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Commons Chamber

Volume 978: debated on Monday 4 February 1980

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House Of Commons

Monday 4 February 1980

The House met at half-past Two o'clock

Prayers

[ Mr. SPEAKER in the Chair]

Oral Answers To Questions

Trade

Statistical Information

1.

asked the Secretary of State for Trade to what extent he has alleviated the burden of providing information for statistics for which his Department is responsible.

The Government are determined to reduce, so far as possible, the number of statistical forms sent out to industry and commerce, particularly to small firms. The number of such forms to be sent out this year, in the inquiries for which my right hon. Friend is responsible, will be 15,000 fewer than last year. I am personally reviewing all inquiries and I expect to make substantial further savings.

I am impressed by my hon. Friend's determination. Among the forms that were sent out, did he notice a reduction in those relating to the 1978 retailing inquiry, which was such a pest to my constituent, Mr. Archer?

I was impressed by the strong representations my hon. Friend made on behalf of her constituent. We have cut the number of forms sent to retailers in the annual retailing inquiry from 24,900 in 1979 to 19,900 this year. Moreover, no independent retailer with an annual turnover of less than £25,000 will be required to fill in a form. That may well be of benefit to my hon. Friend. In addition, simplified forms are being sent to retailers with a turnover of £150,000 or less.

Import Regulations

2.

asked the Secretary of State for Trade if he will now reconsider the early introduction of multilateral import regulations as a means of assisting world-wide growth in manufacturing industries.

Does the Minister appreciate that over the period from 1968 to 1978, import penetration, in terms of ratio between imports and home demand, rose from 17 per cent. to 25 per cent? We are now within 3 or 4 per cent. of a disaster in manufacturing industry. Is the right hon. Gentleman aware that whole sections of the industry will go out of business unless the Minister takes some action?

I accept that import penetration increased substantially over that period, but we have to look at the export side as well. Nearly one-third of our gross national product is represented by exports. We have to maintain a balance between the need to keep open our overseas markets and preserve the jobs which depend on them, and the problems faced by British industry arising from imports. The best way to safeguard the trading system is to abide by the rules of GATT and not to erect new multilateral controls of the sort the hon. Gentleman sugests.

Is my right hon. Friend aware that the British carpet yarn processing industry has been almost totally destroyed by American imports within the last 12 months? Only two firms are still working. As the reason for that is almost entirely because American oil is30 per cent. cheaper than ours, should not an immediate import ban be considered as a matter of urgency?

I examined the figures for a number of carpet firms this morning and I am surprised to hear my hon. Friend say that only two are working. With respect, there are rather more firms than that which are concerned with imports of yarn. As my hon. Friend knows, we have been pressing for action on this matter within the Community. I shall be attending the Council meeting at the Commission tomorrow. We await the report of the Commission on this and other matters, and I hope that, by the end of the week, there will be more to tell my hon. Friend and the whole House.

May I say that I share the view of the Secretary of State in that I, too, am not enamoured of import controls? Will the Minister consider trying to assist the man-made fibre industry, for example, by looking at the question of fair trading, which was an important aspect of negotiations in Japan?

I agree that we must maintain a balance between protecting our industry from disruptive imports—I am concerned to do that—and the need to promote our exports. One-third of our manufacturing industry depends on exports. I accept that the Government must take firm and decisive action against unfair trading practices. I am sure that the hon. Gentleman appreciates that we must now act through the Community.

Does my right hon. Friend agree that there is little point in adhering strictly to GATT if we are constantly in deficit in our overall trading account? Has the Department of Trade made any detailed study of the national origin of exports and imports and the likely effect of retaliation on sectors such as unemployment, production, the public sector borrowing requirement and so on?

I spend my whole time studying these figures. It happens to be my job. The figures are published. As soon as Question Time is over, I shall immediately present a document to my hon. Friend setting out import penetration figures in almost every major product. All those figures are available and I shall be happy to discuss them with my hon. Friend.

Will the Secretary of State tell us precisely what he will ask for as regards protection for the manmade fibre industry when he attends the Council of Ministers tomorrow? Is it a countervailing duty or an import ban? When the meeting has concluded, will the Secretary of State make a statement, thereby giving the House an opportunity to ask him about the real meaning of the Council's decision?

As the right hon. Gentleman knows, I always wish to be helpful towards him. I shall be negotiating tomorrow and it will be more helpful if the matter is not negotiated now across the Floor. I am prepared to ensure that a full statement is made. Whether I am allowed to make an oral statement depends upon my right hon. Friend the Leader of the House. I shall ensure that the House is fully informed by, written or oral statement by the end of the week, and I shall let it know what arose during the discussions at the Council of Ministers meeting.

Hairdressing Council

3.

asked the Secretary of State for Trade if he will seek an early meeting with the chairman of the Hairdressing Council, in view of the withdrawal of part of the membership of that body.

I have no power under the Hairdressers (Registration) Act 1964 to intervene in the running of the council but if either the chairman of the Hairdressing council or my hon. Friend wishes to get in touch with me I shall gladly arrange for a meeting to take place.

I hope that that invitation will be taken up by Mr. Ledger. Is my hon. Friend aware that last December the Hairdressing Council resolved to wind up, and to set up a new body, although it gave no clear indication as regards what would happen to its existing finances, although fees for 1980 were still coming into its accounts? Is that not extremely unsatisfactory? Is it not time that a new Hairdressing Council was set up, answerable to the Department and to the House?

Those who remain on the Hairdressing Council are seeking legal advice as to what steps may be taken to resolve the outstanding problems that have been referred to. I repeat that under the terms of the 1964 Act the Government have no standing on this issue. I shall gladly meet the representatives of the various parts of the hairdressing profession should they wish to discuss those problems with me.

Trade And Development Programmes

4.

asked the Secretary of State for Trade what initiatives are being taken in the negotiation of individual or collective trade and development programmes to absorb an increased share of the surpluses of oil exporting countries in British exports.

With the full support of our posts overseas and export services at home, British exporters are participating actively in the trade and development programmes of all the oil exporting countries. Although performance in individual countries varies, United Kingdom exporters have generally been increasing their share of these markets in recent years.

I thank my right hon. Friend for his reply. Does he agree that, after his recent highly successful visit to the Far East, the time is now right for a similar trade visit to be made to the Middle East, to promote British trade?

I made an equally successful—although perhaps not so well publi- cised—visit to the Middle East only two months before going to the Far East. That was worth doing. I visited Saudi Arabia and Iraq and I spent a fair amount of time in both countries. Perhaps I shall have the opportunity of returning to the Middle East before the year is over. However, I have only just been there.

Inflation

5.

asked the Secretary of State for Trade what is the latest annual increase in the rate of price inflation.

20.

asked the Secretary of State for Trade by what percentage the rate of price inflation has increased since May.

The retail prices index increased by 17·2 per cent over the last 12 months and by 10·3 per cent. over the 12 months to last May.

As the Department of Prices and Consumer Protection has now been absorbed by the Secretary of State's Department, who is responsible for keeping prices down? Most Ministers are increasing prices. There has been an increase in VAT, MLR and several other increases. Who is responsible for keeping prices down?

The hon. Gentleman will remember those unhappy times when his Government had a Secretary of State for Prices and Consumer Protection and a Department, yet prices doubled during that period. The sooner that the hon. Gentleman realises that having a Department that keeps records and reports on prices does not provide a way of controlling them, the better.

Does not the Minister agree that most of the components that make up that considerable increase across the board are a deliberate result of Government policy? They are not due to the intervention of outside forces. How does he relate that to the promises made to the electorate last May to the effect that the Government would solve the problems of prices, mortgages and so on? Does he not think that the general election was won on a completely false premise?

I shall not bore the House by quoting from the speeches of the former Chancellor of the Exchequer and of the former Secretary of State for Prices and Consumer Protection. At the time of the election they both confirmed that inflation was on an upward trend and that the figures were bound to rise during the year.

Is it not a fact that under the previous Labour Government prices more than doubled? The Opposition have an absolute cheek to lecture my hon. Friend on this subject.

Once again, my hon. Friend has put his finger on the problem. It is bad conscience.

Has the Minister examined the crippling effect of 15 per cent. VAT upon our hospital services and upon all supplies? Is it not nonsense? Will he arrange that one Department does not have to pay for another Department's increased costs?

The hon. Gentleman knows that the change in the rate of VAT, and the consequent increases, were part of a major switch from direct to indirect taxation. That switch is, and was, necessary. However, it gives rise to certain problems, as the hon. Gentleman has suggested. The overall long-term effect should be beneficial.

Will the Minister explain what contribution the doubling of VAT, the increase in minimum lending rate, the 10 per cent. increase in gas prices above that asked for by the BGC, and all the other increases in the public and private sectors, make to the Government's counter-inflation policy? All those increases have been allowed to go ahead unchecked. Should there not be a Minister who is responsible? Is there any counter-inflation policy? When do the Government expect to see inflation in single figures, as it was when they took office?

It may be disappointing news to the right hon. Gentleman, but the only time that the previous Labour Government showed any sign of gaining control over inflation was when they cut public spending and started to take control of the money supply in accordance with the instructions of the IMF. That is the long-term direction in which the country must move.

Ussr

6.

asked the Secretary of State for Trade what is the current balance of trade between the United Kingdom and the Union of Soviet Socialist Republics; and whether Her Majesty's Government have yet decided whether to renew the current credit arrangements with the Union of Soviet Socialist Republics when they expire.

Provisional figures for 1979 show a deficit on our visible trade with the Soviet Union of approximately £410 million. On the separate question of credit, the Governrment have decided not to renew the Anglo-Soviet credit agreement when this expires.

When the Government converse with the Soviet Union regarding our trade with them, or the renewal of credit arrangements, will they emphasise the deep concern that is felt in the House and the country on the questions of human rights and the exile of people such as Sakharov, Ida Nudel and Vladimir Slepak? Does the right hon. Gentleman agree that, if and when the Soviet Union comply with the rights and duties of the Helsinki agreement, we shall be more likely to engage in trade, as we did before?

I am sure that the hon. and learned Gentleman is right. We should lose no opportunity to bring our strong views home to the Soviet Union. Their contempt for the dignity of the individual and for human rights are repugnant to the whole House. We must take every opportunity to make that view known.

In the light of that answer, and in view of recent events, will my right hon. Friend urgently consider the dumping of Russian Christmas cards in this country and the possible dumping of general greetings cards and other stationery?

We have a recognised procedure for dealing with dumping. Christmas cards will not have much of a market for a few months, but if my hon. Friend can tell me of other specific items that are being dumped, we shall look into the matter and take speedy action.

Has there been an increase in cargoes carried by British shipping in trade with the Soviet Union since the right hon. Gentleman's Government came to power? What discussions has he had with the Soviet authorities on this topic?

I confess that we have not made a great deal of progress. We have had nine months to try to deal with the problem. The hon. Gentleman had several years, and I do not believe that he would claim that he was particularly successful, either. Discussions are continuing with the Soviet Union. It is a serious matter. I believe that the hon. Gentleman will agree that effective action can properly be taken only through the Community. If we acted alone—and we have the right to do so under the Merchant Shipping Act—it would be much less effective than persuading some of our Community partners to join us.

Reports (Deletions)

7.

asked the Secretary of State for Trade what are his criteria for determining the public interest regarding major deletions from official reports.

The public interest is not defined in the relevant legislation for which my right hon. Friend is responsible. He has to take a view of the public interest according to the circumstances of each report.

How can it be in the public interest for the Secretary of State to delete from the Price Commission report on car components a finding that the cost to the car owner of replacement sparking plugs is 10 times the original price charged to car manufacturers? Does the hon. Gentleman agree that leaving out such information can only be in the interests of the Society of Motor Manufacturers and Traders and definitely not those of the public? Does he further agree that it is an abuse of the powers of the Secretary of State to cover up private exploitation from public view?

I can only assume that the hon. Gentleman is guessing about the precise content of that confidential report. The report was extremely detailed. In making deletions, my right hon. Friend had regard to the commercial interests of companies, where they are justifiably part of the wider public interest. An obvious example is where the disclosure of detailed information would be of considerable aid to foreign competitors.

Does the Minister appreciate that the question is misleading, and that for a number of years in order to popularise their sparking plugs, the manufacturers gave them away?

How does the Minister justify a profit margin where the retail price is 10 times the wholesale price?

It is a speculative discussion, and I am not able to comment on the details.

Is it possible to use some of the money that my right hon. Friend did not use in publishing the Price Commission report to publish the Underhill report?

Air Traffic (South-East)

10.

asked the Secretary of State for Trade if he will seek to regulate the operation of charter and part-charter air traffic to and from Heathrow and Gatwick as part of his plans to control the growth of air traffic in South-East England; and what cities in other countries operate scheduled air services from three separate airports serving the same city.

Whole plane charters have not been allowed to use Heathrow since 1 April 1978. The Government would like to see more effective use being made of airports other than Heathrow and Gatwick, but my right hon. Friend has no plans artificially to restrict leisure traffic in the South-East. New York has three airports operating scheduled services.

What does my hon. Friend mean by "artificially to restrict"? Is the night ban at Heathrow not proper action by the Government, taken for environmental reasons? Does he contemplate with equanimity tour operators continuing to bring coach loads of people down the motorway from Newcastle, Manchester and Birmingham to fly to Majorca, because it is cheaper than using regional airports? What are the Government's views?

The night ban applies to all classes of traffic. It is extremely difficult to draw a line between leisure traffic being a bad thing and some other form of traffic being a good thing. The customer—the passenger—demands the cheapest possible air transport, and I understood that we were interested in giving it to him.

Does the Minister agree that there is inertia among airlines and tour operators about using London's airports? The hon. Gentleman is being too casual. Would not ministerial activity benefit airports such as Manchester, which have the will and capacity to take such passengers?

The hon. Gentleman appears to expect me to do the job of tour operators. If Manchester is a good airport for that purpose—and I believe that it is—it is up to the management of Manchester airport to persuade tour operators and passengers that that is so. We are not in the business of directing people to airports.

Are we not in the business of trying to minimise the impact on the environment of an unlimited buildup of airport capacity in the South-East? Does my hon. Friend therefore agree that it is entirely reasonable to balance the views of tour operators with those of the country as a whole, to ensure the best overall result?

We are in the business of protecting the environment, and we have recommended that Stansted be expanded rather than have further expansion beyond terminal 4 at Heathrow. An aeroplane landing at Stansted will disturb about 17,000 people as opposed to 1½ million at Heathrow.

Footwear (Exports)

11.

asked the Secretary of State for Trade what action is being taken to counter the effect of Canadian import controls which restrict opportunities for British exports such as footwear.

The EEC Commission has had extensive discussions with the Canadian Government, and both they and the United Kingdom Government have repeatedly stressed the harm done to our footwear manufacturers by Canadian restrictions on footwear imports. I am not aware of any other quantitative Canadian import controls which cause concern to United Kingdom exporters.

What action are the Government taking to ensure that footwear imported into this country does not come in at below the cost of production? Further, is my hon. Friend satisfied that that action is adequate and, if not, what further steps does he intend to take?

We have an extensive range of controls, especially on footwear from low-cost countries. If my hon. Friend can suggest ways of strengthening those controls, I shall be happy to hear from him. They are extensive and they are in operation. However, we propose to press the Canadian Government to stand by their assurance that their restrictions will be removed in November.

Is the Minister aware that the dumping of leather cloth from Canada and elsewhere has undermined the leather cloth manufacturing industry in the United Kingdom to the extent that there is now asset stripping and factories are collapsing with resulting unemployment?

As the hon. Gentleman knows, anti-dumping action is now for the EEC. We have an anti-dumping unit in the Department that is available to help industries with information that establishes dumping. If the hon. Gentleman will put the leather cloth manufacturers in touch with me I shall do what I can to help.

Price Commission

12.

asked the Secretary of State for Trade when he expects the Price Commission to have been wound up.

The Commission will be formally wound up shortly after the Competition Bill receives the Royal Assent.

Will the Minister ask the chairman to publish a report showing how much this Government's disastrous policies have contributed to inflation by increasing VAT, mortgages and rents, bus fares, petrol, gas and electricity prices and the prices of bread and many other essential foodstuffs? Would not such a report show that we should retain the Price Commission instead of abolishing it?

The hon. Member should remember with humility that the retail price index doubled during the life of the previous Government. The Price Commission was entirely ineffective in dealing with this and merely operated to delay price increases. This had the effect of storing up large increases for the consumer at a later date.

May I ask my hon. Friend a rather more constructive question? Will he consider introducing legislation to give those whose jobs were destroyed by the Price Commission—that is, those in the bread industry, the brewing industry and elsewhere—an opportunity to sue the members of that Commission for damages?

That is an interesting suggestion which would be of particular interest to members of the legal profession.

Will the Under-Secretary ask the Secretary of State to consider answering a question on prices and inflation at least once during his tenure of office? Is he aware that his right hon. Friend has answered none since he took office? Also, will he explain why his right hon. Friend and other Ministers in his Department seek to evade responsibility for a counter-inflation policy by a change in ministerial responsibility for questions? What is the sense in asking Members of this House to direct questions about the retail price index to the Secretary of State for Employment?

The right hon. Member is not being fair. My right hon. Friend has twice answered a substantial number of questions about prices. The arrangements that are to be made for the future will be an improvement, yet again, because questions on prices will be answered by the Minister responsible for the policies concerned.

Does my hon. Friend agree that, if the Price Commission is to write another report before it is closed down, it might find it very difficult to write one listing those commodities in which prices have been permanently kept down by its actions? Indeed, would it not be so short a report that he would be able to afford to publish it?

I am sure my hon. Friend is right. All these interesting suggestions will be put to the part-time chairman of the Price Commission.

Civil Aviation Authority

13.

asked the Secretary of State for Trade when he expects next to meet the chairman of the Civil Aviation Authority.

My right hon. Friend and I expect to meet the chairman of the authority on 25 February.

When my hon. Friend next meets the chairman will he suggest to him that he should end the nonsense of duty-free shops at international airports? Is my hon. Friend aware that in the cabin of a wide-bodied aircraft today on an international flight, literally hundreds of bottles of liquor and scent are being carted from country to country, creating an additional hazard to passengers in the event of an accident, and an unknown amount of weight in the aircraft? May I suggest that the time has come for vouchers to be issued at the airport of embarkation which could be cashed at a duty-free shop at the home base of the passenger?

I have often thought it slightly bizarre that we freight millions of bottles of Scotch across the Atlantic so that they can come back again to Scotland carried by passengers as duty-free liquor. However, that is part of the tradition and the way in which these things are now conducted. Hon. Members may find that rather amusing, but I suggest they ask their constituents whether they want to give up the privilege of buying duty-free or cheap liquor on the flight from one place to another. I note what my hon. Friend said about the safety hazard, but I do not believe that there is an unacceptable safety hazard if the liquor is properly stowed. However, I shall draw his remarks to the attention of the Civil Aviation Authority.

Would not the problem of duty-free goods and the absence of real turnover be overcome if those purveying so-called duty-free goods offered a genuine price to the travelling public? Is it not a fact that the words "duty-free" are merely a cloak for privileged traders to make excessive profits? Is it not a rip-off?

It is, in fact, a cloak for the way in which airport charges are held down to acceptable levels. The major profit goes to the airport authorities and thereby holds down the other service and landing charges. The hon. Member for Erith and Crayford (Mr. Wellbeloved) can smile—he obviously does not know that about 30 per cent. of the British Airports Authority's revenue comes from concessionary sales.

Will my hon. Friend get the chairman to obtain an explanation, for the information of this House, why British Airways staff refuse to stay over in Belfast, thus adding to the costs of their airline and sometimes leaving passengers stranded? Does this not contrast with the more courageous behaviour of the staff of other airlines?

My hon. Friend has a fair point, but he is addressing it to the wrong chairman. I have already addressed this question to the chairman of British Airways.

Will the Minister discuss with the chairman of the CAA the impending fantastic increase in landing and passenger dues—400 per cent. in my constituency, and even higher elsewhere? Since not even this Government's increases have come anywhere near that figure, will he advise the chairman that they are totally unacceptable and should be reversed?

The Civil Aviation Authority has a statutory obligation to balance its books and not be a charge on the taxpayer. It is clear that the operating deficit and the accrued interest of the Scottish Highlands and Islands airports will be higher this year, even after increases in the charges. Therefore, the right hon. Member is really asking me to ask the taxpayer to underwrite larger losses. It would have been helpful had their rates not gone up so much as they did this year.

Price Restraint (Competition)

14.

asked the Secretary of State for Trade if he will undertake a study to measure the effectiveness of competition in restraining prices.

No, Sir. There is no doubt that competition restrains prices substantially, but the effect is difficult to isolate in terms of precise figures and varies from industry to industry—[Interruption.] Labour Members should go out shopping. They might find out. The extent to which the absence or distortion of competition causes prices to be higher than they would otherwise be can be taken into account by the Director General of Fair Trading in deciding whether to refer anti-competitive practices or to make a monopoly reference to the Monopolies and Mergers Commission, and by the Commission in its investigations.

Is the Minister aware that that is a disappointing reply, as well as a long one? Even without such a study, does not the Minister agree that it is obvious that competition does not restrain prices? Does he not agree that, although competition has a role to play, it is totally inadequate in a modern economic system? Therefore, will he agree to reinstate some controls similar to those exercised by the previous Government in an attempt to restrain the present roaring inflation?

Obviously the sort of controls that the hon. Member has in mind are those which put one of the major bread suppliers out of business and led to a loss of competition in that industry. No doubt that has something to do with the fact that bread prices have gone up somewhat higher than they would otherwise have done.

Is there not a wealth of evidence that competition brings about more competitive prices—for example, with refrigerators and television sets? Is it not also the case that the Government's new Competition Bill will strengthen the Monopolies and Mergers Commission and the Office of Fair Trading, to the advantage of consumers?

My hon. Friend is right on all grounds. I suggest that those hon. Members who do not believe that competition holds down prices might care to look at the newspapers and the news tapes today and see that one grocery chain, under the pressure of competition, has again reduced its prices and estimates that this will save the average housewife about 50p a week.

Reverting to the question of references to the Monopolies and Mergers Commission. is the hon. Member aware that, if the GEC bid for Decca is successful, a monopoly will be created there? Is it his intention to refer this matter to the Commission?

That is an interesting question and, no doubt if the hon. Member tables it, he will get a reply when we have considered the matter.

Will my hon. Friend confirm that it is not the Government's policy in any way to encourage any of the nationalised industries to create a State monopoly for any of the products that they manufacture?

South Korea (Imports)

15.

asked the Secretary of State for Trade whether he will forbid the import of dangerous dolls from South Korea.

The Toys (Safety) Regulations 1974 impose requirements relating to the main hazards likely to be presented by toys. These regulations do not prohibit the importation of non-complying toys, but it is an offence under the Consumer Protection Act 1961 for any person, including any importer, to sell or possess for sale any toy which does not meet the requirements of the regulations. Importers are, therefore, generally careful to ensure that the toys which they import comply with the regulations.

I thank my hon. Friend for that reply. Will he say whether dolls, known as "Cutie" dolls, imported from Korea, fall within these regulations?

My hon. Friend will be pleased to hear that there has been a successful prosecution of an importer who brings in these dolls. Other prosecutions are pending. This would suggest that any- one who is importing them should prepare to be prosecuted.

In view of the ambition of South Korea to become the world's largest textile exporter within the next five years, will the Minister consider reciprocating its treatment of British textiles? South Korea creates enormous difficulties over the admission of our textiles and imposes an 80 per cent. import duty on some of them. Why do we not reciprocate?

When my right hon. Friend was in Korea last week he made a speech on this subject, pointing out that unless the Koreans opened up their markets to other people's goods they would inevitably invite strong retaliation.

In view of the Government's general policy of inadequate consumer protection, combined with their attack on living standards, is it not a fact that the most dangerous doll in this country is the one in No. 10 Downing Street together with her puppets at the Dispatch Box in the House of Commons?

I think sometimes that the hon. Gentleman is some sort of hazard. I await the day when he finally explodes in this House.

Japan

16.

asked the Secretary of State for Trade what progress he made in his recent meetings in Tokyo with regard to developing trade between the United Kingdom and Japan; and if he will make a statement.

During my recent visit to Japan, I met Ministers of the Japanese Government, senior representatives of Japanese industry and commerce and members of the British business community in Japan. Our talks covered a broad range of economic and trade matters.

I am grateful to my right hon Friend for his reply and for the efforts that he and the Minister of State have made to develop trade between this country and Japan. Was he able, when in Japan, to raise the question of the structure of the liquor tax, to which I have referred on a previous occasion? Was he able to point out that, with the change in the rate of exchange, it is likely that Scotch whisky will shortly attract a much higher rate of tax? This is bound to affect sales. Was he able to persuade the authorities to adjust the tax?

While in Japan I raised this important matter with the Minister of Finance and with the Minister of Trade and Industry. I asked, particularly, that the threshold should be raised. I pointed out that this was our single largest export to Japan. But it is a budgetary matter. Just as my right hon. and learned Friend the Chancellor of the Exchequer is not keen to disclose the contents of his Budget in advance, neither is the Minister of Finance in Japan. I did, however, make strong representations.

Was my right hon. Friend able to make any assessment, while in Japan, of the immense efforts that the Japanese are putting into industrial robotics?

I have to confess that I do not know what industrial robotics are. If I did, I am sure that I would have made representations about them.

Inflation

17.

asked the Secretary of State for Trade when he expects the price inflation rate to return to single figures.

No one can predict this. Inflation depends on many factors, but, above all, on the Government's success in bringing down the rate of growth in the money supply and the wisdom of wage bargainers in avoiding pay settlements that cannot be financed.

Is not part of this strategy, if strategy it be, that the Government are asking every worker in the public sector to take a real cut in their standard of living?

The only time that Governments of this country have shown signs, in the past five years, of getting control of inflation is when they have followed a policy of controlling their own expenditure and controlling the money supply. The previous Government were forced to do so by the IMF—and it worked. We are determined to follow that policy as the only long-term strategy that will work.

How does a pay settlement that cannot be financed contribute to inflation?

The Government can do two things. They can either inflate the money supply to accommodate the pay settlement, in which case, the right hon. Gentleman will agree, it would contribute to inflation, or they can hold the money supply, in which case unemployment will increase. In either case, unearned wage increases not covered by productivity will produce no benefit to anyone.

Is it not the case that inflation will be kept down if workers accept the fact that they must not continue to ask for increases in wages without increases in productivity? Is it not the case that they must put their full effort into production?

I have already said that wage increases that are not brought about by increases in productivity will eventually result—if the Government maintain a strong monetary policy, as they mean to—in increased unemployment. Wage negotiators asking for unearned increases must take that into account.

Will the Minister now answer the question that he has been asked repeatedly at this and other Question Times? What contribution have recent Government policies, namely the doubling of VAT, the increase in MLR and the increase in gas prices, made to counter-inflation?

The right hon. Gentleman does not listen to the answers. It is, therefore, hardly worth giving them. I repeat that the move to increased indirect taxes—so that reductions in direct taxation could take place—was voted on by the people of this country. They voted in favour of it. The Government's long-term policies of not holding down prices artificially in areas where they can only hold them down for a short time, but of allowing the market to find its own level—a sound monetary and fiscal policy—is the only way to control inflation.

Multi-Fibre Arrangement

18.

asked the Secretary of State for Trade when he intends next to meet the Council of Ministers with regard to the renewal of the multi-fibre arrangement.

There are no meetings arranged at the present time to discuss the renewal of the MFA, but I shall be attending tomorrow's meeting of the Council of Ministers to discuss another important question on textiles.

I am grateful to my right hon. Friend for that reply. I thank him for the efforts that he is making, particularly, this week, on behalf of the British textile industry. May I respectfully remind him that there would be a revival of confidence in the textile industry if negotiations for the renewal of the multi-fibre arrangement in 1981 were completed as quickly as possible?

Preliminary discussions are taking place on this subject. I must ask my hon. Friend to cast his mind back to the time when the present MFA was established and to accept that the conditions that we face today are very different from those that existed when the MFA was first entered into. While I have always accepted that orderly marketing arrangements are bound to continue when the present MFA expires, I am anxious not to arrive at any premature conclusions when world trade in textiles and general economic conditions are changing so rapidly. I am aware of my hon. Friend's view and that of the industry. I shall take those views fully into account.

Is not devastating damage being done to the man-made fibre industry by subsidised American imports, which now account for 25 per cent. of British sales? What urgent action does the right hon. Gentleman intend to take? Will he bear in mind that in my constituency, at the Deeside Mill at Flint, some 500 jobs depend on him taking urgent action?

Great damage is being done to sections of the fibre industry at present. I fully accept that. The matter will be discussed at the Council of Ministers' meeting tomorrow. I have already said during Question Time that I hope that we shall be able to make some statement by the end of the week.

Does the Secretary of State agree that trade questions are largely becoming a farce? When hon. Members seek safeguards for constituencies against imports from EEC countries, the Secretary of State says that we are bound by treaty obligations. If the imports, or dumping, stem from any other country, the right hon. Gentleman says that he must discuss the matter with the Commission, which does nothing. The right hon. Gentleman has no powers. Does he not agree that those were given up when we signed the European Communities Act?

Ninety-five per cent. of all imports from low-cost producers of textiles coming into this country are now under some form of restraint. The hon. Gentleman is not right to claim that there is no protection against low-cost imports. The present problem that we face is imports from developed countries and that is the subject of tomorrow's meeting. Of our six leading trading partners, particularly those to whom we export, five are Community partners and nothing could be gained from taking action against countries that take the overwhelming proportion of our exports.

Is the Secretary of State aware of the deep anger among textile employers and trade unions in Lancashire about the remarks of the Minister of State on regional television on Thursday to the effect that the problems faced by the industry in Lancashire must largely be sorted out by the industry itself? Does the right hon. Gentleman not recognise that the problems of a high exchange rate, imports from the United States and Mediterranean associates are problems over which the industry has virtually no control, and that they require firm and immediate Government action?

Apart from the extensive range of restraints on imported textiles that existed when we came into office, we have imposed 14 new quotas under the basket extractor mechanism, taken safeguard action against Turkey and entered into new agreements with China, Malta, Cyprus and Mauritius. We are also seeking transitional arrangements on textiles for the accession of Spain and Portugal.

My hon. Friend the Minister of State was correct. It is for the textile industry to sort out its problems. We shall do our best to support it in some of the ways that I have described, but changes of fashion and technology are taking place all the time and the British textile industry must respond to them. That is not something which politicians can do. We cannot run the textile industry on behalf of the directors of the companies.

Will the Secretary of State understand that the multi-fibre arrangement, which has been successful, is a necessary development on which the Government can take action? Their prevarication in making a statement of policy for the future is causing widespread uncertainty throughout the industry. Will the right hon. Gentleman say that he wants to have another MFA and then argue about the details? At least that will settle the principle.

In Opposition I supported the right hon. Gentleman's Government when they negotiated the MFA. Nothing that I have ever said would suggest that I do not support the arrangement. However, the bilaterals still have nearly another three years to run and the MFA has two years to run. At the moment, there is nothing to negotiate about.

Second-Hand Cars

19.

asked the Secretary of State for Trade whether he has considered the suggestions of the Office of Fair Trading for dealing with the fraudulent practice of second-hand car salesmen who misrepresent the mileage to the detriment of the consumer.

The director general is now considering the comments of interested parties on his consultative paper. I shall await his report with interest, since I share my hon. Friend's anxiety about mal-practices in the used car trade.

I understand that there must be consultations, but, in view of the widespread practices that they are designed to try to deal with, can my hon. Friend give any indication of how long he thinks the consultations may take?

I cannot be specific, but the report is expected soon and we shall certainly give urgent attention to the director general's recommendations.

Airports Policy

21.

asked the Secretary of State for Trade what representations he has received since his statement on airports policy.

Following the statement by my right hon. Friend on 17 December, my Department has received about 100 letters concerning airports policy.

Will my hon. Friend take early action to assist those people whose properties have been blighted by the Government's decision and which run the risk of being blighted for perhaps another two years until the public inquiry has been completed? Does he agree that some people have been placed in a most unfortunate position and that there ought to be some help from the Government in the meantime?

The best help that can be given to such people is to get the inquiry over, so that the result is known one way or the other, as soon as possible. As my right hon. Friend said on 17 December, it is our aim that owners of property that will be required for the development should have the opportunity of selling to the British Airports Authority at an unblighted price. We are considering how that could be achieved, but it is a matter that will be relevant after the inquiry, rather than before it.

Is the hon. Gentleman aware that many people who were prepared to support a moderate increase in traffic at Stansted believe that the Government's decision is disastrous, since it provides for a much greater expansion? Is there any possibility that, even after the inquiry, the Government will consider carefully the possibility of putting a ceiling on the development of Stansted, at something like 4 million passengers a year?

I understand well enough the problems faced by the constituents of the hon. Member and of my hon. Friend the Member for Saffron Walden (Mr. Haselhurst), but the hon. Gentleman is asking that we should abandon the policy that we have put to the House and find another site for an airfield, in which case, no doubt, we would find just as many hon. Members and local residents saying "Please take it somewhere else".

As 1½ million people live under the noise shadow of Heathrow, will the Government definitely stand by the decision announced on 17 December not to permit the construction of a fifth terminal at Heathrow, despite the campaigns to the contrary by British Airways, the Civil Aviation Authority and other interests?

We have heard all those arguments. We heard them before we came to our conclusion that it would not be right to go ahead with a fifth terminal. Nothing that we have heard in the 100 or so letters that we have had since then causes us to change our minds.

World Commodities Centre

22.

asked the Secretary of Trade whether there have been any further developments concerning the proposed world commodities centre: and if he will make a statement.

The Government have decided that, in view of the need for further reductions in public expenditure, they cannot provide finance for the building of new premises in London for the existing commodity organisations already established here and the associated conference centre. The Government are still prepared to consider any future proposal for establishing the common fund in London.

Is that not a rather shortsighted decision? Is my hon. Friend aware that it places in jeopardy the continued presence of those commodity organisations already in the United Kingdom? Does he not think that a world commodities centre in the United Kingdom would be a good investment and a good way of spending the revenue from North Sea oil?

I know that my hon. Friend has put a great deal of work into the proposal, but the cost to the Government would be considerable and all that we would have would be new offices for the existing organisations and a place to hold conferences. The cost to the taxpayer would be considerable and would involve a running subsidy of at least £1 million a year in addition to the capital cost. That simply could not be afforded.

Is the hon. Gentleman aware that other Governments think it worth while, in their national interest, to offer considerable inducements to the establishment of such centres and to enable commodity associations to be centred in their capitals? Does he not recognise that there would be a considerable benefit to our balance of payments from such a centre?

When the Government came to power we inherited a borrowing requirement which was too large and a public expenditure programme which was out of control. There are many desirable projects which we might like to have but which we simply cannot afford.

Provincial Airports

23.

asked the Secretary of State for Trade what assessment he has made of the extra employment opportunities which result from the operation of provincial airports.

I have not made such an assessment. However, air transport is a flourishing sector of the economy which is likely to offer valuable new employment opportunities in the future. This is one of the considerations the Government had in mind in deciding to encourage the growth of traffic at provincial airports

I thank my hon. Friend for his answer. Does he agree that the abolition of categories A, B and C for airports would give even more employment opportunities, especially at provincial airports?

I am not sure that my hon. Friend is right. It is vital that we get at least one major international gateway airport firmly established outside the South-East of England. In my view, that airport must be Manchester, and, therefore, we should do everything that we can to encourage that airport to offer a full range of services to all destinations in the world.

Is the Minister aware that, because of the high and unacceptable rate of unemployment in the Liverpool and Merseyside areas, some development of Liverpool airport could bring some advantages to those leaving school and looking for jobs?

I agree with the hon. Gentleman, and that is why I have been pleased that Liverpool has developed to such a great extent in the past year and has been so successful in attracting a wide range of traffic. One contributing factor to the improvement of services, and the improvement of employment, is that there is now a private enterprise airline improving the service that, regrettably, our nationalised airline felt it had to give up.

Is my hon. Friend aware that the number of passengers passing through Liverpool airport has doubled in the past year? Is he further aware that there is more freight passing through Liverpool than through Stanstead? Will he upgrade the airport from C to B category and allow private enterprise to move ahead?

My hon. Friend quotes impressive figures. I have to remind him that during part of that period there were extensive runway repairs at Manchester which forced traffic away from that airport. None the less, it was a creditable achievement. We shall do what we can to help Liverpool to expand but, basically, it is a matter of whether the traffic wishes to go there, rather than whether we can push it there.

Steel Industry

(by private notice) asked the Secretary of State for Industry whether he will make a statement on the effects of the extended dispute in the steel industry.

The employees of the private steel companies have now been brought into the steel dispute, although they have no quarrel with their employers. The loss of business arising from this action, and from the continuing dispute in BSC, is putting steel firms and the jobs in them at risk.

So far steel users generally have been little affected by the dispute, but production and employment will be threatened on a much wider scale if and when steel supplies run out. It is in the interest of all who depend upon steel for their livelihood that the BSC and the unions should end this self-destructive dispute quickly on terms which the industry can afford.

Will the right hon. Gentleman indicate the value of lost production to date? He said that it is little. However, I observed a report in the weekend press which suggested that there was a conspiracy of silence between the CBI and the BSC as to the damage that had been done.

Is it not a fact that it is the Government's refusal to intervene—andespecially the inaction and complacency of the right hon. Gentleman—that has led us into a strike that is coming to its sixth week? Is not the real problem in the contraction of the British steel industry caused by the contraction of British manufacturing industry? Has that contraction not been accelerated by the Government's economic policies and by their failure to protect the industries that are at greatest risk? Is it not true that by cutting the economy the right hon. Gentleman and his colleagues are successfully cutting the British steel industry's throat?

I am unable to give a precise answer about the loss of production. From such figures that have been published, the quantity of production appears to have been very little down—about 1 per cent. in the third week of the strike. The real damage cannot be measured in lost production only, serious though that is. The real damage is to confidence and to future orders for British steel.

The right hon. Gentleman's second question showed that, once again, he has flinched from putting what he really means. He has asked me to intervene when what he really means—I do not know why he does not say so openly—is that he wishes to Government to find more money from the long-suffering taxpayer. [HON. MEMBERS: "Yes."] Hon. Members may say "Yes", but most taxpayers have smaller earnings than the £112 per week average earnings of a steel worker.

It remains true that it is not in the interests of the taxpayers, the steel workers or the country as a whole that the taxpayer should, once again, pay money that the workers can earn by the higher productivity that is available. It is deeply in the interests of the steel workers to become internationally competitive. It serves those workers very ill when Opposition Members reject that basic argument.

The right hon. Gentleman charges the Government, after nine months in office, with bringing about the contraction of British manufacturing industry that was manifest during the five years of the previous Labour Administration. It is true that one of the factors reducing the demand for British steel has been the fall in demand of British steel-using industries. That is deeply tragic.

The right hon. Gentleman is quite wrong to say that I have not said openly what I believe—I have said it in debate after debate—and that proves that he does not listen, any more than he listens—[Interruption.] If the hon. Member for St. Marylebone (Mr. Baker) will read the reports in Hansard of the last few debates he will find it at the beginning.

The right hon. Gentleman does not listen, any more than he has listened to those European competitors he praises so much or to Commissioner Vredeling, none of whom can understand what his rigid timetable is meant to achieve.

Does my right hon. Friend agree that, following the decision by the House of Lords on Friday, which reversed the decision of the Court of Appeal, the law on secondary picket- ing is in a state of considerable confusion?

Will the Government take an early opportunity to clarify the law and to narrow the range of trade union immunities, especially the immunity enjoyed against an action by an employer in a trade dispute when that employer is not involved in the dispute?

It appears deplorable to many that the law should allow the private steel sector, where there is no quarrel or dispute between employers and employees, to be brought into the BSC dispute. However, my hon. Friend's question is one for my right hon. Friend the Secretary of State for Employment.

Has the Secretary of State studied the reports on the success of the French steel industry following the restructuring carried out and back by the Government in 1978? Does not the right hon. Gentleman think that there are lessons to be learnt from that?

Is the right hon. Gentleman aware that there is a growing feeling among the public, including among the employers in the private steel industry, that the Government's steadfast refusal to take any action smacks not so much of the principles of Toryism as of the principles of anarchy?

The right hon. Gentleman is one of those who think that the long-suffering taxpayers—who number most wage earners among them—should be asked to make good earnings that the steel workers could make good for themselves.

It is true that a number of foreign steel industries, especially the Germans and the Dutch, but also the French, have either turned from loss to profit over the past two years, or are well on their way to doing so, by their own efforts and despite the difficulties facing steel industries.

Order. We are dealing with a reply to a private notice question, not a statement. It is an extension of Question Time. I am prepared to call another three hon. Members from each side of the House.

Does my right hon. Friend accept that there is considerable pressure from workers and trade unionists in the West Country—whose average earnings are £60 to £80 per week—that no further Government subsidy should be paid to the steel industry that would enable steel workers to receive wages financed by the taxpayer that are higher than those that can be earned in the West Country?

I am sure that no one grudges higher earnings to the steel workers, but many people realise that the steel workers can earn more and need not, therefore, turn to the taxpayer.

Surely the right hon. Gentleman is aware that a considerable proportion of the money involved in BSC's financial difficulties comes from the interest payments on debt incurred as part of the modernisation programme in constituencies such as my own—a modernisation programme towards which the steel workers have made their own contribution, with over 10,000 jobs lost in my area, and more in other parts of the country. Is it not right that the community should make its contribution by easing the burden of these repayments? Such an action could produce a settlement of this damaging strike.

The interest payments are less, proportionately, in the case of British Steel than in the case of practically all its European competitors. The last £1,500 million invested by the taxpayer in the British Steel Corporation pays no interest at all; it is public dividend capital.

Since there still appear to be some lingering feelings in both the private sector and elsewhere that the Government can be coerced into intervening, will my right hon. Friend categorically and unequivocally state that the Government will not intervene, will not usurp the management function, and will not provide any more money?

I am grateful to my hon. Friend for giving me the chance to say again that, despite the disagreement of the right hon. Member for Deptford (Mr Silkin), it is deeply in the interests of the steel workers that they should become more competitive. In that way their jobs can be saved. In that way they can earn more and have secure employment. Further rescue by the taxpayer will not help them.

It is not clear that the responsibility for the lay-offs that will inevitably come will lie with the Government in refusing to lift a finger to bring about conciliation between the two sides, as well as with the Government's attitude in supporting the employers in refusing to make a sensible offer? If the allegations of telephone tapping at strike headquarters are true, should not these be looked into immediately by the Home Secretary?

Is it not possible for the hon. Gentleman to see that if the steel workers do not co-operate in increasing their competitiveness they will find themselves yet further behind their rivals, who are accelerating way ahead of us in increasing productivity? It is not in the interests of the steel workers to be lulled into ignoring their own self-interest in higher competitiveness.

Is not my right hon. Friend aware that this strike has now moved on? There is the odour now of a politically motivated strike? I feel quite sure that my right hon. Friend and his right hon. Friends will do all they can to protect the employers, the employees and the public, who are not engaged in this dispute, by introducing the relevant legislation at the earliest possible moment.

Questions about legislation on that subject are for my right hon. Friend the Secretary of State for Employment.

Will the Secretary of State answer a very simple question? For how long do the Secretary of State and the Prime Minister intend to maintain their stance of non-intervention and allow industry to bleed to death?

We hope that the management and unions will soon be negotiating very seriously, and with good results.

The Secretary of State said a moment ago that the future of the steel industry lay entirely in the hands of the steel workers. Is he not ignoring two facts? The first is that that they have themselves consented, over the past two years, to reductions of 35,000 in their work force. If he does not think that that is working for productivity, I do not know what it is. Secondly, is not the real issue the demand for steel? Is not the fundamental point that the Government's policy is destroying manufacturing industry, and hence destroying the demand for steel?

I do not think that I used the words that the right hon. Gentleman says that I used, but certainly the demand for steel is not, in general, a problem. The demand for British steel from the British Steel Corporation is the problem. The demand for steel last year was at record levels in the world as a whole. We failed to hold our share of the market, partly because, as the right hon. Gentleman correctly says, our own steel-using industries have not been doing well, but also because our prices — and, to some extent, I fear, our quality and our delivery — have not been such as to hold our customers at home and abroad. There are large users of steel in this country who have despaired of getting the quality and the delivery that they need, and have therefore turned to overseas sources. I must include both management and workers in the responsibility for that.

On a point of order, Mr. Speaker. May I suggest to you, Sir, that the Prime Minister, in a reply that she gave last week, on the question of EEC steel, to my right hon. and learned Friend the Member for Aberavon (Mr. Morris), seriously misled the House? My right hon. and learned Friend's question quite clearly related to the criticism that Commissioner Vredeling has expressed of the failure of the Government to apply for part of the £70 million that was earmarked in the Community budget for this purpose. When the Prime Minister replied, she led the House to believe — and the Official Report confirms it — that the Government have made applications for steel aid of this kind. That is not so, and I now have a letter from the Under-Secretary of State for Employment which spells out very clearly that the Government have taken a conscious decision not to apply for that aid. In view of that fact, I suggest that the right hon. Lady owes the House an apology.

Further to the point of order, Mr. Speaker. The hon. Gentleman is, wittingly or unwittingly, misstating the facts. My hon. Friend the Under-Secretary of State for Employment is discussing applications that might become relevant under a scheme that has not yet been adopted. If the hon. Gentleman wishes to discuss that scheme, I can tell him that only one of the EEC partners is in favour of it, and that we are one of the majority of the partners who are against the scheme. The scheme is not in action; it has not been agreed. It therefore does not represent money that is available for us to apply for. The hon. Gentleman is on a bad point.

Further to the point of order, Mr. Speaker. My point of order concerned the Prime Minister's answer. If what the right hon. Gentleman has said was the case, we should have been told so at Question Time last week. We should not have had to drag it from a reluctant Government in this way.

Order. I have told the House on previous occasions that hon. Members cannot expect me to rule on points of order relating to whether the content of a Minister's reply is satisfactory or—to use an old parliamentary expression—is misleading the House. It is not within my domain to rule in that way, and the House should bear it in mind.

Statutory Instruments, &C

Ordered,

That the draft Sea Fish Industry Act 1970 (Increase in Rate of Levy) Order 1980 be referred to a Standing Committee on Statutory Instruments, & c.—[ Mr. St. John-Stevas.]

Welsh Affairs

Motion made, and Question proposed, That this House do now adjourn.—[ Mr. Wakeham.]

3.48 pm

This is the second Welsh day debate since the general election. Whatever other criticisms may be levelled against me and my colleagues today, I hope at least that no one will suggest that I am reluctant to provide Welsh Members with opportunities for debate. Our determination to restore the Welsh day, abandoned by our predecessors, and our decision to bring it forward at this difficult time, is a recognition of the seriousness of the situation we face and an acknowledgement that it should be fully debated.

The future of the coal and steel industries and the industrial and social consequences of the BSC's proposals will form the centrepiece of the debate and I shall deal with them before commenting on a few other matters of great importance to Wales.

First, I want to say a word about the economic background to those events. They are events which any Secretary of State for Wales, faced already with a depressing inheritance of social and industrial difficulties, would do almost anything to avoid. But no Secretary of State can, any more than can Government or people, dodge and evade economic reality for ever. It is at least in part because the previous Administration tried to do so that our problems are so formidable today.

Search though I may, I can find no way of avoiding the need to adjust to the further doubling, within the last 12 months, of world oil prices, or of the necessity to face up to the financial consequences of our spending far more than we produce. Neither am I able to see a way in which our industry can be insulated from the need to be competitive, and adjust to the size of the market it can obtain.

As I reminded an audience in my constituency 10 days ago, by spending more than we earn we are adding staggering amounts to the burden of public debt. The previous Government added £41 billion to it during their period in office, and it is likely that about £9 billion will be added to it this year. The consequence is that we are now spending about £10 billion each year in debt interest—more than the total spent each year on the health and personal social services, on education or on defence.

The inescapable consequence of the need to fund this huge burden of debt is high interest rates, which not only have unpleasant consequences for individuals, but which destroy industry, large and small, so that we produce even less. Unless we can escape from this destructive cycle I can see no way to avoid sharply lower living standards, and unemployment certainly higher than we are likely to face as a consequence of adjusting our spending to our output.

Faced with that situation there is no alternative—at least I have seen none seriously suggested—to the need either to cut expenditure or to raise taxes. There is a way—that is, to produce more—but I cannot see that happening with higher taxes and higher interest rates. Therefore, I accept, and support my colleagues in, the unpleasant but necessary task of reducing public expenditure.

That brings me to the argument whether we should continue using public money to sustain our steel industry at a larger size than it can itself support, by selling competitively in the market. Of course, I understand the argument of those who say that we face a temporary recession and that we should support the industry until the market recovers. But I have to face two unpalatable facts. The first is that if we add to the already enormous sums that have been paid into the steel industry in recent years that money will either have to come from the social services or by way of higher interest rates and taxes, which are likely to reduce output and destroy jobs in other industries.

Secondly, I have no evidence, and the Government have no evidence, to support the view that BSC's long-term assessment of the market is wrong or too pessimistic. The consequences of past Government interference are with us today, and I am not encouraged to repeat the process.

There are those who say—and no doubt it will be said today—that the BSC's decisions are entirely determined by the Government's adherence to the target that the BSC should break even by the end of the financial year 1980–81. But that is not a new objective. It was an objective that was given the backing of the previous Secretary of State for Industry, who sought to achieve it a year earlier. He stated in his White Paper—"British Steel Corporation: the Road to Viability"—:
"The over-capacity that would result from unchanged policies would be more costly than either the Corporation or the country can afford".
The reality is that what now compels the BSC to act is not a financial target but the need to remain competitive with other countries' steel industries which are not standing still but which are moving still further ahead in their competitive position.

If the BSC does not adjust to its reduced market, losses will be bound to accelerate upwards again very sharply. No steel company in the world can operate so far below capacity and remain competitive.

Whatever the size of the future market, the BSC's ability to take its full share of it, to keep out imports and to export depends upon its ability to reduce its manning to the level of its competitors. If it does that, with all the new plant that is the result of recent investment, it has the prospect of success and of expanding production in future.

The Government are being asked to intervene in two ways—to impose a different judgment on the BSC of the size of the market—I cannot believe that would be right—and to delay. The TUC, in the meeting on Thursday at which I was present, asked for more time. Unfortunately, there is no reason to think that our problem will grow any easier by postponing it, although it is up to the BSC to negotiate with unions the time table for the reduction in manpower, as well as the details of the future structure of the industry.

The Minister states that one of the questions facing the Governmeint is that of judgment of the size of the market. Does he not accept that one of the options open to the Government is to control the size of that market in regard to imports, particularly from steel-producing industries that are indirectly subsidised through subsidies on coking coal? Does not that play a major part in the equation?

I shall talk about coking coal later. With regard to import controls, we must remember that we are a trading nation. If we adopted additional controls other than those already exercised by the EEC, we would further damage our trade in the world. Also, our other industries, which depend on the steel industry for their supplies, would have less competitive supplies on which to base their efforts.

The BSC's decisions clearly have very serious consequences for the coal industry in Wales, although the real reason for the reduction in the demand for coking coal is the inability to sell steel rather than the closure or scaling down of plants. It should also be recognised that the coking coal problem is only part of the problem facing the NCB in South Wales, and the consequences of the BSC's position should be seen in context. Out of a total output of Welsh coal of 10·5 million tonnes, less than a quarter goes to the BSC in Wales. As hon. Members know, there are other high cost pits that the NCB believe might only have a limited life.

Obviously, a substantial reduction of consumption by the BSC will put South Wales pits at risk and lead to closures and loss of jobs, but they would be far less than some of the figures being bandied about, which include high cost pits that might have to be closed over a period, whatever the situation in the steel industry. No firm decisions have been taken by the NCB either on the timing or numbers, although the local management has put forward a number of possibilities.

There are no firm proposals from the National Coal Board, and I am unable therefore, at present to discuss firm figures here today.

Do not the Minister's remarks contest the view of Mr. Philip Weekes, area director of the National Coal Board in South Wales, that the consequences of the combination of the rundown at the BSC and the large-scale imports of coking coal into South Wales—40 per cent. to 50 per cent. of the BSC's needs—will be massive closures and large-scale unemployment in the coal industry? Does the Minister deny the figures put forward by Mr. Weekes?

Mr. Weekes has put forward a number of different figures on a number of different occasions.

With respect, I have seen a great many different sets of figures. For example, I know that Mr. Weekes told a meeting of Labour Members recently that up to 10 pits might have to close. My point is that only a number of those closures are a result of the reduction in coking coal consumption. The coking coal problem is only a part of the problem which faces the National Coal Board in South Wales.

Has not the Minister had a meeting with Mr. Weekes? What did Mr. Weekes say about the number of jobs lost and pits closed as a result of the cutback in steel production at the BSC, and the amount of coal imported from the United States and Wales? Will the Minister give figures of the potential number of pit closures and lost jobs that have been given to him by the NCB in Wales? Does he deny that that is a reasonable assessment made by the NCB?

I have been given a number of different estimates over a period by the National Coal Board. It has taken no firm decisions.

I have been asked about a subsidy for coking coal. The Government's position is quite clear. They have authorised, as part of their coal strategy, a substantial investment programme of over £600 million and are providing grants of more than £250 million. The Government have authorised the NCB to provide a coking coal subsidy from within its own finances and subject to its own commercial judgment. The NCB has asked for an additional £18 million towards the agreed cost of £33 million, but, since the subsidies and cash limits were agreed, the price of oil has risen sharply raising the Coal Board's headroom and the Government can see no reason why, on the scale of a total turnover of around £3,000 million, the NCB should not be able to find the necessary funds. At the request of the TUC last Thursday, we are again pressing the chairmen of the two industries to seek agreement.

The Government accept their share of the responsibility for cushioning the impact of change, and they will seek to do everything possible to encourage and assist the growth of new industries in affected parts of South Wales.

Can the Secretary of State elucidate the conundrum on coking coal imports for Llanwern? According to the managing director of the BSC Welsh division, a contract was signed some years ago for what he called very dear coking coal from Germany. Apparently that coking coal is not going to Llanwern, but is being diverted to Redcar. The second part of the cunundrum is that the BSC is talking about signing contracts for the import of cheap American coal for Llanwern. I think that some elucidation is required.

That is a management decision for the BSC. If British Steel is to be competitive, it must have competitive coal.

I turn to the question of responsibility for encouraging change and development. I know that there will be anxiety about assisted area status. The Government have already made it clear that the grading of the relevant areas will be reviewed. But the BSC's plans are still the subject of negotiation with the unions—which has been delayed by the present industrial dispute—and we do not yet know just what the relative impact of closures will be on the travel-to-work areas most likely to be affected. My right hon. Friend the Secretary of State for Industry is reviewing the situation and will be making an announcement as soon as possible after final decisions have been taken by the BSC following consultation with the unions.

I am, however, most anxious that an early start should be made in providing the infrastructure needed to attract new industries to the area in Wales affected by the BSC's plans. I should add that my right hon. Friend the Secretary of State for Industry is urgently considering what may be necessary in the areas affected in England.

The prime need is for the acquisition, preparation and development of industrial sites together with a substantial programme of advance factories within the areas most affected, and taking advantage of the excellent communications provided by the M4 and the trunk road and high speed rail networks. There will be need for a continuing programme over a number of years which can be worked out as the situation becomes clearer. What is needed now is to launch a new infrastructure programme so that we can get things under way and give people the assurance that action will be taken.

I can now tell the House that within the reduced public expenditure programme we have been discussing the Government are planning to make available some £48 million over the next two years for remedial measures of this kind. The major part of these additional resources will go to the Welsh Development Agency, which is preparing detailed plans for this purpose. I have also asked the Cwmbran development corporation to discuss with local authorities whether they could develop industrial land in or around the new town as a contribution to providing alternative jobs in the Llanwern area. I am also in touch with BSC Industry to see what further contributions it can make.

I have discussed the situation with the WDA. My announcement today will enable it to get on without delay with a substantial programme of acquisition and development of industrial sites which will be available for both public sector and private sector development. I should again emphasise, as I have before, that we are determined to obtain an increasing private sector participation in the development of industrial sites, but this will take time, and the programme that I am announcing is an essential first stage.

Apart from this new programme, in the coming financial year the WDA will be spending about £12 million from its normal programme in the areas affected by the closures, including £8·5 million in Ebb Vale and Cardiff, while I have already announced a programme totaling £13 million for the first year—including BSC Industry's contribution—at Shot ton.

I should add that despite the overriding necessity about which I have spoken earlier to obtain public expenditure reductions I have defended the key motorway and trunk road programme, including the M4 and A55, which will proceed on the basis already announced.

All this is clear evidence of the Government's determination to tackle on a realistic scale the task of providing the infrastructure that will enable modern industries to develop in Wales.

The right hon. Gentleman is talking about attracting new industry to Wales, but there are the existing industries. Last July he said that he was considering investment in the Phurnacite smokeless fuel plant, which is affecting coal pits in Wales. What decision has been reached by the Government on that investment?

That is the responsibility of my right hon. Friend, who will in due course be making a statement about the future strategy of the coal industry. It is primarily a management responsibility of the National Coal Board. The hon. Gentleman knows that there are difficulties, which the ANCIT proposals do not overcome, in connection with the environment. There is also the fact that, even with the increased price of gas, it is unlikely that many of the supplying pits will become competitive. That matter will be dealt with in due course.

The contribution by the Government to the job of assisting with change is not confined to the WDA and Cwmbran development corporation programmes or to the construction of trunk roads. I recently announced an urban aid programme for 1980–81 amounting to a record £8·4 million. In considering new schemes for approval, I paid particular attention to the needs of areas affected by job losses in the steel industry. The schemes that I have approved in these areas will assist both in alleviating the social consequences of major redundancies and in attracting new employment by promoting the development of industrial sites and the construction of small factory units. It will not be the last such programme.

The MSC also has a major role to play. At Shotton it quickly established a job centre at the works and it is carrying out vigorous training programmes. It is preparing to do the same in the South Wales closure areas. I am well aware that there is great anxiety about the future of the skillcentres, particularly those at Llanelli and Blaenau Gwent. The MSC has been concerned about the under-utilisation of its centres and the need to make effective use of resources, and it hopes to provide facilities to train more individuals than at present at less cost. I have made it very clear to the chairman, Sir Richard O'Brien, and to the commission that I consider that there are other important factors as well—the geographical availability of such centres and the part they have to play at a time when so many existing jobs are under threat. He knows very well the importance that I attach to the work of these centres. I am glad that the MSC has decided to undertake further consultation with local committees and others and has undertaken to provide adequately for major redundancies. I shall continue to keep in close touch with the chairman and with my right hon. Friend the Secretary of State for Employment on this important issue.

Does my right hon. Friend accept that, whilst it is important to provide as many training facilities as possible within the skillcentres and others that he has mentioned, the best form of training is always undertaken within existing industry. Does he also accept that there is still a large capacity within workshops in existing industry that could be used for training purposes? Will he concentrate upon that aspect?

I have discussed that matter with the chairman of the MSC, and I know that it is in the Commission's mind.

I have little doubt that I shall be asked about Inmos, I wish to make it clear that no decision has been taken by the Government about the request from the NEB for the second tranche of £25 million funding for the project or its location. I would only say at this stage that I fully understand the importance of the issue, and I am in no doubt that there are many very attractive sites available in Wales and other regions.

Anxiety has been expressed outside the House—and it was expressed in the House earlier this afternoon—that the Government are not taking full advantage of the assistance available from the EEC. That is not true. The Government are making full use of existing schemes. The Commission was advised of the BSC's proposals in early December. Formal applications cannot be submitted until detailed agreement has been reached between the BSC and the unions. However, as with Shotton when £7·7 million was allocated by Commissioner Vredeling himself, this will be done at the earliest possible date. In addition, officials of my Department met an EEC representative in Wales on 31 December for dicussions in the light of the BSC's proposals and the implication of these proposals for South Wales. To eliminate any doubt, we have undertaken to examine with the TUC whether there is any further EEC aid that we could possibly obtain under existing schemes. As to the proposed social measures, involving subsidised jobs, these proposals have not been agreed and are at present supported only by Belgium.

It is clear from everything that I have said that the industrial prospects for the immediate future are extremely difficult. I would be the last person to underestimate the difficulties we face, which are not confined to South Wales and Shotton. The announcements last week of the impending closures of the Bernard Wardle factory at Caernarvon and Smiths Industries watch factory at Ystradgynlais made that point very sharply. The Bernard Wardle closure is, I understand, due to the sharp decline in orders for its products, but my officials are meeting with the company's manager today seeking further information.

When I have had a report I will be prepared to discuss the matter further with the hon. Member for Caernarvon (Mr. Wigley) should he wish to discuss it. It will not be easy to fill this factory, though perhaps we can take some encouragement from the facts that GKN factory in my own constituency and the Wallis and Linnell factory at Blaenau Ffestiniog have both been filled again quickly. Last week's news that Borg Warner were to concentrate its production at Kenfig also came as a considerable relief.

Does the Secretary of State accept that over the last two and a half years there has been virtually no reduction in the market demand for the product at the Caernarvon factory of Bernard Wardle and that last year this factory made a profit in excess of £600,000? In these circumstances, does not the Secretary of State accept that this closure is the worst manifestation of the ugly face of capitalism coming from an asset stripping operation as a substitute for moving the work elsewhere?

I shall not comment in detail until I have had a report from today's discussions. I know that the total market for the goods supplied by this company has fallen and that the company has a more modern and more recently equipped factory elsewhere. Sometimes good fortune flows in our direction, as in the case of the Borg Warner plant, and sometimes we lose out. The Borg Warner plant is evidence that there is no particular prejudice by managements against Wales where it is in the interests of good management to go to the most recently equipped and modern factory.

Because the restructuring of the BSC has taken place too slowly and too late, we have had to attempt to restore the industrial base in an uncomfortably short space of time and in a period of world recession. It is absurd and a serious disservice to Wales to talk about the creation of an industrial desert. Our industry is far more diverse than it used to be. We have good communications and a good labour force. No one who has visited the industrial estates in Glamorgan or at the Heads of the Valleys could possibly say this was an industrial desert. During our last debate on the Welsh economy I said that there were 18,000 jobs in the pipeline from projects involving Government factories or Government assistance.

Last year my industry department handled over 700 inquiries by industrialists and handled over 800 visits. But in the face of the economic recession the level of interest in the second half of the year was on a par with the second half of 1978. These figures are reflected in the all-time record of 1979 of factory allocations. These reached 140, promising just under 5,000 jobs. In just the first few weeks of this year 10 advance factories were firmly allocated, promising 700 jobs, and a further 80 provisional allocations are being processed.

I am not underestimating the difficulties, but these figures show that there is still a good deal of steam in the demand for investment in Wales.

The allocation of a 500,000 sq ft factory at Rassau to Merry weather and Son with the prospect of 500 jobs and the expansion of Alfred Teves, also at Ebbw Vale, are equally encouraging developments. I am also encouraged by the quality and diversity of major projects attracted to Wales recently. Aiwa at Penyfan, the Ferranti development at Cwmbran, Merryweather at Ebbw Vale, the selection of Shotton for the titanium plant and the arrival of the new AA office at Cardiff, are all good examples.

Can I assume from the assertions of the Secretary of State that he is confident that Deeside, which will need 8,000 jobs within three months, will speedily obtain those jobs? Will he also confirm that he fought against the Secretary of State for Industry's policy of non-intervention and is it not his ill-luck that he must be the apologist in Wales for the policies he opposed in Cabinet?

I hardly believe that the policy that I have announced today indicates that the Government are standing back from their responsibilities or that they are not encouraging fresh industrial development in Wales. I have not attempted to underestimate the difficulties but the hon. Gentleman knows that there are very attractive sites on Deeside and that the area has good prospects for the future.

The right hon. Gentleman has poured scorn on the allegations that Wales is being turned into an industrial desert. Will he accept that there are 11 per cent. fewer men in employment in Wales today than there were 10 years ago?

I know that there is a great deal more diversity and strength in the Welsh economy today.

I have said little about industry in the rural areas, but hon. Members will have the opportunity in the Standing Committee on Statutory Instruments & c. to debate the work of DBRW on Wednesday. However, I want to say something about agriculture.

There is no way that farmers, any more than any other group in the community, can be insulated from the doubling of the world oil price and other economic pressures. The publication shortly of the annual White Paper will no doubt show that there has been a rise in costs for Welsh farmers and a fall in their incomes. But the Government are determined to encourage agricultural production, and I find, as I go round Wales that farmers fully appreciate how much, despite the difficulties, we have been able to do.

Farmers have seen three green pound devaluations in the past year which, together with a strong pound, have largely eliminated the currency gap. The increases in milk prices have done something to cushion the greatly reduced margins of milk producers, while the increases in the hill livestock compensatory allowances have gone a good way to restore confidence in the hills after last years severe difficulties.

Farmers understand very well the problems that lie ahead during a period when prices must be held in Europe when costs are rising. I believe, however, that confidence has been maintained by our evident determination to assist them, and by our equal determination to take the measures that are necessary to bring down interest rates and inflation.

Despite the need for expenditure cuts my right hon. Friend the Minister of Agriculture, Fisheries and Food has been able to announce the continuation of a substantial capital grant scheme. We have set out to simplify it and to restrict assistance given to the largest farm businesses, but we have maintained the general level of assistance available to farmers in the less favoured areas, and I am certain that hill farmers will welcome the enhanced grants now available for sheep housing.

My reference to less favoured areas gives me the opportunity to say something here on the issue of marginal land. My right hon. Friend answered a parliamentry question on the subject on Friday and about two weeks ago I met representatives of the NFU marginal land committee to explain that we have now reached the stage when it is absolutely necessary for field inspections to take place, particularly in England where much of the land is more scattered than in Wales, before we can confirm the areas which will meet the less favoured areas criteria of the EEC Commission.

I am afraid there is no way of avoiding this and it will take time, but I hope to complete it next year. I have to repeat my right hon. Friend's warning—a warning also given by the previous Government—that we cannot give an undertaking at this stage that the less favoured areas will be extended as a result of the survey or that extra funds will be available. There will no doubt be disappointment that we cannot get the job done more quickly, but I know that those who have studied it understand the problem and have been reassured to know that, despite the difficulties, we are pressing on with the task.

I turn now to the floods that occurred on 27 and 28 December. Fortunately, loss of life was limited, but about 8,100 houses were flooded in South Wales. In addition, a great deal of other damage was done.

The emergency services, public services and local authorities responded immediately to the emergency and I should like to pay tribute to their efforts. The Under-Secretary of State, my hon. Friend the Member for Cardiff, North-West (Mr. Roberts), and I visited some of the most seriously affected areas. My hon. Friend the Under-Secretary has since discussed some of the problems with representatives of the Welsh Counties Committee and the Council for the Principality.

I emphasise that the expenditure incurred by local authorities in taking steps under section 138 of the Local Government Act 1972 in dealing with the emergency, including any help from individuals, qualifies for rate support grant. In addition, there are Government grants for approved land drainage works undertaken by the Welsh Water Authority and district councils, and my officials are in close touch with the bodies concerned about the acceleration and revision of schemes. Grants may also be paid to farmers under the farm and capital grant scheme.

The Government have also announced that in view of the gravity of the disaster they will pay a special grant to local authorities at the rate of 75 per cent. of net additional expenditure above the product of a 1p rate incurred in dealing with flood damage. A letter setting out details and inviting claims from county and district councils was issued by my Department on 25 January.

It is not, therefore, true that the local authorities have had to shoulder the burden alone, but through rate support grant and through specific grants they will receive substantial assistance. It seems to me right that the responsibility for deciding exactly what is needed locally should be left to them.

Several Welsh authorities asked to be declared a disaster area. However, this would have no significance either in English law or for the purposes of EEC aid. As to EEC aid, the possibility of applying for European regional development fund aid in respect of new or revised flood prevention schemes which would help the development of industry is being examined.

Meanwhile, on 9 January two senior officials of the European Commission visited South Wales at my invitation. Following that visit, the Commission has made available to Wales emergency fund aid amounting to £176,000. This aid will be distributed by district councils as quickly as possible at a flat rate per house to those householders whose homes were flooded. People have been asked to get in touch with their local authority as soon as possible in order that the fund may fairly be divided between all involved.

There have been complaints that insufficient warning was given of the impending flood. The issue of adequate flood warning depends on local circumstances. Flood warnings were issued by the Welsh Water Authority but were not, I think, in every case passed on. The local authorities and the police are now reviewing the matter to ensure that the system works better in future, and I am asking to be kept fully informed of their conclusions.

While we hope that flooding on a similar scale will not occur in the near future, it obviously may happen at any time. All flood defences are being reviewed. The proposed flood prevention scheme for the River Taff in Cardiff is being speeded up and will now take about three years to complete. Meanwhile, I am assured by the Welsh Water Authority that all breaches in defences have been repaired, either permanently or to a strong enough standard to afford protection until permanent and, where necessary, improved defences can be provided.

Just after the flooding, statements were made by or on behalf of one or two local authorities, including county authorities, suggesting that they had to pay very large sums of compensation—in one case it was said, I think, £½million—before they could obtain any help from Government sources. Is my right hon. Friend able to reply to that?

I have already made clear that any relevant expenditure quali- fies for rate support grant in the normal way, and my hon. Friend knows that that involves a substantial contribution from the Government.

I do not propose to repeat what I said recently in the Grand Committee about the Health Service or to duplicate the discussions taking place in the appropriate Committees on education, housing, the Land Authority or local government finance, but I want to say a brief word about the major transfer of responsibility for rate support grant to the Welsh Office.

It has for a long time been a weakness that the Secretary of State for Wales should not have responsibility for the administration of rate support grant in Wales, despite the fact that he is responsible for local government in Wales and that the grant represents such a large share of public spending there. It was an obvious step to take in the evolutionary development in the responsibilities of the Welsh Office and will, I believe, enable us to react with greater sensitivity to the particular needs of Welsh local authorities.

Some have suggested that Wales will get less under this arrangement than at present. There are no reasonable grounds at all for thinking that. Certainly, it has never been the experience of Scotland, which has for long operated under similar arrangements. Wales did well out of the RSG distribution this year, and I see no reason why we should do less well in future.

I think it right to take this opportunity to say something about the Welsh language broadcasting. It is my intention within the next few weeks to set out in a comprehensive form the Government's view on the Welsh language and the way in which we can fulfil our clear commitment to support it. We shall shortly be issuing a consultation document on the place of the Welsh language in the curriculum.

We have set in train the legislative steps to provide additional financial support for Welsh language teaching and, despite the financial crisis, we are planning further to improve the present financial backing given by the Government to the language. I have already announced support on an increased scale for the National Eisteddfod, which will enable those responsible to plan ahead with greater confidence. All this is an indication of our commitment.

The proper time to debate all this will be, I suggest, after I have made the announcements that I have promised, but I think it right to take this opportunity to explain the change of policy that has taken place with regard to Welsh language broadcasting. Having heard all the arguments and considered all the possibilities, I changed my mind, and I make no apology for that. There is nothing to be said for sticking obstinately to a policy when one comes to believe that it is wrong.

The arrangements that we are now proposing will, we hope, achieve at least 20 hours of Welsh television programmes a week from the autumn of 1982, and my right hon. Friend and his officials are having discussions with the broadcasting authorities about this. The Broadcasting Bill will make provision to ensure that there is consultation about the scheduling of Welsh language broadcasts.

We expect that in this way clashes will be avoided and that the Welsh language programmes will get their fair share of peak viewing times. The end result will be that when one of the four channels in operation is showing Welsh language programmes the other three will be showing English language programmes.

In providing a Welsh language television service there are two claims to be met: the interests of those who speak the language, and the interests of a larger number who do not. The one-channel solution was a satisfactory answer to the problem provided only that the fourth channel was not operating on a United Kingdom basis. To use the fourth channel exclusively for Welsh language programmes would mean that Wales would have to opt out of the United Kingdom network for nearly 50 per cent. of transmission time. It would be an almost impossible task to reschedule the programmes that were missed. That task becomes much simpler if the Welsh language programmes are spread over two channels.

I believe that there would have been great anger in Wales when people discovered that they were being deprived of the opportunity to see the greater part of what will be a very attractive new channel. And even if the single channel were available for Welsh language programmes, I do not believe that it would be in the interests of the Welsh language. It would have had the effect of confining the new channel to a comparatively small dedicated band of people who would watch Welsh language programmes irrespective of their content or quality. Far from increasing the audience, it would have reduced it.

Our solution gives as much Welsh language broadcasting as the other, it gives wider choice to the Welsh people, it enables them to enjoy much of the new English programmes on the fourth channel if they want to, it gives a sounder financial base, and it prevents the exile of Welsh language broadcasting into a ghetto. I believe that it is the best solution to a difficult problem to which there is no perfect answer.

I understand the reasons which the Secretary of State is now advocating for having the Welsh language on two channels, but all those reasons existed when he wrote what he did in the Conservative manifesto and when he made a television broadcast even after the election. Nothing has changed. What persuaded him to change his mind? Was it not pressure inside the Government?

No, it was not pressure from inside the Government, and it was not a battle. I listened to the arguments and concluded, as did all my colleagues, that this was the right decision to take.

To return to the central issue, I have not sought to play down the scale of the crisis that we face. What I have argued is that if we fail to face economic reality the consequences will be even more serious. There comes a moment when one has to face facts. Even the previous Government, though they tried, could not avoid a reduction of about 7,000 in the numbers employed in steel in Wales and of nearly 3,000 in the coal industry there. Even as they left office they knew that further substantial job losses would have to follow in both industries. They could not prevent a massive increase in unemployment during their period in office.

The argument, therefore, cannot be about the need for change, only about its pace and scale. We are being asked to postpone the adjustment and to impose a level of capacity on the steel industry and a labour force larger than management considers is realistic. We believe that postponing action will not save jobs but will actually risk more. We fear that other countries will move further ahead, that we shall be even less competitive, and that what then will be at stake will be the survival of any steel industry at all.

For the benefit of the House, will the Minister summarise what new beneficial acts have flowed to Wales from the particular functioning of the Welsh Office under his stewardship which are not a response to the Government's policy of throttling Welsh industry?

The steel industry is having to contract in the light of its competitive position in a world market. The right hon. and learned Gentleman knows that perfectly well—or, if he does not know it, he ought to.

Frankly, I do not know how quickly the changes can be achieved. The Steel Corporation and the Coal Board have to negotiate that with the unions. What I do know is that I and the Government have a duty to accept responsibility for the social consequences of change and to assist in every possible way to bring it about. My statement today is an indication of our acceptance of that responsibility.

It is understandable that the Wales TUC and others should seek to avoid these changes; but they must recognise that, far from helping those affected, by their actions last week and their planned strike on 10 March they have added to the immensity of our task. I know already of two major overseas investments in Wales postponed or cancelled due to industrial action last year. Any further disruption will discourage the arrival of the new industry we want.

We shall make the process of change infinitely more agonising if we just seek to dodge reality and put off until too late the action that has to be taken. If we are to come through this painful period, we have to make use of all our assets—good communications, good industrial locations, the reputation of the labour force regional aids and increasing competitiveness. It is on those foundations that we have to build the future.

4.32 pm

In the 13 years that I have been a Member of this House, and, my colleagues tell me, for years before that, we have had these Welsh days, and this is the very first occasion that we have felt it necessary to issue to our supporters a three-line Whip indicating not only our concern with the situation that is facing us in Wales but our complete dissatisfaction at the way in which the Government are setting about their business.

In these days we have a fairly wide-ranging debate. The Secretary of State did a little ranging himself today. For my part, I shall be concentrating on one subject—a subject which is of greater importance than all the others. I accept that there are problems in agriculture. I accept that we need to know more of the Government's views on the Welsh language. Certainly our colleagues in local government are concerned about the very future of local government under the present Administration.

The Secretary of State had a great deal to say about the flooding, and I think that it is appropriate that he should have said it, because it caused a great deal of personal hardship and still causes a great deal of worry to people in South Wales who still feel themselves under threat. It is important, therefore, that we have from the Secretary of State at some stage a full statement on the financing of any preventive measures which are necessary. I am not sure that it is sufficient to say that expenditure incurred under section 139 of the Local Government Act will qualify for rate support grant assistance when we are not sure whether it will be caught by the Heseltine concept of a standard rate. We want to know a little more about that.

Let me make it perfectly clear that we have said that in considering any action under the transitional arrangements we shall take account of the cost of the floods, and local authorities will not be penalised in undertaking essential expenditure.

I am very grateful to the Secretary of State for that statement. I am sure that our colleagues in local government will be equally grateful.

There is another point about flooding that I want to raise. It has been raised in my constituency and in Cardiff. The right hon. Gentleman referred to it himself. People felt that they had received no warning when many people in official positions knew of the danger. The right hon. Gentleman said that the water authority or some authority was taking steps on this matter. I believe that, again, a public statement has to be made to allay the fears on this aspect, which certainly still exist, and to ensure that people are given adequate warning, not only when their property is at risk but when their lives are at risk. Fortunately, there was little loss of life—two deaths in Merthyr—but there could well have been serious loss of life. The lack of public warning was a matter of great concern.

On the question of the flooding, does my right hon. Friend agree that, while we might sort out the financial formula for Government assistance to local authorities, the cases causing the greatest anxiety are the families who have lost all their possessions and find that there is no one to whom they can turn immediately? Must we not address ourselves to the problem of funds being made available to those families to meet their immediate needs?

Certainly it is a subject which must be examined, but the solution is not as simple as some seem to think. Nevertheless, it is true that the matter is causing considerable concern. It has been met in a variety of ways, none of which is meeting the gravity of the situation.

Before turning to my main theme, I say to Conservative Members that I am quite willing to give way but that they should not, at the end of my speech, tot up the time that I have been standing at the Dispatch Box if they have taken up a large amount of it themselves.

I come to the main problem facing us in South Wales. It is also prevalent in parts of North Wales, particularly Flint-shire. I refer to the particularly high level of unemployment. We have not seen such unemployment figures since the war. Unemployment among steel workers, miners, transport workers and workers in the private manufacturing sector and in the public service sector is on such a scale and is increasing at such a rate that it threatens not only the well-being of individuals and their families but the very social cohesion of many of our communities. In fact, it is a threat to the survival of some of them.

That is why my right hon. Friend and hon. Friends and I were proud to march last Monday in the demonstration in Cardiff, where people of South Wales showed their strength of feeling. Indeed, in some ways it was a pity the Secretary of State could not have been there. He would have learnt and got a better idea for himself of the depth and strength of feeling on this subject. What those people demonstrating last Monday were asking for was not the moon or anything tremendous but that the Government should realise that this is 1980 and not 1930, and they were saying that we in Wales will not be treated by a Conservative Government in 1980 as we were in 1930. That is the truth of the matter.