Welsh Affairs

Part of the debate – in the House of Commons at 6:49 pm on 28 February 1991.

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Photo of Mr Denzil Davies Mr Denzil Davies , Llanelli 6:49, 28 February 1991

My hon. Friend the Member for Alyn and Deeside (Mr. Jones), in an excellent speech, highlighted the decline of manufacturing industry, and the manufacturing and industrial base of Wales, during the past 12 years. The gap between the income per head and the gross domestic product in Wales, and the income per head and the GDP in the rest of the United Kingdom, is wider than it was in 1979.

In Llanelli, in the six years from 1981 to 1987, for which official figures are available from the Department of Employment census of employment, manufacturing employment has declined by at least one fifth. In the 12 years of the Government's term of office, manufacturing employment in Llanelli has declined by one third—33 to 35 per cent. That shows the measure of the decline of manufacturing in my constituency. The decline in mining has been 40 to 50 per cent. during that period; it has now declined by about 80 per cent. No doubt in a few years' time it will have declined by 100 per cent. when the last British Coal pit, Bettus, in my constituency is closed.

There has been a steady decline in the manufacturing and industrial base in Wales and a dramatic decimation of the coal industry in south Wales. The Government put forward myths and propaganda. We heard them again today when the Secretary of State talked about the rebirth of the Welsh economy. The myth and propaganda suggest that manufacturing jobs have been replaced by service jobs. The reality in my constituency and many others is quite different.

Over a six-year period we have gained 1,000 jobs in the service sector, but with the closure of factories, pits and steelworks we have lost 35 per cent. of jobs in the haulage industry—a service industry. The running down of manufacturing industry has consequences for the service industry. In six years, we have gained 1,000 jobs in the service sector, but we lost 1,800 jobs in one night in 1981 in the Duport steelworks in Llanelli as a direct result of the policies of the then Chancellor of the Exchequer. It is a myth to suggest that some of those jobs have been replaced by service jobs.

Although service jobs have come to Llanelli and other constituencies, many of them have been part time and poorly paid. therefore, although, to some extent, the jobs have come, the locality's income has been reduced. The withdrawal of well-paid, manufacturing jobs and quite well-paid mining jobs, and their replacement by part-time jobs in the service industry, has affected the community. Income has been taken out of our communities and towns which has had adverse consequences for their development.

Another myth perpetrated by the Government is that a decline in manufacturing industry is inevitable because the world has changed. They say that we have automation and no longer need to worry about factories. However, that is not the case in other countries. There has been hardly any decline in Germany's manufacturing industry during the past 10 years. The figure for manufacturing in Germany is far higher than it is in Britain. There has been a slight decline in manufacturing industry in France. The position in Japan is totally different.

It is a myth to say that we can forget manufacturing now because it is no longer important and high-tech has replaced it. Basic manufacturing industry makes the consumer goods that people want to buy in the shops. We are not making such goods any more. If other countries on the continent and in the far east can do so, why cannot we?

The main, but not the only, reason for the decline in manufacturing industry in Britain during the past 10 years was the attitude of the Conservative party when it came to power in 1979. There was certainly hostility, if not hatred, of manufacturing industry. Some of the first acts of the then Secretary of State for Trade and Industry were to abolish investment grants, cut down investment allowances and take away the regional grants. Such grants were not a panacea and did not solve all the problems, but they helped to redress the imbalance caused by the Welsh economy being on the periphery of the European economy. Nearly all those aids were taken away. That is the main reason for the decline in manufacturing industry.