asked the Secretary of State for Wales what is his estimate of the effects on the Welsh economy and industry of the social contract to date and of the new policies to combat inflation.

I do not think that these two factors should be separated. The social contract is an essential building block in the Government's anti-inflation policy. The most important problem we face is inflation. This is why the Government recently announced its new policy on "The Attack on Inflation". It is essential that the new policy is complied with over the coming 12 months if the economy, not only of Wales but of the United Kingdom as a whole, is to be put firmly on the road to recovery.