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Oral Answers To Questions

Volume 981: debated on Monday 17 March 1980

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Wales

P Leiner And Son

1.

asked the Secretary of State for Wales if he will make a further statement concerning his investigations into the investment by the Welsh Development Agency in P. Leiner and Son.

The Welsh Development Agency has made a detailed statement, a copy of which my hon. Friend has received. I have nothing to add to it.

Will my right hon. Friend say whether his predecessor and his predecessor's Department were aware that at the time the WDA made its £2 million so-called investment in P. Leiner and Son more than a year ago that company owed the WDA substantially more than one-third of this sum? If not, why not?

My hon. Friend will know that I am not advised exactly of the information available to my predecessor. But this investment was submitted to my predecessor for approval because of the option clause contained in it, and not for the overall investment as such. I do not believe that at the time it was known that the scale of the loss was as great as later transpired.

Whatever the outcome of that investment, does the right hon. Gentleman agree that, as the WDA is trying to prevent a number of private enterprise failures, there are bound to be some failures but there have been many successes, and the role of the WDA is to help firms in difficulty to try to preserve jobs as well as to play a part in the economy?

I am glad that the hon. Gentleman referred to the many successes in Wales. I have emphasised them in recent speeches. There is a lot that is going well for Wales, and it is right to emphasise it. Nevertheless, the questions being asked about this investment by the WDA are fully justified in view of the substantial loss that has been made.

In considering the future in the broadest sense, is it not possible that £2 million is too large a proportion of the resources available to the WDA to be devoted to one enterprise? Would it not be more desirable for the available resources to be spread more widely and among more concerns?

That is a view that I expressed to the WDA at my first meeting with it. That was a worrying feature of this investment. Under the policies now being pursued by the WDA and the guidelines and my requests for it to concentrate on small firms when considering investment, I do not think that such a position could arise again.

Welsh Economy

2.

asked the Secretary of State for Wales how many representations he has received about the impact of the current exchange rate of the £ sterling on the Welsh economy.

I have received no specific representations on this matter; but some exporting firms in Wales have certainly commented on the effects of a strong £ sterling on their overseas business.

Does not the present unrealistically high exhange rate make it very difficult for the products of Welsh manufacturing industry to be exported, and does it not mean that cheap foreign imports can compete unfairly in the domestic market with the products of Welsh industry? Has my right hon. Friend drawn the attention of the Chancellor of the Exchequer to this?

I am sure that my right hon. and learned Friend the Chancellor of the Exchequer is as aware of the benefits and disadvantages of the present level of the exchange rate as anyone. But it follows from what my hon. Friend said about cheap imports that the same applies to cheap raw materials for our manufacturing industries. There are benefits to be obtained as well as some disadvantages.

Whatever may be the damage caused by the current level of the exchange rate the real damage to the Welsh economy is created by the Government's monetary policy. Is it not now time to relax that policy, otherwise whole sections of Welsh industry will be decimated?

No. The real damage to the economy was caused by the overspending and excessive borrowing of the previous Government that this Government are having to put right. Today's interest rate is the direct result of the economic policies pursued by the previous Government and their Treasury team in which the right hon. Gentleman was a leading participant.

Is the Secretary of State aware, however, that there are factories that have closed primarily because of the effect of the exchange rate? I think of SCM in my own constituency. Is he aware of the devastating effect that the exchange rate is having on manufacturers of consumer goods, such as washing machines, and others? Surely, the loss in terms of export of these manufactures is far worse than the benefit of the raw materials which are imported more cheaply.

I have said that there are advantages and disadvantages. I do not question that some companies with large export businesses are finding their competitive position very difficult at present, even if they manage substantial improvements in productivity. As I have said, however, it is important that we should have cheap imports for our manufacturing sector, and this has an effect on the inflation rate. These are matters which my right hon and learned Friend the Chancellor of the Exchequer will take fully into account in framing his Budget.

At a time, however, when Welsh industry is feeling the impact of interest rates and of the high rate of sterling, how does the Secretary of State justify the fact that 50 per cent. of those workers who previously were in areas which enjoyed full development area status or special development area status in Wales will lose that benefit, while in Scotland it is only 1 per cent. and in the North of England it is only 25 per cent? Let not the right hon. Gentleman tell us that the others have intermediate area status, because the Government have so reduced the incentives there that the status is meaningless.

Of course, 94 per cent. of the working population of Wales will continue to receive regional aid because they live in assisted areas. We are concentrating help where it is most needed. It is relevant to the points which are being put to me about high interest rates that we should reduce public expenditure in this as in other sectors.

Road Traffic Signs

3.

asked the Secretary of State for Wales whether, in the interests of road safety, he will ensure that no more bilingual traffic signs are erected.

No, Sir. The policy of successive Governments has been for bilingual traffic signs to be erected in Wales, and I intend fully to uphold it.

As an Englishman, Mr. Speaker, I ask this question with a great deal of humility and trepidation, but I have a Welsh wife and five half-Welsh children, and a Welsh rugby international father-in-law, and consequently, great admiration for the Welsh culture and language. I feel just sufficiently emboldened to ask the Minister whether he will agree with me that traffic signs are basically there to give direction to people from far-away places, and whether he considers that the signs, for example, on the M4 outside Newport, those great cinemascope screens, in an area of Wales where a relatively small proportion of the population actually speak Welsh, achieve the purposes for which they are erected or whether in fact they lead to a certain amount of confusion and danger?

The signs on our roads in Wales are there for the benefit of visitors and of Welsh motorists as well, from whom I have had no complaints at all. There is no evidence to suggest that bilingual signs are a source of danger to road users. I remind the House that they have been in use perfectly successfully for many years.

Does not the Minister agree, and will he not remind his hon. Friend the Member for Northampton, North (Mr. Marlow), that, after many years of some dissension and disagreement, the Welsh people have at last accepted bilingual road signs and that we take it very much amiss that an outsider should be stirring things up in Wales?

I do not regard a motorist from England or my hon. Friend in any way as an outsider. Indeed, he and others are more than welcome to the Principality. It is not true to say that Welsh motorists and the Welsh people have completely accepted bilingual signs, but I think that we are getting used to them and using them effectively.

When does the Welsh Office intend to respond to the representations from Gwynedd county council—and the same argument applies to Dyfed—as to the order of signs, and whether it is not confusing to have the county council signs with the Welsh version first, and the Welsh Office signs with the English version first in Gwynedd and Dyfed?

The hon. Member knows that the matter of the precedence of Welsh on road signs, which has been proposed by Gwynedd, is a matter to which I have given consideration. I hope to make a report on the matter in the not-too-distant future.

Might it not help my hon. Friend the Member for Northampton, North (Mr. Marlow) if he could spend a holiday near Brieg, in central Switzerland, where within 30 miles one encounters signs in at least three languages?

I should be very happy for my hon. Friend to spend his holiday in Gwynedd and support our own tourist industry.

Welsh Economy

4.

asked the Secretary of State for Wales what measures he proposes to stimulate the Welsh economy.

18.

asked the Secretary of State for Wales what measures he proposes to take to stimulate the economy of Wales.

In addition to the general economic policies of the Government which are aimed at reducing public sector borrowing and containing inflation, I shall press ahead with the major road programme and shall support the work of the development and promotional agencies to which I have made available substantial additional resources for use in steel closure areas.

With the Wales TUC forecasting an alarming 140,000 or more jobless for next year, however, does not the right hon. Gentleman have any new major job projects in mind for Wales? With regard to the North-East Wales economy, what credence should we give to the recent reports about 2,000 new jobs possibly being set up by British Aerospace, making wings for the European Airbus? Does he see the titanium smelter plant on Deeside coming on stream on time? Does he see the steel workers and textile workers coming out of a job getting employment prospects in those spheres?

The WDA is undertaking a major programme of site preparation and advance factory building. I think that it is agreed on all sides that this is one of the most effective inducements to new job creation in the Principality.

I understand that planning permission has now been given for the titanium plant and that it is proceeding.

On the aerospace question, I have seen the reports. I understand that the company is considering a number of possible options and that it has not taken any decisions yet. But, in view of the importance of the matter, I have written to my right hon. Friend the Secretary of State for Industry expressing my interest in the matter and I have asked to be kept fully informed of all developments.

In order to stimulate the Welsh economy, will not the right hon. Gentleman persuade the Secretary of State for Industry to restore the £36 million worth of regional development grants and selective assistance which he will be withdrawing from the Welsh economy as a result of rolling back the so-called map of regional development, thereby reducing the incentives to industrialists to come to Merthyr, Pontypridd, Swansea and other areas? This makes a nonsense of the right hon. Gentleman's claim that he has given us money—£48 million in South Wales or £15 million to Shotton and other places.

The right hon. Gentleman is not comparing like with like, and he is talking about a figure which would become effective only after the current downgradings are completed. We have already indicated that we are reviewing the areas affected by current closure proposals. If upgradings take place as a result of those reviews, clearly additional sums of money will be injected into the Welsh economy on top of the announcements that I have already made.

In his weekly lecture to the Saundersfoot Conservatives, the Secretary of State accuses the Opposition of painting a far too gloomy picture in Wales. Does he not realise that the gloom is of his own making? With 92,000 people already unemployed, with daily redundancies being announced in the private sector, with a threat hanging over our steel and coal industries, and with no sense of urgency on the part of the Secretary of State for dealing with the problems of North Wales, such as those in Dinorwic, I make an offer to the right hon. Gentleman. We shall gladly alter the tone of our speeches if he shows greater concern and takes positive action to prevent the gloom from becoming reality.

I have announced some very substantial measures. The talk about an industrial desert, which has been used by a number of the right hon. Gentleman's colleagues and by the Wales TUC, is seriously damaging to the Welsh economy.

I know of specific companies which have indicated that their investment decisions have been affected by this talk, and I hope that those who use such language, including the right hon. Member for Swansea, West (Mr. Williams), will remember the damage that they are doing to the Welsh people.

Welsh Development Agency

5.

asked the Secretary of State for Wales if he has had any recent discussions with the chairman of the Welsh Development Agency.

Does the Secretary of State appreciate that there is intense dissatisfaction in Newport with the efforts of the Welsh Development Agency? Does he accept that the assistance offered to that town is a fleabite compared with that given to surrounding areas? Does he further accept that only 350 jobs will be provided, although it is expected that no fewer than 8,000 jobs will be lost? Essentially, that money is being provided to alleviate the loss of steel jobs. Will the Secretary of State ensure that the WDA is acquainted with those facts? Will he further suggest that some of that money is spent on land drainage in southeast Newport, where ideal sites are available?

The WDA is currently engaged in discussions with the local authority. The hon. Gentleman must be aware of a lack of immediately available sites of sufficient size in the Newport area. The WDA and the other bodies involved are therefore planning a major development, initially in the Llantarnan area, alongside Cwmbran. Discussions are continuing to see whether further sites can be brought forward in the Newport area. The hon. Gentleman will know that talks have continued between the Minister of Transport, the British Transport Docks Board and local authorities concerning the possibility of available land in the dock area. Every possible effort has been made to bring forward new sites in New- port. However, such sites are not readily available for instant development.

When my right hon. Friend next sees the chairman of the WDA, will he draw his attention to the genuine ground for public disquiet engendered by the circumstances surrounding the Agency's investment in P. Leiner and Son? Will he suggest that there should be a full public inquiry into the circumstances of that investment, in order to ensure that the facts are established and that blame is apportioned where necessary?

The new chairman of the WDA has no responsibility for the original investment. However, he is taking a close interest in the issue. He has seen all the papers and has discussed the matter with me. There is more than a possibility that the Public Accounts Committee will wish to look into the investment and that might be the right way of proceeding.

Will the right hon. Gentleman make clear that there is no foundation to the stories circulating in South Wales that it is the Government's policy to permit a relaxation of regulations concerning factory building and planning arrangements on sites in South Wales that could be developed by the WDA?

I think that the hon. Gentleman is referring to the possibility of enterprise zones. The Government have made it clear that they are considering proposals for limited areas to be treated in that way. Announcements will be made in due course.

Does the Secretary of State recall that during his reply to my hon. Friend the Member for Newport (Mr. Hughes), he said that the Department and the WDA were considering bringing forward new sites and projects in Newport? How are those projects to be financed? We have heard a great deal about the £48 million that is to be spent on Port Talbot and Llanwern, and about the £15 million that is to be spent on Shotton. However, is it not true that the WDA's budget for the coming year will be only £58 million, and that that sum represents only £6 million more than the original budget? If that is true, how on earth can those new schemes be in that area? Has my right hon. Friend re-brought forward?

With respect to the right hon. Gentleman, the problem is not one of finance. Immediate sites are not available. The WDA has made resources available in steel closure areas and will fully carry out a programme that it considers reasonable and practicable during the next two years.

Unemployment (Caernarvon)

7.

asked the Secretary of State for Wales, what proposals he has to combat the anticipated severe increase in unemployment in the Caernarvon area.

I am fully aware of the unemployment problems facing the Caernarvon area and I am planning to discuss the situation with Gwynedd county council.

Is the Secretary of State fully aware of the magnitude of that increase? Is he aware that 1,300 redundancies have been registered with the local employment office in Caernarvon in recent weeks and that that adds to the escalating unemployment rate? Does he accept that the CEGB has been run down in Dinorwig, that the Bernard Wardle factory has been closed and that several public works have come to an end? Is it not therefere ridiculous to downgrade the Arfon area from a special development area to an ordinary one, when the unemployment rate will probably exceed 20 per cent?

I am fully aware of the situation in Gywnedd. I therefore hope to discuss the matter with Gwynedd county council within the next month. We have said that if the unemployment situation changes, we shall review those areas affected. That applies to this part of Wales as to others. I am also pressing on with the A55 road programme. That is of great importance to the area.

Three major projects will begin in the coming financial year; Bangor bypass, Colcon stage I and Hawarden bypass. In total those projects will cost £125 million. We are treating that programme as a matter of urgency.

What contribution does the programme of arson against country cottages in North Wales make to the creation of employment opportunities in that area? Has my right hon. Friend re-ceived from Plaid Cymru an unequivocal denunciation both of the acts and of the motives behind those acts?

I hope that all hon. Members will condemn actions that damage and destroy property, and that endanger life. I agree that such acts seriously damage the economy of the area. They weaken the tourist industry and they may prevent or deter new investment. I hope that all hon. Members and all political parties will vigorously condemn those acts. I hope that Plaid Cymru Members will join in that condemnation.

Is not the Secretary of State aware of the statements that I have made during successive sittings of the Standing Committee on the Housing Bill? Will he not draw those statements to the attention of his hon. Friend the Member for Flint, West (Sir A. Meyer)?

It might have been helpful if the hon. Gentleman had repeated his condemnation—if that is what it was—in unequivocal terms today. I have not read his remarks. However, if he condemned that arson, I welcome his statement.

May I congratulate my right hon. Friend on taking such a close personal interest in the affairs of North-West Wales and its economy? Does he not agree that we should stimulate small firms in that area? Will he therefore consider whether the WDA's present scheme for giving loans at lower rates of interest in rural areas and in small towns should be extended to other parts of Wales?

My hon. Friend is right. We attach great importance to encouraging small firms. We are taking several measures in order to meet that end. I have asked the WDA to concentrate its investment programme on the small firm sector. Loans at concessionary rates of interest are available to firms in rural areas. The agency has joined banks in launching a guarantee scheme. I hope that my hon. Friend will draw these various schemes and the services available from the agency to the attention of all interested and potentially interested customers.

In order to mitigate any effect on outside investment that may result from such arson, has the Secretary of State had discussions with the Home Secretary—as I understood he was to do—to ensure that no more irresponsible programmes stem from the BBC? Does he not agree that those programmes demonstrate that the BBC has colluded with arsonists and has presented unbalanced programmes which act as an incitement to arson?

I am in touch with my right hon. Friend. I expressed my views beforehand about holding the programme. I do not accept the case put forward by Sir Michael Swann in his letter to The Times justifying the programme. I believe that the programme gave a platform for the view of a small minority, which will encourage further such acts. The chief constable for North Wales has stated that it will make his task more difficult. I hope that the broadcasting authorities will consider carefully the consequences of their actions, when property and life are being put at risk.

Expenditure

8.

asked the Secretary of State for Wales if he is now in a position to state in what way the additional £48 million will be spent in Wales.

Around £40 million will be allocated to the WDA and the rest to the Cwmbran new town development corporation. The money is for the provision of sites and advanced factories in the area affected by the planned reductions at Port Talbot and Lianwern.

Will my right hon. Friend accept that the emphasis that the Government are placing on the problems of Wales will be welcomed by all hon. Members? However, will he and the Minister continue to make speeches such as that at the weekend to ensure that potential foreign investors are aware of the benefits of Wales? Will he deprecate the statements made by right hon. and hon. Members opposite, which serve only to damage future investment prospects in Wales? Will he school them to cease such pontifications?

I entirely agree with my hon. Friend. It is not only I who hold that view. It is shared by those responsible for the Development Cor- poration and the Welsh Development Agency and others who have the job to encourage new industry to come to Wales. Such statements and the travesty of the truth presented by those who make them add to the problems of the Principality and make it more difficult to attract new jobs to Wales.

As the Government are determined to further cut public expenditure and as private investment is falling, where will the growth in the Welsh economy come from over the next few years?

As a result of the reckless policies pursued by the right hon. Gentleman and his colleagues when they were in Government, we have excessive public expenditure and borrowing. As a result of our policies, there will be a gradual reduction in the public sector borrowing requirement, interest rates and inflation, and new investment will he given fresh confidence.

Will the Secretary of State accept that once again we have had the £48 million turned down? Will the right hon. Gentleman now confirm that the budget for the WDA for 1980–81 will be only £58 million, which is £6 million more than the orginal budget? Will he further confirm that the concentration will be in the steel areas, at the expense of other areas that have long been in need of such investment? Does the right hon. Gentleman agree that the poor areas of Wales are having to pay for the follies of this Government's steel policies?

If the right hon. Gentleman ponders a little further, I believe that he will agree that it is right to concentrate aid on the areas affected by steel closures and the present serious situation. He knows perfectly well that we publicly announced in this House a reduction in the WDA budget. Since then a new situation has developed, and I have found substantial additional funds to be concentrated on the infrastructure in those areas. I hope that the right hon. Gentleman will welcome that additional expenditure and do something to encourage fresh development to come to Wales, instead of backing his colleagues in nonsensical talk about industrial deserts and painting a picture of gloom and despondency, which can do us nothing but harm.

Steel Industry Closures (Job Losses)

9.

asked the Secretary of State for Wales what discussions he has had with the European Economic Community regarding the anticipated 50,000 loss of jobs in Wales as a result of the cutbacks at Llanwern and Port Talbot steel plants and consequent effects on the coal and other industries.

My right hon. and hon. Friends the Secretary of State for Employment and the Minister of State, Department of Industry and their officials have discussed the BSC proposals fully with the Commission, and I and my staff are in close touch with these developments. I do not anticipate that the number of jobs lost at Port Talbot and Llanwern will be as high as the hon. Gentleman estimates.

In view of the disastrous consequences on the Welsh economy of the closures, will the right hon. Gentleman accept that I and my colleagues who met Commissioner Vredeling in Brussels were surprised that the Government had had very little contact with the EEC and that the Welsh Office had had no contact? Will the right hon. Gentleman listen to the EEC's comments about not immediately making closures but, if they have to be made, phasing them over a period? Will he accept that in two or three years' time we may find that we have less steel-making capacity in this country than we require? Will the right hon. Gentleman further accept that the EEC is talking about cutting 6 million tonnes, while BSC is cutting 6 million tonnes in this country alone?

As usual, the hon. Gentleman is wrong. I saw Commissioner Vredeling in Brussels before Christmas, and my officials have been in touch with EEC officials since then. We are maintaining the closest possible contact with the EEC in these matters, and we shall continue to ensure that we obtain everything to which we are entitled from EEC funds.

Will my right hon. Friend confirm that statements by Commissioner Vredeling that the United Kingdom has been slower than other member States in taking up benefits available are untrue?

We have taken all the benefits to which we are entitled under existing schemes from the moment that it was possible to do so. As my hon. Friend knows, a completely new scheme has been proposed, which has not yet been approved by members of the EEC but which Commissioner Vredeling favours. We are now discussing the proposed scheme with the Commission to see whether it can be modified so that it is acceptable and can be used in addition to existing schemes. If it is modified in a suitable way, we shall certainly use it.

Does the right hon. Gentleman agree that Newport is possibly the largest steel making area in the country, yet the Government's plans are all based on providing 350 jobs when job losses of 8,000 are anticipated in the town? The right hon. Gentleman appears to be complacent not only about the attitude of the EEC but also about that of the WDA, and what does he plan to do?

The hon. Gentleman does himself no credit when he suggests that the work force at Llanwern, first, comes only from within the town of Newport, and secondly, can only travel to sites within the town of Newport. He is well aware that the travel-to-work area is much larger than that. I hope that he is not suggesting that the admirable Llantarnan site, for example, is not entirely suitable and will not provide jobs for his constituents, as well as others.

If the right hon. Gentleman believes that the figure of 50,000 job losses given by my hon. Friend the Member for Aberdare (Mr. Evans) is somewhat high, what does he consider to be a reasonable estimate? When he met Commissioner Vredeling, did they discuss the consequences of steel closures? Will the right hon. Gentleman accept that when we met Commissioner Vredeling a week ago he was far from satisfied with this Government's response to the steel industry closures and the effects on South Wales.

A number of things have yet to be decided, so I can not give an estimate of the total number of job losses. The National Coal Board has not yet come forward with firm proposals. The hon. Member for Aberdare (Mr. Evans) was asking about the consequences of the cutbacks at Llanwern and Port Talbot, and I am not aware that any responsible body is suggesting that they would cause 50,000 job losses. I do not believe that even the right hon. Gentleman would suggest that. The Wales CBI came to see me last week and that was not its view.

When I saw Commissioner Vredeling, the latest BSC proposals had not been put, and I clearly could not discuss them with him. Since then, my officials have been in touch with Commission officials. As the right hon. Gentleman knows, my hon. Friend the Minister of State, Department of Industry, has had conversations with the Commission recently, as has my right hon. Friend the Secretary of State for Employment.

In view of the unsatisfactory nature of the reply, I shall seek to raise the matter on the Adjournment.

Colleges Of Education

10.

asked the Secretary of State for Wales if he will make a statement on the future of the colleges of education in Wales.

The public sector institutions are moving towards the revised target capacities announced by the previous Administration in 1977.

In view of the high cost of living, will not the Minister agree that the student grants scheme should be made mandatory?

That it not my responsibility, but I shall pass the hon. Member's comments on to my right hon. Friend.

Will the hon. Gentleman indicate whether the Government will carry out a further review of the number and size of colleges in Wales?

Clearly every college in Wales must fight to some extent for its own survival. The right hon. Gentleman will know why—because of the falling rolls and the consequent drop in the demand for teachers. Also we must consider the increased standards of admission for entry into our colleges of education. Severe difficulties are imposed on them because the universities are attracting so many more candidates from the schools. We are not conducting any review, and we are confident that all the colleges will meet their targets.

Housing Finance

11.

asked the Secretary of State for Wales what representations he has received from local authorities in Wales regarding the Government's proposals for housing finance.

Nine authorities have made formal or informal representations about the recent housing allocations. Five authorities have also asked for clarification of points of detail.

Does my hon. Friend consider that the reduced allocations will none the less permit virtually all authorities to carry out such housing programmes as are reasonably practicable, given the material resources available?

I can assure my hon. Friend that Rhuddlan, on account of which he has made representations to me, is getting more money in its allocation for next year that it is spending this year. If it runs into difficulties it may supplement its allocation by using the next proceeds of sale of council houses or land.

How on earth can the Government pretend that this is an adequate programme in relation to the available resources when in the construction industry we have enormous unemployment in Wales?

The right hon. Gentleman will know that a promise was given in November 1978 that for the coming year the authorities would get 80 per cent. allocated to them of their allocations for this year. We have abided by that promise.

Will my hon. Friend continue to encourage the housing associations in Wales, as being a good way for local authorities to provide housing places for those on housing waiting lists without any cost whatever to the ratepayers?

Certainly we have encouraged the housing associations. We have allocated more than £28 million to the housing corporation which should enable the housing associations to maintain the programmes that are currently running.

Can the Minister explain why the housing investment programmes for England are available and have been placed in the Library, but those for Wales are still apparently subject to the Official Secrets Act?

The housing investment programmes have always been regarded as confidential, but certainly the housing allocations have been placed in the Library and they are public knowledge.

How can the Minister claim that there has been an improvement in housing when he has cut 30 per cent. in real terms off Merthyr's housing programme for next year? After all, this is a community which is trying to deal with the problems of redevelopment of more than 100 years, as well as build new council homes and give mortgages to people. Is he not condemning many people to an eternity of waiting? Is he aware that there are thousands on the waiting lists in Merthyr as well as other areas in Wales?

Merthyr is getting in 1980–81 92 per cent. of its original allocation for 1979–80. Therefore, I think it is doing pretty well.

On the question of housing waiting lists, the hon. Member knows from his experience of housing at the Welsh Office that there is no such thing as a standard housing waiting list. The waiting list is no real guide to housing requirements in Wales.

Land Development (Flooding Danger)

12.

asked the Secretary of State for Wales whether he will advise planning authorities to consult the Welsh water authority before authorising development on land that could be subject to flooding.

Planning authorities are well aware that they should consult water authorities on development proposals which have implications for land drainage. They are specifically required to do so if the development includes works on rivers and streams and refuse tipping, among other things. We are nevertheless considering whether further guidance is needed.

Would it not be advisable to issue a circular formally urging planning authorities to make use of the expert advice of the Welsh water authority?

Advice is available to planning authorities, which emphasises the importance of consultations on development proposals which lie within the areas liable to flooding. I am considering with my colleagues whether a further circular would be justified in the light of recent events.

Will not the Minister agree that all the land under the jurisdiction of the Severn-Trent water authority should be handed back to the Welsh water authority?

Welsh Development Agency (Financial Support Policy)

13.

asked the Secretary of State for Wales what guidance he has given the Welsh Development Agency as regards withdrawing financial support from companies previously supported by it.

None, Sir. It is a matter for the agency's commercial judgment to decide when to invest in a company and when to take action to protect its existing investments.

Will the Minister tell the House when, during the past four months, a company in which the agency had a majority shareholding, has had a receiver called in, following which an associated company, on the strength of its commercial prospects, has been able to attract substantial financial support from agencies outside the United Kingdom with a view to establishing a major manufacturing plant employing several hundreds of people in another country?

I think that that question would be properly directed to the Welsh Development Agency, but if the hon. Member tables a specific question I will see that he gets the information that he requires.

Will the Secretary of State clarify reports in Wales this morning that the WDA will not go ahead with 30 advance factories in Wales because it has not enough funds available? Will he confirm that he wrote to the Dyfed county council recently telling it that the whole programme of advance factories would be held back because of a lack of funds for this work?

I have not seen the report to which the hon. Member refers. There is a programme of small starter units going ahead under WDA control in his part of Wales. I confirm that that is not being held back. The remaining factory programme of the WDA is being concentrated in areas which have suffered from steel closures and the running down of the steel industry.

Will my right hon. Friend review the requirement of a 15 per cent. to 20 per cent. return on equity undertakings by the WDA, in order to stimulate further such investment in firms in Wales and thereby stimulate the economy?

I am not sure whether my hon. Friend is suggesting that the agency should look for a lower return than in the past. If so, I am not sure that I could go along with him. It ought to set its sights high, rather than low. To date, its overall return has not reached the target that has been set.

Leasehold Reform

14.

asked the Secretary of State for Wales what representations he has received concerning the working of the leasehold system in Wales.

Leasehold reform has been the subject of six parliamentary questions and 84 letters.

Is the hon. Gentleman aware of the resentment among leaseholders in Wales who are finding themselves compelled by ground landlords to effect insurance on their homes? Will he seek an early opportunity to introduce legislation to make that practice of ground landlords illegal?

It is clearly in the interests of both the leaseholder and the freeholder that the property should be insured with a reputable insurance com- pany. The most common form of conveyance of leases contains only a requirement to that effect. However, I understand that some landlords who own many leasehold properties require that cover be obtained from a particular company, possibly because that greatly facilitates the necessary checking by the landlord that cover is being continued by all his leaseholders. I shall discuss that aspect with my right hon. Friend the Secretary of State for Trade.

Church Commissioners

23.

asked the hon. Member for Wokingham, as representing the Church Commissioners, when next he expects to attend a meeting of the Church Commissioners.

(Second Church Estates Commissioner): Consistent with my duties in this House I hope to be present at the Commissioners' headquarters at least once this week.

As the Government were defeated last week in the other place, this seems to indicate that even the House of Lords including the Lords spiritual take a more enlightened view than this materialistic Tory Government. Will the hon. Member give us an assurance that the Church Commissioners will join the rest of the Church militant and demand that the Government abandon their proposal to deprive children of their legal right to free school transport?

I have patiently explained to the hon. Member before that the Church Commissioners as such have no responsibility for education. I am not able to assist him, though perhaps he will have observed, as he studies these matters so carefully, that not all the Church Commissioners voted in one way when this matter was discussed in another place.

Public Libraries

24.

asked the Chancellor of the Duchy of Lancaster how many books were borrowed from public libraries during 1979.

About 557 million books were borrowed from public libraries in England in the year which ended on 31 March 1979.

Do not those substantial figures show what an important part the borrowing and reading of books from public libraries plays in the educational process as a whole? Is my hon. Friend prepared to say, in relation to economies that we on the Conservative side accept totally, that he would hope that not disproportionate economies are made by local authorities on public libraries when considering the economies that they necessarily have before them?

I certainly endorse my hon. Friend's opening remarks. Everyone acknowledges the important role that libraries play in all communities. However, expenditure on the library service cannot be exempt from the restraints to which public expenditure in general must be subjected in present circumstances. I hope that the libraries will continue as the focal point that they have become for many people in every community.

Do not the facts that opening hours of libraries are being cut and fewer books are being bought by local authorities because of the Government's insensate and destructive tendencies in public expenditure cuts do enormous damage to the long-established tradition of free borrowing in British libraries?

The hon. Gentleman states his case with a little too much excess. The matter is constantly under review by my Department, but the hon. Gentleman must not exaggerate too much. We acknowledge that libraries play an important part and the number of books lent over the past year show no signs of a recession over the next 12 months.

Having made the gesture of supporting the public lending right legislation, will the Government take the further step of showing that they have their feet firmly on the ground by filing the matter and letting it gather dust?

That is not an undertaking which can be granted this afternoon. My hon. Friend knows the precise state of that legislation and the pro- gramme that has already passed the House.

Arts Expenditure

25.

asked the Chancellor of the Duchy of Lancaster what representations the Government have received about the effect of public expenditure cuts on the arts.

I refer the hon. Member to the answer that I gave him on 5 November 1979.

Will the Minister confirm that the Arts Council grant for next year will be £68 million, which is less in real terms than the grant for the current year? Is he aware that the cuts in the BBC budget have caused a proposal to scrap the BBC Scottish Symphony Orchestra? Will the hon. Gentleman urgently investigate that matter with a view to saving the orchestra, because its destruction would be seen as yet another act of cultural vandalism by the Government?

The hon. Gentleman's indignation is a little excessive and he is displaying some of his traditional gloom and despondency, which he does not owe to his constituents. The hon. Gentleman knows that the latter issue is a question for the BBC. On the other matters that the hon. Gentleman raised, he has waited since 5 November for his question. I suggest that he waits a little longer to hear my right hon. Friend.

In the difficult task that my hon. Friend faces in allocating such expenditure as remains to him, will he feel able to look more critically at the Marxist cottage industries that claim tranches of his budget and more benevolently at various artistic activities, such as those of South-West Arts in my constituency, which are creative rather than destructive?

My hon. Friend referred to my budget, but I must point out that it is a budget granted to the Arts Council and its allocation is a matter for the Council. Many hon. Members have written expressing deep concern about a number of recent matters that have appeared in the press and they are being looked at.

The Arts (Private Sponsorship)

26.

asked the Chancellor of the Duchy of Lancaster if he will make a statement on the latest results of his appeal to private sponsors for help in financing the arts.

The Chancellor of the Duchy of Lancaster and Leader of the House of Commons
(Mr. Norman St. John-Stevas)

I am happy to say that there has been a continuing positive response by the business world to appeals for increased sponsorship of the arts.

Does the right hon. Gentleman realise that it is obvious that the arts will have to depend increasingly on private sponsorship since the Government will not give adequate funds to enable the arts to prosper by that means? In view of the enormous windfall profits of the oil companies and the banks, will he undertake to approach them to disburse some of their ill-gotten gains for the sake of the arts?

On the first point, the hon. Gentleman is not right. The Government have made clear that they intend to continue public support for the arts. I agree with him that for any increase we must look to the private sector. We have had considerable success there. The Association of Business Sponsorship for the Arts estimates that private support is running at up to £5 million a year. I accept the hon. Gentleman's interesting suggestion that the banks and the oil companies should be approached, not for their ill-gotten gains, but for their perfectly legitimate gains. I shall be happy to go along, with the support of the hon. Gentleman, and suggest that they might make an even bigger contribution to the arts.

Does my right hon. Friend think that sponsorship from private companies will be able to overcome the problems caused to theatres by the 15 per cent. rate of VAT?

That is a different issue. I hope that the increase in private sponsorship will help not only the theatres, but the entire art world in a time of economic difficulty.

Returning to the BBC Scottish Symphony Orchestra, why should the BBC be, to such an extent, the sole patron of music? Is there not a case for some help from the Government in that respect?

How the BBC disposes of its funds and programmes is a matter entirely for the Corporation.

Arts Expenditure

27.

asked the Chancellor of the Duchy of Lancaster if he is satisfied with the level of Government spending on the arts.

33.

asked the Chancellor of the Duchy of Lancaster when he will make a statement about the level of Government spending on the arts.

The House will be glad to know that in the expenditure plans for 1980–81 which I shall be submitting for parliamentary approval, I intend to provide for a grant of £70 million to the Arts Council of Great Britain.

I do not intend to be churlish to the right hon. Gentleman. I thank him for his reply. However, is he aware that the £9 million increase does not make up for the cut of £1¼ million in the arts grant that the Government made on taking office or for the 20 per cent. inflation rate from which the labour- intensive arts are suffering acutely? Is he also aware that, as his hon. Friend the Member for Preston, North (Mr. Atkins) pointed out, the increase nowhere near meets the doubling of VAT on the arts? What prospect can the right hon. Gentleman hold out for an improvement in the situation?

I would be the last person to accuse the hon. Lady of being churlish to myself, but she is perhaps being less than her usual generous self on these matters. The increase in the Arts Council grant amounts to £11.75 million and we hope that the inflation rate will not be 20 per cent. for this year. The £11.75 million represents an increase of 20 per cent. and I think that that is a fair deal for the arts. Of course, I should much rather see an even bigger grant, but I think that the hon. Lady will agree on reflection that, in the circumstances, the arts have not done too badly.

May I congratulate my right hon. Friend on his answer? However, will he bear in mind that it would be helpful next year if the Arts Council could know of the Government's intentions just a little earlier?

I think that that is a fair point. I thank my hon. Friend for his more than generous remarks, which make up for my disappointment with the hon. Member for Wolverhampton, North-East (Mrs. Short), with her less than generous ones. During the year expenditure reviews have taken place. In fact, the announcement has been made earlier than the general announcement on public expenditure. The Arts Council receives an earlier informal notification. I hope that next year there will be different circumstances and that we shall be able to get these matters over earlier.

Perhaps the right hon. Gentleman should temper his euphoria and even show a little penitence. This grant does not meet the inflation rate and the likely inflation rate under this Government's policies. Perhaps he should recall—[Interruption.) I do not need any help from either side of the House on this.

Order. I am in the middle. Therefore, the hon. Member for Warley, East (Mr. Faulds) meant "Will he".

I am most grateful for your assistance, Mr. Speaker. I was about to rephrase that, but the sight of the right hon. Gentleman so incenses me. Will he recall—if he wants to make comparisons—the very poor performance of his grant this year compared with the five years 1974–79 of the Labour Government when the increase was 250 per cent.?

The hon. Gentleman is not right. The increase in money terms was not 250 per cent. but 225 per cent.

In real terms it was 63 per cent. That is very similar to the rates of increase achieved by the previous Government. We are in a different situation now. During a period of cutback in Government expenditure we can all be proud of this year's arts grant. As for penitence, no doubt I have a great deal to be sorry for. like most people. When the lion. Gentleman makes an act of contrition for his sins, I shall happily join him.