Welsh Affairs

Part of the debate – in the House of Commons at 6:54 pm on 4th February 1980.

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Photo of Mr Roy Hughes Mr Roy Hughes , Newport (Monmouthshire/Gwent) 6:54 pm, 4th February 1980

I assure you at the outset, Mr. Deputy Speaker, that I shall not abuse the time of the House in that respect.

There is no doubt that the life and the economy of Wales are overshadowed by the national steel dispute. As I see the problem, there are two aspects to it. First, there is the wages issue. I believe that the steel workers' claim is perfectly justified, bearing in mind the level of inflation in the economy. Steel workers' wives in Newport will continue to purchase their goods in the same supermarkets as housewives with husbands who are employed in other industries, Certainly, steel workers will not stand idly by and see their wage and living standards eroded.

The other aspect of the dispute is far more significant—the job losses in the steel industry. They will spill over into coal and other ancillary industries. I believe that BSC's proposals for Llanwern and Port Talbot are catastrophic. Over the years, I have had a fair bit to do with BSC. From the chairman down, its members have always been perfectly courteous to me. However, I would be less than frank if I did not say that many people are questioning the judgment of the executives in the BSC. It is not necessary to read the columns of Private Eye to come to that conclusion.

Not so long ago, the BSC was pressing the Government for an investment of £800 million at Port Talbot. Now, not so long after that, it has proposals to decimate the works—even one proposal to close it. In recent weeks, I have taken part in illustrating the fiasco of the limestone contract at the Llanwern works. That is a 15-year contract for which the BSC currently pays £300,000 annually for materials that the works does not require. The figure is index-linked and, presumably, it will escalate each year until the contract terminates in about 1987. I have been trying to find out how much of the limestone has been delivered to the works over the years and how much has been paid for.

I intervened in the speech of the Secretary of State to refer to the conundrum over the coal imports into Llanwern. Imports of dear German coal and cheap American coal will now be going to Redcar. The House is entitled to more explanation about these matters. Added to that, there are a charge of nepotism in the BSC and the existence of what we know to be a Yorkshire mafia who have permeated the top positions in the South Wales industry. The least that can be said is that the BSC has not come up to our expectations of public ownership.

Perhaps there will be easement of the corporation's redundancy proposals as a result of the talks going on between the unions and the corporation—particularly the redundancy proposals that will affect the two principal works in South Wales, Llanwern and Port Talbot. What we must face up to is that it is no good producing steel simply to stack it up on the mountainside. It has to go into manufactured products such as motor cars, washing machines and other consumer durables—to use that posh economic term. The case for import controls is therefore overwhelming. That is the answer to the challenge made by the Secretary of State to my right hon. Friend the Member for Rhondda (Mr. Jones). For many years I have seen the situation.

It is a pity that many of our key industries have been dragged down. I hate to say it, but it is particularly vexing to me that the Labour Government of 1974–79 took little, if any, action. Is it any wonder that we now have these so-called ideological differences in our party? The prerogative of the leadership is now being questioned on important policy issues, particularly those affecting employment in Wales.

Imports are rising so quickly that the revenues from North Sea oil cannot prevent a serious balance of payments crisis in the near future. When such a crisis arrives, it is areas such as Wales, particularly South Wales, that will suffer most, if experience is anything to go by.

Last year the United Kingdom had a trading deficit of £2 billion, despite the fact that Britain is virtually self-sufficient in oil. What other country would have allowed the import penetration of motor cars to reach 60 per cent. without taking action? Is it any wonder that our steel industry in South Wales is now suffering? The Treasury and the previous Labour Government have a case to answer.

A distinguished school of Cambridge economists has for some time courageously called for import controls. It believes that only that aspect of economic policy can prevent the de-industrialisation of our country. The Western Mail, the daily newspaper of Wales, carried a report last Friday in which The Economist Intelligence Unit came to the same conclusion, namely, that import controls are essential. The intelligence could not have been all that good, because it has taken the unit so many years to catch up with reality. The volume of imports of manufactured goods must be checked and then reduced.

If people bought British and Welsh goods, production would expand. People would be taken out of the dole queue, and unit costs would be reduced. Such a policy is tailor-made for our principal steel plants in South Wales—Llanwern and Port Talbot. Millions of pounds have been invested in those two major plants. They must be operated at full strength if they are to be economic and profitable.

In the leading article in the business supplement of The Observer yesterday, William Keegan stated that such policies are now being discussed behind closed doors. Those policies would bring the country into a certain amount of conflict with the Common Market. However, most people realise now that it is membership of that organisation that has brought us to our present plight. Wales is not part of that golden triangle that was brought into focus during the referendum debate. The leader writers of financial columns have had to eat their words and the advice that they gave to the British people at that time.

Roy Jenkins and Shirley Williams were prepared to split our party from top bottom on that issue. The people of Britain were kidded, with the full backing of the media. A week or two ago I was on the picket line at the Llanwern steelworks. One of the pickets came up to me and said: Mr. Hughes, I voted for us to stay in the Common Market, but if we could come out you could take my right hand off tomorrow. That is the extent of feeling now, and it is particularly manifest in the steel industry.

There is no doubt that EEC membership has done immense damage to the economy of Britain, and particularly to that of Wales. That view is broadly shared. We know of the appalling budgetary costs. They are apparent for all to see. Even the Prime Minister has had to make bitter complaints about our net contribution of £1 billion. It is pretty obvious that she has not been able to do much to rectify the situation.

The damage to our industry is even more significant, as we in Wales are learning from our own experience. The economy of the United Kingdom deteriorated at a more marked rate throughout the 1970s. During that time our economy was opened up to our European competitors. Soon the shutters will have to be put up. From a Welsh point of view, the sooner the better.