Welsh Affairs

Part of the debate – in the House of Commons at 7:18 pm on 4 February 1980.

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Photo of Mr Ednyfed Davies Mr Ednyfed Davies , Caerphilly 7:18, 4 February 1980

This is a time of suffering. The country is suffering from the doctrines of a Government who are bent on pursuing their monetarist policies. What is bad for Britain is always worse in an area such as Wales. In addition to cyclical economic problems, we have underlying secular economic problems.

The Secretary of State should seek to ameliorate in Wales the effect of the policy of disincentives to industry. The Government have engineered a minimum lending rate that makes it unthinkable that industry will wish to invest risk capital in Wales. There are no signs of the entrepreneurial rebirth that was to flow from cuts in higher levels of income tax.

I ask the Secretary of State whether there has been any substantial fall in the number of applications for Government aid to industry. There is no buoyancy in Wales. The right hon. Gentleman will probably claim that he has made aid to industry more selective and, therefore, more beneficial, but in fact he has reduced it. I raise the question of the criteria of applying section 7 of the Industry Act to aid. This kind of aid has become so discretionary that firms cannot calculate what they are likely to get and, therefore, cannot use it as part of their planning in areas like South Wales where cuts in public expenditure merely compound the evil effects of Government policy.

What kind of growth can possibly come from this contraction? It is rather like the silly tale of the tinker who wanted to train his donkey to live without food. Step by step he reduced the donkey's diet, until he got to a point where the donkey was living without food. Then, for reasons that the tinker could not understand, the donkey died. The Government are performing an absurd exercise on the economy of Britain as a whole and Wales in particular.

The hon. Member for Flint, West (Sir A. Meyer) talked of the possibility of further contraction. With nothing left in the end except a tiny profitable residue, everything is being sacrificed in the interests of that residue. In the meantime, the whole of the economy has died as a result. This Government, who have taken away so many supports of industry, are none the less obsessed with the notion of profitability in the steel and coal industries, regardless of the astronomic social costs of the contractions that they envisage.

Is the Secretary of State not aware of what the threatened steel closures will mean in real terms to Wales? The Government have not been given a mandate to close down the whole economy. The contraction in the steel industry will lead to contraction in the coal industry and the whole of the economy that is supported by those activities.

In my constituency I have the National Smokeless Fuel ovens at Nantgarw, and even without the cuts and steel closures Nantgarw's coking plant and the pits supplying it are being put in jeopardy by the BSC's purchase of foreign coal, which is very often subsidised at source. In the present economic climate it is nothing less than criminal for the Government to fail to intervene in the BSC's purchasing policy. We cannot have one nationalised industry pursuing a policy which is so destructive to another nationalised industry. When the BSC's commercial policies blight the coal industry, the Government should intervene.

I do not believe that industrial action should be undertaken lightly. I certainly do not believe that it should be undertaken vindictively. However, we have come to the point in Wales where the Government have so abandoned responsibility for the real needs of the economy that creative industrial action is called for. This is the only way to compensate for the Government's failure to intervene. Selective refusal to handle certain kinds of goods is becoming more and more necessary.

I have listened to my hon. Friend the Member for Newport (Mr. Hughes) talking about import controls and the need to introduce them. In the past I have been opposed to import controls, but we are now getting to the point where, in certain areas, we must think in these terms. If the Government will not intervene in the purchase of foreign coal and steel, it is the duty of the dockyard and transport workers of South Wales to carry out their responsibility for them—[HON. MEMBERS: "Disgraceful. "In the present predicament, I urge that not one tonne of foreign coal should enter South Wales. We cannot afford to sacrifice our economy in the interests of exporters in Germany, Australia or the United States.

The Secretary of State would have benefited greatly from attending the TUC rally in Cardiff a week ago. He would have seen a strength emerging from the people who, in the end, will not allow these things to happen. The dockyard and transport workers of South Wales may well do the Government's work for them in certain areas where the Government are unwilling to take action themselves.

Does not the Secretary of State comprehend the importance of a coal industry for the future? While he is prepared to allow the coal industry in South Wales to be run down as a direct effect of the kind of steel policy that he envisages, does he realise that at the same time Germany is building and subsidising a coal industry as an investment for energy needs of the future? Either we must prohibit the importation of foreign coal or we must introduce subsidies, as other countries have done, in order to make South Wales coal competitive.

We complain that our coal is uncompetitive against that of other countries when, as part of their energy policies, they are subsidising their coal industries. If we allow our coal industry to decline, we shall throw away all the work done in recent years, by investment and by other means, to increase its efficiency. We are getting to the point at which our coal industry could reach a high level of competitiveness, and if we were to subsidise it we would see the South Wales coal industry to the end of this period of improvement.

Judging by his performance, if it were left to the Secretary of State he would be happy to think of the memorial to his tenure of office as being the fact that he had presided over the decline of the steel and coal industries in South Wales.. But the people of South Wales will not allow that to happen. If he pursues these policies, he will have on his hands an indusstrial battle of his own making which he cannot hope to win. Let him take heed.