welsh unemployed, and today he said that in the short term the proposals for an agency cannot be of direct help. It is what he called an additional piece of executive machinery to be judged against the situation in which it is asked to operate—at best a useful tool; at worst a positive impediment to economic activity.
It is important that we should be absolutely clear about this, and that we should face up to the fact that whatever we may think about the agency is entirely secondary to the Government's management of the economy as a whole. That, as the Secretary of State says, is the heart of the matter—and a proper mess they are making of it, too!
The prime responsibilities of any Government in the field of economic management are: first, to create a climate in which productive industry can maintain national output at something approaching its full potential; second, to ensure the maintenance of a high level of employment; and, third, to preserve the value of the currency, internal and external.
The Government have created a situation in which national output is back to the level of the three-day week, in which unemployment is at its highest June level since before the Second World War, and in which 25p has been sliced off the pound in the people's pocket and 27 per cent. has been knocked off the pound sterling in world markets since December 1971, so that today it stands at its lowest ever level.
On a three-monthly basis, the rate of Inflation in Britain has now crossed the 50 per cent. threshold into hyperinflation only eight months since the Chancellor of the Exchequer's notorious 8·5 per cent. statement.
In Wales this June there are nearly 7,000 more people out of work than in any other June in the last 35 years. The seasonally adjusted figure of 53,000, or 5·2 per cent. of the working population, takes no account of short-time work, factories working a three-day or four-day week, or companies holding on to workers to maintain a nominal state of employment. The figure has deteriorated by ½ a per cent.—in other words, by over 5,500 people—since we last debated the matter in the Welsh Grand Committee in early May.
During the same period the Government have done nothing to check the inflation rate, nothing to cut their own expenditure, and nothing to restore confidence in industry. By doing nothing except increase their own expenditure they are ensuring that the sickness will become more critical and the eventual cure more painful.
We are considering the Bill at a time when there are more than 20 Government factories in Wales standing vacant, when the number of firms known to be on short-time work is approaching 100, and when the number of inquiries and first visits from outside Wales is sharply declining. The Welsh CBI report "seriously depleted order books" and that companies are holding back or cancelling investment plans wherever that is possible.
The Welsh Secretary of the CBI writes in a letter to me this week:
The underlying trend of unemployment is, of course, upwards and we expect the position to deteriorate as increasing numbers of employers realise that there is not going to be an upturn in the economy in the near future and are therefore compelled to release work people.
He did nothing of the kind. I shall be coming to the views of the Welsh CBI later in my speech.
The architects of this disaster, the men personally responsible for this mounting national misery, are the architects of this Bill. The agency is charged with the job—in the original version it was given the duty—of furthering the economic development of Wales. But that central responsibility cannot be that of a subordinate agency. It is the job of the Government, and it is a job that this Government are failing to do calamitously.
The Secretary of State said that the agency was a vital part of the machinery which he needed to tackle the problem. But it is absurd to imagine that the task of assisting individual companies, of stimulating job creation in individual locations or even of achieving such generally desirable social objectives as the clearance of derelict land are possible, however good the machinery, if the Government mishandle the general management of the economy.
We also have to consider the Bill in the context of the Government's legislative programme as a whole. It cannot be judged in isolation. Clearly, it is part of a package of measures designed to achieve a Socialist objective. I do not blame them for that, because it is their belief. It goes hand in hand with the Industry Bill, and whole sections of it have been lifted almost straight from that Bill. However the relationship between the National Enterprise Board and the agency is defined—and we shall wish to return to it in Committee—it is clear that the NEB will retain some of its most formidable powers for operation throughout the United Kingdom—for example, the vesting order power of Clause 10 and the power to extend public ownership into profitable areas of manufacturing industry.
If it were not blasphemous to say so, I should suggest that we were discussing something rather like the Trinity—a mystery in which separate powers combine to make up a whole. This interlocking relationship is well illustrated by the fact that the agency will have the duty to implement the provisions of the 1972 Industry Act as directed by the Secretary of State, but provisions from which all safeguards and all the protective clauses are being removed by the present Industry Bill.
Those safeguards were that the Secretary of State had to be satisfied that assistance could not be given in any other way than by the acquisition of shares. He could not acquire more than 50 per cent. of the equity capital, and he was required to dispose of any stock or shares as soon as practicable.
It is the common phraseology, the shared objectives and the interlocking relationships of the Bills which are so alarming to many people, especially to those involved in private industry. They see the agency not as something designed to assist Welsh industry but as part of a package of State interference and State aggrandisement which they believe will be deeply damaging to private industry and, therefore, to the jobs and well-being of the Welsh people.
Some people in Wales have rejoiced, because they claim that the Secretary of State and the Welsh Office have extracted their powers from the even more dangerous hands of the Secretary of State for Industry, whoever he may be from time to time. The Western Mail suggested in a leader that if the. Conservative Opposition curbed the Secretary of State for Wales we would be
…handing hard won autonomy straight back to Mr. Benn or his successors.
In some way, it sees the Welsh Office as a more cosy institution than the Department of Industry. It is a false analysis, because these two Bills and the Scottish Bill which was debated yesterday are separate instruments to implement the will of one Government. The doctrine of collective responsibility may have been sullied a little in recent weeks, but the fact remains that a Secretary of State defined in a Bill still means any Secretary of State. This agency is to be not an independent body but the tool and instrument of the Government carrying out their collective will.
We have to consider the Bill against the Government's handling of the economy and as part of their industrial policy. We have to judge it in expenditure terms and by its impact on industrial confidence.
This Bill is a very different one from that originally presented to us. I suggest that it has been much improved by amendments in another place. It has had removed from it some of the worst features of the original Bill, especially the power for the agency to involve itself in business competition with the private sector.
From the hon. Gentleman's comments on the powers which have been removed for the agency to compete with the private business sector, are we to assume that on behalf of his party he no longer welcomes competition in industry? His party has always spoken in favour of competition. Why turn down competition from the public sector in this way?
The competition provided in this way by the public sector can be actually destructive because of the unlimited resources available to it which can destroy private firms competing in the same area. If jobs are created in the public sector, it is done at the expense of jobs elsewhere.
I continue dealing with the changes made in the other place, and I shall return to the topic raised by the hon. Member for Caernarvon (Mr. Wigley).
The wording of Clause 1 has been altered so that the agency does not have laid upon it duties which could have been contradictory. It has been brought into line with the Scottish Bill. The membership of the agency has been enlarged. The selection of a chief executive, except on the first occasion, will be made by the agency and not by the Secretary of State. An attempt has been made to define the phrase "industrial democracy". The Secretary of State refused to define it today. Whatever he may understand by the phrase, here we are producing an Act of Parliament, and this is a phrase which has to be understood clearly and interpreted in the courts. The Government failed totally to provide any form of definition in the other place which would stand close examination. Finally, we have seen safeguards introduced for farmers on matters which worried those engaged in agriculture.
Although we are still highly critical of the detailed powers of direction given by the Secretary of State and of the lack of parliamentary control, I should have been inclined to recommend to my right hon. Friends to give the amended Bill a Second Reading had it not been for the speech today by the Secretary of State. [HON. MEMBERS: "Oh!"] In that speech, the right hon. and learned Gentleman made it quite clear that in reality the Bill that we should be considering in Committee was not this Bill but the one originally presented to the House. He made it clear that he intended to put back the power to form bodies corporate, to carry on industrial undertakings and to establish and carry on new industrial undertakings.
The Secretary of State said that he sought to unite the people of Wales. I wonder whether he realised that he had within his grasp, and still has, the possibility of an agreed measure backed by all the parties and acceptable to both sides of industry. Of course, we should all have to give up something and to accept some things that we did not like. But I ask the Government whether it would not be worth surrendering one of their objectives in order to set the agency to work in an atmosphere of mutual confidence and support.
Is the hon. Gentleman being quite frank with the House when he says, as he did just now, that had it not been for my speech he would have been prepared to recommend his colleagues not to vote against the Bill? He knows about the Whip which was issued by his party instructing hon. Members to attend here at 10 o'clock tonight in order to vote against the Bill.
We had already heard speeches by Government spokesman in another place making it quite clear what the Secretary of State would do. We had been forewarned. But I am saying to the right hon. and learned Gentleman now that if he cares to say that he will not seek to put back those clauses which were taken out in another place, I shall recommend my right hon. and hon. Friends to accept the Bill which has been sent from the other place.
I agree that there is seldom anything new in any speech which the right hon. and learned Gentleman makes. We had every right to expect the intransigent statement which he offered us. We hoped that he would have had more imagination, but we feared that he would not.
The Opposition support the creation of an agency which will co-ordinate industrial effort in Wales. We welcome the environmental functions. The CBI welcomed the proposal to form a body to accelerate the economic and industrial development of Wales and to improve the environment. So do the Opposition. We think that a development agency, though no substitute for proper management of the economy by the Government, could be a useful mechanism. But the CBI in Wales has also made it clear that it deplores the powers given to the agency to take equity holdings in companies to which it has given assistance and that it is opposed to the sections which the Government are now pledged to reintroduce which would enable the agency to take over companies, to set up organisations, to do business and to complete with the private sector.
I cannot follow the objections of the hon. Gentleman in principle to the State taking a holding in, for example, BP. Is there any objection to that in practice? Surely we should be concerned with the way in which any industry is run. We should be concerned not so much with who owns the equity as with how it is run.
I said that the Government should not have power to set up organisations and take a controlling interest in organisations in competition. There is nothing in the amended Bill to stop them going into partnership. There is specific provision for them to be able to do so. I hope that in some cases they may even take that course.
My hon. Friend makes a sound point. No doubt there will be others.
We are told that the acquisition can be made only by agreement. But there is a difference between a negotiation transacted freely between equals and one in which the agency is bidding with unlimited funds behind it. The agency can indulge in contested take-over bids. It can use its financial strength to overcome the wishes of the directors. It will be able to pay whatever price it likes so that it is impossible for shareholders to refuse taxpayers' money.
Having taken over a company, or having set up its own company, regardless of commercial considerations, the agency will be able to compete with private companies in Wales with all the strength which its resources can give it. If we are to overcome our economic difficulties, the Government must restore the confidence of industry. They must create the right economic conditions in which firms can prosper and enterprise can be rewarded.
The Government's insistence on restoring these powers, and their clear determination to enlarge the public sector will have a disastrous effect on the confidence of industry and will damage the relationship of the agency with industry. Nor do I believe that the agency will be equipped to take on this active entrepreneurial rôle spelt out for it by the Government. It will not be equipped to decide where individual enterprises should be established with any prospect of success. Nor will it have the management required to supervise those operations.
Given stable market conditions and some confidence about the economy of our country, business men will usually exploit commercial openings if they exist. It is hard to see why the Secretary of State or the agency should judge circumstances better than a collective body of individual business men reacting to industrial opportunities. There can he no point in establishing factories where no markets exist for products or where the costs of operations will be uneconomic. Either the operations will fail in the long terms or be kept alive by means of ever-increasing subsidies, the cost of which has the effect of destroying other businesses elsewhere and putting other people out of work.
The Secretary of State said that we needed an intervention body. However, speaking on Second Reading of the
Industry Bill about the vital need for a profitable private sector, the Paymaster-General said:
Any idea that we can substitute for it, that Whitehall can manage British industry, that it can take its investment decisions, its marketing decisions, its research and development decisions, would be an illusion."—[Official Report, 18th February 1975; Vol. 886, c. 1135.]
Of course, the Paymaster-General was right.
In another place Lord Lovell-Davis, speaking for the Government, said:
Wales needs an agency which can help to make Welsh-based firms more viable, more competitive and more free-standing."—[Official Report House of Lords, 12 June 1975, Vol 361, c. 563.]
We agree. But we do not believe that that can best be done by taking over private companies or setting up new companies owned by a State-directed organisation.
That is the principal reason why I shall urge my hon. Friends not to give the Bill a Second Reading. We must take not the Bill as it is presented to us but the words of the Government when presenting it.
There are other aspects to which we object. My reference to a State-directed organisation brings me to the first. We object to the dictatorial powers given to the Secretary of State and to his power of specific direction. We object to the lack of parliamentary control.
Under Clause 7(1) the Secretary of State can give the agency general or specific directions which the agency is bound to obey. It is the agency's duty to prepare and submit schemes to the Secretary of State if he asks for them. But the Secretary of State can refuse to approve them. The Secretary of State has the power to appoint the chairman and the members of the board. He can appoint the first chief executive, and would have appointed subsequent chief executives but for an amendment in the other place. He determines the financial duties of the agency. He directs the agency to exercise powers under the Industry Act 1972. None of those powers is at present subject to effective parliamentary control. Other than that, they may be referred to in an annual report published long after the event.
As originally drafted, the Bill restricted the agency's power to appoint committees.
I do not want the hon. Gentleman to labour under a complete misunderstanding of the Bill. On the one hand he presses the need for more parliamentary control. On the other he objects to my powers of specific direction. I shall have the power of specific direction to ensure that there is parliamentary control. That is why the proposed body is different from the water body which was set up by the Conservative Government. The result is that hon. Members will be able to ask Questions of the Secretary of State about the activities of the body. The hon. Gentleman cannot have it both ways. He cannot object to specific actions and claim that there is no parliamentary control.
I hope that the Secretary of State will act on two points. I hope that he accepts the amendments we propose for the early notification of these powers when exercised. I hope that he will accept our proposal that we should have a Welsh Select Committee so that we can examine his performance and the performance of the agency.
As originally drafted, the Bill even restricted the power of the agency to appoint committees. While dealing with that point, Baroness White, a former Minister at the Welsh Office, and a supporter of the Government, was moved to tell the Government that she would not feel inclined to serve on such a body if she were invited to do so. Like Baroness White, I thought it intolerable that the members of the agency should be so much under the thumb of the Secretary of State. A concession has now been made, but I agree with the Baroness that there are too many manifestations of "nanny knows best" in the Bill. Those were the views expressed in another place. The Government can dismiss them if they feel like doing so.
Sadly, it is the intention of the Governernment that the agency is to be nothing more than the creature of the Secretary of State. I think that that will be a dispiriting experience.
In Committee we shall have a great deal more to say about the powers given to the Secretary of State and the lack of public accountability. We shall seek to move amendments that will at least ensure that Parliament is informed at an early stage when the Secretary of State exercises his power of direction or overrides the agency. But the most serious aspect is the lack of accountability for public money. The Secretary of State for Energy—the architect of the Industry Bill—has frequently argued the case for public knowledge about finance for the taxpayer when it is provided for individual companies.
Accountability can be achieved only when clear-cut criteria are laid down as to the use of public funds. That concept of accountability is entirely destroyed when the Secretary of State can give specific directions to the agency and, in effect, make up the rules as he goes along. Accountability can be restored only if on each occasion the Secretary of State does that the fact is reported very soon to Parliament.
The very first act of public accountability should occur during the Second Reading of a Bill, when the Minister should explain and justify to the House the Commons the expenditure of public money, but that has been a duty on this occasion most casually performed.
We are told that £100 million—or £150 million by order—is to be made available to the agency, but we are entitled to know a great deal more than that. We know practically nothing. How quickly is the money to be spent? How far will the Government control that expenditure? In discussions on the consultative domument there was talk of the money being spread over five years, but, in the present financial crisis, is the agency to be told that there is an annual limit beyond which it cannot go or, taking its cue from this profligate administration, can it blue it all in 18 months, as suggested from the benches behind me, and come back for more? The Secretary of State said that there was no time span and no time limit. Will he say exactly the same after the economic measures have been announced by his right hon. Friend the Chancellor of the Exchequer within the next three weeks?
During the debate in the Welsh Grand Committee on 31st May, the Secretary of State confirmed that in the current financial year the expenditure of the agency over and above the money already being spent on selective assistance, regional development grants and the regional development premium was planned to be £8 million or £9 million. He went on to say that the agency would be operational for only part of the year—for three or four months perhaps—and made clear that we should do a multiplication sum to arrive at an annual rate of expenditure——in other words, between £24 million and £36 million. Are we to assume that the Government will allow the agency to spend that sort of sum in a full year? Is that the intention? We are entitled to be told how much the Government expect to be spent on the various functions. What, for example, is the agency's range of expenditure likely to be on development land clearance, and how does it compare with current expenditure?
We are sometimes given the impression that extra funds of £100 million are being injected. That is not really the position. The Secretary of State referred today to expenditure of £11 million by the Industrial Estates Corporation, and £3 million is being spent by the local authorities on derelict land clearance. That represents £15 million a year which is being expended at present and which will be absorbed by the powers of the Bill.
In another place, the Lord Chancellor said that the agency would be able, with the additional resources made available to it, to do more in existing spheres—for example, derelict land clearance—and to make an impact in new activities. He went on to say that the Bill did not specify any period for which the funds should last and that the Government thought that was right. He said that it was hard to predict how rapidly the agency would need to draw on financial resources. The Secretary of State said today that he was not in a position to indicate how rapidly the agency would draw on the funds. Is that all that can be said? Is it right in the present economic crisis for the Treasury to leave entirely uncontrolled the rate at which £100 million of public money is spent? I just do not believe it.
The Government have been equally imprecise about the £200 million allocated to the Scottish Development Agency, not to speak of the £700 million granted to the National Enterprise Board. We are talking about a collective expenditure of £1,000 million of public funds—taxpayers' money—without reference to Parliament at a time when the Government have a borrowing requirement of at least £9,000 million and problably more.
It will be of no benefit to the Principality if we provide financial aid to individual companies only to have them bankrupted by inflation unleashed largely as a result of excessive public expenditure. If that policy is pursued, for every job created in an agency project 100 jobs will be lost in small companies throughout Wales.
It is imperative that the House of Commons should not permit the expenditure of a pound that it has the power to control without being fully satisfied that that expenditure is essential and unavoidable. Before the House authorises spending on this scale, it should at least insist on knowing much more about the details of the expenditure than it has been told so far. It should do something else as well. It should ask for a statement of the Government's strategy. It should insist on an answer to the question whether expenditure of the kind provided for in the Bill is likely to produce the best results and the best value for money.
If there is to be stringency—that is what is belatedly promised by the Chancellor of the Exchequer—if every pound is to count, it must be spent in the right way. It may be more sensible to spend available resources on the infrastructure, on building roads and on providing sewerage and water facilities than on grants and loans to individual companies, let alone on the acquisition by the State of private companies or the establishment by the State of industrial enterprises.
The question we have to ask is what will be achieved by the expenditure of the extra money in terms of lasting employment opportunities and prosperity for Wales. Could it not perhaps be better spent? The taxpayer has a right to know that he is getting full value for his money.
For 10 years regional policy under both political parties has been concentrated on the payment of expensive subsidies to manufacturing industry. That policy has met with some success, and such aids have a vital part to play, particularly at a time when there is a heavy rundown of the old labour-intensive industries. In the Welsh Grand Committee debate on the economy I pointed to some of the results of the Conservative's Industry Act 1972 which had been given in recent Government answers. I referred to the 600 applications for projects in Wales and 23,000 jobs. None the less, we also have to acknowledge that there has been too little sign of widespread self-generating economic development in any part of Wales—and that is what we all need.
In April 1964 the unemployed in Wales as a percentage of the unemployed in the United Kingdom was 5·7 per cent.; in April 1974 it was 6·5 per cent.; in June 1975 it is just under 6 per cent. In June 1964 41·4 per cent. of the population was at work; in June 1973 41·5 per cent. of the population was at work—and that at the height of the boom. In 1960 there were 669,000 male workers in employment; in 1973 636,000 and in June 1974 621,000.
Unemployment is relatively high in Wales, partly because of the decline of the old industries, but partly because investment is less profitable in Wales than it is elsewhere. The most common reason for this lack of profitability is poor communications. The motorway map of Great Britain reads like a map of the development areas in reverse. After 16 years of motorway building, there are still only 27 miles of motorway in use in Wales. Time after time lack of communications has proved vital to investment decisions.
As a temporary expedient, subsidies are invaluable. I do not argue that they have not a part to play, but I fear that the creation of the agency may tip the balance so that we get the strategy wrong or, perhaps worse, that there is no strategy at all.
In general terms, it is a mistake for the Government to dictate these matters. They make mistakes. The job of the Government is to provide the conditions in which industry can flourish—infrastructure, labour training, education, housing to promote mobility, low taxation—and let industry get on with the job.
When presenting the Bill the Secretary of State had absolutely nothing to say to the House about his strategy. We are supposed to take on trust the policies of an administration whose every act so far has caused production to decline, the pound to lose its value and people to lose their jobs.
The Secretary of State puts the Bill forward as a kind of magic potion although he has done nothing to cure the fundamental sickness. He seeks to interfere where he should leave alone. He seeks to dictate where he should give freedom. He seeks to keep from this House the information that it should rightly have. Given the chance of an agreed measure, he rejects it. He persists with policies that destroy confidence. For all these reasons I ask the House to reject the Bill.
I do not propose to comment in any detail on the rather sour and ill-tempered speech that we have just heard from the hon. Member for Pembroke (Mr. Edwards). [HON. MEMBERS: "Shameful—"]
I believe that the House as a whole and all those who view the Bill objectively are of the opinion that the great majority of people in Wales appreciate that this is one of the most important Bills affecting the Principality to come before the House in modern times. The objectives, the scope and the powers which the Bill confers on the proposed agency and on my right hon. and learned Friend the Secretary of State are of the utmost significance. For these reasons it is essential that the Bill should be subjected to most careful scrutiny, as, of course, it will be in Committee.
However, the Bill must contain powers if it is to do the job and not to be the sort of boneless and toothless creature which the hon. Member for Pembroke appears to want.
During the whole of my time in the House I have been more concerned about the problems of unemployment, depopulation, attracting new industry to Wales and finding new opportunities for our young people than with anything else. The pages of Hansard are proof of this. During the whole of this century, and indeed even longer, with the exception of the two wars, we have been afflicted with the twin evils of unemployment and depopulation. At one time they were taken for granted as being inevitable by the predecessors of the hon. Member for Pembroke. The scrapheap of unemployment and the slagheaps of the pits were, in those days, features of the landscape. Neither is tolerated today, and, as I see it, the Bill is a massive attempt to obliterate both, once and for all.
I do not propose to delve into the past but I believe that two matters should be borne in mind. The first is that since the last war, indeed since the publication of the Report of the Barlow Commission, attitudes have changed radically, and successive Governments, of all political complexions, have, to a greater or less degree, introduced measures to try to solve the economic and industrial problems of Wales. The overall result is that in less than 30 years there has been a vast shift of manpower from the old basic industries of coal, tinplate, slate and agriculture into new manufacturing industries in Wales. The breakdown of manpower statistics in 1946 compared with 1974 tells a graphic and remarkable story.
It is true that the economic situation is grave. It is true that we are in a world recession and that unemployment in Wales is unacceptably high. But it would be quite wrong to ignore the great changes which have taken place in the last 30 years.
Against that background, let us not always paint a gloomy picture of Wales. Wales is one of the best places in Europe to live and to work. It is a country of unsurpassed beauty with an adaptable working population. Let us, on all sides of the House, say this loud and clear so that people may know it, because now that we have decided to remain in the European Community it is important that the world should know the facts.
There are two matters in which I am deeply interested and upon which I shall value the Minister's comments when he replies. The first is the future of the Derelict Land Unit which I set up in the aftermath of the Aberfan disaster. The unit has a splendid record and is of international repute. I was glad to hear my right hon. and learned Friend say that when it is absorbed by the agency the clearance of dereliction will he accelerated. The current expenditure is, I understand, approximately £2½ million a year, and we shall be interested to know what the future plans will be under the new dispensation and what kind of financial allocation we can expect as the years pass.
Secondly—my right hon. and learned Friend also referred to this—what precisely will be the future of the Mid-Wales Development Corporation? The House will recall that I set this up in 1967 and it has done a first-class job in Newtown under the chairmanship of Mr. Emrys Roberts and with Mr. David Garbett-Edwards as chief executive. I should like to pay a tribute to both those gentlemen for what they have done.
The terms of reference which I gave the corporation enabled it to extend its activities to other towns in Mid-Wales with the Government's approval. That is why I named it the Mid-Wales and not the Newtown Development Corporation. I hope that its rôle under the new régime will be sustained and that its boundaries will be enlarged so that the corporation, with its excellent record and expertise, can take in Aberystwyth, Blaenau-Ffestiniog and other towns in the region where assistance is needed.
The one industry which I do not see mentioned in the Bill is agriculture. I make no criticism at this stage, because agriculture may be included in the definition of "industry" in the various clauses. We must never forget that agriculture and its ancillary industries—the dairy and cheese factories, for example—are of primary importance in Wales. My right hon. and learned Friend referred to Clause 2(3) in his opening speech. That subsection sets out the qualifications of members of the agency and says:
The members of the Agency shall include persons who appear to the Secretary of State to have wide experience of, and to have shown capacity in, one or more of the following, namely, industry, commerce, banking, accountancy, finance, the organisation or representation of workers, administration, local government and matters relating to the environment".
Can we assume that "industry" includes agriculture? We need clarification, because it is not always the case and this list is an exclusive list. I am not sure that it should be exclusive in this sense; it might be better if it were drafted so as to give general guidance to my right hon. and learned Friend in his selection. I noted that my right hon. and learned Friend was modest enough to exclude
lawyers from the list, but I assumed that he, myself and other hon. Members who belong to that profession might come broadly under the heading of "administration"—there is hope for us all at the end of the day—However, I would ask my right hon. and learned Friend to look at that point carefully.
The position of local authorities also needs clarification. Many of the old county and district councils before the reorganisation did absolutely first-class jobs, and my own county of Anglesey achieved oustanding work in attracting new industry into an area of high unemployment. In my view we should never cut the district councils out, because they are in closer touch with local problems than other bodies in Wales, including the Civil Service.
The Association of District Councils, of which I am a vice-president, is concerned about a number of points which I shall list briefly and which will be more appropriately dealt with in detail in committee. First, to what extent, if any, will the agency's powers conflict with the rights of local authorities to purchase land for industrial purposes? Secondly, should there not be a local authority representative, under Clause 2(3), to which I have already referred? Thirdly, to what extent will Clause 7 create a conflict between the agency and the housing authorities in the provision of housing? Finally, on Clause 11, should not local government be added to the list of interests in Clause 11 (3), in view of its rôle in providing industrial estates? I hope that the Under-Secretary will deal with these important points when he replies.
My right hon. and learned Friend, referring to the site of the new agency when it is set up in due course, said that he had not yet made up his mind where it should be. I can suggest an admirable location, but modesty forbids. If the agency is set up in Cardiff, for example, we shall be asking for an office in North Wales adequately staffed with at least one senior official. Justice must not only be done but must manifestly appear to be done.
Cardiff is a long way from North Wales and the lines of communication are not all that good. I come to London from Anglesey quicker by train than if I were going to Cardiff. Therefore, if the agency is in the South, it must have a long and strong arm in the North.
The long and strong arm will pass through Mid-Wales. But if the agency were established in Mid-Wales, I should not object.
The Bill confers wide and extensive powers on the Secretary of State and the agency. They must be used with propriety and respect for individual rights. But, if the powers are great, the problems are greater. We shall debate the agency's activities in this House not only at Question Time but on the Adjournment. If the agency overreaches its powers—[Interruption.] The hon. Member for Pembroke must not think that he is the only Member in this House who is concerned about rights. We are all deeply concerned about individual rights. The record of the Labour Governments in the preservation of the rights of the individual, with the creation of the ombudsman and certain other institutions, is one of the best in the world. Before making sweeping criticisms, the hon. Gentleman must give a little thought to what has been achieved by his opponents.
Does the right hon. Gentleman agree that there is something to be said for investigating the possibility of having a Select Committee to deal with the agency—at least until we have devolution?
I should have no objection to that. I should expect the Welsh Grand Committee to debate the report of the agency annually and as soon as possible. Indeed, it is clear from the schedule to the bill that the Public Accounts Committee will have surveillance over the work of the agency as well. Those of us who have been members of the Public Accounts Committee will realise how effective and detailed that surveillance is in practice.
I support the Bill and its objectives. But let there be no illusions about the magnitude of the task. The Bill in itself will not solve our problems. Success will depend upon three factors. The first is our national economic situation. We must conquer inflation and get on to a steady economic course. All this is "pie in the sky" unless we get that right. We know that perfectly well. We do not need to be taught that lesson by the hon. Member for Pembroke.
Secondly, the agency must have adequate resources to do its job. I am glad that the Government recognise that fact. I think that £150 million is not bad in the present economic situation. It is a good start.
Lastly, the personnel who will be engaged in running the agency—notably the chairman and the chief executive—will be crucial. They must be men of drive and determination who know Wales well in all its aspects. I hope that careful thought will be given to their appointment. I hope that my right hon. and learned Friend will appoint the chairman first and then consult him on the appointment of the chief executive. It is vital that the chairman and the chief executive have mutual confidence and that the chairman should agree the appointment.
The Bill is a historic landmark, and we hope that it will point towards more prosperous times for our country.
I certainly echo the sentiments expressed by the right hon. Member for Anglesey (Mr. Hughes) in his closing sentence.
The broad aims of the Bill are unobjectionable to most of us. Indeed, they are desirable to hon. Members on both sides of the House. We all wish to further Welsh economic development. We all seek industrial efficiency in the Principality. The provision and safeguarding of employment throughout Wales is the common objective of all parties in this house and, I believe, of all Members. There is also a general desire to see the Welsh environment improved and the attractions of our countryside enhanced.
The means of achieving these objectives, however, are largely available in existing legislation—under the Industry Act 1972 and the Local Employment Act, and under powers available to local authorities. Whether the proposed agency will add significantly to powers already available to attain these laudable objectives is arguable. Whether the agency will prove to be the best instrument for these purposes is even more doubtful. But certainly we must not expect or require the agency to achieve miracles, as the right hon. Member for Anglesey suggested. Whatever its powers, whatever its resources, such an agency alone cannot ensure the future prosperity of the Principality.
If inflation continues and if our general industrial performance does not improve dramatically, the future for Wales must be pretty bleak. I say that without being too partisan in my criticism of the present siuation. I believe that all Governments since the war have grappled with our difficulties with only a modicum of success.
In a context of United Kingdom economic decline, the agency would indeed be faced with an impossible task. It is extremely doubtful whether any body of this kind could itself instil efficiency into a faltering and ailing economy.
We must also recognise that a strong and sucessful industrial base throughout the United Kingdom is required to sustain and pay for each addition to our administrative and bureacratic structure.
Having said as much, I echo the broad welcome which has been given to the agency and wish it well. It would be nonsensical to do otherwise.
If the agency is formed in accordance with the Bill as amended in another place, I submit that it will have a far better chance of success than if the Government insist on reintroducing some of the more objectionable features which were in the original Bill. Therefore, I regret that the Secretary of State has indicated his determination to reintroduce some of those parts which were taken out. I appeal to him, even at this stage, not to insist on bringing back into the Bill any clause or clauses which would enable the Welsh Development Agency to control companies. That is particularly objectionable. I do not like the idea of the agency forming companies, but control by the agency is particularly objectionable to many people.
The Secretary of State will be aware that many people associated with industry and business in Wales have profound anxieties and fears about that aspect of the Bill. Let the Government, if they wish, disregard for the moment the arguments and objections which we may put forward. But I implore Ministers to heed the real concern of those in industry whose whole-hearted co-operation and work will be essential not only to make a success of the agency but to make the Welsh economy recover and succeed.
During a long period in the House, a period roughly comparable to that of the right hon. Member for Anglesey, I have never before received so many communications expressing fear and concern from companies of all sizes and from industrialists of long experience and proven worth. Moreover, an agency of this kind, however gifted its leadership and membership may be, will not be an appropriate body to control and run individual companies and firms.
I support most of the broad objectives of the Bill. However, I also share the concern of industrialists and business people about the basic philosophy which appears to inspire some of the clauses. There is implicit in some clauses the idea that the agency will be able to decide the detailed future of several industries rather better than those who have spent a lifetime in them. In that sense the Bill is miscast and misconceived.
In that context the Bill has a different approach from the attitudes which were demonstrated when the Industry Act 1972 was framed. Of course, that was a Conservative measure. There is also a different approach from that which is contained in the Industrial Reorganisation Corporation Act, a measure that was introduced by a former Labour Government. In the 1972 Act, as many hon. Members will recall, intervention was contemplated only as a sort of rescue operation for a firm in difficult, and especially in cases where many jobs were involved. It was also envisaged as a kind of short-term operation to assist a company to restore its profitability. In the 1972 Act State intervention was obviously intended to take place when other methods were shown to be inadequate. In both the 1972 Act and the Industrial Reorganisation Corporation Act there was a duty on the part of the Government to dispose of their interests as soon as a company had been put back on its feet. All that is lacking in the present Bill. No similar safeguards are to be found.
The Bill appears to permit somewhat indiscriminate Government intervention for unlimited periods. Whatever the intent behind the Bill, such intervention could lead to a further unhealthy and undesirable extension of the State sector and of the powers and influence of the Government.
On the whole, during the years of Conservative Government we refrained from attempts to denationalise, to interfere or to split up State-owned companies and services. We accepted on the whole the idea of a mixed economy. We refused to create more uncertainty in industry by reversing the actions of the previous Labour Government. However, if the present process towards State control and ownership continues, those of us who believe in the superior virtues of progressive and enlightened private enterprise will surely be impelled to devise measures of curtailing the growth of State agencies and State power. That must inevitably follow if the present process continues.
It is obvious that the powers of intervention and acquisition by the development authority, without greater safeguards and without prescribed time limits, could place in jeopardy other companies and other competing organisations. That is my reply to an intervention by the hon. Member for Caernarvon (Mr. Wigley). Such companies might have to endure overlong periods of unfair competition from companies which are wholly or partly controlled by the agency.
One cannot foresee what influence the treaty would have. Given the terms of the Bill, should the agency acquire control of companies and run them it would in essence be unfair to the companies which are already in Wales and doing a good job in creating excellent employment and good conditions.
Given that British Leyland is taken into public ownership and it is decided to start a subsidiary company in Wales, does the hon. Gentleman not agree that the development of public enterprise in those terms could mean that privately-owned component industries would benefit by public industry in the manufacturing sector coming to Wales?
I am not talking about new companies coming into Wales, be they British Leyland or other undertakings. I am talking about the acquisition of control by the agency of existing companies or the creation of new companies. Of course, the Government can remove our fears at once if Ministers refrain from restoring to the Bill any powers to acquire control. If Ministers introduce comparable safeguards to those contained in the 1972 Act and in the Industrial Reorganisation Corporation Act, there will at once be a different mood among industrialists. That is all that they have to do. If that were done it is possible, as has been suggested, that the Bill would go through without any opposition. That is such an easy course to take that I am amazed that the right hon. and learned Gentleman does not take it. It would be a great help in restoring confidence where confidence is so sadly needed.
Much will depend on the abilities of the first chairman and the original members of the agency. The initial period could be crucial for the success of the agency. The first appointees will have the opportunity of creating confidence by their fairness. They can demonstrate that approach in their initial period, thereby demonstrating the value of the agency. By their actions they will be able to remove some of the fears which have been expressed. Therefore, I hope the appointments will be made with great care and after a great deal of forethought.
The right hon. and learned Gentleman will be aware that there was some debate on the Scottish Development Agency Bill which centred on a matter mentioned by the right hon. Member for Anglesey—namely, the qualifications of the members of the agency. It is appropriate to point out at this stage, that because such a large proportion of the geographical area of Wales is rural and because farming is still a chief industry in most of the Welsh counties, it is necessary to have in the agency persons with wide experience and proven capacity in agriculture, horticulture and rural land management. I accept, of course, that some other improved formula may be devised. As the right hon. and learned Gentleman knows, that matter was debated at some length in relation to the Scottish Bill. Further, I believe it was mentioned in relation to the Welsh Bill in another place.
In another place the Lord Chancellor, like the right hon. and learned Gentleman today, was at great pains to emphasise that the Welsh Development Agency will direct its attention to the whole of Wales and not merely to the industrial areas of the South and North-East. It will be an instrument for the whole geographical area of Wales. As an earnest of that intention, let the Government include in the agency persons with agricultural and similar experience. I know that that suggestion was turned down when it was raised before, but that is no reason for us not considering in Committee whether or not it should be done. I believe that it would be helpful for a country such as Wales.
I turn to the detailed function of the agency as specified in Clause 1(3) as amended in another place. The wording of the original Bill was to promote industrial democracy in undertakings which the agency would control. My hon. Friend the Member for Pembroke (Mr. Edwards) has already referred to this matter. For several reasons I plead with the Minister to look more sympathetically at the amended wording. First, I believe that the amended wording is superior because we reject the concept of control. We prefer a fruitful and helpful association between the agency and individual companies. The term "industrial democracy", whatever the right hon. and learned Gentleman may have said in the heat of the moment, is vague and almost meaningless. To some it would connote State ownership of a kind that exists in Eastern Europe; to others it might involve a need for worker control; to others it might mean the provision of joint works councils. Some would take "industrial democracy" to mean the participation of employees in the individual firm or company; others would prefer wider participation by trade union interests not limited to a particular company.
I prefer the wording substituted in another place, although I recognise that the wording is capable of further improvement. But it conveys the importance of promoting good industrial relations and appropriate employee involvement. I regard these as sensible terms to be included in a definition of that kind. In this respect what may be appropriate in a labour-intensive industry may not be suitable in a capital-intensive undertaking.
Is not that precisely the reason why "industrial democracy" has been left as it is—in other words, that it is better not to be too precise because of the reasons put forward by the hon. Gentleman?
I am merely submitting that the phrase means different things to different people. To some it is analogous to control by the workers themselves; to others it is the institution of co-partnership schemes; to yet others it connotes a works council. Therefore, it is inappropriate terminology. I should like to see added to the provision the words "the promotion of appropriate co-partnership and profit-sharing schemes." I believe that such arrangements tend to narrow the frontiers which have often separated those who are owners or managers from those who are employed.
I must confess that even in the amended Bill that is now before us I dislike the sound of Clause 1(4), which says:
The Agency shall have power to do anything in Wales, and, with the approval of the Secretary of State, anything in other parts of the United Kingdom or elsewhere, which is calculated to facilitate the discharge of their functions, or is incidental or conducive to their discharge.
The phrase "to do anything in Wales" conveys sweeping, almost unlimited powers. I submit that we shall need to look at the phrase very closely indeed in Committee.
Perhaps I can put the hon. Gentleman's mind at rest, although we may want to consider the matter further and perhaps give better advice in Committee. The hon. Gentleman should read the beginning of that subsection:
The Agency shall have power to do anything in Wales",
then forget the next two lines and go to the words:
which is calculated to facilitate the discharge of their functions …".
It does not refer to a power to do anything, but the phrase must be related back to the functions which were stated earlier.
The Secretary of State anticipated my next remarks. The phrase refers to:
the discharge of their functions, or … incidental or conducive to their discharge.
Is this to be calculated by the agency or by the Secretary of State or by some reference to the principles of natural justice? The terminology is far too wide and sweeping. If the agency should take a decision to acquire possession of a house, a building, or piece of land, who will decide whether such acquisition is calculated to facilitate the discharge of the agency's functions? I know it is important to interpret these matters correctly, but I sincerely hope that we shall have something a little more restrictive than the present wording.
Another matter which is not at all clear is to what extent the writ of the National Enterprise Board will run in Wales after the setting up of the agency and to what extent there may be some overlap between the National Enterprise Board and the agency. Further explanations are still necessary, otherwise industry in Wales may be uncertain as to the body to which it must apply in a particular case.
In conclusion, I repeat my support for the main objectives of the Bill. I welcome the extent to which some additional resources may fairly accrue to Wales without injustice to competitive and efficient firms already engaged in fruitful operations in the Principality.
I question the nature and extent of the powers given to the agency by the Bill and repeat my request for the sort of safeguards which were contained in the Industry Act 1972. Far too many of these powers seem to be the powers of the National Enterprise Board translated into Wales and into a Welsh agency. We must also feel some concern that the extensive powers given to the Secretary of State and to the agency are not subject to adequate parliamentary control. In marginal cases this could deter foreign firms from creating new and much-needed factories in Wales. At the same time it is within the power of the Government to remove the causes of most of the fears about some aspects of the Bill both in this House and outside, but this, I fear—as we gathered from the Secretary of State's remarks—they are not willing to do.
I appeal to the Secretary of State to seek to remove these fears. Wales is now facing a frightening state of affairs involving a high level of inflation and accompanied by an unemployment rate such as we have not seen since before the last world war. It is vitally important that we should inspire confidence among our people and not introduce measures which will frighten those who are already doing an excellent job in Wales. It is far better that we should have an agreed measure which will be seen by people in all parts of industry in the Principality to be fair. It is against this background that I make this last appeal to the Secretary of State for Wales. If the Bill becomes law, I trust that the agency will have a beneficial influence and will improve the viability of the economy of Wales.
It is an exotic pleasure to be called to speak following the remarks of the hon. Member for Barry (Sir R. Gower) if only because the first time I had the pleasure of meeting him was at the General Election in Barry in 1966.
The hon. Gentleman's speech in quality and tone was in marked distinction to the somewhat hysterical, if not hypocritical, speech of the hon. Member for Pembroke (Mr. Edwards), who constantly amazes the House with his extravagance of speech and its irrelevance of content. We believe that the establishment of this agency—a bold new departure—will result in going a long way to remedy the cruel disparities that exist between Wales and other parts of the United Kingdom.
May I be allowed to strike a personal note? My right hon. Friend the Member for Anglesey (Mr. Hughes) referred to the siting of the agency's headquarters, and I was somewhat reassured to read that in another place Lord Lovell-Davis made clear that the agency would require offices in more than one part of the Prin- cipality. May I urge the Secretary of State—and I should be grateful if the Minister could deal with this point when replying to the debate—to consider the claims of North Gwent, Abertillery and Ebbw Vale, if not as sites for the headquarters, as what Lord Lovell-Davis called "the spheres".
The remedies so far deployed to take on the challenge of unemployment in Wales have been mostly haphazard, piecemeal and unco-ordinated and have achieved only a measure of success. It was very gratifying to read the speech of the Secretary of State in Merioneth when he went to the crux of the matter and spelt out the idea behind the concept of a Welsh Development agency. He said:
The more difficult the period ahead, the stronger the case for bringing together and under one roof the responsibilities on the one hand for improving infrastructure, and on the other the planning and improvement of factories and providing help for industry".
That is the crucially important task that has to be tackled by the agency.
The worst affected areas in Wales are those at the heads of the valleys. In the 1960s the population in the heads of the valleys fell by 21,000, and unless immediate steps are taken this picture will be repeated in the 1970s. This is simply beyond our toleration. In recent months we have seen nearly 3,000 redundancies, with 500 in Brynmawr alone. We are now faced with additional difficulties further down the Western valley at the Conway Stewart factory. The times have gone when it could be said that the tombstones in the graveyards of Wales were marked: "Not dead, but gone to Slough".
When I listened to the hon. Member for Pembroke, I was reminded of the most extraordinary speech I have ever heard. It was made by the hon. Member for Flint, West (Sir A. Meyer), who said in the Welsh Grand Committee in 1971 that before becoming the Member for Flint, West he
had the honour to represent Slough, which is one of the largest Welsh towns in the United Kingdom. Slough … was founded by people escaping from unemployment. There can be escape from unemployment, and there can be other Sloughs in the United Kingdom and in Wales as well".
Listen to this—it gets even better:
if the Government hold fast to their present policy and refuse to be panicked into short-term measures, if only the Government will
continue with their present policy of confronting workers".—[Official Report, Welsh Grand Committee; 28th April 1971, c. 29.]
all would be well.
Does the hon. and learned Member dispute the success, for example, of Wrexham in evolving a totally new and integrated approach to the problems of unemployment in that part of the world? Does he dispute the wisdom of seeking to make a new departure, based on new industries, rather than merely trying to prop up decaying industries, doomed to disappear by the evolution of technological change?
I think the hon. Member has missed the point, and if so that is no doubt my fault. Of course I welcome the development in Wrexham and I welcome the diversification of industry, whether in Wales or the rest of the United Kingdom, but we cannot afford unemployment in Wales. We cannot afford to lose our young people, their talents, skills and abilities to the Sloughs of Great Britain. We need them in Wales and we need the jobs in Wales, not in Slough.
I have given way once; I do not propose to do so again.
What is required and what will be at the heart of the task facing the agency is not the sort of approach adopted in the past on so many occasions and described by the late Aneurin Bevan in the graphic phrase "Colour washing the tombstones in the graveyards". I hope that the agency will not follow such policies. I do not think for one moment that it will. It is vital that we get away from the destructive, dog-in-the-manger approach that we have come to expect from the Conservative Party. We can afford it no longer.
So often in the past the social responsibility of public and private enterprise towards workers and consumers has not been developed along the right lines. I hope the agency will ensure that this public responsibility and accountability is nurtured and fostered in its activities. I hope that the agency will treat as a matter of top priority the need for a cogent policy on the distribution and issuing of indus- trial development certificates. The Hunt Committee revealed some time ago that a Department of Trade inquiry had shown that at least one in five firms had moved within the previous five years to development areas, largely because they were refused certificates elsewhere. We must restrict still further the issuing of IDCs in the richer areas of Britain, and I hope the agency will ensure that there are the most stringent controls in this matter.
Coming from the part of the world that I do, I cannot fail to welcome the provisions in the Bill on land reclamation. Before turning to that subject, however, let me deal with personal accountability, a topic which several hon. Members have raised, including the hon. Member for Barry, who dealt with the matter in some detail a moment ago. This question is a sensitive one. I have always pressed for more accountability on the part of industry both in the public and the private sectors. I shall continue to do so. This is a special case. I shall not go into the difficulties which might arise involving commercial dealings. I would have thought that Conservative Members would have been the first to realise the sensitive area into which they are moving if they ask Parliament to account for and approve of, for example, financial assistance to X firm or Y firm before the firm knows in which direction it is going.
This could have adverse consequences upon the firm, whether in the public or the private sector. In another place the Lord Chancellor dealt with it by saying that to provide for every power to require parliamentary approval in its exercise and for every direction to receive Parliamentary approval would not only overburden Parliament but would unnecessarily frustrate executive action. The inevitable delay caused by the mechanics of obtaining parliamentary consent would excessively limit the use of the agency's powers. Surely this is at the root of the objection to further accountability.
The Secretary of State is answerable to this House. In the interim there is the Welsh Grand Committee. There is no reason why there should not be a Select Committee. There is the Public Accounts Committee and so on. The hon. Member for Pembroke referred only to parts of the Western Mail leader of 15th May. What the Western Mail said, and I say
this in fairness to the hon. Gentleman, was:
To be successful it must be independent—and firmly under Welsh control. The Bill the Conservatives are advocating would have its teeth so drawn that it is unlikely the resulting agency could play any significant rôle in our economy—indeed this seems another rather gratuitous knock at devolution … To take away powers from a Welsh agency is simply to hand hard-won autonomy back … and ensure that the agency is just the Welsh arm of the National Enteprise Board. In fact the agency could boost the Welsh economy without upsetting the private sector as it stands and could give advice, assistance, and grant aid without nationalisation. To deny the Welsh people the opportunity to influence at first hand decisions that affect them and maintain that this is a function which could be carried out from Whitehall is wholly against our interests. But such proposals cut deeper. The agency is one of the few bodies which it is proposed to make accountable to a Welsh Assembly. To take away its powers is to undermine not only the agency but the assembly itself.
Coming from the part of the world that I do, I particularly welcome the Bill's provisions dealing with the environment. We in Wales, in the aftermath of the Aberfan disaster, soon became not only the front runners in Britain in land reclamation and dealing with the environment but the European league champions. We virtually had to start from scratch because, incredible though it may seem, particularly after listening to Conservative Members, only eight acres of derelict land were cleared between 1960 and 1964.
Even in the early 1970s England, as ever trailing its coat behind the Principality, had a dismal record. A total of 43 out of 102 counties and county boroughs as they then were had not restored any derelict acreage at all. In Wales today 1,300 acres justify treatment. One of the problems which will confront the agency is that every year over 100 acres of fresh wasteland are being created. We in Wales have proved that the problem of dereliction can be solved. The impediment to success has not arisen because of technical or engineering difficulties. What is required and what is now to be provided by the Government through the agency is the political will to remove the scars of past pollution and to prevent further contamination.
The agency must continue the job of improving the environment, not only because we want to improve the infrastructure for industrial purposes but also as a memorial to the thousands of men and women who sacrificed their lives on the altar of industry to create this country's wealth. The structure of beauty in the Welsh valleys still stands. Only its surface is tarnished. The agency will mean an end to the patchwork quilt approach to the problems of industrial development in Wales. It will mean an end to the "filling in the gaps left by decay" approach which has so often been the case in the past—a kind of dental economics. The agency will be an instrument by which to forge a realistic and comprehensive policy to provide for the first time a strategy for the whole of Wales. It is for these reasons that we welcome the agency and wish it a fair wind.
At the outset I congratulate the Secretary of State on the presentation of the Bill. It is a measure with which we in Plaid Cymru find ourselves in full accord. We have as Nationalists been campaigning, if we have campaigned for anything at all, for a development authority for a long time—since the days when unemployment in Wales stood at the horrific level of 30 per cent. to 33 per cent. Many people in Wales have bitter memories of those days when hundreds of thousands of Welsh people had to leave their country for Slough and elsewhere to find work.
I recall those days to show that the need for a development authority has been long felt in Wales. Yet we have had to wait until the growth of nationalism in Scotland and Wales has compelled the Government to act. The Tories have been loth even to act now. We are continually depressed by their obstinate determination to prevent Wales living as a nation. We welcome this measure warmly but our welcome must, understandably, be qualified as a result of the tardiness of successive Governments.
The phrase which describes the Welsh position is that of "internal colony"—a phrase which is used as a title for a distinguished book published in California, which states the Welsh and Scottish situation. For generations Wales has not been governed in her best interests but rather has she been exploited by outside interests. At last, with this agency, we will, I hope, have a tool which the Welsh people can use to begin to act for themselves. After a short interim period in which the agency will be in the hands of the Secretary of State, I hope that the Welsh people, through their assembly, will be responsible for its development.
The development agency itself requires development but it has the makings of a powerful instrument. I want to refer to the issue of accountability but to give it a different emphasis from that which has so far been given to it. The bureaucratic element in this body must be diminished and the domestic element enhanced as much as possible. Although for some time the agency will, as I have said, be responsible and answerable to the Secretary of State, and through him to this Parliament—that is right, and nothing else is possible now—I hope that this will be a temporary arrangement and that it will last only until we have our own elected assembly in Wales. The agency can then be made accountable to that assembly—an assembly of the representatives of the people of Wales.
It is essential that the agency engages the interests and the enthusiastic support of the people through their representatives. I hope that its muscles will be well flexed. In particular, we need a plan in Wales—we have needed one for a long time—for balanced economic development, which the Assembly can implement. For this purpose the Assembly will require considerable powers for dealing with various aspects of the infrastructure because a great deal of leeway has to be made up in Wales after generations of comparative neglect. For example, between 1966 and 1970 the Government substantially reduced the sums spent on Welsh roads and increased the sums spent on roads in England by 150 per cent. We have a great deal of leeway to make up in this area.
However, balanced development must include both rural and industrial areas. I was glad to hear the Secretary of State refer to the needs of the rural areas. We urgently need light industry in villages and and small towns in rural Wales to stem the depopulation and to safeguard our way of life, and in many areas our language. We can all refer to small towns and villages where there is heavy unem- ployment and virtually no industry. It is essential to have this kind of light industry to maintain the population at a level which will sustain the schools, the chapels, the churches and the societies which are essential to a local community, which give vitality to rural life and make it attractive to young people. This deserves a special unit within the agency that is charged with responsibility for development of rural life in this way.
There must also be balanced development between economic, social and cultural matters. Economics should always be subordinate to social ends and social ends in this context should always include cultural matters.
In the post-war period, when my party campaigned for this kind of development agency, for some time we used the title "TVA for Wales" because the Tennessee Valley Authority was very notable as an ambitious and successful piece of planning covering large parts of seven of the states of the United States. Most commendably in that experiment it regarded the whole of the society of that area as a "seamless web". This is a good phrase.
In this way the national community of Wales must be seen as a seamless web. Great care must be taken to assess the effect of every political and economic action on each of the social, cultural and linguistic aspects of Welsh life, and to ensure that the national community is developed as a whole.
My right hon. and learned Friend the Secretary of State for Wales and my hon. and learned Friend the Member for Abertillery (Mr. Thomas) made passing references to our great fellow countryman, Aneurin Bevan. It was Bevan who said that the Welsh were the most contentious nation in the world, and I do not doubt that. It is the only area in which in any pub, club or gathering of people at the drop of a handkerchief and within 30 seconds flat one can become involved in political argument of a high order which is not only tolerant but is usually extremely well-informed.
Therefore, I find the argument of the hon. Member for Pembroke (Mr. Edwards) somewhat saddening. Whether he was dazzled by the possibility of conquering some lush empire in a future Government and leading an army against this wicked interventionist Socialist gathering on these benches, I do not know. What has happened is that he and others like him have been reduced to making all kinds of apologia, because there is more unanimity in Wales today over this issue than I have seen for a long time.
Even the Welsh Nationalists are joining with the thinking on the Labour Benches. I could even find it in my heart to forgive some of their recent activities in my constituency. However, in reality, instead of the hon. Member for Pembroke finding that he has an army behind him, he finds that it is a group of people riven with dissensions, including the Welsh CBI. Even that Press organ—hardly a pillar of Socialist thinking—the Western Mail chides him like a naughty schoolboy for his attitudes. In this debate he is reduced to carrying the tattered remnants of his flag across to these benches and saying "If you will please let me keep this little bit of flag, I am willing to join you, although you are my enemy." He does all this, as did the hon. Member for Barry (Sir R. Gower), in the name of saying that this is the State trying to effect a massive transference of power. This is the pattern that is running through current legislation.
As a somewhat less intelligent Welshman, I was always under the impression that many of the people who sent me here did so precisely because they wanted to transfer economic power into their own hands and to transfer powers of decision that affect their lives very deeply into organs that were representative and closely linked at local levels to themselves, so that ideally they might at long last be allowed to have a voice in deciding their future and the future of their children.
If Conservative Members think that we shall be frightened, they had better think again. There are enough of us on these benches who still adhere to what many on these benches refer to as old-fashioned Socialism. We accept the need for the transfer of power and are determined to achieve it. The messing about as regards amendments to the Bill in another place will quickly be remedied.
The hon. Member for Carmarthen (Mr. Evans) referred to the deep trauma of the past, through which so many of our people went. Certainly in heavily industrialised parts of South Wales we saw it at its deepest. It was in my constituency that a certain illustrious person burst into tears and said that something must be done. Something must still be done. We shall see that it is done.
In yesterday's debate on the Scottish Development Agency this was a recurring theme. The Secretary of State for Scotland pointed out that most of the guilt for what has happened in Scotland rested fairly and squarely on the shoulders of people who had run the previous economies of Scotland and who had been responsible for lack of investment. They had regarded the smaller units in Scotland as capable of being sacrificed—they called them their marginal Scottish interests—in order to buttress and sustain their large units, which are outside Scotland. Wales has a similar problem, because although we are heavily dependent on publicly-owned industries, which many Labour Members want to be socialised, we accept that Wales, as a land of small communities, has always been dependent quite significantly on small to intermediate businesses. This is a function which a Welsh agency can fulfil and which no other organisation can.
Many of the specifics in the Bill have been touched upon. I shall most certainly not be repetitive. However, we know the history of the past and we hope that we can find some of the answers to it. While we are trying to give our answers in the Bill, let us not be churlish and, because dark clouds are still hanging over Wales, deny the gratitude and respect which we owe to organisations which have very valiantly carried on up till now, the many bodies to which the Secretary of State referred. But the plain answer—anyone in local government will know this—is that the time wasted by local authority industrial development committees, by Members of Parliament and by other people who are desperately concerned about the situation, in going from one body to another, taking an interminable time to try to effect some kind of palliative to a desperate situation, absolutely calls out for the bringing of these organisations under one umbrella, so that the route can be shortened and action can be far more effectively and speedily carried out. I think that despite some of the fears they have expressed, this is why so many local authority organisations have given an unstinting welcome to the Bill.
I am deliberately omitting many of the points that have been made hitherto. I want to sec this development agency for Wales have the imagination to do some forward looking. The powers given to the agency are set out in Explanatory and Financial Memorandum. It is to establish and to carry on industrial undertakings. Although the signs may not be all that significant as yet, there are things happening in Wales which portend nothing but good for the future, in our ability to meet the challenge of modern technology and to evolve entirely new patterns of industry.
Perhaps I may mention just two instances with which I have been quite deeply involved over a number of years. There is absolutely no doubt that some of the leading thinking, research and experimentation in recycling of waste products has been done in Wales by Professor David Hughes, in the microbiology department of Cardiff University, and by Mr. Clive Jones, an industrial chemist formerly of British Silicones and now the industrial liaison officer for the Wolfson Laboratory. These inspired and dedicated people have solved most of the problems of recycling most waste products.
My own party—I addressed the meeting in Blackpool on this subject—has formed a group on the recycling of waste products. It was put into our manifesto that nationally this process could be worth £400 mililon a year. I would say that it goes far beyond that. This was also a subject of Sicco Mansholt's survival blueprint for mankind—that the recycling of waste products could be done even on a European scale.
Out of my pride in being a Welshman and as research work and pioneering has been done, I should like to see what has been costed out and planned on the drawing board—the establishment of a labora- tory specifically for this work and the establishment of the first pilot plants of a completely new industry in my country. It is not only feasible. It wants only a modicum of interest to spark this off, and here is a growth industry which can have a few parallels in Britain. As well as its saving to the national purse, its value in focusing world attention on the forward-looking nature of the Welsh approach to technology would be quite dramatic.
Turning to the side of pure inventiveness, I have just been in communication with a man whom I have known for many years and with whom I have kept in touch. It has taken him about three years to try to get a foolproof patent, but here in this field we have in working order, as a pilot plant, an oil and water separator which achieves 98·5 per cent. efficiency. It has had its own booms and sluices designed, and it could sail into a slick such as that left by the "Torrey Canyon" and clean it up in no time.
If we have the interests of an agency such as this to foster and to encourage, there is nothing in technology and inventiveness that other peoples can do—I do not wish to cast any animadversion—which cannot be reached by the Welsh people. I hope to see this day come.
I turn briefly to the other major point in the Explanatory and Financial Memorandum—the environment. Here in particular the people of Wales owe a debt of gratitude to the inspired work of the derelict land unit attached to the Welsh Office, which should receive public acknowledgment far more than it has done hitherto. My own area, being a very heavily derelicted one, can pay tribute to this unit. There are at present two truly inspiring pieces of land clearance and reclamation taking place. I pay tribute also to the speed with which the action can be taken. Within a month of a date being given for a colliery closure, the announcements were made for the clearance of this and the restoration to its pristine beauty of a truly glorious Welsh valley. We shall indeed, as the Secretary of State said, increasingly see "How green is my valley", not how green was my valley, becoming a predictable event within certainly the lifetime of our children.
Some fears have been expressed over the set-up on the derelict land reclamation side. I fully agree with the Secretary of State that the people who have shown such expertise, speed and imagination should have a full function to perform now under this agency. They are certainly capable of getting this job done, and done thoroughly.
Under the Bill there is provision for the agency to clear land and either to make use of the land itself or to adopt the generous approach of offering it to the local authority on favourable terms. The agency can give land free of all charges to the local authority for development which is approved by the Secretary of State. This again is a very significant move forward.
On the financial provisions, I can well understand the perturbation which, I believe, lay behind the question asked by the hon. Member for Caernarvon (Mr. Wigley) during yesterday's debate on the Scottish Development Agency about the absence of a time limit under which the initial expenditure would be phased. Of course the same answer was given—that this would be a matter for the Secretary of State and that there is always the safeguard that the agency must come back to the Secretary of State, who in turn must come to this Parliament for further sanction for financial expenditure.
Inherent in the hon. Member's question was a further one which disturbs me in the current economic climate: that however short the expenditure phasing may be, it is bound to be eroded by the factor of inflation. We should ask whether there is to be any kind of reverse procedure, any building-up procedure, to offset totally or partly the effects of the erosion of the original sum of money. This is a subject on which one could speak in extenso. I end by saying that in my party in Wales we have dreamed for a very long time of having a central body of this kind, just as in the total field of devolution, even in my father's time we were talking of a Welsh Assembly with unitary authority. A year or so ago I had a conversation with the hon. Member for Merioneth (Mr. Thomas) on the subject of where we should go. Within those terms I congratulate my right hon. Friend the Secretary of State. I hope that the passage of this legislation through the House will be expeditious and I very much hope that the deadline for the structuring of the agency will be completed by the end of the year.
The need for some kind of development agency in Wales has been obvious for some time. More than in many other parts of Britain, Welsh Liberals have felt the need for some cohesive policy to prevent the decay of existing industries and to prevent a continuation of the rural depopulation which has taken place since the First World War and even since the days of the lead mines. It is now very necessary to develop the industrial potential of Wales to its full capacity and to make an effort to overcome the serious problem of unemployment throughout the Principality.
The possibility of an expansion of the oil industry off the Welsh coast also makes it imperative that the environment should be protected, and I believe there should be strict controls imposed on any major building plans put forward by new industry. With tourism making an important contribution to the economy, it is important to preserve the features that have made it so successful. Above all, we must make Wales a pleasant place in which to live, while providing the necessary job opportunities. I invite hon. and right hon. Members on both sides of the House, if they have a few days off during the Summer Recess, to come to the Teifi Valley to see the environment, which represents the very best scenic beauty which we have in Ceredigion, and also the Rheidol Valley, where the Secretary of State enjoyed his boyhood days. That is the type of life we need in Wales—a pleasant environment, plenty of work and a healthy economy.
I should like to congratulate the Secretary of State on making a move in the right direction in making the concept of such an agency a possibility. We can now be more hopeful of the Government's intention to safeguard industries in Wales, we may see the setting up of advance factories in Wales in areas that really need them and we may then see the stemming of the rural depopulation which has been such a depressing feature of the Welsh way of life in recent years. With the right kind of encouragement, the economic life of these areas will revive. If only the Welsh agency would slow down the drift of young people away from my constituency I would be well pleased. Only 8 per cent. of my constituents are working in manufacturing industry, so there is a great imbalance between the self-employed and the employed in Ceredigion. I have in my constituency towns like Tregaron, Aberaeron and New Quay which have no industry of any kind. I hope that when the Welsh agency is set up such towns will be remembered and light industry will be introduced into them.
Good intentions are one thing. The way in which intentions are carried out is another. I agree that there is a great need and a desire to plan ahead and to bring to an end this stop-go system that has bedevilled all planning over the past few years, with one plan quickly succeeding another, causing confusion and a certain cynicism among those who might be attracted to invest in Wales. One could say that the Welsh Development Agency is yet another alteration of regional policy reflecting merely another aspect of parliamentary dogma.
I would be grateful if the Secretary of State would assure us that this is not just another exercise in spending money on a massive scale in order to implement social theories. I understand that the overheads alone are likely to be in the region of £2·5 million. Can he explain to the House by what criteria the success of the agency will be measured? As it stands, it has three separate functions which do not lie easily together. The first involves the encouragement of industry and commerce, which presumably would have a commercial return. The other two functions involve the use of public money, which would be given in the form of grants for environmental development and protection and powers to take over ailing firms under the terms of the Industry Act. Does the Secretary of State believe these functions to be compatible?
I should also like to seek the assurance of the Secretary of State that the policies of the Government do not further exacerbate the position of small firms and industries already in Wales, so that they are forced to seek help under the Industry Act. There is a sizeable section of the community already feeling a certain sense of injustice at the treatment being meted out to them by the Government in the form of punitive taxes. I hope that these people, who form the backbone of the economy in rural Wales, will be considered. I am referring to the self-employed.
I said that we had only 8 per cent. working in manufacturing industries in my constituency, but in Ceredigion over 30 per cent. of the electorate are self-employed, the highest percentage not only in Wales but in Britain. Will the Secretary of State agree to support private enterprise and the self-employed? Or does he believe that mere nationalisation is the answer to our economic problems in Wales? I hope not.
Is the Minister aware that 60 per cent. of school leavers are unskilled and untrained? If we are to have more industry and more factories, would it not be possible to look into the possibilities of developing technical training in Wales for those who wish to enter the various industries? One could also make out a very strong case for retraining for those who may be made redundant in certain industries and could be channelled to other jobs. I should like to see evidence of more Government thinking along those lines.
I have lived in Ceredigion all my life, and am now middle-aged. It is very disheartening to see our young people leaving the rural areas year after year, never to return except for a few holidays now and again.
The most serious defect in the Bill is that it has been drafted with no reference to the proposed Welsh Assembly. This indicates that the Government still refuse to take devolution seriously, in spite of the serious recommendations of the Kilbrandon Report. We have already heard this week that no separate Civil Service will be provided for the Welsh and Scottish Assemblies. The setting up of the Welsh Development Agency before a Welsh Assembly has been formed makes nonsense of any attempt at a unified policy for Wales.
It would appear from the Bill that the proposed agency is completely dependent on the whim of the Secretary of State for Wales. One might say that it is the creature of the Secretary of State, as he, for example, even appoints the chief executive. It is entirely wrong to have the chief executive appointed in that way. Is it possible for the agency to make an independent decision? This dependence on the agreement of the Secretary of State in so many ways makes the whole agency too political. This is an area that should be free of politics if we are to have continuity of policy.
There is not sufficient demarcation in the Bill between the agency and the National Enterprise Board. I have said before that it is important that the affairs of Wales should be dealt with by people who understand Wales, and I see here evidence of the desire of those who wish to nationalise everything in sight to keep control of Wales.
I believe that it is of the utmost importance for the future of Wales that its development should be kept as far as possible in Welsh hands. The way to do that would be to ensure that the agency was answerable to an elected assembly in Wales, an assembly with legislative powers and with effective control over the economy.
On 1st May I put a Question to the Secretary of State for Employment, asking him to list the 10 employment categories which had had the biggest job loss during the past five or 10 years. It is interesting to note that during the past five years the biggest losses have been in agriculture, forestry, fishing, mining, quarrying, metal manufacture, gas, electricity and water.
Before we can entice industrialists to Mid-Wales we need better communications. I hope that the Minister who winds up the debate will say how much money will be spent on road and rail communications into Mid-Wales.
Today we have been discussing the Welsh Development Agency, and in a few months we shall be discussing the Welsh Assembly White Paper. We must ask ourselves where the money is to come from. If we are to conquer inflation, and if we are to have a Welsh Assembly and a Welsh Development Agency, does the Minister believe that we need control of prices and incomes by statute?
I am very sorry to have to refer to a statement made earlier by the Secretary of State, who blamed the Liberals for opposing the setting up of a rural development board a few years ago. I am proud to say that I was one of those Mid-Walians who stood out against the board. I challenge the Secretary of State to present the same type of board with compulsory powers to the people of Mid-Wales once again. It will not be acceptable. In the last General Election Labour lost control of Carmarthenshire. Merioneth and Cardiganshire owing to the attempt to set up the rural development board. If the Secretary of State tries to do it once again to the people of Mid-Wales, perhaps he will lose more seats in Wales.
The broad welcome for the Welsh Development Agency in the speeches of the hon. Members for Cardigan (Mr. Howells) and Carmarthen (Mr. Evans) illustrates the acceptance of the agency by the substantial group of political forces in Wales and the extent to which the Conservative Party is out on a limb, on its own in Welsh terms, on this matter.
In listening to the speech of the hon. Member who led for the Opposition, the hon. Member for Pembroke (Mr. Edwards), who represents little England beyond Wales, I felt how significant was the location of his constituency, since he spoke in a wholly different tone even from that of the Welsh CBI. Although it has reservations about the Bill and the agency, the Welsh CBI has said that it gives support in principle to Government proposals for a Welsh Development Agency, though it enumerated certain reservations. Never again shall I refer to the Conservative Party in Wales as the mouthpiece of the Welsh CBI, because the Conservatives' views are less progressive than the views of that body in relation to Wales. The hon. Gentleman must already feel somewhat unsure about the battleground that he has chosen. He must consider how ill-chosen it was.
The agency is a new instrument for restructuring and modernising our Welsh economy. It gives more powers, comprehensive powers, and more funds for development within the Principality. I accept that the fundamental battle on allocation of resources must still be fought within the British Cabinet, but it is a useful additional weapon.
One cannot be satisfied with the existence of the weapon itself, because the weapon is not an end in itself. Its effectiveness will depend on the manner in which the powers of the agency are exercised within Wales. I think particularly, for example, of the quality of staff who are to be recruited to man the agency, and the back-up resources for decision-making within the agency. I hope that there will be someone at the head of the agency with real practical experience of industrial decision-making within Wales. Its effectiveness will also depend on the extent of the readiness of the agency to pursue a long-term strategy for the Principality and not to be diverted to short-term unproductive job preservation at all costs. Indeed, for industrial planning there has to be a substantial degree of continuity, which we have not seen in relation to the various regional location incentives of either Government.
On one point I wholly agree with the hon. Member for Carmarthen: that we need a plan for Wales if the investment decisions taken by the agency are to be effective. We need to clarify our goals within the Principality, otherwise investment decisions will be haphazard and not directed to particular ends.
We need, for example, to build on the existing foundations, in particular to obtain manufacturing units in Wales downstream from the existing heavy industry. I have in mind industries making consumer goods from chemical production, sited in the area of Baglan Bay, and aluminium-using industries centred in North Wales.
We need also to take more care in attracting linked industries to areas which are relatively close together in order to avoid the haphazard grouping of industries. We need more toy manufacturing within the Swansea area, and more electronic component manufacturing industries in the area of Aberdare. If such clusters of linked industries are achieved in the Principality, a number of very important external benefits will accrue. For example, we shall have educational courses at local technical colleges which can be geared to the cluster of industries within those areas. Similarly, specialist servicing and stock-holding firms will be attracted as a result of the cluster of industries, but this must depend on clarifying our models and having plans for the Principality so as to know where we are going.
Many questions will remain unanswered by the Bill, such as the relationship between the agency and the National Enterprise Board, and also questions of financial accountability and whether, for example, there should be a form of public dividend capital. A large portion of the activities of the agency cannot be costed in commercial terms anyway, certainly not in the short term, such as the derelict land facilities, but there must be some yardstick by which the effectiveness of the agency can be measured.
In passing I will say one thing about the location of the headquarters of the agency. I am very much concerned with the danger of overcentralisation of administrative facilities within Wales in the Cardiff area. I shall not make a parochial point in relation to Swansea. My own view is that, in looking at the needs of Wales at the moment and in prospect, it would be an imaginative example and an act of faith if the headquarters of the Welsh Development Agency were to be sited somewhere in the Heads of the Valleys area. This would be a focus for an important service grouping within that area which needs it.
I am glad to have the support of my hon. Friend the Member for Aberdare (Mr. Evans), but I hope that we in Wales learn from England's example of having an administrative capital and try to diversify administrative jobs as far as we can away from Cardiff. The real need now is for some jobs to buttress the economy in the Heads of the Valleys area.
My second point is that I see the agency as a new means of co-operation between Government and industry within the Principality. The old confrontations and frontiers are blurred, and hon. Members on both sides of the House must come to terms with this fact. We live in a mixed economy. We need a genuine mix and a partnership. There are areas which are now wholly nationalised or where 100 per cent. nationalisation is in prospect, where there could be a public equity holding but not a complete holding. This might have been an appropriate solution for Bristol Channel ship repairers.
Conversely, there is a substantial case for a governmental stake in profitable private industry. I accept the interventionist rôle which my right hon. and learned Friend the Secretary of State outlined for the agency in this respect, as long as we remember that Government investment is not some form of cornucopia for invalid industries, that we need a healthy scepticism concerning Government and business judgment and that we need to give a degree of independence, within limits, to the agency to back its own judgment. There has to be a much clearer means of monitoring the achievement of the agency than appears at present to exist, in particular some more extensive means of parliamentary control.
The improvement of the environment is the last of the duties enumerated for the agency in Clause 1(2). It is a clear duty. It raises many questions of an urgent nature because of the prospect of Celtic Sea oil. What priority in Wales shall be devoted to environmental factors? Will it be a residual factor after other factors have been taken into consideration, rather like the Government's reaction to those of us who protest about the lead content in petrol and are told that it is a health hazard but we must put up with it because we are so dependent on the motor industry? In other words, improvement of the environment is a good thing in its place. In my view, and drawing upon Welsh experience, that place should be at the forefront of our considerations, learning from the shortsighted decisions of the past.
Environmental decisions will have a significant effect on industrial location policies as well. I ask how the environmental considerations will be fed into the decision-making process within the Welsh Development Agency. Will there be a special section of the agency. Will there be a specialised committee? Will there be a board member charged specifically with responsibility for the environment? Inevitably there will be a conflict. I hope that the decisions reached will not be blurred and that the people of Wales will be able to participate in these conflicting decisions as a result of an open debate.
The Development Land Unit is one of the great success stories in Wales. It is only sad that we had to wait for another round before we were stirred into action on this front. I hope that the agency will start with an imaginative and perhaps a model scheme of what can be done in co-operation with local authorities—and where better than in the Swansea Valley, which is still the largest area of industrial dereliction in the whole of the United Kingdom?
There is now a blueprint for the development of that valley with the zoning of industrial areas and recreational areas. It is an imaginative blueprint which has been drawn up by the local authority. It may be that one of the most signficant activities of the agency could be working with the West Glamorgan and the Swansea City Councils in revitalising the whole of the Swansea valley. That would be an excellent example of co-operation with local authorities.
This agency, welcomed by almost all the political forces in Wales and by our Welsh people and endorsed at the last two elections as the policy of my party, will, I am confident, be of considerable benefit to the Principality. It is an exciting organisation, and in common with my colleagues and the bulk of the Welsh people I wish it every success.
It would be churlish for any Welsh Member, concerned though he may be about what may happen to this Bill at a later stage, to deny that, in the form in which it has emerged from another place and is being presented to the House, it contains very considerable advantages for Wales. It is obviously a most desirable step to have a single central body to co-ordinate the efforts of a number of existing bodies, the purpose of all of which is to develop the Welsh economy and to bring industry to Wales. No reasonable person could possibly quarrel with such an objective. We have been reminded today of the state of unemployment in Wales. Ever since April it has been at its highest monthly level since the last war.
In speaking of the desirability of establishing a single central body of this kind, I do not mean in any way to denigrate the sterling work which has been clone up until now by man local authorities and voluntary bodies. However, there is no doubt that there has been a lack of co-ordination in these efforts in the past, and this is one of the weaknesses which the Bill, rightly, seeks to remedy, although it is to be hoped that the agency will continue to rely upon and make the fullest use of the spirit of co-operation in both the local authorities and the voluntary bodies.
Criticism has been made by some members of my party in another place, and yesterday in this House when the sister measure relating to Scotland was considered, that the creation of the agency and its Scottsh equivalent amounted to a proliferation of existing bodies. Certainly there are many of them. But I do not think that this charge is made out, because part of the purposes of the Bill is the co-ordination of the efforts of existing bodies.
Another aspect of the Bill which I hope will command universal support is the duty which it imposes upon the agency to develop and redevelop the environment in Wales, to grant-aid local authorities in carrying out derelict land clearance works, and to carry out such works itself. No one doubts that much remains to be done in this respect, and again I say that without any reflection upon what has bene done already in this regard. Anyone who knows Wales well will be aware of the tremendous efforts which have been made, especially in the South, in clearing up the industrial dereliction which has existed for so long. I am fortunate in that I represent a constituency where that problem does not exist at all.
I understand—and perhaps the Secretary of State will confirm—that it is intended that local authorities should continue to play a most important rôle in this work, and that agency schemes will be undertaken only after full consultation and agreement with local authorities. This should apply just as much to major environmental schemes as to others. It is important that this should be the case. I ask the Secretary of State roughly what proportion of the money that the agency is likely to get—whether it be £100 million or £150 million—will be applied to the derelict land reclamation programme. A figure of £5 million has been mooted, which is something like double the present expenditure. Perhaps we can have some more information about this.
So far I have had nothing but praise for the principal objectives of the Bill, and, were it to remain in the form in which it has appeared before us, I could leave it at that. However, as we are all painfully aware, substantial and far-reaching amendments were effected in another place. As regards one of them. we have heard from the right hon. and learned Gentleman that the Government are quite determined to undo the good work done in the other place. Therefore, it would be unrealistic to discuss the Bill without considering the effect of the reinsertion of the provision which, temporarily, has been extracted from it. Very rarely has so much attention been given in a Second Reading debate to what, for the time being at any rate, does not appear in the Bill under discussion. The same applied yesterday to the sister measure relating to Scotland.
In terms of the injection of financial assistance into Wales, the Opposition, or, rather, the part of it to which I belong, feel that the 1972 Industry Act, despite the scorn poured on it by the Secretary of State, provides all that is necessary. Moreover, it contains highly desirable safeguards against such assistance being used to nationalise firms and unnecessarily to increase the size of the public sector.
The safeguards embodied in the 1972 Act were, firstly, that the Secretary of State had to be satisfied that assistance would not be given in any other way than by the acquisition of loan or share capital. Secondly, he could not acquire more than 50 per cent. of the equity share capital. Thirdly, he was required to disposed of any stock or shares as soon as practicable.
We think that that goes far enough. As we are aware, these safeguards are swept away in the Industry Bill, and, if the Government have their way with this particular Bill, there will be no limitations of the kind that I have mentioned on the agency if and when it wishes to acquire stock or shares in a privately-owned company. Accordingly, the agency would be able to take over control of companies without restriction and even without the agreement of their boards of directors. It could buy its way into profitable industry and set up its own enterprises in direct competition with existing companies in the private sector.
Although it has been argued that competition between agency-created companies and privately-owned ones would be fair, one can be forgiven for being a little doubtful on that score. For an established company in the private sector, the possibility of investment is very difficult at present, as we know, and it could hardly compete on equitable terms with a company or undertaking set up by the agency and equipped by it with modern plant and machinery.
Let me make it clear on behalf of all members of my party that we do not suggest that the agency should not be able to provide financial aid to companies in Wales, that it should not be able to invest in the equity of a company which it felt it desirable to assist, or that it should not have directors on the boards of companies in which it was financially interested. We draw the line at the point where the agency would run companies or undertakings which it had taken over or formed itself.
We feel that such activity is not necessary to enable the agency to perform its functions, and we also feel that the agency is not well suited to enter into industrial management, which can best be performed by people experienced in that field. It follows that, if the agency were to move into company management, over the years there would be a continuous enlargement of the public sector into areas of activity for which it was quite unfitted.
The powers which the Government wish to give the agency reflect those given to the National Enterprise Board under the Industry Bill. If they are restored under this measure, the Welsh agency will truly act as an arm of the National Enterprise Board. I use that much-quoted expression, even though exception is being taken to it, as a succinct description of the situation which would arise. It represents an extension of State control into the private sector without adequate parliamentary control. We feel that that is not the way to win the confidence of private industry, which should be the principal concern of the Government if they seriously intend to attempt to remedy our economic ills.
I am not opposed to the establishment of the agency or to its being invested with the eight functions set out in the present Bill. On the contrary, I welcome it. In carrying out those functions, it can do much good for Wales by exercising the powers given to it by the Bill. Let it so remain. Let there be no addition of any other function, or functions which do not enjoy the full and, indeed, enthusiastic support of hon. Members of all parties representing Wales in this House.
I welcome the contribution made by the hon. and learned Member for Denbigh (Mr. Morgan), who, like his colleague the hon. Member for Barry (Sir R. Gower), welcomed much that is in the Bill. I hope that those hon. Members, in common with the remainder of Members of Parliament, will vote in support of this measure, which will fulfil the desires of the people of Wales.
The Secretary of State said that this was a historic day for Wales. Yesterday there was a debate on the Scottish Development Agency. That was a historic day for Scotland. Next week the Industry Bill will provide a historic day for Britain. Circumstances will change for the better if these measures are implemented by Parliament.
I regret the delay which has occurred as a result of the obstructive tactics of, I was going to say, the Conservative Party. But perhaps I should not include all the Welsh Members of the Conservative Party in that category, although I include the hon. Member for Pembroke (Mr. Edwards), who led the opposition to this measure. The constituents of Denbigh and Barry will at least know that their Members of Parliament showed some restraint. The people of Pembroke will realise that their Member of Parliament expressed his all-out opposition to the Bill. I say "all-out". I wondered whether political schizophrenia had been demonstrated. Some hon. Gentlemen delayed the measure going to the Welsh Grand Committee. One or two other hon. Members representing other constituencies have taken part in the debate, but the contributions to this debate have, in the main, been made by Welsh Members.
The debate could easily have been taken upstairs in Committee and the matter could have been brought to the Floor of the House at a later stage. Parliament has a heavy programme of legislation. Not only are the Government fulfilling the promises made in our policy statement but we have had to undo the harm of legislation carried forward from the previous administration. That is why more legislation has been brought before this Chamber than for a long time. A measure such as this could easily have been taken in the Welsh Grand Committee. It is deplorable that the Conservative Party's obstruction should have prevented the Second Reading of this measure being taken at an earlier date. Instead of having been debated first by this elected Parliament, the measure has arrived from the other place.
I was pleased at the contribution made by the Lord Chancellor, an eminent Welshman, who moved the Bill admirably in the other place. I am personally attached to him because he came from the school in Wales at which I taught.
The Secretary of State demonstrated the need for this measure. The Opposition spokesman while addressing us today, discussed the economic situation rather than the Bill. The impression he gave was that the economic ills confronting Wales, as well as those in Britain, had been caused by the Labour Government. He neglected to mention that we were passing through a world recession. He spoke as though we were experiencing a phase of which we were unaware when the Conservative Government were in power. The Labour Party manifesto for the October election said:
Britain faces its most dangerous crisis since the war. The Labour Party makes no attempt to disguise this. On the contrary, at the time of the February election, we took the British people into our confidence and shared the realities of our daunting problems. We inherited a three-day week, unlit streets, unheated homes and work-places. And worst of all, a wounded national economy, made all the more serious by the socially divisive policies of the previous Conservative Government, with its deliberate confrontation with the organised working people of our country.
Those were the opening sentences of the manifesto which we put before the people.
There is now a world economic recession. That situation exists in America, Germany, France and Italy. The Opposition give the impression that all the troubles which we face are due to the policies of the Labour Government. What shabby nonsense. We are faced with serious financial, economic and industrial problems. I believe that this vital, valuable new machinery for assisting in the solution of the problems of Wales has been held up because of the delaying tactics of the Conservative Party.
What are the functions of the Welsh Development Agency? They are, first to further economic development, secondly to maintain employment, and thirdly to improve the environment. It may finance or establish industrial undertakings and take over the functions of the Welsh Industrial Estates Corporation.
On 20th November 1974 the Prime Minister announced that the ministerial responsibility for selective regional assistance in Wales under Section 7 of the Industry Act 1972 would be transferred from the Secretary of State for Industry to the Secretary of State for Wales on 1st July 1975. That day has been referred to as "free enterprise day". In Wales it will be called "national enterprise day" because the tasks performed by the Department of Industry will be transferred to Wales.
The White Paper dealing with the regeneration of British Industry said that it had been decided that appropriate functions of the National Enterprise Board should be carried out in Scotland and Wales by the respective development agencies. In July 1974 the Government announced their intention to establish a Welsh Development Agency responsible to the Secretary of State. Its aim would be to strengthen in an effective way the instruments available for promoting the development of the Welsh economy and undertaking major environmental projects. That had been outlined in the manifesto of the Labour Party in Wales. That manifesto was accepted by the majority of the people of Wales, as in the election the number of Welsh people who voted for the Labour Party equalled the number who voted for the Conservative, Liberal and national parties.
That document explained that the agency's major responsibility would include tackling industrial decay, unemployment in Wales, the encouragement and establishment of new enterprises and the provision of new industrial estates and factories, paying special attention to those industrial areas which had suffered from the worst effects of the decline of the older industries.
The manifesto made it clear that the agency would play a key role in environmental matters, in which it would work closely with local authorities. This Bill is the fulfilment of the promises made in that manifesto.
In its role the agency will bring new resources, both of finance and of professional skills, to bear to promote industrial and environmental development. The two are closely interrelated, and the agency's twin objectives will be to accelerate economic and industrial development in Wales and to create the environmental facilities conducive to such development. The agency will be working with the National Enterprise Board in promoting industrial support and development. Labour Members make no apology for the fact that the Government are setting up the National Enterprise Board. It is all very well for Conservatives to talk about the glories of the private enterprise system, but it is difficult to sell that system in Wales.
Reference has been made to the book "How Green was my Valley", which was written some years ago. We know how the coal industry had declined at that time, when the mines were privately owned. Who is to deny that the public ownership of the coal industry has been of great benefit to the people of Wales and to the mining community? I recall what was written in that book by Richard Llewellyn about a strike in a mining valley. Meat was scarce. There was butter only on Sunday and the tea was made without milk, without sugar and without tea.
The hon. Member for Cardigan (Mr. Howells) referred to the Tennessee Valley Authority which dealt with the problem described in Steinbeck's "Grapes of Wrath". Wales has never had a development authority. There is a need for an agency to bring industry into Wales. There has been private enterprise, but even the former Leader of the Opposition stated that Tory Governments had failed to get private enterprise to invest in manufacturing industry. Where private enterprise has failed, surely we should put public enterprise in its place.
We need to continue the task of dealing with dereliction to stimulate environmental regeneration. The Derelict Land Unit of the Welsh Office has done much to solve this problem in recent years. It is tragic that we had to have the Aberfan disaster before we got around to dealing with derelict land. Since then much has been done in my constituency in the Cynon Valley, from Aberdare to Mountain Ash—the Queen of the Valleys—to remove the coal tips and the industrial scars. I hope that improvements of this nature will continue during the years ahead.
Our main problem is unemployment. I recognise that we are passing through a difficult economic and financial period and that much has been done by regional policies, but a serious situation is developing in my constituency. A factory that was brought into Aberdare—Levex—was closed down but it has now been opened again under a different name. There is a light engineering works on the Hirwaun Industrial Estate in which the workers work hard and are prepared to cut their wages to keep the firm going, but on Monday morning when they went to work they were told that on Thursday their jobs would finish.
Complaint has been made mat the Bill deals with industrial democracy. It is about time we talked about industrial democracy. It is about time we realised that, in addition to the people who invest capital in industry, there are people who invest their labour in industry and who must be consulted before decisions are taken about the closure of firms.
More recently, the Girling firm in Aberdare has been threatened with closure. Talks are going on, and I hope that they will meet with success. The unemployment situation in the valleys is serious, and the Bill will play a positive part in creating job opportunities in the area.
The only happy industry is the coal industry. We see at pitheads notices saying "No vacancies". The coal industry is moving forward and productivity is increasing. At the beginning of last year we recognised that the mining industry was in the doldrums, and there was conflict. Now the industry is producing coal in great abundance to meet our energy requirements.
I should like to have answered the argument of the hon. Member for Pembroke, who opposed the Bill, but he deployed hardly any arguments. In the latter part of his speech he turned his attention to suggesting amendments to the Bill. It is strange that someone who opposes a Bill should say how he would improve it. The Conservatives must make up their minds where they stand.
In the debate on the Scottish Development Agency Bill last night the hon. Member for Glasgow, Cathcart (Mr. Taylor) summarised the reasons why the Conservatives opposed that Bill. First, he said that the Bill was not needed. The need for the Welsh Bill has been proved by this debate and the House of Lords debate, especially by the contributions made by the hon. Member for Barry and the hon. and learned Member for Denbigh (Mr. Morgan), who did not give it a whole-hearted welcome but recognised the need for it.
Secondly, the hon. Member for Cathcart said that the Bill was "inevitably bureaucratic". "Bureaucratic" has become a favourite word for those who oppose progressive measures. I do not understand why it should be bureaucratic for the people of Wales and the people of Britain to own their own industries and, through Parliament, to control them. Why should it be more desirable for industries to be run from Texas, Tokyo or Timbuctoo? The Conservatives have no objection to foreign capital coming into the country. Why cannot the people, through Parliament, control these industries? I would prefer industry to be run in that way rather than have a large bureaucracy to have to pay out unemployment benefit because private enterprise had failed to provide jobs.
The hon. Member for Cathcart said. thirdly, that the Bill would create confusion because of the multiplicity of agencies. But the Bill seeks to bring several agencies together. It replaces and co-ordinates those agencies. That is an argument not against the Bill but for it.
Fourthly, the hon. Gentleman said that we should bear in mind the Government's pledge to restore interventionist policies. In Wales we have to have interventionist policies. It is no use Conservatives—who might have some success in Surbiton— talking about the evils of Socialism. Public enterprise has worked for Wales. The people of Wales recognise that if the coal industry, the electricity industry and other industries in the public sector can be run successfully, there is no reason why the manufacturing sector should not be publicly owned.
I am pleased that the measure has been brought forward this Session. I am also pleased to hear the Secretary of State say that he will consider the location of the agency, and I echo the hon. Member for Swansea, East (Mr. Anderson) in saying that it should be located in the Heads of the Valley. There are certainly some good sites between Neath and Ebbw Vale. I must declare an interest because those towns are near to my constituency. The Hirwaun Industrial Estate would be an excellent location for the agency. From the industrial point of view many jobs would be involved. There is a tendency for us to think of Cardiff or even Swansea as a suitable location, but why can not we go to the top end of the valley'? If we located it in such a place, it would show the vision of what we expect from the agency.
I know that many hon. Members wish to speak in the debate. 1 wholeheartedly applaud the Welsh Office on putting the Bill through this Session. We have kept our promise to the people. I look forward in the next few months to see this measure pass through all its stages in the House and be implemented. I want to see the regeneration of industry in Wales by this agency working with the National Enterprise Board. At the same time I want to see the beautification of our valleys that have known the scars of the Industrial Revolution. I want to provide a better environment with more jobs so that people can add to the wealth of our country.
In welcoming the Bill I have to declare an interest because I have spent seven or eight years travelling around Wales calling for an agency of this sort. I am pleased to see it finally come into being.
I see that the Minister on the Front Bench is raising his eyebrows. I should like to draw his attention to a Question that I asked on 1st April 1974. As it was 1st April that may explain the answer
that I received. I asked for a national development authority of this sort to be set up, and the answer I received was:
No, I am responsible for the co-ordination of economic and other forms of develpment in the Principality and I see no need to establish a separate National Development Authority."—[Official Report, 1st April 1974, Vol. 871. c. 248.]
The Minister spoke earlier of the blinding light on the road to Damascus. I am delighted to see that the blinding light has struck home in this instance. There has been a call in Wales for this sort of agency for many years. It is not for one side or the other to take credit for it. To that extent we should all welcome it and make it work effectively.
It is disgraceful that the Bill has to some extent over the past two months become a political football. That should never have happened. There is such a crying need in Wales for the co-ordination and reorganisation of bodies concerned with the development of the economy and industry, that everyone must unite to make the Bill work. I hope that that is what will happen.
Interest has been shown in this type of body on previous occasions, because other countries have developed them. Other countries in Western Europe have made a success of development authorities. There have been instances of such authorities in Ireland, Italy and Belgium. I draw the attention of hon. Members to the minutes of evidence taken before the Trade and Industry Sub-Committee of the Expenditure Committee in 1971–72. In Appendix 22 there is an analysis of the type of para-governmental agencies that exist in other areas. The analysis refers to State holding companies and industrial development banks. I cannot help feeling that the agency we are considering is a hybrid of the two, and that it will be interesting to see some of the powers built into it work in practice. I hope and believe that they will work successfully.
I shall certainly be voting in favour of the Bill tonight. However, there are a few questions that remain unanswered. One of the main questions that have been mentioned on several occasions during the Committee stage of the Industry Bill is the relationship between the Welsh Development Agency and the National Enterprise Board. There is a certain amount of doubt about the exact linking that there will be between the two bodies.
The hon. Member for Aberdare (Mr. Evans) and other hon. Members stressed the importance of the co-ordination work that the agency will do. It is important that there are clear lines of demarcation between what the WDA does and what the NEB does. I have no doubt that there is room for the work of the NEB to be of assistance to the WDA and that they can work together. However, it is important for the people employed in this and other bodies in Wales, at different levels, to know exactly how the two organisations are interlinked. Attempts have been made on several occasions to find out exactly what is the relationship between the two bodies.
I draw attention to a quotation referred to by the hon. Member for Aberdare from "The Regeneration of British Industry", Command 5710, where it says:
It has therefore been decided that appropriate functions of the NEB should be carried out in Scotland by the Scottish Development Agency.
I am concerned about "appropriate functions". In Committee there will be need for greater clarification of these functions.
Reference to this was made by the previous Under-Secretary of State for Industry in February. In the same debate I raised a few questions which I think are worth underlining concerning the relationship between the two bodies. I should like to raise those questions again now, because if they cannot be explained tonight perhaps they can be referred to in Committee. I asked what, if the NEB and the WDA worked in parallel, will be the mechanism to link the two, what proportion of the total joint activities of the NEB and the development agency in Wales will be undertaken by the development agency. With particular reference to the budget, I asked whether £100 million to £150 million over a certain period of time, which at the moment is not defined, fitted into the expenditure pattern of the NEB and whether the £1,000 million referred to in Clause 6 of the Bill dealing with the NEB affected this at all or whether any of the money would come to Wales in addition to £150 million? I also asked whether the NEB would have total responsibility for branch factories and subsidiaries located in Wales, and, if that was the case, whether the WDA would have any responsibility at all for those bodies. Those are important questions, because so much of the Welsh economy concerns companies that straddle the border.
To a large extent we are a "branch factory" economy. We have a branch factory syndrome. Of the companies that employ more than 100 employees in Wales, only 113 out of 477 have headquarters in Wales. This is an important question that needs clarification. We shall have to wait to see what the final Industry Bill looks like, but there are many areas in the original Bill where there will be questions about whether the powers of the NEB will be appropriate to the WDA and whether the development agency has total authority for those companies that exist in Wales but do not exist outside Wales.
Another question that arises in this context is the relationship between the WDA and the assembly that we are expecting will be set up in the near future. I am glad that the hon. Member for Aberdare referred to the Labour Party's manifesto in the last General Election and said that it had the wholehearted approval of the people of Wales. He will no doubt be aware that the October 1974 manifesto for Wales stated that
A Welsh Development Agency will be established under new legislation, with a budget from the United Kingdom Treasury, as an executive body, responsible in the first instance to the Secretary of State, and then it will be the concern of the Assembly once it is established.
I have no doubt, in view of their enthusiasm about sticking to the manifesto, that hon. Members will ensure that the WDA will be responsible to the assembly. This is a matter that cannot be settled finally until the legislation for the assembly has come through. I hope that there will not be any delays, so that we can see the democratic control of this body in Wales in the near future. One of the justifications that Labour Members have given for the establishment of an executive assembly in Wales is to oversee bodies where there is no democratic control. I hope that the WDA will be such a body and that hon. Members will demand control of it by the assembly.
I turn to the objectives at which we should be aiming in setting up this mechanism. They are fairly clear to all. We should aim to reduce unemployment, which is too high in Wales. Increasing activity rates have been referred to. Our activity rate, particularly in the female sector, is unnecessarily low. We need to eliminate enforced migration. If people want to leave Wales, the best of luck to them. But people should have the opportunity to stay and have a future in their own areas. We should ensure that jobs are available of as wide a choice as possible, within reasonable travelling distance for people in all parts of Wales, and, through the work of the agency, we should aim at raising the gross domestic product per capita in Wales to a level that is at least equal to the average for the EEC.
What should be the means of arriving at those objectives? First, if the agency is to succeed in its rôle—I believe that it will—it will need to have an influence on the development of the infrastructure. The infrastructure in Wales requires urgent attention. I underline the need to develop our roads, particularly in my part of Wales. The lack of adequate roads in Wales has been a serious problem for some time. I draw attention to the report by the Welsh Council four years ago regarding an economic strategy for North-West Wales. Referring to the need to develop the A55 and the A5, it states:
If additional allocations of resources for the completion of these roads within the foreseeable future is not forthcoming, it is suggested that the Welsh Office together with the County Councils consider in what ways additional resources can be applied for the improvement of these roads.
In the context of a cut-back in public expenditure, I underline the need to develop our roads if the success of this body is to be ensured. The same applies to developing the infrastructure in other directions. I refer to sites for industry, facilities, utilities, and so on, having adequate technical and business education, the right training for people to work in industry, and the development of the labour for people to work in industry, and the development of the labour force with the right skills. All these are essential. Even if they are not the responsibility of the agency, they are responsibilities about which the agency will need to co-ordinate with the other bodies to ensure that they are undertaken.
We need the right structure of incentives. At this stage I ask the Secretary of State, in considering the money that has been given for the development of industry in Wales, to give a categoric assurance that the money will in no way be clawed back from the EEC contribution. The EEC contribution to regional development in Wales should be an addition to anything that the Government are committed to giving. There should not be a reduction in the money coming from the regional fund of the EEC on account of the Government's commitment. That is worrying people in the Commission in Brussels when I was discussing this matter there yesterday. The Government must give a categoric undertaking about that matter.
It is important that the agency should have powers of initiative. This should appeal to Members of the Conservative Party. Apparently it does not, but I believe that it should. There should be initiative at home in setting up new industry and helping existing industry. We need to set up new industry. If the private sector can do it, very well. But the story in so many parts of Wales has been that the private sector has failed. If the private sector fails to set up private industry in the right place, we need the initiative in the public sector to ensure that people do not suffer.
We need initiative not only at home but in an international context to seek additional markets for the products of Welsh industry. I believe that can be done through co-ordination with the Development Corporation for Wales. The agency should be able to bring companies into Wales from the United Kingdom, from Europe or from across the sea.
Another important point concerns the co-ordination of the functions to avoid duplication of effort. It is important that the agency should carry this out if it is to be successful. There is a danger of duplication.
In this context I underline the need for an economic plan for Wales. The tragedy in the 1960s was the failure to develop such a plan. Following the George Brown plan, there was an attempt to create regional planning and an economic plan for Wales should have developed effectively from it.
The hon. Member for Motherwell and Wishaw (Dr. Bray) referred to this aspect yesterday in the debate on the Scottish Development Agency. I hope that there will be an economic plan for Wales in association with the agency.
I am appalled at the attitude that Conservative Members have taken towards the Bill. I say that having heard some of the comments that have been made by back benchers in the last few speeches. If, as has been said, they are to vote against the Bill, even as it stands, they are totally contradicting themselves. They said that they were worried about matters which were not in the Bill. If they wish to oppose those matters, the time to do so is in Committee when the Government try to put them back in. I shall support the Government in bringing those powers back. But that is a matter for Committee, Report, Third Reading, or whatever stage it may be. It is no case for voting against Second Reading. If Conservative Members do, they will show the total hypocrisy of their party. They will demonstrate that it is not the watered-down version that they are voting against but any form of development agency for Wales. I hope that when they consider going into the Lobby and forcing a Division they will have that point in mind.
There are many interesting differences between the Welsh and the Scottish Bills. These will have to come out in Committee. Grants included in the Welsh Bill are not possible in the Scottish Bill. CORSTR A. which is included in the Scottish Bill, is not in the Welsh Bill. Questions relating to air services, the reclamation of land from the sea, and other matters will have to be discussed in Committee.
One point that worries me—I refer to Baroness White's speech in another place—is the possible clash between the interests of the environment and industrial development. I certainly appreciate the link that the Government have proposed, but I have some sympathy for the school of thought that this could be counterproductive. Tension may be created which puts decisions at a level where they should not be taken. If there is a question of priority between industrial development, on the one hand, and the environment, on the other, and it is a question of spending £5 million on the one or the other, that will be a decision which will have to be taken at a political level. I do not believe that such a decision should be put into the mechanics of the agency. That is the one doubt I have about bringing these two matters together in the agency. Both are important. I should not like to say that one has priority over the other, because both are necessary.
The European dimension is important. The offices of the development corporation should be expanded to the maximum extent possible. The corporation has full-time representation in Germany. It is important that that representation should be extended to other countries. There is a role for the agency here in co-operation with the development corporation to ensure that that happens.
I should like to see a means for enabling the agency to raise loans directly from overseas if there is difficulty in raising money at home. I hope that it will be able to raise money in excess of the £100 million or £150 million at present laid down. Perhaps that matter could be explored in Committee.
Reference has been made to the rural development board. There is a need for special provision for rural Wales. I hope that the Secretary of State will address his mind to setting up machinery which will ensure that rural Wales gets the same benefits as the areas of the Highlands and Islands Development Board in Scotland. They are allowed a higher level of grant from the Regional Development Fund in Europe than anywhere else in the United Kingdom. We need the right mechanism to be set up in Wales so that similar benefits can be given to rural Wales. That is another matter which ought to be looked into.
There is the question of the definition of the agency's areas of activity. It is interesting to see the definition of industry in Clause 24. It is a rare definition, but welcome. I take it that the powers of the board will go as far as extractive industries. There is a need for intervention in extractive industries and also in certain tourist areas. The tourist industry can play an important part in developing the economy of many parts of Wales. I hope that the agency will have a rôle to play there. In this context we are talking about industry in the broadest sense and not just manufacturing industry.
Further liasion with nationalised industries is also important. The Bill does not make very much reference to that. If the Government are successful in introducing their amendments to set up publicly-owned companies, the relationship of those companies to the agency and the parallel relationship with the nationalised industries that already exist will be of the utmost importance.
Risk capital must also be considered. In a Welsh Council study five years ago it was recognised that there was a need for additional risk capital for small companies. I hope that there will be a rôle for the agency in providing more risk capital for Welsh industry.
Next, I turn to finance. I asked the Secretary of State earlier what period the £150 million was to cover. If it is to cover a certain amount of work and if it will be possible to return after 18 months or two years and to receive a favourable response to a request for more money, that is fine. I draw the attention of the Secretary of State to the fact that the Welsh TUC called for a fund of £500 million over five years. I take it from what the Secretary of State has said today that that is quite possible within the context of the Bill. I hope that will be the case.
It is important for managements to know exactly where they stand so that they can develop plans over a long period and do not have to live from hand to mouth from one year to the next. It is also important that there are more extensive borrowing powers in addition to the £150 mililon.
Finally, I emphasise a point that has been made by many hon. Members. If the agency is to work it will work because we have the right calibre of person running it. It is essential to get the right man for that job. I hope that the Government will leave no stone unturned in order to get the right man. I would like to see a Welshman occupy that position, but more important, a man from any part of the world who will make the agency work properly. I hope that we are successful in obtaining the right man.
I remember a few years ago in a time of gloom as regards economic policy in Wales that Professor Nevin said there was no movement "because the boat had no engine". The Bill can provide the boat of economic development in Wales with an engine, and I wish it luck.
It is a pleasure to follow the hon. Member for Caernarvon (Mr. Wigley), and particularly after the zest he has shown for the proposals contained in the Labour Party election manifesto.
I welcome the Bill for the two-pronged attack that it is intended to make in promoting industrial development in Wales and in bettering the environment. Both of those objectives are vitally necessary. As regards the first objective, it has been apparent for over 10 years that the British capitalist system is breaking down. This has been manifest by a lack of investment. Of course, investment is the seed corn in industry which keeps our competitive edge in the world export markets. It provides more power to the elbow of workpeople in industry. What is more, it ensures that they stay in employment, which again is vital. Alongside the lack of investment we have also had a build-up of property speculation. Those two factors are the principal reasons for the present parlous nature of the British economy. Of course, we have very much felt the ramifications in Wales.
It is in that sense that the Bill is essential, as is the Industry Bill. However welcome both Bills may be, if anything they are too late. For Conservative Members to say at this stage of our affairs that such proposals are not necessary is sacrilege to say the least. Likewise, when the Government invest public money in private industry there must be public accountability alongside that development.
I do not understand why the Opposition can oppose such sensible proposals. Indeed, the Conservative Party in Wales now seems to be so way out that it is even falling out with the Western Mail. That is an interesting development. I must ask Conservative Members where the Welsh entrepreneurs are to be found. If we had to rely on them we would become a nation of unemployed.
I briefly refer to a rather forgotten sector of the Welsh economy—namely the ports, and in particular my own area of Newport. Over the past few years the British Steel Corporation seems to have been trying to bankrupt the Newport docks. It has taken the entire iron ore trade from Newport. Millions and millions of tons of iron ore are being transported overland from Port Talbot. That is not an efficient system and it is particularly unreliable. The corporation has turned what was a consistent profit-making port into loss-maker. There is a vital need to invest in a new terminal at Newport to supply the great works at Llanwern. Those works have been turned into a virtual subsidiary of Port Talbot. One of the most disastrous mistakes that the corporation made was when it pigeonholed the proposals for the new port at Newport. That marks the turning point in the sad story of Llanwern and all the troubles that have gone on there ever since.
The only answer remains the provision of a new port for Newport to supply the great Llanwern works. It should be given the go-ahead, especially during this time of economic recession. It could mop up a lot of the unemployment in Gwent, and particularly in the valleys. If such a project were put into effect it would be ready and available when the upturn in the economy came about.
A fortnight ago we had the report of the National Ports Council. Mr. Philip Chappell, chairman of the council, said:
Capital expenditure by port authorities is still declining from the peak achieved 10 years ago … But more investment could mean over-capacity.
Of course, Mr. Chappell is perfectly right. That is why my right hon. and learned Friends opposed the West Dock development in Bristol. We said that the South Wales ports were already under-utilised. How right we were. Of course, the go-ahead was given for that development and the cost is escalating. The ratepayers of Bristol are saddled with this great burden and they have the biggest white elephant in history.
Mr. Chappell also said:
The one exception could be by the development of an 'industrial port' alongside the more conventional commercial port. It was for this aspect of renewed industrial activity, for both large and small developments, that more coherent support—and perhaps financial aid in selected places—could be based.
The scheme which I have mentioned in respect of the Spencer works would fit in ideally with the proposals made by Mr. Chappell, Chairman of the National Ports Council. Furthermore, such a scheme would be an automatic money-spinner because the trade is there already and should be proceeded with. I hope that the Secretary of State is taking note of what I have said. I appreciate his constituency interest, but I am sure that we can rely on him to be impartial.
While the Secretary of State is present, I should like to make a few comments about Clause 2 of the Bill dealing with appointments. Please let us not have any more Tory "dead-beats" in these jobs. The Secretary of State in introducing the Bill said that we require men of outstanding ability. I could not agree with him more. There is a sad record of disastrous appointments. We have only to look at what happened in the steel industry. We appointed Mr. Cartwright, a man who over the years persistently opposed steel nationalisation. He was made vice-chairman of the publicly-owned industry, and we know the consequences for that industry and its disastrous record.
In the water supply industry there was the appointment of a Tory old-age pensioner. I agree that some of these appointments were made by a Conservative Government. I am Chairman of the Parliamentary Sports Committee and I must say that the Secretary of State in his recent appointments to the Welsh Sports Council has not shown the imagination which we are entitled to expect from him. We must realise that the Conservative Party in Wales is only a small and anglicised faction. Wales has always rejected the Conservative Party. Let us hope that in his new appointments my right hon. and learned Friend will use some imagination.
Clause 13 deals with environmental development. It could be said that over the years South Wales has paid dearly for its failure in terms of lack of attention to environment. I do not doubt that because of this fact we have lost many new industries and enterprises which otherwise would have come to the Principality. When people from more salubrious parts of the British Isles visit South Wales they cannot understand how we in our valleys are prepared to live next door to coal tips. They see our once-beautiful rivers as black as the ace of spades. This is one of the principal reasons why many industries have not been attracted to Wales in the past. Then we had the terrible shock of Aberfan to shake us out of our apathy.
I congratulate the present Government, and indeed their Conservative predecessors, on the progress they have made in improving the Welsh environment. Our rivers have improved. I hope that the Secretary of State with the aid of his new powers in the Bill will put pressure on the local authorities to go all out to improve our environment in Wales, because this can do so much for the economy as a whole.
I have spoken about action taken to deal with pollution in Welsh rivers over the years. The pollution of those rivers is only minimal compared with what is happening in the Bristol Channel, which is choked with pollution. We have heard that 96,000 tons of poisonous industrial waste is to be dumped in that channel this year by the Welsh National Development Authority. On top of that, no less than 210,000 tons of crude sewage goes into the Severn Estuary every day. I have been in correspondence with my right hon. Friend the Minister of Agriculture, Fisheries and Food and also with Welsh water authorities over this development. A total of 60,000 tons of sewage sludge comes from the treatment works at Gwent and is taken out by ship from Newport docks. That sludge may contain traces of a lethal substance known as cadmium. One of the vital aspects is the fact that under Section 68 of the Public Health Act 1961 the water authority is prevented from divulging the source of the cadmium which is being discharged into the sewers. It is a remarkable state of affairs when people are being systematically poisoned and yet are not allowed to know where the poison conies from. The Secretary of State for Wales is the voice of Wales in the Cabinet. He should look into the matter and say what can be done as a matter of urgency.
I welcome the Bill because there is nothing but good in it. I wish it a speedy passage to the statute book. References have been made to Richard Llewelyn's "How Green was my Valley". I read the Second Reading debate in the other place. Their Lordships waxed eloquent about George Borrow's "Wild Wales" and also about Alexander Cordell's "Rape of the Fair Country". We have seen in Wales a great deal of disfigurement of the countryside. I hope that the Bill will bring a small measure of recompense for those who have suffered so much over the generations.
The wind-up speeches are due to begin at 9 o'clock. I hope to accommodate four more hon. Members who are anxious to take part in the debate. This can be done if hon. Members co-operate.
We have heard from the hon. Member for Newport (Mr. Hughes) a remarkable speech which contained a bitter attack on the Conservative Party. I can only assume that the hon. Gentleman is still feeling a little sore after the overwhelming rejection by the people of Wales of his advice for us to quit the EEC.
At first sight the Bill appears rather harmless, and possibly even beneficient. We have been taken to task for daring to oppose it. We do not oppose the environmental and co-ordinating functions in the Bill—quite the reverse. I do not think that the Government should be surprised at our opposition to the Bill in its present form or to the original version, nor should they be surprised at our opposition to the Secretary of State's proposals to amend it by restoring the agency powers which were included originally. The Bill was considerably improved in another place and I only wish that we could promise to do the same.
The Bill will create a major Government agency and arm the Secretary of State with enormously increased powers so that neither the House nor anyone else will have control over what is happening. The agency, either under the direction of the Secretary of State or acting on its own account, will have the capacity to alter entirely the economic aspect of Wales. It will not be operating on normal commercial lines and it will be established with public money. On these grounds, its accountability to this House should be made clear. Is it intended that we should have the right to debate the annual report when it is presented to Parliament by the Secretary of State? I believe we should have that right every year.
What is becoming ever clearer is the need for a Welsh Select Committee to investigate and cross-examine the Secretary of State, his Ministers and the civil servants on the operation of their powers and responsibilities. Every hon. Member knows that as the Secretary of State's powers have grown, Welsh Question Time has become a farce. We cannot effectively examine on the Floor of the House what he is doing, his functions and his responsibilities. We are limited to one Question each on one topic of the very many for which he is responsible, and yet his powers are increased by the Bill. That will make matters even more difficult for hon. Members. The Secretary of State's powers will be widened still further and will be unchecked by Parliament.
What will be the position of the agency if the Government fulfil their pledge of an elected Welsh Assembly? If the Secretary of State is to retain powers in this field and not devolve them, I am sure that certain hon. Members, including some on the Labour benches, would be very interested to know that. If the Assembly is to replace the Secretary of State in the exercise of these powers, other questions arise. Will the agency be eligible to receive finance from the EEC, for example through the regional fund?
The nub of our opposition to the Bill, particularly in the form in which the Government wish to see it, is that it represents a considerable increase in State power and ownership. It is also extremely confused in certain respects. We know that the agency will have certain powers and features in common with the proposed National Enterprise Board. The Minister of State, Scottish Office attempted to show where the lines would be drawn between the agency and the NEB when the Scottish Development Agency (No. 2) Bill was in another place. The Secretary of State tried briefly this afternoon to give his own explanation, but Ministers' efforts merely serve to illustrate how confusing and confused the situation is.
The Minister of State said:
Perhaps the greatest difficulty to be resolved
that means it has not yet been resolved—
is how to express the dividing line between cases in Scotland which are to be financed by the NEB and those which are to be financed by the Agency. We shall be working out these details.
Apparently they have not been worked out yet.
we intend to adopt general principles whose applications will be determined, fairly pragmatically, on a case-by-case basis. The point is that there will be no rigid demarcation between some companies or undertakings in Scotland which are the concern of the Agency and others which are reserved to the NEB."—[Official Report, House of Lords, 24th June 1975; Vol. 361, c. 1298.]
The truth is that the Government do not know where they are drawing the line. How do they think that industry can order its affairs if they cannot give a clear indication of their intentions? I would like the Minister to refer to paragraph 21 of Schedule 1 to the Bill whereby the agency is to be exempted from Section 14(1) of the Prevention of Fraud (Investments) Act 1958 and Section 13(1) of the Prevention of Fraud (Investments) Act (Northern Ireland) 1940. This point was raised yesterday in connection with the Scottish agency by my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton). I trust that the Welsh Ministers have had sufficient notice to be able to tell us why the agency should be immune from the conditions applying to private undertakings under those Acts.
At the root of our objections is the tact that the agency is, like any Government agency or nationalised industry, free from constraints which apply or ought to apply to private industry. While the agency was originally charged with promoting industrial efficiency and international competitiveness, it was also charged, and still is, with safeguarding employment in any part of Wales. How fortunate it was that their Lordships altered the original wording of Clause 1 so that what originally were duties are now only discretionary functions for the agency.
Even so, the agency will find itself in a hopeless tangle. We all know that if industries or individual firms wish to compete internationally the work force will have to be cut in the interests of increased productivity. How on earth will the agency choose between efficiency and safeguarding employment in view of the Government's pusillanimous attitude towards redundancies?
May I give the hon. Member an example of the way in which I envisage the agency being able to intervene effectively? Two years ago, during the period of the Conservative administration, a firm withdrew from a branch factory in my constituency. It has been holding the tenancy of the factory for two years. Now it has collapsed into liquidation. In such a situation, surely the agency would be able actively to intervene to retain employment and a viable production unit.
If that company has gone into liquidation because it was losing money, I cannot see why the public should have poured money into it. Private industry finds itself in a hopeless situation. We have record post-war unemployment figures which are increasing monthly. Our currency is sagging to a record low level. Inflation is running at two or three times the rate of that of our international competitors. The capital market is being sucked dry by the Government's enormous and growing borrowing requirement. The Government have enormously increased personal and corporate taxation. They have invented new taxes, like the capital transfer tax, and intend to invent further new taxes, like the wealth tax. We need not just incentives. There needs to be an ability on the part of private industry and individuals to invest on their own account.
The Government have introduced measures such as the Community Land Bill, the Trade Union and Labour Relations Act, the Employment Protection Bill and the Industry Bill, which immeasurably increase the power of the State and of trade unions. Today, of course, the Secretary of State has gone ahead and threatened us with a new form of rural development board for Mid-Wales. The Government do all this at a time when there is a world trade recession.
Labour Members have complained that private industry—which provides well over 90 per cent. of the life-blood of the country in the form of exports and the bulk of our taxes, which are the lifeblood of the Government—is failing the nation. Indeed, as the Government's measures progressively bite into the vitals of British industry, the excuse to use the powers of bodies such as the Welsh Development Agency to carry on—this is what they want to put back into the Bill—industrial undertakings and establish and carry on new industrial undertakings, particularly where their form of industrial democracy, yet to be defined, is practised, will become quite overpowering.
The Bill is just another excuse for further nationalisation and State control. The parts which refer to the environment or to promotional co-ordination could perfectly well have been achieved by other means. Some will claim in relation to State power that the Bill is only a little one. That was the claim of the maidservant with the illegitimate child. The results are the same—an eventual and irresistible growth.
This is a Socialist measure, just as the ill-conceived Welsh Rural Development Board was a Socialist measure. We cannot expect any less from a Socialist Government, and with that I cannot take issue. However, I take issue with Socialism itself. The Bill and the Minister's statement today make it plain that we have a prime example of a Socialist Bill purporting to be a measure of moderation. Certainly it may be moderate in the eyes of the Tribune Group but, my goodness, would not its predecessors of just a few years ago have been delighted to achieve what the Bill threatens?
Unless the Bill and the other measures I have mentioned are not overturned or utterly reformed by the next Conservative Government, Britain will no longer enjoy a mixed economy.
Indeed some claim that the balance has already badly tilted away from the private sector. We shall have instead—and unless we can overturn it soon we shall have instead—a Socialist State, State-owned and State-run, and a system, therefore, in which freedom itself is bound to perish.
I shall try to keep my remarks within the time allocated. Some people, especially Conservative Members, have criticised the principle of the public having certain rights when they have invested public money in concerns. Conservative Members are very willing for public money to be invested in ailing or failing concerns, but they are not willing for us to invest in profitable concerns. This seems a very odd way for these guardians of the public purse as they like to portray themselves, to carry on. When we have invested, they are unwilling for us to expect some return on our money or to expect some say in the way in which the industries concerned are run. This lies behind a great deal of what has taken place in the debate and in other debates on related matters.
The argument of Conservative Members, as the hon. Member for Cardiff, North (Mr Grist) has just illustrated, is that market forces must be the be-all and end-all of things, and that protection of employment comes second to that. He made it pretty clear in his remarks that if a firm, such as the example given by the hon. Member for Merioneth (Mr. Thomas), is going under it should be allowed to fail. That seems to be his theory.
We believe in an entirely different philosophy, namely, that if a firm is marginally in trouble we need an agency, such as the Welsh Development Agency, to rescue it. We believe that we should have such a means. Surely it is better to spend a smaller sum on enabling people to retain their jobs than to pay out £1 million in unemployment pay?
We are accustomed to the arguments used by the Conservative Party for allowing simply those industries in which it is difficult to ensure profitability, such as coal, to remain in public ownership. However, if an industry threatens to be very successful, the Opposition do not want it in public ownership because they might have too many of their supporters clamouring for more public ownership. They want these examples to show that public ownership does not work. For this reason they will be unwilling to support that element in the Bill which indicates that we want to invest in profitable industries as well and to have a stake in them.
The Secretary of State must retain some controlling powers over this agency. If it has a free rein we in this House shall not be able to question its activities. I have been concerned over the years about the agencies that have been set up in Wales. I believe that Wales, compared with any other part of the country, has more agencies which are semi-independent and which we cannot get at. Throughout the United Kingdom we have the Post Office. I deplore the fact that we cannot question Ministers sufficiently closely on the activities of the Post Office. I do not like the idea that we cannot ask sufficient questions about the activities of the water authority in Wales. We ought to have more power over these bodies. It is public money that they are spending on our behalf.
This is where the Welsh Development Agency is important. However, we must have a say in its activities through the Secretary of State at this stage. We might develop that in other forms later. Hon. Members may object to this, but in doing so they are crying for complete independence for this body. I am unwilling to allow it such independence, because the appointees should not be free to spend public money in whatever way they wish.
The hon. Member for Pembroke (Mr. Edwards) did an injustice when he criticised the reference to industrial democracy. He did the Bill less than justice. In Clause 1(3)(d) we refer to the promotion of industrial democracy in undertakings with which the agency is associated. This is important, because our experience over the past few years has been that the creation of public bodies and corporations has not led to sufficient say for employees in the industries concerned. I do not expect it to be spelt out in the Bill exactly what form of industrial democracy is intended.
At the lowest level, it is simply that workers in the industry concerned have some say in the affairs of the industry and are not dictated to. This can be expanded upon and we can discuss what form it may take. But certainly I do not see why we should again have the pattern of set-up that we have had in the past, which has been unsatisfactory. People working in the industries concerned ought to have much more say.
Finally, I was glad to hear my right hon. and learned Friend the Secretary of State refer to Mid-Wales and rural Wales. I understand his point of view that we cannot at this stage have another body alongside this one. However, when this Bill has become an Act, I look forward to the creation of some such body to look after the interests of Mid-Wales. It could come under the umbrella of this agency or could be a separate body. I shall not argue about that.
I notice that the most vociferous critics of the Welsh rural development board, Liberal Members, are nowadays finding support for the creation of some such body. The National Farmers' Union of Wales was among the most vociferous opponents of the WRDB, but now it is asking for something similar. We have certainly lost out by not having such a body. I remember when the Tory Government abolished the Pennines Rural Development Board in 1971. That was a good example of what we need in Mid-Wales. I hope that we shall have a comprehensive set-up to look after our interests.
Like all hon. Members who have spoken in the debate, I welcome those parts of the Bill which provide for co-ordination of existing activities—that is very useful—and those parts of it dealing with the environment. I want to ask the Under-Secretary to make it quite clear that tourism will get a look in on the sponsorship that is coming in under the Bill, because it is one field in particular in which State enterprise can play a really useful rôle in developing and even initiating projects which can have spin-off greatly to the benefit of private enterprise working in the same field.
I wish briefly to explain why I am going to vote against the Bill tonight. I do so as one who voted with a happy heart for the 1972 Industry Act. I am not at all opposed to the principle of State intervention in industry. I regard the State as having a continuing rôle to fill what might be called social gaps in the achievement of private industry. But in 1972 the situation was a very different one. The problems that faced us in those days were problems of pollution, of running out of raw materials, of labour shortages and of economic imbalance, not at all the problems with which we are faced today. The problems which we face today are the mirror image of the problems that we faced in 1972.
If I vote against the Bill tonight it will be not primarily on account of what is in it. It is a little hard to know exactly what is in it in terms of intervention, if only because we do not know how the Industry Bill will survive the raking cross-fire that it is getting from both wings of the Labour Party. I shall vote against the Bill not primarily because of what is in it but because it comes at the wrong time, at a time when the mixed economy, as my hon. Friend the Member for Cardiff, North (Mr. Grist) said, is in real peril.
I wonder whether those hon. Members who pay lip-service to the idea of the mixed economy realise quite what a danger there is of a massive collapse of the whole of the private sector, and I have a horrible fear that the Bill will accelerate that process of collapse, and do so for two reasons: first, because of the additional tax burden which is to be laid on an already groaning private industry. The money that will be spent under the Bill—and we are a little unclear exactly how, and how fast, they are to be spent—has to be raised and much of it will have to come out of private industry. In so doing the Government will be further limiting the ability of private industry to pay its way.
There is a point that has not been raised by any other speaker in this debate, that bodies such as the Welsh Development Agency and the National Enterprise Board provide a kind of surrogate for effective action. They "kid" people into believing that by creating the right kind of organisation, by setting up the right kind of body, we can somehow avoid having to make very painful choices, that somehow we can make bricks without straw. Hon. Members opposite know as well as anybody else that the only way we are going to get out of our mess, the only way that we shall conquer inflation and start to reduce the terrifyingly rising tide of unemployment, is by persuading people somehow or other to go without goodies today in order to buy the tools to work with tomorrow. It is as simple as that.
I have a horrible feeling that the Welsh Development Agency is going to obscure that basic truth and that for every two jobs that this agency creates by its interventionist activities, it will take away three elsewhere.
The one and only certainty about the Bill is that it will win more votes than jobs. It will do so at a time when unemployment is running as rapidly out of control as inflation. As an index of the way in which inflation is running out of control, it is instructive to compare the price of the Bill now with what it cost when it went into the House of Lords on 29th April. It then cost 29p, and when it emerged rather less than two months later it cost 42p. That is a rate of inflation of 45 per cent. in just under two months. On what is now known as the Healey basis of calculation, that is a rate of 270 per cent. per annum, which helps to explain the mess we are in.
I am seriously concerned about the way in which unemployment is rising in my constituency. It is bad enough for middle-aged people who find themselves out of a job, people who are tempted into premature retirement by the offer of severance pay and so on, and who before very long bitterly regret it. I am still more worried by the prospects for school leavers. The figures for the Rhyl travel-to-work area show that 53 boys and 29 girls are unemployed, compared with nine boys and 11 girls at this time last year. This picture is repeated all over the country. I have a horrible feeling that the young people concerned will grow up into an unfriendly, unwelcoming world in which they feel unwanted.
Here, more than anywhere else, is the problem we shall face in two years' time—not just an economic problem, not just an unemployment problem, but a social problem of appalling magnitude which will be a time bomb exploding not under the present Government but under their unfortunate successors.
If the last two Opposition speeches had come from Conservative Members from South-East England and the other fatter regions of the countries of the United Kingdom, they would not have caused a ripple on our consciousness because we have been so used to hearing that kind of thing from them. We can understand that in their salubrious and affluent areas, insulated from some of the harsher realities of industrial life, they can arrive at the kind of conclusions they have reached. But when we hear Welsh Tory Members proposing that the cure for inflation in Wales, and even in their own constituencies, is more unemployment it is an extraordinary revelation of their attitude to the conduct of affairs in Wales compared with ours.
I am sorry that I have not been here for a large part of the debate——
I took the trouble to try to explain to the hon. Gentleman's Whip before the debate that I was serving on a Committee upstairs, where my hon. Friend the Member for Wrexham (Mr. Ellis) is still serving and therefore was obliged to be absent from part of these proceedings. I am sure that everybody will understand.
We are now faced with the Welsh Development Agency. When I looked at the Bill when it was produced, and as I followed the debates in the House of Lords, I was not convinced that it was the answer to a Socialist's prayer, but I was prepared to give it my wholehearted support in the knowledge that the powers proposed for the agency, and its purpose, had a realistic place in meeting the problems of Wales. After hearing the hon. Member for Cardiff, North (Mr. Grist), I am much fortified in my opinion that it is after all a Socialist weapon, because the hon. Gentleman sees it as part of the slimy hand of Socialism reaching over our free country, destroying everything that is best. Everything that appears to the hon. Gentleman to be best appears to me to be worst. The very kind of development that he appears to fear most, I wish for most. Therefore, I shall go into the Lobby with a ready conscience and a more joyous heart than I might otherwise have had.
The Welsh Development Agency, its running mate the Scottish Development Agency and the National Enterprise Board are realistic because they are designed to meet the main difficulties which beset our economy and our people now. With the prospect of growing unemployment, there is a need for a new industrial basis, a new impetus, and—dare I say it?—a new form of enterprise, the traditional system of enterprise having completely failed to deliver the goods or satisfy the needs of workers and citizens in a modern democracy.
We need a renewal and reinvigoration of our economic system, and it is through machinery like the development agencies and the National Enterprise Board, the extension of public ownership and control, and public accountability throughout our economy that we shall achieve the kind of development we need.
The answer to our problems, whether we are talking about our outdated industrial structure, our decrepit social infrastructure or our disastrous investment record, lies in the State sponsorship and public accountability of the means of production, distribution and exchange. It does not lie in the destitution of mass unemployment and the destitution of cutting back public expenditure to the bone—remedies which have been attempted before and resulted in the untold misery of the two decades between the wars, as well as the many years of bitter experience before that—[HON. MEMBERS: "Three weeks."] I shall be saying this in three weeks' time, because I am prepared to be honest with my own Government, unlike the hon. Gentleman opposite with his Government and its newly-developed conscience about unemployment—a novel experience for hon. Members who were here during 1972–73 when the unemployment figure reached 1 million. I shall be quite prepared to speak up for my constituents, for my class, for the interests I represent and for the manifesto on which I was elected, regardless of which Government happen to be in power. I hope I shall not have to prove this in three weeks' time, but if I have to do so I certainly shall.
The answer to our problem lies in production, and not in the destitution which would be visited upon the people as a result of the different types of proposals made by Opposition Members.
In pursuing our purpose, regional policy is vital. Until now, under both Governments, regional policy has been a crutch for capitalism. It has been the last faint gasp of hope of a Welfare State, trying by cajolery and bribery to generate sponsored industrial development in the peripheral areas by injecting a few hundred million pounds. Help has come but not at the speed or on the scale that is needed. Therefore, the responsibility for creating the jobs, renewing the infrastructure, changing and redeveloping the environment and bringing Wales up to a level of expectation and civilisation which people in many other parts of Britain and throughout the world take for granted is moving more and more into the sphere of public provision.
It is an inevitable consequence of the failure of the system supported by Conservative Members. If they had any understanding at all of the system in which we are living, of the age in which we are living and of the economy as it develops, they would see that the best they can hope for is a rationalisation of that process. To stand against it in the stupid single-minded way they do is like trying to push back the tide of history. As part of the process we have this increasing demand for accountability and the new aspirations of the people of our country. Having invested their skills, they also demand the same powers in the conduct of their material lives as they have in the conduct of their political lives.
We are at the dawn of the age when the power of democracy is moving out from its single base of the ballot box periodically on to the shop floor. Opposition Members will throw up their hands in disgust and horror at that, in the same way as people of their convictions did when the vote first came to working men and women. They have the mask of civilisation today. They understand the maturity of the lumpenproletariat and are prepared to concede that they should have the vote. But if they are capable of making a direct contribution to the running of our country, they are more than capable of making an equally direct contribution to the running of our industries which depend on their energies, talents, skills, originality, inventiveness and enterprise even to exist, let alone to be profitable and viable.
In all these spheres, whether we talk about the development that we need of industry in Wales, about the improvement of our environment or about the inspiration of our people, the Welsh Development Agency will play its part. Like many other propositions made by the Government, they are plans; they are proposals.
I am willing to stand in charitable judgment of such proposals and to judge them in the reality of the jobs they bring, the changes they bring and the encouragement they give to our people. Those who are ideologically opposed to the Bill are not simply in for a hiding tonight in the Division Lobbies. They are in for a hiding by history.
Despite all the criticism levelled at the Opposition for insisting on this debate being held on the Floor of the House rather than in the Welsh Grand Committee, I have not noticed that the debate here has impaired hon. Gentlemen's enjoyment of it. We have had a good debate, and I am sure that the Government as well as ourselves will have found it useful.
This may be a historic Bill, but never did a Bill suffer more from bad company than this one. Someone once said that bad company was like a dog: it dins those most whom it loves best. The Bill has been sullied by its association with the Industry Bill, and that association has made its passage through this Parliament more difficult.
Not only are the two Bills associated in our minds. They are physically associated. They have similar features. So, too, has the Scottish Bill. That and the Welsh Bill are as alike as twin brothers, and one has only to trace their lineage in the manifestos of the Labour Party to discover that both are offspring of the Industry Bill concept. Further comments on my part on their parentage would probably be in bad taste, if not out of order.
The Prime Minister has now seen fit to amend the Industry Bill—not half as much as some of us would wish, but a little is better than none. One of the amendments requires that the National Enterprise Board should conform to Section 209 of the 1948 Companies Act. That section deals with the power to acquire the shares of shareholders dissenting from a scheme or contract approved by the majority. I hope that the Minister will be able to tell us whether the same amendment will apply to the Welsh Development Agency.
The similarity between this Bill and the Industry Bill naturally led to a suspicion that the agency in Wales to be established under this Bill would be a sub-office of the NEB. Indeed, the suspicion was there before the Bill was published, because the Government felt obliged to deny it in their consultative paper published in January, which said that the agency would not be simply a Welsh arm of the National Enterprise Board. That may be so. Clearly, the agency has other functions, but the fact remains that at this moment the precise relationship between the agency and the NEB has yet to be defined in guidelines which this House has yet to see. I am sure that we should all, including the hon. Member for Caernarvon (Mr. Wigley), be much happier if we had those guidelines with us now. I think that the Government are culpable to some extent in not having produced them for our discussion today.
According to a statement made by Lord Hughes in the other place, we shall not see these guidelines until the development agency and the board are established. Lord Hughes was talking about the Scottish agency and the NEB. But I think I am right in taking it that what he said about the relationship of the Scottish agency with the NEB is equally true of the relationship between the Welsh agency and the NEB. We understand that the guidelines will deal with those functions of the NEB in Wales which are not devolved to the Welsh Development Agency. These are the functions of extending public ownership into profitable sectors of industry, promoting schemes for the reorganisation or development of industries at a national level, acting as a holding company for State holdings in industry and acting as a channel for selective assistance to companies with branches in Wales which need to be assisted on a United Kingdom basis.
Those are considerable powers. We take strong exception to some of them. Although they do not belong to the agency, we are told that the NEB will consult the agency about their exercise in Wales. In other words, there is likely to be a considerable overlap in the activities of the NEB in Wales and the agency. The agency may not be the arm of the NEB in Wales but those bodies will certainly be hand in glove.
Our suspicions of the agency's relationship with the NEB were well justified. The connection between this Bill and the Industry Bill has been curiously interpreted by the Press in Wales, notably the Western Mail. A number of speakers have referred to that point. That newspaper took a convoluted line—to use one of the Prime Minister's current favourite phrases—when it sought to deal with the typically mild criticism of my hon. Friend the Member for Pembroke (Mr. Edwards) of the Bill as a vast extension of Bennery in Wales.
But what he is proposing
said the Western Mail leader,
is precisely that. To take away powers from a Welsh agency is simply to hand hard-won autonomy straight back to Mr. Benn or his successors and ensure that the agency is just the Welsh arm of the National Enterprise Board.
In other words, the Western Mail did not mind the Secretary of State for Wales extending public ownership as long as it was not done by the Secretary of State for Industry.
I am sorry to tell the right hon. and learned Gentleman that I see no difference between the extension of public ownership under one Secretary of State or the other. There is no difference. They are both Secretaries of the same State. We are still one State, if not one Church, and will remain so until the Members of Plaid Cymru get their way. The Western Mail's curious philosophy was that we do not mind being robbed as long as we are being robbed by friends.
Perhaps this is the right moment to deal with the general impression prevalent in Wales that in the not-too-distant future the agency will be made responsible to a Welsh assembly. The same future apparently awaits the land authority for Wales to be set up under the Community Land Bill. Yet what the Government have said on that point is meagre. The general impression that a transfer of responsibility will take place is based on what the Government have not said rather than on what they have said. Hon. Members who wish for such a transfer should not count their chickens before they are hatched.
Meanwhile, we are giving immense powers to the Secretary of State, powers which he himself described as near-dictatorial, and we are giving those powers to him very much on trust. He is becoming the latter-day Rowland Lee, for we must take into account not only the powers he has under this Bill but the powers he will have under the Community Land Bill. I am not sure which I fear most, the liaison between the agency and the NEB or that between the agency and the Land Authority. Both will have compulsory purchase powers, both are small, compact bodies, democratic only in so far as they are responsible to us through the Secretary of State for Wales. We assure him that we shall watch both organisations and himself very carefully.
The Bill and the agency have suffered, too, from what I can only call bad presentation. I should not like to call it dishonest presentation, but neither would I call it honest. We had all the good news first and somehow the Government never got round to giving us the bad news, or, if they did, it was subliminally presented. News of the agency to be set up under the Bill was delivered with an ample sugar coating of euphoria and we had to bite hard to taste the bitterness within.
In the consultative paper we read of the agency's impeccable objective as being
to accelerate the economic and industrial development of Wales and to improve the environment in a way consistent with that objective.
We read of the proposed take-over of the Welsh Industrial Estates Corporation by the agency and its supporting rôle in connection with the development corporation. If one did sit up at the description of the agency's third function as being:
to carry out regional development functions in Wales of the proposed National Enterprise Board
one was quickly reassured by the firm statement that the agency would not simply be a Welsh arm of the NEB.
Fair play to the CEI in Wales. Although it welcomed the agency in
principle—the agency as described in the consultation paper, not as seen in the Bill—it expressed reservations, and those reservations have deepened with time. That part sentence in the consultation paper that states that the agency will:
establish new and joint ventures
has gathered more opposition to the Bill than all the rest. In the original Bill it is enshrined in Clause 1(3)(c) as the power:
to carry on industrial undertakings and to establish and carry on new industrial undertakings"—
in other words, to extend public ownership and compete with existing private undertakings. Let us get this clear. What we object to about this competition is that we cannot see that it will be fair.
Where does the money come from in the first place? We have had this argument before, when Government supporters were saying that the State supports industry to the tune of £2 million a day. Is it not equally true that industry supports the State to the tune of £10 million a day in taxation?
The NEB has similar powers under the Industry Bill to form bodies corporate and partnerships. We must resist the Bill, because the Secretary of State has made it absolutely clear that Clause 1(3)(c), although removed by the Lords, will be restored at the first opportunity. It seems silly to us that the Government should spoil their ship for a ha'porth of tar, but that is their decision.
We must resist the Bill, because we do not believe that the extension of public ownership is either politically or economically right. It may on occasions be the lesser of two evils, but it is not, in our opinion, a course that comments itself as being desirable in itself, which is the way that Labour Members regard it. This is Socialism, as so many Labour Members have said in the course of the debate, but to me it is Socialism not so pure and not so simple. I note in passing that Plaid Cymru may now be called Plaid Cenedlaetholi, which may be translated as the Welsh Nationalisation Party.
I do not think that question fits into the context at all. I shall be coming to that point soon.
Before the right hon. and learned Gentleman restores the Bill to its pristine form, let me plead with him to take various matters into account. First, there is the current economic situation and the Government's immense borrowing requirement that is now estimated at considerably more than the £9 billion given by the Chancellor in this Budget Statement. This may well necessitate cuts of some £2,000 million over three years, according to some pundits who are basing their view on the last quarterly bulletin of the Bank of England.
I am sure that the Secretary of State feels that the £100 million he can obtain for his agency under the Bill will be well spent. Part of it he is clearly committed to spending anyway. However, does the Secretary of State seriously believe that the new spending he has envisaged will be in the best interests of the country as a whole? If so, does he seriously believe that the Chancellor of the Exchequer will agree with him? I tell him bluntly that I do not think that he or his Bill will escape the public expenditure cuts to come, and I shall tell him why. It is precisely because he intends to use some of his funds for the purposes of Clause 1(3)(c). The money which he will have to do this will have been borrowed by the Government at a rate of interest which industry and commerce are finding it increasingly difficult to afford. If successful businesses cannot afford to borrow at such rates and remain solvent, what hope has a Government-sponsored new venture? It will be faced with the prospect of a loss right from the start.
It is all very well to back an existing industry, like British Leyland, when it is facing hard times, and try to tide it over, but it is an entirely different matter for the Government to become involved in new ventures, especially when we are in a world recession of the magnitude and depth of this one, and when the outcome of the renegotiation of the social contract is still unknown. I do not know how the Government think it possible to have wage restraint when they are flashing their money about like children at a funfair.
If the hon. Gentleman believes that no money will be available and, therefore, the Bill will be harmless, why does he intend to lead his troops, few as they are, into the Lobby against it tonight? Secondly, will he explain the constitutional novelty whereby we are dealing with a Bill the parts of which he finds offensive are not in it as proposed, and yet he intends to vote against Second Reading?
I will take the right hon. and learned Gentleman's second point first. He made it absolutely clear, and it was made abundantly clear in another place, that the Government propose to use the Bill as a vehicle for the return of the obnoxious clause about which I am talking.
To answer the first point, the right hon. and learned Gentleman may have the money for the consolidation aspects of the Bill, but he will not have the money to operate Clause 1(3)(c), which he insists on putting back into it. I warn the Secretary of State that by insisting on the restoration of Clause 1(3)(c) he is not only placing his own economic judgment in grave doubt but putting his Own head on the block within his own Government.
Last weekend we had the Prime Minister preaching that the end was at hand—within six weeks, I think—and pleading for a sense of urgency based on a cleat recognition that money cannot be spent twice because if it is pre-empted for income it is no longer available for public expenditure. But this is precisely what has happened and what may happen again. It is in this context that I believe the Bill may not survive the public expenditure cuts to come. Clearly, the Bill was conceived in happier times. It looks forward optimistically to a future which, alas, has become clouded with uncertainty. It has, therefore, lost its immediate relevance.
We wish that the Secretary of State was bringing forward a measure more apposite to the present situation. The right hon. and learned Gentleman accused us of being out of touch. It is he who is out of touch with the present situation in Wales.
I think that the Secretary of State has begun to realise that. When I pressed him on that point in the Welsh Grand Committee on 7th May his reply was modest. One might almost say that it was humble, which is the appropriate attitude for any Minister faced with our present unemployment figures in Wales. I asked:
Do the Government really think that this is the answer to the economic problems of Wales now? Are they seriously saying to the 60,000 unemployed and those whose employment is threatened that the development agency will be their salvation? If so, they are deceiving the public and deluding themselves.
The right hon. and learned Gentleman replied:
We have said quite clearly that we are part of the economy of the United Kingdom, that the heart of the matter is solving the problems of the United Kingdom as a whole. I said so today. But I believe that the Welsh Development Agency will be a vital part of the machinery that I need to tackle the problem. I put it no higher than that."—[Official Report, Welsh Grand Committee, 7th May 1975; c. 91.]
No, I will not give way.
We understand the need for machinery to consolidate control over the Welsh Office's various activities in the industrial and environmental sectors. We have no quarrel with that aspect of the agency. Nevertheless, we question the relevance of some of the Secretary of State's new powers under the Bill to cur current problems in Wales, some of which have been exacerbated by the Government.
I will give an example. In my constituency there is a factory which employs about 1,500 people manufacturing washing machines. The Chancellor has increased VAT on washing machines to 25 per cent. Those who work at the factory now live in fear of losing their jobs if orders fall off. That situation has been created by the Government. What is the relevance of the Bill to that situation?
One of the purposes of the agency is to maintain or safeguard employment, but can it do so in the face of counter-productive action by other Government Departments? That is the question that we have to answer. The situation in my constituency is a microcosm of what is happening in Wales and in the country as a whole. It is Government action that is responsible for much of our present unemployment and lack of investment.
I have quoted the OECD survey of the United Kingdom economy at the right hon. and learned Gentleman once before but I make no apology for doing so again. The survey reads:
Investment intentions in manufacturing industry and business confidence weakened through 1974 to historically low levels. Poor profitability, the liquidity squeeze, rapid inflation, weak demand and uncertainty about Government plans for industry and the Common Market, may all have contributed to this.
That is a damning indictment from an impartial and objective source which we all respect. Clearly we must first get right our general economic and industrial policies. If I recall his words correctly, the right hon. Member for Anglesey (Mr. Hughes) said that this is all "pie in the sky" unless we get our economic policies right. When the United Kingdom flourishes, Wales flourishes, but that will not happen until the rate of inflation is reduced, until there is reasonable profitability, and until investors have the confidence to invest.
This Bill only tinkers with the edge of our problems and, insofar as the impression has been given that it does more than that, the Welsh public have been deluded and badly misled. The Government's function is to provide the framework in which business and industry can flourish. It is not the Government's function to run industry themselves. The Government should provide the infrastructure—for example, roads, sewerage and sites. Heaven only knows, there is enough work to do on those lines in Wales.
For the Government to become involved themselves in industry is an admission of failure. We may be sure that where private industry cannot succeed the Government will almost certainly fail. There will be little to show for their efforts except for the new style of dereliction which is revealed in the Government's accounts.
To sum up, I ask my right hon. and hon. Friends to oppose the Bill's Second Reading. The Government have indicated clearly that they intend to restore to the Bill those sections which we believe to be totally misconceived, unnecessary and mistaken both on political and on economic grounds. I refer to the sections which give power to the agency to extend public ownership, a principle which the more it is practised the more we abhor because of its costly results.
Secondly, we do not think that this is the right time to experiment with new ventures on dearly borrowed money. It is a time for restraint in public expenditure, as the Government well know. We accept that some of the expenditure under the Bill is inevitable in the sense that it was there before and necessary, but some of the new anticipated expenditure is gratuitous. I refer, of course, to the extension of public ownership. We doubt whether it can be other than wasteful in the long run.
Finally, we shall vote against the Bill because it is our first opportunity on the Floor of the House to express our grave displeasure at the Government's conduct of economic and industrial policies in Wales. The Bill before us will not be the salvation of the Welsh people. We are all agreed on that. But if it is not to be the salvation of the Welsh people, what is? The Welsh people are entitled to look to the Government for help. We are entitled to press the Government to think again and to try to devise solutions which are matched to our current problems.
The Bill is a mask to hide the Government's inability to deal with our problems, many of which they have created and exacerbated. For these reasons and others, I ask my hon. Friends to vote against the Bill.
Perhaps the best comment I can make on the Opposition's opening and closing speeches is summed up in the phrase "bitter and mild"—"bitter" from the hon. Member for Pembroke (Mr. Edwards) and "mild" from the hon. Member for Conway (Mr. Roberts).
I listened attentively to the speech made by the hon. Member for Pembroke. I do not find it easy to find many points worth answering. We heard a good deal about the Opposition's view on the United Kingdom economy and there was much bandying about of highly tendentious statistics. The hon. Gentleman's speech seemed to bear all the hallmarks of the hard-nosed men in the Central Office research department. What it lacked was any contact with the people of Wales, their working lives and their wishes. I think that all Members of the House and all the people of Wales would have welcomed much more from the hon. Gentleman about the Bill. I suspect that the reason why we did not hear a lot about the Bill was that the hon. Gentleman genuinely found little to complain about. As for the hon. Member for Conway, his speech had a canine flavour to it. It was slightly rabid in parts and perhaps in many ways its bark was worse than its bite.
This has been a good and wide-ranging debate. I shall try to answer the points of detail which have been made. The Bill is a landmark in the economic history of Wales. It clearly commends itself to the great majority of people. Acceptance of the Bill cuts across party political boundaries, and it is hard to think of any proposal affecting Wales in recent years which has met with such approval. This is the case only because the purposes of the Bill are seen to be directed at the real needs of Wales and in a sensible and practical way.
As for the parentage of the Bill, I do not think there is any doubt about it. It is a Labour Bill and is very much the child of my right hon. and learned Friend the Secretary of State for Wales. It is true to say that no other political party had such detailed proposals to put before the House as those contained in the Bill.
Individual areas of Wales suffered many years ago from bad, sloppy economic planning—or, more accurately, from no planning at all. Worse still, the pursuit in the past of financal rewards with no concern for social or environmental implications has led to areas of great deprivation. Added to this, an excessive dependence on the two major industries of coal and steel has made our economy particularly vulnerable to attack when times are bad. Current problems and the awesome inheritance of yesteryear mean that we have mammoth difficulties to overcome. Clearly a radical solution is required. I believe that the agency will have the powers to make a contribution to setting things aright and preventing the mistakes of the past from happening again.
This is the first wholly Welsh Bill on economic, industrial and environmental matters. There are perhaps, in the English language, two novels—Llewellyn's "How Green was my Valley" and Cordell's "The Rape of the Fair Country"—which described the ravages of industrialisation in Wales in this and the last century—popular fiction which depicted grim fact. My right hon. and learned Friend's Bill repays a debt to generations past and offers hope for the future for the people of Wales.
Having emphasised the "Welshness" of the Bill, I should particularly like to draw attention to two points. The first is the subject of derelict land clearance. The county and district councils have this assurance from me. They will continue to play the major rôle in derelict land clearance. We will consolidate, not change, the existing arrangements. We will build on, not detract from, the strengths of the present system. We acknowledge the success of local councils so far in clearing dereliction. I have mentioned Richard Llewellyn, the novelist. He returned to Wales recently after some years' absence. In the Rhondda Valley, at Gilfach Goch, he could not recognise the place he revisited. The great tips had been removed, and the area was landscaped.
Nevertheless the agency has a substantial and important environmental rôle. The Welsh Office's Derelict Land Unit will merge into the agency. I expect to see the agency act as a catalyst to ensure a further surge forward to rid our beautiful land of the despoliation of the past. The rôle in derelict land clearance is crucial. Land for new housing and for factories is in short supply. The people of the valleys are entitled to live and work in an improved environment. This Bill offers them just that prospect.
I pay tribute to my right hon. Friend the Member for Anglesey (Mr. Hughes) for the great work he did at the Welsh Office, and in particular on having the vision and commitment to set up the Derelict Land Unit in Cardiff. That was a master-stroke for Wales. My right hon. Friend showed again in his speech his great involvement and experience in Welsh affairs. I echo the tribute he paid to the Mid-Wales Development Corporation. It is not intended that the agency should alter or detract from the work of the corporation. We are seeking to emphasise that the agency in its Mid-Wales rôle, will work in harmony with the corporation, and within this partnership a further strategy for developing and reinvigorating Mid-Wales can be worked out. My hon. Friend the Member for Brecon and Radnor (Mr. Roderick) made strong points on Mid-Wales in his very knowledgeable speech.
My right hon. Friend the Member for Anglesey and the hon. Member for Barry (Sir R. Gower) asked why there was no mention of agriculture in the list of requirements in Clause 2. This does not mean that experience in agriculture would not be of importance to the agency, and it is not excluded. Perhaps my right hon. Friend slightly misread the terms of the clause; it is not as exclusive as he suggested. It refers only to certain skills and experience which may be drawn upon, but it is open to the Secretary of State to look for people who will bring to the agency experience of other walks of life, not excluding agriculture
I accept that the provision is not exclusive, but the Government have gone to the trouble of naming certain other industries. Why exclude agriculture, which is the chief industry in most of Wales?
This is a Second Reading debate and I hoped I had shown in my speech that I had taken this important point on board.
My right hon. Friend the Member for Anglesey referred to some apprehensions expressed by the Association of District Councils. There is no cause for conflict about purchase of land. The existing arrangements are unaltered by the Bill. Second, there is no conflict on housing, because the agency does not have a housing rôle. The point about local government local representation will need to be considered further. There will certainly be an opportunity for discussion in Committee.
My right hon. Friend the Member for Anglesey, my hon. and learned Friend the Member for Abertillery (Mr. Thomas) and my hon. Friend the Member for Swansea, East (Mr. Anderson) made some valuable points about the locations of the agency. These will certainly be taken into account when the agency's locations are discussed.
It will be clear from the terms of the Secretary for State's speech that the agency will not be "cabin'd, cribb'd and contin'd" to, for example, Cardiff. As my right hon. and learned Friend made clear, the agency will have an all-Wales rôle and its locations will have to reflect that. The agency is not being placed in any way in a privileged position in relation to planning permission. This is made clear by the absence in the Bill of any provision to the contrary. We attach particular importance to this. I know that the local authorities in Wales do so too. This is one of the ways in which we emphasised and illustrate that the agency will he expected to act in partnership with local authorities and other bodies such as the Countryside Commission and the Nature Conservancy.
Questions have been raised about the agency's finances. We have made it cleat that there is no time limit on the expenditure. I would have thought that the reason for this is clear. It is impossible to predict how rapidly the agency will need to draw upon the financial resources at its disposal as this will depend upon a variety of matters, including the needs of industry for investment finance.
The speed at which the money will be spent will depend on what the agency determines it needs to carry out the job effectively. What is important is that the agency has sufficient resources now to get on with the job we are giving it, which will enable it to make an impact upon the problems facing Wales. A full opportunity will be afforded to Parliament to debate the raising of the limit from £100 million to £150 million, as hon. Members will see if they read Clause 16(4) of the Bill.
I want to make a brief reference to the point raised by the hon. Member for Caernarvon (Mr. Wigley) about the EEC. There is no inhibition upon the agency if it wishes to work in full partnership with organisations or agencies of the European Community. The details will be for the agency to work out with Brussels. The full range of Community finances will still remain available.
The hon. Member for Pembroke spoke at length on the subject of finance. He asked whether the money would be spent. That would seem to be a reasonable enough question, but I got the impression that he did not really want any money to be spent. We are talking about money to be spent for the benefit of the people of Wales in Wales. The money will be spent on matters of the highest priority like derelict land reclamation.
Is the hon. Member for Pembroke suggesting that £2½ million a year is enough for derelict land work? Surely he will agree that that sum is not enough. Is he suggesting that we cannot increase expenditure on the work of the Welsh Industrial Estates Corporation? Surely, again, he would say that it is not enough. I believe he is suggesting that nothing more should be spent on intervention in industry. Therefore, he had to be critical of the agency's whole spending. I am sure that the agency's board will spend wisely, well and with a due sense of priority on those jobs which all know in their hearts to be essential and right for Wales.
The hon. Member for Cardiff, North (Mr. Grist) seemed to be much exercised by the provision in paragraph 21 of Schedule 1 which relates to the Prevention of Fraud (Investments) Act. That paragraph prohibits the unauthorised distribution of circulars relating to investments. The Act as a whole gives complete freedom to exempted dealers to distribute such circulars. Most leading City institutions enjoy exempted dealer status.
The agency will be a body of high financial probity which will provide shareholders with a fair and honest account of the circumstances in which they are being asked to dispose of their shares. There are precedents for this in the Trustee Investments Act, the Charities Act, the Industrial Reorganisation Corporation and, indeed, the Industry Bill. I am not quite sure what the hon. Member was trying to impute in his remarks, but he might have taken the trouble to look at the provision to which he took exception before complaining. I hope that my remarks have helped to set his fear at rest.
Questions have been raised by the hon. Member for Caernarvon and the hon. Member for Cardiff, North on the relationship between the Welsh Development Agency and the National Enterprise Board. I am sure they will agree that much of this will be dealt with in detail in Committee.
I shall give three assurances to the House. First, the Government have undertaken to publish guidelines setting out details of the relationship when they are finalised. Clearly, this will not be before the agency and the board are in being since we wish both bodies to have an opportunity to participate in formulating the contents of the guidelines. It would make no sense to impose the guidelines on them. However, I can give an absolute assurance that the guidelines will be made widely available and that Parliament and industry will be fully aware of their contents.
Secondly, the agency will not be an arm of the NEB in Wales. We consider that a vitally important facet of the agency's responsibilities is that it should develop contacts with the whole of industry in Wales. It will be able to enter into discussions with any Welsh-based company or the management of any Welsh undertaking to establish how that company or undertaking can best contribute to the good of the Welsh economy. There is no question whatever of the agency's activities being limited to small, locally-owned companies, as some misguided critics have suggested. There will be much work for the agency to do in Wales, which it will be in a position to do entirely on its own.
I have dealt with many of the points raised by the hon. Gentleman.
Thirdly, when the NEB operates in Wales, as it must do, and if, for example, it is involved in companies operating on both sides of the border, it will do so in full consultation with the agency.
In conclusion, speaking now as a NorthWalian—the hon. Member for Flint, West (Sir A. Meyer), the hon. and learned Member for Denbigh (Mr. Morgan) and the hon. Member for Caernarvon spoke as North Walians—I feel sure that I can welcome the Bill on behalf of all those whose homes are in that part of the Principality. North Wales is an area of both outstanding natural beauty and major industry—from Snowdonia, the Isle of Anglesey and the Vale of Clwyd to the steel complexes at Shotton and the vigorous industrial life of Wrexham. Thus it has just those two aspects of life and work to which the Bill directly is addressed.
North Wales needs economic development and reinvigoration. It has many threats to face up to. Its steel industry must at least streamline itself. Twelve collieries have become but two. The slate quarries have closed. Our communications system requires improvement. West of Deeside, unemployment rates are uncomfortably high. These threats will be met strongly.
The area also has an environment to preserve. It will always be our objective to be able to develop new jobs without despoiling the environment. But the area also has many miles of bleak industrial dereliction—the unfortunate legacy of the past about which I spoke earlier—which need to be restored and given new life. This includes the forbidding spillage of the great Snowdonian slate quarries and the ubiquitous tips of the northeastern coalfield. It is my firm conviction that the powers in the Bill and the resources to be available to it will help to meet these objectives which all those whose heart is in North Wales must share with me.
I have said that this is a wholly Welsh Bill. It has been preceded by exhaustive and successful consultations with industry, organised labour and local government. It establishes an organisation for economic and environmental development which can bring great help to South Wales, Mid-Wales and North Wales. It creates a strong and flexible agency which will work very hard indeed to generate prosperity in the Principality in the decade ahead. It has both the financial resources and the power of the Secretary of State and the Welsh Office behind it.
I do not say that it is a magical and universal panacea for the problems that beset the Welsh economy. We have many problems, and we shall need as many measures as are necessary to overcome them. But this is an imaginative proposal which can contribute speedily and effectively towards the creation of a better and more secure way of life for all the people of Wales.
|Division No. 247.]||AYES||[10.00 p.m.|
|Abse, Leo||Gourlay, Harry||Murray, Rt Hon Ronald King|
|Anderson, Donald||Graham, Ted||Newens, Stanley|
|Archer, Peter||Grant, George (Morpeth)||Noble, Mike|
|Ashton, Joe||Grimond, Rt Hon J.||Oakes, Gordon|
|Atkins, Ronald (Preston N)||Grocott, Bruce||Ogden, Eric|
|Atkinson, Norman||Hamilton, W. W. (Central Fife)||Orme, Rt Hon Stanley|
|Bagier, Gordon A. T.||Harper, Joseph||Owen, Dr David|
|Barnett, Guy (Greenwich)||Harrison, Walter (Wakefield)||Padley, Walter|
|Barnett. Rt Hon Joel (Heywood)||Hatton, Frank||Palmer, Arthur|
|Bates, Alf||Hayman, Mrs Helene||Parry, Robert|
|Beith, A. J.||Heffer, Eric S.||Pavitt, Laurie|
|Bidwell, Sydney||Hooley, Frank||Peart, Rt Hon Fred|
|Blenkinsop, Arthur||Horam, John||Phipps, Dr Colin|
|Booth, Albert||Howells, Geraint (Cardigan)||Rees, Rt Hon Merlyn (Leeds S)|
|Bottomley, Rt Hon Arthur||Huckfield, Les||Richardson, Miss Jo|
|Boyden, James (Bish Auck)||Hughes. Rt Hon c. (Anglesey)||Roberts, Gwilym (Cannock)|
|Bradley, Tom||Hughes, Mark (Durham)||Robertson, John (Paisley)|
|Bray, Dr Jeremy||Hughes, Robert (Aberdeen N)||Roderick, Caerwyn|
|Brown, Hugh D. (Provan)||Hughes, Roy (Newport)||Rodgers, George (Chorley)|
|Brown, Robert C. (Newcastle W)||Hunter, Adam||Roper, John|
|Buchan, Norman||Irving, Rt Hon S. (Dartford)||Rose, Paul B.|
|Butler, Mrs Joyce (Wood Green)||Jackson, Colin (Brighouse)||Ross, Stephen (Isle of Wight)|
|Callaghan, Rt Hon J. (Cardiff SE)||Janner Grevilie||Ross, Rt Hon W. (Kilmarnock)|
|Campbell, Ian||Jay, Rt Hon Douglas||Rowlands, Ted|
|Carmichael, Neil||Jenkins, Hugh (Putney)||Ryman, John|
|Carter, Ray||Jenkins, Rt Hon Roy (Stechford)||Sedgemore, Brian|
|Carter-Jones, Lewis||John, Brynmor||Shaw, Arnold (Ilford South)|
|Castle, Rt Hon Barbara||Johnson, James (Hull West)||Sheldon, Robert (Ashton u-Lyne)|
|Cocks, Michael (Bristol S)||Johnson, Walter (Derby S)||Shore, Rt Hon Peter|
|Cohen, Stanley||Jones, Alec (Rhondda)||Short, Rt Hon E. (Newcastle C)|
|Cook, Robin F. (Edin C)||Jones, Barry (East Flint)||Silkin, Rt Hon John (Deptford)|
|Corbett, Robin||Jones, Dan (Burnley)||Silverman, Julius|
|Cox, Thomas (Tooting)||Kaufman, Gerald||Skinner, Dennis|
|Craigen, J. M. (Maryhill)||Kelley, Richard||Small, William|
|Crawshaw, Richard||Kerr, Russell||Smith, John (N Lanarkshire)|
|Cryer, Bob||Kilroy-Silk, Robert||Snape, Peter|
|Cunningham, Or J. (Whiten)||Kinnock, Neil||Spearing, Nigel|
|Davidson, Arthur||Lamborn, Harry||Spriggs, Leslie|
|Davies, Bryan (Enfield N)||Lamond, James||Stewart, Donald (Western Isles)|
|Davies, Denzil (Llanelli)||Leadbitter, Ted||Stewart, Rt Hon M. (Fulham)|
|Davies, Ifor (Gower)||Lee, John||Stoddart, David|
|Deakins, Eric||Lewis, Ron (Carlisle)||Stott, Roger|
|Dean, Joseph (Leeds W)||Lipton, Marcus||Strang, Gavin|
|Delargy, Hugh||Loyden, Eddie||Taylor, Mrs Ann (Bolton W)|
|Dell, Rt Hon Edmund||Luard, Evan||Thomas, Dafydd (Merioneth)|
|Dempsey, James||Lyons, Edward (Bradford W)||Thomas, Jeffrey (Abertillery)|
|Dormand, J. D.||Mabon, Dr J. Dickson||Thomas, Mike (Newcastle E)|
|Douglas-Mann, Bruce||McCartney, Hugh||Thomas, Ron (Bristol NW)|
|Dunn, James A.||McElhone, Frank||Thompson, George|
|Dunwoody, Mrs Gwynerh||MacFarquhar, Roderick||Tierney, Sydney|
|Edwards, Robert (Wolv SE)||Mackenzie, Gregor||Tinn, James|
|Ellis, John (Brigg & Scun)||Mackintosh, John P.||Tomlinson, John|
|Ellis, Tom (Wrexham)||McMillan, Tom (Glasgow C)||Tomney, Frank|
|English, Michael||Madden, Max||Tuck, Raphael|
|Evans, Fred (Caerphilly)||Magee, Bryan||Urwin, T. W.|
|Evans, Gwynfor (Carmarthen)||Mahon, Simon||Varley, Rt Hon Eric G.|
|Evans, Ioan (Aberdare)||Marks, Kenneth||Wainwright, Edwin (Dearne V)|
|Evans, John (Newton)||Marquand, David||Wainwright, Richard (Colne V)|
|Ewing, Harry (Stirling)||Mason, Rt Hon Roy||Walker, Harold (Doncaster)|
|Faulds, Andrew||Maynard, Miss Joan||Ward, Michael|
|Flannery, Martin||Meacher, Michael||Watkins, David|
|Fletcher, Raymond (Ilkeston)||Mellish, Rt Hon Robert||Watkinson, John|
|Ford, Ben||Mikardo, Ian||Weetch, Ken|
|Forrester, John||Millan, Bruce||Welsh, Andrew|
|Fowler, Gerald (The Wrekin)||Miller, Dr M. S. (E Kilbride)||White, Frank R. (Bury)|
|Freeson, Reginald||Mitchell, R. C. (Solon, Itchen)||White, James (Pollok)|
|Freud, Clement||Morris, Alfred (Wythenshawe)||Whitehead, Phillip|
|Garrett, W. E. (Wallsend)||Morris, Charles R. (Openshaw)||Whitlock, William|
|Gilbert, Dr John||Morris, Rt Hon J. (Aberavon)||Wigley, Dafydd|
|Gould, Bryan||Moyle, Roland||Willey, Rt Hon Frederick|
|Williams, Alan (Swansea W)||Wilson, William (Coventry SE)|
|Williams, Alan Lee (Hornch'ch)||Wise, Mrs Audrey||TELLERS FOR THE AYES|
|Williams, Hi Hon Shirley (Hertford)||Woodall, Alec||Mr. Donald Coleman and|
|Williams, W. T. (Warrington)||Woof, Robert||Mr. James Hamilton|
|Wilson, Rt Hon H. (Huyton)|
|Adley, Robert||Gow, Ian (Eastbourne)||Nott, John|
|Arnold, Tom||Gower, Sir Raymond (Barry)||Oppenheim, Mrs Sally|
|Atkins, Rt Hon H. (Spelthorne)||Gray, Hamish||Page, Rt Hon R. Graham (Crosby)|
|Awdry, Daniel||Grist, Ian||Parkinson, Cecil|
|Baker Kenneth||Grylls, Michael||Percival, Ian|
|Bell, Ronald||Hall, Sir John||Pink, R. Bonner|
|Bennett, Dr Reginald (Fareham)||Hamilton, Michael (Salisbury)||Prior, Rt Hon James|
|Benyon, W.||Harrison, Col Sir Harwood (Eye)||Raison, Timothy|
|Berry, Hon Anthony||Hayhoe, Barney||Rathbone, Tim|
|Biffen, John||Higgins, Terence L.||Rawlinson, Rt Hon Sir Peter|
|Biggs-Davison, John||Holland, Philip||Rees, Peter (Dover & Deal)|
|Blaker, Peter||Hordern, Peter||Renton, Rt Hon Sir D. (Hunts)|
|Boscawen, Hon Robert||Howell, David (Guildford)||Renton, Tim (Mid-Sussex)|
|Boyson, Dr Rhodes (Brent)||Hunt, John||Ridley, Hon Nicholas|
|Brittan, Leon||Irvine, Bryant Godman (Rye)||Ridsdale, Julian|
|Brotherton, Michael||James, David||Rippon, Rt Hon Geoffrey|
|Brown, Sir Edward (Bath)||Johnson Smith, G. (E Grinsiead||Roberts, Michael (Cardiff NW)|
|Bryan, Sir Paul||Jones, Arthur (Daventry)||Roberts, Wyn (Conway)|
|Budgen, Nick||Kellett-Bowman, Mrs Elaine||Rodgers, Sir John (Sevenoaks)|
|Carlisle, Mark||Kershaw, Anthony||Rossi, Hugh (Hornsey)|
|Carr, Rt Hon Robert||Knight, Mrs Jill||Sainsbury, Tim|
|Chalker, Mrs Lynda||Knox, David||Shaw, Giles (Pudsey)|
|Clark, Alan (Plymouth, Sutton)||Lamont, Norman||Shelton, William (Streatham)|
|Clark, William (Croydon S)||Lawrence, Ivan||Shersby, Michael|
|Clarke, Kenneth (Rushcliffe)||Lawson, Nigel||Silvester, Fred|
|Clegg, Walter||Lewis, Kenneth (Rutland)||Sims, Roger|
|Cockcrofl, John||Lloyd, Ian||Spicer, Jim (W Dorset)|
|Cooke, Robert (Bristol W)||Loveridge, John||Spicer, Michael (S Worcester)|
|Cope, John||McAdden, Sir Stephen||Sproat, Iain|
|Cormack, Patrick||Macfarlane, Neil||Stainton, Keith|
|Corrie, John||MacGregor, John||Stanbrook, Ivor|
|Costain, A. P.||McNair-Wilson, M. (Newbury)||Stanley, John|
|Dodsworth, Geoffrey||McNair-Wilson, P. (New Forest)||Steen, Anthony (Wavertree)|
|Douglas-Hamilton, Lord James||Madel, David||Stewart, Ian (Hitchin)|
|Drayson, Burnaby||Mates, Michael||Stokes, John|
|Durant, Tony||Mather, Carol||Stradling Thomas, J.|
|Eden, Rt Hon Sir John||Maude, Angus||Taylor, R. (Croydon NW)|
|Edwards, Nicholas (Pembroke)||Mayhew, Patrick||Tebbit, Norman|
|Elliott, Sir William||Meyer, Sir Anthony||Temple-Morris, Peter|
|Emery, Peter||Miller, Hal (Bromsgrove)||Thomas, Rt Hon P. (Hendon S)|
|Eyre, Reginald||Miscampbell, Norman||Townsend, Cyril D.|
|Fairbairn, Nicholas||Mitchell, David (Basingstoke)||Trotter, Neville|
|Fairgrieve, Russell||Moate, Roger||van Straubenzee, W. R.|
|Farr, John||Montgomery, Fergus||Vaughan, Dr Gerard|
|Finsberg, Geoffrey||Moore, John (Croydon C)||Viggers, Peter|
|Fisher, Sir Nigel||More, Jasper (Ludlow)||Weatherill, Bernard|
|Fookes, Miss Janet||Morgan, Geraint||Wells, John|
|Fowler, Norman (Sutton C'f'd)||Morgan-Giles, Rear-Admiral||Whitelaw, Rt Hon William|
|Fox, Marcus||Morrison, Charles (Devizes)||Wiggin, Jerry|
|Galbraith, Hon. T. G. D.||Morrison, Hon Peter (Chester)||Winterton, Nicholas|
|Gardiner, George (Reigate)||Neave, Airey|
|Gardner, Edward (S Fylde)||Nelson, Anthony||TELLERS FOR THE NOES|
|Glyn, Dr Alan||Neubert, Michael||Mr. Adam Butler and|
|Goodhew, Victor||Newton, Tony||Mr. Spencer Le Marchant|