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

The figures in my constituency show that a third—33 per cent.—of manufacturing jobs have gone. The number has not risen but gone down; jobs have disappeared.

The Government said in 1979 that Britain's future would be in property, banks, financial services, leisure and tourism, and that Britain would be a low income tax, rentier economy, living off the dividends of the production of other countries. That was said by the Conservative party before it came to office, and it was what the Conservative Government tried to achieve. Local authorities in Wales and other agencies were encouraged to move out of manufacturing and to move towards banks, financial services and leisure activities. Wales is now covered with artificial lakes around which there are executive houses, where tired executives sit on cramped verandahs and look at their little boats bobbing in the water. Many of them cannot even afford to take their boats to sea. That is the sort of economy that the Government are creating in Wales.

The Secretary of State mentioned banking. It is extraordinary that he did not know what had happened in Shotton, and he does not seem to know what is happening in banking. He said that it was a high growth sector. He should tell that to Sir John Quinton of Barclays bank, the National Westminster bank and the Trustee Savings bank. The previous Secretary of State used to be enthusiastic about encouraging banks to come to Wales, but banks will not be a growth sector in the 1990s—quite the opposite. That bonanza has ended, as has the property bonanza. But money is still being poured into crazy property and marine schemes and leisure activities in Wales, although they will not make money and there will be no money in the 1990s to support such schemes.

Another Government myth is that, if we develop service industries, they will not be affected by recession in the same way as the old manufacturing industries. The irony is that the service sector in Britain—as well as the manufacturing sector—is being affected because it is totally out of balance and out of kilter with the manufacturing sector. The service sector is the borrowing sector; it does not generate profits for future development. It merely lives on money coming in and out—borrowed money. The idea that we should invest in banks and property to prevent a recession affecting our economy has been proved untrue, and is being proved untrue by the state of Britain's economy today.

With the problems of the environment, eastern Europe and the American economy, and with oil reserves petering out or running down, it seems that the future of the Welsh economy lies in manufacturing, and not in the service sector because the service boom is over. It is time that the Government started to think about rebuilding our manufacturing base. The Welsh Development Agency—or Welsh Development International—has had some success—nobody wants to be churlish about it—in going around the world looking for what used to be described as footloose capital. It had success in Japan, and some in Germany. However, I fear that there will not be much fruit to be had in going around the world in the next 10 years looking for footloose capital. The Secretary of State may go to Baden-Wurttemberg again, but he will not get much investment there or from Bosch. The Germans will be pre-occupied with rebuilding east Germany, eastern Europe and perhaps even the Soviet Union. The Japanese will not be in the same position in the next 10 years.

We must look to home-grown industry instead of believing that we can rejuvenate the Welsh economy by getting investment from outside. By all means let us get investment from outside, but the future lies with home-grown manufacturing. In many ways, that is more difficult than seeking investment here, there, and everywhere.

From what I have said, it may seem surprising that 30 per cent. of the people employed in my constituency are still employed in manufacturing. The figure was probably 50 per cent. 10 years ago. We must not lose the skills of those people. We can build on them, and also on the skills of those who are unemployed and who lost their jobs in manufacturing but who still retain their skills. That is why it is so important that the next 10 years should see the rebuilding of the manufacturing basis.

There are four pits left in south Wales, one of which is in my constituency. Frankly, the way in which the Government have reduced the Welsh coal industry to four pits is a crime. We know that coal cannot regain its pre-eminence even of the 1950s. We know that it has environmental problems and that it has competition, especially from gas and perhaps from coal imports. We understand that, but there is room for a coal industry. There is room in Britain for two energy sources. We accept that gas must be one, but coal is the other. Neither the Government nor British Coal has shown any imagination about developing the coal industry or about finding new technology and ways to burn coal which are not detrimental to the environment. The Government's attitude has been that coal, like manufacturing, is old-fashioned and dirty, that there is nothing good about it and that we should develop the service sector.

My hon. Friend the Member for Carmarthen (Mr. Williams) and I have the anthracite coalfield in our constituencies. Again, nothing has been done. British Coal is interested only in gouging the anthracite out of the earth with the JCBs. It has not considered the small drift mines or the opportunities to use anthracite. It is the only anthracite field west of Poland, as I keep saying. There has been no attempt whatsoever to market it. There has been no imagination and no belief in it. That permeates all the way down from Government to the local authority and to local government agencies, which take their cue from Government.

In the past 10 years, there has been a decline in manufacturing and in the coal industry. The Government have forfeited any right to a chance to rebuild that economy. Only a Labour Government can do that.