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Employment Prospects In Wales

Volume 15: debated on Monday 14 December 1981

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4.27 pm

I beg to move,

That this House deplores the policies of Her Majesty's Government as they affect employment in Wales, in particular those that have decimated the greater part of Welsh industry, resulting in the highest rate of unemployment in the Principality since the 1930's; calls upon the Government to increase investment to create new jobs and to sustain existing ones and believes that finance should immediately be made available to the National Coal Board for developments that include the New (Deep) Mine at Margam, thus ensuring that the South Wales coalfield shares in the expansion and modernisation in this traditional industry Which is so essential to the nation.
I hope that my good fortune in drawing the first place in the ballot for today will be shared by others who may benefit from it.

For the major part of two and a half years I have listened to and participated in debates deploring the Government's economic policies I have attended numerous debates on unemployment. I am absolutely convinced that the arguments and warnings from the Labour Benches are accurate and acceptable to most clear-headed Members. Unfortunately, Members on the Government Benches have taken a little longer to accept them, although I am pleased to see that at last we are getting through and that there are signs of revolt and a breakthrough to more reasonable, acceptable and moderate thinking. A loss of solid, safe Tory seats might be one reason and threats to the seats of existing Conservative Members might be a further cause, but, whatever the explanation, let us hope that it will mean changes to help the people of Wales, to reduce the cancer of unemployment and to bring hope for the young and the middle-aged who are desperate for a chance of a job, for security and to be independent.

We could do no better than to ask all right hon. and hon. Members to read or re-read the excellent first report of the Select Committee on Welsh Affairs. That more than adequately and comprehensively covers all the arguments for developing opportunities in Wales. All the members of the Committee deserve our sincere thanks, especially my hon. Friend the Member for Pontypool (Mr. Abse), who ably presided. None the less, it is interesting to note that since July 1980 very few, if any, of the recommendations have been acted upon. It is even more interesting to note that the preparation of such an excellent document necessitated only one visit away from the House.

Without wasting a great deal of time repeating what has already been said many times, it is necessary to mention the effect of the Government's economic policies on employment prospects in the Principality. Within months of their election to office and without the necessary time lapse, the Government slashed the personnel of British Steel by 25,000. There is little hope of recovery from that action. The consequential repercussions were redundancies, factory closures and bankruptcies on an unprecedented scale. The Government also increased bank rate, doubled VAT and started the slaughter of local government services. The consequential repercussions were higher mortgages, higher taxes, higher interest rates, higher rents and rates and fewer and fewer services for the old, the sick, the disabled and children. There have been cuts in the meals on wheels service, medical treatment has been reduced, and there have been cuts in school meals, school milk, school places and, in some areas, even schools. There are many more consequencies, too numerous to mention.

We all know the extent of this vicious rape of our industry and services. We know, too, of the serious consequences of the Government's policies—in particular, the tremendous escalation of unemployment. Hardly a skilled or unskilled industry or profession has escaped this malicious monetarist madness. Doctors, dentists, dockers, dairy workers, nurses, firemen, shopworkers, woodworkers, transport workers and all workers in the steel and construction industry have suffered and are still suffering. Many more could be added to the list. There are 170,221 people registered as unemployed, but there are thousands more who are not registered but are without work. The vast numbers of our people who are suffering this indignity, frustration and impoverishment in a so-called civilised society must be given hope.

It is not my purpose to make any political capital out of the plight and misery of those unemployed people. I see that happening every week. It is so easy for us to bandy the figures about in the House, whether socially, regionally or nationally, but how many of us really appreciate what unemployment means to our people in terms of human misery and suffering? How many of us realise the degradation, demoralisation and total despair that it creates? How many of us fully appreciate why it drives people to desperate action and to suicidal thoughts and, in some instances, acts? That misery, humiliation, suffering and degradation of the 170,221 unemployed people in Wales is more than a reminder of the 1930s. More and more we see men standing around the streets; more and more we see young people aimlessly walking around; and more and more we see poverty creeping back into our valleys. The young have soured and becomed sickened with life on the dole. They are depressed, dejected and prone to drug addiction. That has been brought about by a Government who have engendered more hate in two and a half years and destroyed more of our commercial and industrial undertakings in Wales than did the last world war.

What has happened over that period? The gap between the unemployment rate in Wales and that of Great Britain as a whole tended to narrow between 1965 and 1974. Since then, however, especially in the last two years, the gap has widened as unemployment has risen. Wales now has a higher percentage of unemployed people than any region in England. Wales is approaching the unenviable status of the worst-hit industrial nation in Europe. Official projections suggest that a further 13,500 people per year will enter the labour market in Wales between now and 1985. It has been estimated that regional policy created about 6,000 new jobs per year, at best, between 1960 and 1972. There is no evidence that that pace of new additions to the stock of jobs has been sustained in recent years.

Let us put on record and let us all clearly understand the present position. I refer to the replies given to me by the Secretary of State on 7 December 1981. He said that in Wales there was an 8 per cent. drop in the number of people in work compared with a 5·5 per cent. drop in the United Kingdom as a whole. In 1979, the number of unfilled vacancies in Wales was 619; in 1980 the figure was 171, but in 1981 it was only 129. Yet 170,221 people are registered as unemployed. If the unemployed workers accept the advice of the Prime Minister to look for work, where should they move to in Wales? If they have a bike,

where should they ride to? The number of 16- to 18-year olds unemployed in Wales in October 1979 was 14,171. In October 1980 the figure was 21,649. However, in October 1981 it was 24,924—an increase of 10,800 young people unemployed in two years.

Further to the replies that were given to me by the Secretary of State, up to 8 October 1981, 33,835 young people under the age of 20 were registered as unemployed and 17,290 were in youth opportunities programme schemes. In 1979, the number of unemployed school leavers under the age of 18 was 5,694; in 1980 the figure was 9,995, and in October 1981 it was 11,884. So, between October 1979 and October 1981, there has been a 110 per cent. increase in unemployed school leavers under the age of 18. The rate of unemployment in Wales is 15 per cent., whereas the lowest rate in England is 9 per cent.

What action will the Government take to remedy this problem? Promises are not enough. We need positive action, and we need it desperately. Instead, the Secretary of State for Employment is determined to add further insult to the injury of the young unemployed. The right hon. Gentleman should heed the warning that there is already wide opposition to the present inadequate youth opportunities programme, which offers the miserly sum of £23·50 a week. He wants to impose a training programme for young people at £16 a week and to withdraw supplementary benefit from anyone who refuses a place. That is quite obnoxious and could have been suggested only by a person with a twisted mind. Already our young people are deprived of what they need most—a job with an income. The right hon. Gentleman's proposals will unite and anger all those involved with the young unemployed.

Before the Secretary of State introduces such foolhardy proposals, I advise him to get on his bike and talk to the CBI, the TUC, the MSC, and especially the young unemployed, and, for a change, to listen to what those directly involved have to say.

With this shameful record, having created all this unemployment and industrial havoc, the Government suggest that if people in work are having their living standards reduced, those out of work must be expected to shoulder their share of the burden. But these people, put out of work deliberately and calculatedly by the Government, already bear more than their fair share of the national burden. Cutting their benefits by 2 per cent. in real terms will be an act of criminal irresponsibility.

The right hon. Member for Sidcup (Mr. Heath) summed it all up admirably in last Tuesday's debate when he described the ideas as fallacious and unacceptable, and as having no philosophical backing.

It is not my intention to speak at length about my constituency of Ogmore, but I suggest that what has happened recently is typical of most constituencies in Wales.

This weekend, the Ogmore constituency received an announcement from Bridgend Paper Mills that 70 jobs would be lost by the end of the year. Only 12 months ago, the workers agreed to the loss of 70 jobs and a cut in their pay packets. In Bridgend Paper Mills there is an excellent industrial relationship between management and workers. The manager claims unfair competition from European firms which receive heavy subsidies on their fuel costs, and that that is the main cause of the redundancies. There has been substantial investment to ensure long-term security there, with £6½ million being spent on a coal-fired electricity generator to cut fuel bills. But Government policies, creating recession and lack of consumer demand, are the main cause of jobs being lost.

Again last weekend, 100 redundancies were announced at the Borg Warner factory, and we heard of a further 20 redundancies at Tensia Limited on the Bridgend industrial estate, with the managing director stating that the recession, costing problems and a lack of adequate premises were forcing him to close.

In only one weekend we have had these announcements of redundancies, closures and intended closures. At Bridgend, an electrical factory which has not had a strike in 45 years threatens closure if its workers will not accept the 2 per cent. increase that they have been offered. If the work force goes on strike, 96 jobs will be lost. The average earnings of those workers, most of them women, are about £55 a week. The 2 per cent. offer would mean an increase of £1·10 a week. The recent mini-Budget will take away the £1·10 a week from those 96 workers if they each have nothing more than a colour television set. It is no wonder that after 45 years the workers are talking of strike action.

The Secretary of State for Wales accepts that Ogmore has suffered as a result of Government policies and redundancies. On the last occasion that the right hon. Gentleman answered Welsh questions, he suggested that because Sony at Bridgend was receiving the first-ever EEC grant to a foreign company for extensions to its factory, with the eventual employment of 120 persons, Ogmore 's difficulties would be reduced substantially. We try continually to explain to the Secretary of State that, although we accept the good news of jobs coming to areas, the job losses, factory closures and redundancies that I have outlined are at least 400 per cent. to 500 per cent. more than the new jobs, and the position is getting worse week by week and month by month.

In the same week that we had the good news of the Sony development, with 120 jobs, we had the bad news of the Coegnant colliery closure, with the loss of 400 jobs. That is one of my reasons for initiating this debate. The outlook for jobs and the job market in Wales is very bleak.

Government agencies have warned that unemployment in Pembroke dock could soar to 30 per cent. next year. One in four persons in Tenby is out of work. Is it not ironic that £80,000 is being spent building advance factories in Tenby when the district as a whole has 150,000 sq ft of empty space which cannot be filled—and this in the constituency of the Secretary of State for Wales?

The latest issue of The Economist says:
"Nissan's giant Datsun car plant will be built in Wales if the Japanese firm decide to take the plunge in Britain."
I wonder whether the Secretary of State is having talks with Mr. Takashi Ishihara, the president of the company, to clinch the decision. I hope that the right hon. Gentleman will make a statement to the House as soon as possible.

I want now to discuss the coal industry and the changes in it that we have seen during the past 20 years. I have a vested interest because my father was a miner and, like Mr. Speaker, whose father was also a miner, I sere a Welsh constituency.

Over the past 20 years we have seen changes brought about by cheap oil prices which caused contraction, closures and continuous trouble in the mines. When that era ended at the close of the 1960s, the climate changed. We could still have had the right hon. Member for Sidcup as Prime Minister and avoided the embarrassment of the present Prime Minister's climb-down over pit closures. Rising oil prices changed the negotiating climate. Some have argued that Sheikh Yamani should be congratulated on saving the miners and sending them to the top of the wages table where they rightly belong.

Recently I signed an early-day motion congratulating Arthur Scargill on his outstanding victory to the important and responsible post of president of the NUM. His election will ensure that the miners receive just rewards for the dangerous and extremely hazardous work they do. We all want a satisfactory outcome to the pay offer.

Having visited the St. Johns colliery during the recess, my support is solidly behind the NUM and all those who work in the coal industry for less than £200 a week. The miners are asking for a necessary increase to keep pace with the cost of living, especially after the mini-Budget and other recent attacks on their living standards.

The latest colliery closure in my constituency is Coegnant Maesteg and it was that which prompted me to initiate the debate. Most miners there will be absorbed in another colliery, but the closure means a loss of job opportunities in an area that has already suffered at the Government's hands. The unemployment rate in the Maesteg area is over two and a half times greater than when the Government came to power. It is approximately 20 per cent. and getting worse. The men believe that they have not been given a fair chance, that there are valuable reserves of coking coal and that investment to open new seams would enable the pit to continue the extraction of coal which is in demand.

The National Coal Board estimated that the investment would cost £4 million and decided against that because of geological difficulties; there was no certainty that any new seams would be workable and profitable. The men had no alternative, apart from strike action, but to accept the decision, which they did on 7 November.

The lack of investment is putting other collieries in South Wales at risk. Although pits are producing large amounts of coal at the coal face, the lack of mechanisation is cutting the overall output figures. For example, output at the coal face in the Trelewis drift is 17·5 tonnes per man-shift, but overall production is 2 tonnes per man-shift. At the Marine colliery, production is 12·5 tonnes at the coal face, but only 2·5 tonnes overall. The production and profitability of many collieries—some in danger of closure—can be improved if the NCB is able to invest in developing new seams, improving mechanisation at the coal face and bringing coal to the surface.

On the brighter side, today's announcement of the £2·3 million spending to open up estimated reserves of 20 million tonnes of coal at the St. Johns colliery will be welcomed by all concerned. Indeed, that might help to alleviate the fears expressed by lodge secretaries in the area that miners in Maesteg are being referred to as "caravan colliers", because of the continued moves from one pit to another. I am sure that the House will place on record its welcome and express its hopes for the success of the new enterprise with grateful thanks to the management and union representatives for the continuation of excellent industrial relations.

The NCB manpower in South Wales coalfields is 25,000–950 fewer than a year ago. In one year there have been 473 early retirements and 300 men have left voluntarily. A total of 600 men, about half of whom were juveniles, have been recruited. The NUM complained that men were finishing on early retirement and not being replaced. There is a shortage of men on the coal face, the development of new coal faces is being held up, and often men are taken from the coal face to help in opening new faces. That means a substantial loss in output. Therefore, pits will become uneconomic and soon face closure threats. Serious trouble can arise unless more men are recruited to meet these needs.

From 1979 to 1980, the Government were spending £35·6 million on capital investment in the South Wales coalfields, in 1980–81 £35 million and in 1981–82 £30 million. The Government are spending £5 million less this year than last year and £5·6 million less than in 1979–80—a drop of approximately one-fifth in total investment in South Wales in the past three years. The Secretary of State for Wales said:
"The Government are committed to … Plan for Coal and are making available … £800 million for the industry in the current year."—[Official Report, 2 February 1981; Vol. 998, c. 9.]
Investment in the South Wales coalfield is substantially less in real terms than it was from 1977 to 1980.

At the end of November 1980, coal stocks in Wales were substantially reduced to 2·9 million tonnes of deep-mined coal—mainly steam raising coal—which is 1 million tonnes less than a year ago. In the 13 weeks up to the end of November 1981 900,000 tonnes were taken from stock. The reasons for that were the good performance at the Aberthaw power station, success of the export drive and higher sales to steel works. The NCB expects to clear stocks by mid 1983. The output of South Wales pits increased by 6·4 per cent. in the past 12 months. If British Steel wanted to buy more South Wales coking coal for Port Talbot and the Llanwern works next year, the NCB could not supply it because of its export commitments.

We are glad to hear of the extent of the NCB development and its success over the past year. British coalfields produce the cheapest and the best-mined coal in Europe. The cost of coal in nationalised British pits is £35 a tonne and in the private pits of West Germany £44 a tonne, France £45 and Belgium £61. The NCB find it difficult to compete with European countries because of the high subsidies they give to their coal industries. The subsidies paid to the Belgian coal industry are £27 a tonne, France £15, West Germany £12 and the French Government are increasing their subsidy substantially.

The NCB is heavily shackled by high interest charges on borrowed capital, currently totalling £185 million. Exports could be increased if the Government increased the NCB's subsidy and took over the burden of the high interest charges which are inflicted on it by the Government's policies.

While the demand for and supply of anthracite does not directly concern my constituency, I am sure that my right hon. and hon. Friend's will wish to mention it. It is claimed that there is a need for capital investment in anthracite, and that is an urgent matter. The western part of the South Wales coalfield is the only area in Britain that has anthracite reserves. It is the best anthracite coal in the world.

Anthracite coal of an inferior quality is being imported from Tunisia, the Soviet Union and Vietnam. Anthracite, especially that of the quality extracted in Wales, is in great demand and a feasibility study is taking place on the development of anthracite reserves. It is essential for Britain that they be made available urgently.

About seven years ago, the NCB considered investing in a new deep mine at Margam. The estimated cost at the time was £80 million and it was expected that the project would employ about 150 men immediately, but nothing was done about it. Since then, pressure for the project has built up, mainly because it would release huge reserves of first-grade coking coal which will be in demand in the near future.

The current scheme envisages an investment of almost £200 million. It would take nearly 10 years to reach full production and would employ nearly 1,000 men. The mine would produce enough coal for the needs of the BSC and for export. It would be virtually on top of the huge Port Talbot steelworks and near to Llanwern, thus reducing transport costs to a minimum, and there is excellent access to ports and railways.

When the new mine was first agreed, it was hoped that it would be ready to absorb the men in the Maesteg area when the reserves at collieries there became exhausted. Since then, Caerau and the Coegnant colleries have closed and the Garw and Wyndham—Western Colliers have reserves for about 12 years. If the Margam project is commenced soon, the men from those colleries could be employed in the new pit. What will happen to those men, and others, if Margam is not opened? There will be even fewer jobs, still less coal being produced and more miners on the dole and perhaps lost to the mining industry for ever.

The work force at Wyndham-Western colliery in Nant-y-Moel holds the top position in the NCB's improved safety standards league, and that is attributable to the skills of that work force. The men work under very difficult conditions, calling for expertise, knowledge and skill. They should not continually and constantly be under the threat of closure.

The chairman of the NCB, Sir Derek Ezra, said that Margam is still a live project, but, because of the considerable depth, it appears that the costings are above the norm. Why is he not prepared to say to the Government that the project should be classified as different? It should have independent investment in addition to the overall "Plan for Coal". It should be started immediately to show the Welsh miners that the NCB has a duty to the Welsh coalfield. The only way that it can survive is by such a commitment. Margam, with its reserves of 20 million tonnes or more, would be the injection of confidence that Welsh miners need.

The young need to know that they have a future in the industry and the NUM needs to know that promises are kept. If South Wales is to be dismissed as a declining and decaying coalfield, the fight back must start now. The people of South Wales have been dominated by coal. Their whole environment has been destroyed by it, and now that things have changed they have earned the right to new hopes of a bright future—or of a least some future—and Margam should be the start.

I urge that the Government discuss the issue with the NCB and the NUM as a matter of urgency so that progress can be made at the earliest moment. It is a matter of national importance in which the Government must give a lead to preserve jobs, to create jobs and to safeguard Britain's energy resources.

I know that a number of my right hon. and hon. Friends wish to take part in the debate. I have taken long enough, but, given the problems besetting my constituency and the Welsh coalfield, I could have gone on for much longer.

Order. Before I call the next speaker, I remind the House that 14 right hon. end hon. Members have indicated their wish to take part in this important debate. It must end at 7 pm, and I hope that the House will understand if I do not give preference to those who are official Front Bench spokesmen and, therefore, have other opportunities to speak.

5.5 pm

I compliment the hon. Member for Ogmore (Mr. Powell) on his choice of subject. I understand why he dwelt on the difficulties of his constituency and the coal mining industry. I found his speech a trifle imaginative only when he appeared to suggest that all the problems of British industry, including unemployment, started after the Government's arrival in office. I certainly share the hon. Gentleman's profound concern and anxiety about unemployment in Wales. Anyone who, like me, has represented a Welsh constituency for many years would take the same view.

Even when I was first elected to the House in the 1950s, unemployment was a lively issue in the Principality. We Conservatives were blamed, wrongly in my view, for having been responsible for all the pre-war industrial problems and difficulties, including unemployment, even though, for the most part, they had been of a world-wide character.

In my first 12 years in the House, I saw three successive Conservative Governments conducting with great skill policies that led to economic growth and what could be fairly described as full employment. Therefore, it must be obvious that, apart from humane considerations, the Government have every incentive to seek to reduce unemployment. There are many reasons why that is so, and I shall give just a few.

First, excessive prolonged unemployment suggests a degree of failure, and most Governments prefer success. Secondly, in our third year of office, the persistence of unemployment must be electorally disastrous. In addition, the industrial problems and failures that create unemployment must surely alienate our supporters. I could also point out that unemployment has been shown to be extremely expensive. Not only does it cost huge sums in the payment of benefits, but it involves heavy losses to the Exchequer through the loss of corporation tax from companies that have failed and the loss of income tax and national insurance contributions from those who are put out of work. When unemployment affects areas such as Wales that have been dependent on a few industries for too long the problems are compounded.

However, we must surely acknowledge the achievements of successive Governments, assisted by the Welsh Development Agency, the Development Board for Rural Wales and ancillary organisations, in promoting new industrial undertakings. The answer given to me by my right hon. Friend the Secretary of State for Wales last week that 108 advance factories, promising nearly 4,000 jobs, have been occupied in the past year shows the size of the achievement. The fact that 251 factory units, totalling 1·4 million sq ft, were allocated between January and November this year shows that the momentum is being sustained.

I appreciate the natural concern for the building of new factories and the creation of schemes for the young unemployed and I understand Ministers' preoccupation with the problems of the younger unemployed, but I suggest that sometimes the problems of middle-aged men and women who are put out of work can be even more intractable. I hope that Ministers will look carefully at those problems.

I am deeply concerned about whether we are doing as much for existing industries and firms that have been established for several years as we appear to be doing for new entrants into industry. I have in mind a company that is sited near my constituency and employs many of my constituents. It has been managed by a friend of mine and his family since before the Second World War.

Morfed Ltd. gave employment to a considerable number and over 100 jobs existed when the company ceased operations. I know of the tremendous exertions of the management and work force in seeking to keep the company in operation. I am aware of the magnificent efforts of the managing director, who travelled throughout the world seeking orders. He was indefatigable in his personal efforts. I supported the efforts of the hon. Member for Caerphilly (Mr. Hudson Davies) when we jointly tried to persuade the Welsh Development Agency and other agencies to give some financial help to the company. The company might have been saved if it had been offered a grant or loan. An excessively large amount would not have been needed.

I turn to another tragic problem in my constituency. After 24 years of fruitful association Geest Holdings Ltd. has decided to pull out of Barry docks. Its reason for doing so, so it has told me and declared publicly, is that its newest ships cannot safely enter and leave the docks in bad weather conditions. Experienced pilots—some of them with many years' association with the trade of the docks—assure me that the dock entrance is eminently safe for the newest Geest ships even in bad weather conditions.

The loss of Geest Holdings Ltd. is not due to economic decline. The company plans to transfer its valuable business to Bristol. There are some suspicions that the financial package that has been offered by Bristol is better than that offered by the British Transport Docks Board in South Wales. I ask my right hon. Friend: are large organisations such as the board unable to offer a package comparable to that offered by a single port such as Bristol? It seems inconceivable that it is unable to do so. It must be an expensive operation for Geest to transfer its business.

It is a fact that Barry has been able to offer many special advantages. It has a deep-water entrance that permits entry for more hours of the day than most of its rivals. It is advantageous that a dock should have a deep-water entrance if it is to be used by a company dealing in perishables such as bananas, which is the main commodity conveyed by the Geest ships.

Generally, industrial relations in the docks at Barry have been excellent during the 24 years that Geest has been there. The work force has shown itself to be competent and adaptable. Moreover, at this very moment road communications with Barry docks are being improved. Following the extension of the M4 the link road to connect the motorway with the docks is in the process of construction. Any help that the Welsh Office can give in retaining the valuable Geest business for the Barry docks will be greatly appreciated throughout my constituency.

It may be said that if Geest decides to stay at Barry it will continue to enjoy the support and good will of the entire community in the town and around it. As a major user of the docks, the company would continue to have paramount importance at Barry. In our anxiety to meet its needs it would be recognised as one of the chief users, which might not be recognised in a much larger dock such as Bristol.

The Geest business is a considerable proportion of the trade that passes in and out of the Barry docks. It would be serious if that trade were lost permanently to Barry. In some respects those in the Barry area have not suffered as much as those in the constituency of the hon. Member for Ogmore. Yet all Wales has special needs that have been recognised to some extent. Its dependence on a few industries has been partly rectified. Newer and more modern industries have arrived. I take pleasure from the fact that Wales has been getting some of the most modern industries over the past few years. But we must be vigilant.

I compliment the hon. Member for introducing for debate such an important subject. We must reduce unemployment. It is one of the most challenging issues to face any Government. I hope that we shall make significant progress during the months ahead.

5.16 pm

First, I congratulate my hon. Friend the Member for Ogmore (Mr. Powell) on securing the debate. The fact that he has done so is typical of the zeal with which he pursues his constituency's problems.

My hon. Friend rightly drew attention to the coal industry, which is basic to the Welsh economy. I support his call for more investment in the coal industry, especally for a new mine at Margam. I know that in this endeavour he will receive the support of the new president-elect of the National Union of Mineworkers, Mr. Arthur Scargill.

I wish to draw attention to another traditional sector of the Welsh economy, the Welsh ports. The ports have faced many difficulties. They were originally coal-exporting ports. They have survived over the years, albeit in reduced form. They have certainly suffered a reduced volume of trade and a much reduced labour force. It appears that once again they have cause for concern about their future.

It seems that the threat to the Welsh ports is coming from the new port development at Bristol, which to date has been nothing more than a white elephant and a waste of public investment. Nearly 16 years ago, when I first entered the House, there was a controversy raging over whether the port of Bristol should be allowed to build new docks. The then Labour Government firmly vetoed the proposal on both social and economic grounds.

At that time the ports in the Severn estuary were considerably under-utilised. It was felt, too, that if development were required for social reasons, South Wales had a far better claim, especially with the rundown of its traditional industries and the heavy unemployment from which it is still suffering.

On economic grounds it was felt that the money could be better spent on a new iron ore terminal to serve the Llanwern steel works. The Labour Government vetoed the proposal for expansion at Bristol. The controversy was raging during the run-up to the 1970 general election. The Conservative Party said "If a Conservative Government are elected, that Government will give the port of Bristol the go-ahead." The widely held belief at that time was that the intention was to win two marginal seats in the Bristol area for the Conservatives. In the event, the Conservatives won the general election and Bristol was given the go-ahead. It is worth pointing out that Bristol is a local authority port.

I think that the hon. Gentleman will admit that his facts are slightly inaccurate. Surely the Bristol port was established as a result of a Private Bill that was supported by a majority of both parties, and the hon. Gentleman and I were among the few Members who voted against it.

That is a complete distortion of the facts. It was a Conservative Government who gave the go-ahead and the proposal was firmly vetoed at all times by the Labour Party and by successive Labour Governments.

The new port development was subsequently opened by Her Majesty the Queen and for some years trade there has been negligible. Bristol's ratepayers have faced an enormous burden and my latest information is that the port is costing them 17p in the pound. It now appears that the port of Bristol is asking for further Government support for its investment. I wish to register the strongest possible protest because such assistance would be highly detrimental to the ports in South Wales and to employment prospects in our area. I hope that the Secretary of State will make that point of view felt in the Cabinet and that he will fight for Welsh interests in that respect. Such support from both local authorities and the Government would be a negation of fair competition.

We should consider what has already happened. The hon. Member for Barry (Sir R. Gower) referred to Geest Bananas and the excuse given by that company. The channel pilots have also been to see me. They point out that the excuse given by Geest that there are navigational problems is rubbish, and they should know about such problems. The real reason is that Bristol is undercutting and is able to do because of these unfair subsidies.

The port of Bristol has other aims as well. For example, it hopes to secure the timber trade from both Cardiff and Newport. That type of trade is basic to the survival of the ports at Cardiff and Newport.

There is the further example of what is known as the Egyptian potato trade. The contract is apparently awarded on an annual basis and last year Cardiff won it. Now the port of Bristol has made an offer that is lower than the price at which Cardiff obtained the contract last year. This undercutting is due to the subsidies which the port of Bristol is receiving.

I appreciate that Liverpool and London have already received financial support to cut the number of employees in their docks. But I maintain, as I did in the debate on that issue, that if there is to be Government support, it should be of a general character to British ports as a whole. It would be a scandal if Bristol were to receive both rate support and Government support. Some straight answers are called for from the Government Front Bench, particularly as I understand that the Under-Secretary is to reply and he, of course, is a Cardiff Member.

While decrying these subsidies with which Bristol is, apparently, luring business away from Cardiff and other ports, does the lion. Gentleman agree that subsidies themselves are damaging, dangerous and always result in lost jobs in areas other than the areas which directly benefit from them, and that, therefore, they should, in general, be widely avoided?

Yes, but it was the hon. Gentleman's Government who created this difficult situation, and that is the basic point I am making.

I have one final brief point to make which concerns the projected Datsun investment in this country. There was a very optimistic article about it in The Economist last week. It spoke of a $600 million development project. It said that it would almost certainly be in South Wales. That is why I say that it was optimistic. Up till now the content of the cars has been a controversial matter, but apparently that has been ironed out. The British content would he no less than that of British Leyland cars at present and probably more than that of the cars of Ford, Talbot and Vauxhall. It is also interesting that one of the reasons given in the article by the Japanese is Britain's stable Government. I should think that that repudiates the drivel talked in some quarters about proportional representation.

More specifically, however, South Wales has at present so much to offer, with an adaptable labour force and excellent sites. The interest that I declare is a particularly good one. From the Llanwern steelworks, steel could almost be thrown over the wall for the manufacture of cars. A number of Japanese firms have already been happily established in South Wales.

As it happens, I speak with a bit of experience of the motor industry. I appreciate that some people have misgivings about the Japanese as a result of the war. have some interest in the matter because I am the proud holder of the Burma Star. The Japanese can at least bring a new dimension to the British car industry with new technology and they can do much to revitalise this extremely important sector of our economy.

Another very important factor in persuading Datsun to come to the United Kingdom and, in particular, to South Wales is that Britain remains a member of the EEC.

I am 100 per cent. in favour of Britain leaving the Common Market. The Western European car manufacturers have raped the British market, and it is time to call a halt to that. The vast majority of imported cars on British roads do not come from Japan; they are Volkswagens, Renaults, Fiats, and so on. That is the foreign competition with which we have to contend.

What is the latest position on the Datsun project? Perhaps the Minister can give hope to the people of South Wales. Some hope is needed after two and a half years of this Government.

5.28 pm

There is no more important subject on the Welsh agenda than the creation of more jobs. For that reason, we must welcome the debate initiated by the hon. Member for Ogmore (Mr. Powell) today.

I am struck by the amazing assumption that underlines the hon. Member's motion, which is that unemployment in Wales is overwhelmingly the product of the Government's policies. One might imagine that unemployment was an unknown phenomenon prior to the last general election. The implication is that Labour Party policies would reverse the present tragic trend of unemployment, even though this is a problem that must be grappled with in many countries. It is a Socialist President who presides over unemployment of 1½ million in France. It is a Socialist Chancellor who presides over unemployment of 2 million in Germany. That is apart from the 2 million guest workers who have left Germany in the last two or three years.

Is the hon. Member aware that the policies now being devised and put into effect by the French President, both on regional autonomy and economic regeneration, are markedly different from the monetarist policies being pursued by the Conservative Government? How does he explain that?

It is remarkable that President Mitterrand has already, after three months, had to reverse his course. An important result was the considerable loss of confidence in the French economy. However, we are not here to debate the French economy; we are here to debate Wales. I am merely pointing out that we are dealing with a world-wide phenomenon.

Before Labour Members roar with laughter, let me remind them of the figures of Welsh unemployment for which they were responsible. In 1974 the Labour Government took over an unemployment figure of 38,000 in Wales. When they left office that figure was 84,000, yet there has been no basic change in Labour thinking and we have not had from them any plans for the creation of employment. Therefore, we can only assume that the ideas that a Labour Government would implement would be the same as those that led to the doubling of unemployment in the last period of office.

The great message of the Labour Party is that a Labour Government would promote reflation, which is another word for inflation. No one has spoken more lucidly about the fallacies of the Labour Governments policies than the former Labour Prime Minister, the right hon. Member for Cardiff, South-East (Mr. Callaghan). Labour Members would do well to refresh their memories by consulting his speech to the Labour Party conference in 1976. He said that there was a whole range of options which had once appeared to be solutions for unemployment, but which had been demonstrated not to have any permanent effect, and which very soon tended to destroy rather than create jobs. However, we still have that tired thinking from the Labour Benches, and we have heard no constructive suggestion from the official Opposition at any point in the life of this Parliament.

I remind the hon. Gentleman that more male jobs were lost in Wales between 1960 and 1970 than were lost between 1970 and 1981.

I thank the hon. Member for his contribution.

There is something that is much more important than any measure taken by the Government. There is a great challenge facing our factories and services to increase productivity. There is much hope in the current developments in the economy in Britain as a whole.

My right hon. Friend the Secretary of State for Industry referred last week to the spectacular improvement of 10 per cent. in the relative performance of Britain vis-á-vis the rest of the world in terms of output per man over the past year. This is the first time that Britain has improved, after many years of slipping behind our competitors in the international league. Of that 10 per cent. improvement, 7 per cent. was in output per man and the rest was accounted for by the fall in the value of the pound.

Sir Raymond Pennock, the president of the CBI, said one of the shrewdest things I have heard when he pointed out that halving the level of pay increases would have a far greater effect on the competitiveness of industry than any conceivable changes that could be brought about by Government policies, whether on taxes or interest rates, or in other directions.

Let us review the 1970s presided over by both Labour and Conservative Governments. Britain managed to come out of that decade having increased wages in real terms by 300 per cent., at a time when the increase in output over the whole 10 years was a pathetic 15 per cent. In the last five years of the period, 1975 to 1980, our unit labour costs rose by 88 per cent. In the same period the French increase was 45 per cent., the American 36 per cent., and the German 17 per cent. The most spectacular of industrial performers, the Japanese, did not increase their unit labour costs at all.

That is a lesson that is far more relevant to the needs of Britain than anything that can be done by way of Government policies, even though I am in favour of a number of ways in which the Government can helpfully intervene. The Conservative Government are doing all that they can in that direction. I am trying to inject a note of realism, which has been sadly missing in the debate. We must recognise that the greater part of the progress in fighting the blight of unemployment will not come from Government policies. At the end of the day, we can only hope that jobs will not be destroyed by an incompetent Labour Government. The best thing that we can hope for is that the talents of people and industry will be deployed properly. That is where trade unions can make a great contribution.

The hon. Member for Ogmore referred to the new president of the National Union of Mineworkers. I hope that, despite the hon. Gentleman's remarks, he will use whatever influence he has with Mr. Arthur Scargill to urge on him the value of making sure that if there is to be investment—say in the new mine at Margam—the mineworkers will be aware that the degree of investment will be closely related to the prospective return on investment. The most suicidal course is that being followed by Mr. Scargill, who advocates wage increases which bear no relationship to possible increases in productivity.

The hon. Gentleman asked whether I supported the newly elected president of the NUM. I am convinced that he will, as his predecessors did, act in a rational and responsible manner because he represents the miners. I said that I thought that miners deserved £200 a week for working in such conditions. I believe that when miners look at the economics of mines they will act responsibly. However, if their production increases by 6·8 per cent., they expect to receive a 6·8 per cent. wage increase, but if inflation goes to 12 per cent. because of Government policies, they expect to have at least a reasonable amount to meet the cost of inflation imposed on them by the Government.

If the hon. Gentleman uses his influence with Mr. Scargill to obtain a reasonable settlement, he will have the sympathy of Conservative Members. There is no question but that one of the most evil results of strong trade unions has been that men have been priced out of jobs. There is a lemming-like zeal for self-destruction that seems to appeal to the members of some uni ns.

I remind the hon. Member for Ogmore of the record of his own party over the coal industry in South Wales. During the lifetime of the Labour Government from 1964 to 1970, 39 pits were closed in South Wales, eliminating 30,000 jobs. That reduced employment in South Wales in the coal industry from 77,000 to 47,000. I have never heard the hon. Member tell us about the 30,000 jobs destroyed during that time.

While your figures might be correct, and I do not wish to doubt them in any way, you have not mentioned that in the period from 1951 to 1964 the Conservative Government—

I am astonished to hear that Mr. Deputy Speaker was up to such mischief in those years, but I remind the hon. Member for Ogmore that the same phenomenon was experienced under the most recent Labour Government, from 1974 to 1979, when again 14 pits were closed, reducing the number of pits in Wales to 36.

I have emphasised the limitations on what can be achieved by Government action. This is the realistic context in which we have to look at the problem. Within that realistic context, is it not impressive that half of all the new factory building taking place in Britain is in Wales? A new factory is being opened every day in Wales. At the depth of the world recession, the number of new lettings, in terms of space, is double that of a year ago.

The Government are to be congratulated also on the very high priority that the Secretary of State has given to maintaining the major road programme in Wales. This is extremely important, to ensure that the Welsh economy will be competive in the years to come.

I remind the House of the great importance of our participation in the European Community as the basis for attracting the foreign companies that have been drawn into Britain. We have already been told of the possibility of a Japanese car company arriving here. Car companies can also depart if they do not have access to the European market. I remind Labour Members that Mr. Ivor Richard is one person who has recently given a public warning, in an address on BBC Wales, that 50,000 jobs could be destroyed in Wales alone if official policies of the Labour Party were to be adopted.

I follow my hon. Friend the Member for Barry (Sir R. Gower) in underlining the great importance, as we seek to shift gradually the mix of industries in Wales, of a greater diversification of industries. I congratulate my right hon. Friend in particular on his progress in bringing a certain number of the most thriving electronic companies to Wales. It is very much the new industries that will be the basis of our prosperity. That in no way detracts from the reliance that we have on the old, traditional industries. I am sure that if the National Coal Board can justify an investment in a coal mine in Margam, helped to a degree by reasonable wage settlements, it will eventually have the money for that project.

Those of us who were members of the Select Committee that studied employment prospects in Wales were struck constantly by the complexity of the institutional arrangements and by the large number of bodies, all worth while in themselves, that are seeking to promote Welsh industry and to provide information. Our conclusion was that there was a particular onus on the Welsh Office, on the Secretary of State and on the Department of Industry to be the ultimate guiding voice to ensure that people understand the provisions that are available. In my constituency, I receive this lesson constantly by having business men telling me that they are bewildered by some of the provisions that are available. The take-up is limited, and a great deal of education is needed in this context.

I was delighted to see that one initiative by my tight hon. Friend was the recent establishment of business opportunities conferences in Wales. I was most favourably impressed by the large numbers of people who were attracted to the first two or three of these events. It is a very worthwhile step forward.

5.44 pm

I shall not try to follow the negative, strident and predictable speech from the hon. Member for Brecon and Radnor (Mr. Hooson). It was a rehearsal of negative attacks on the Labour Government. It does neither the hon. Gentleman nor the Labour Party any credit to have that catalogue rehearsed. We need to have a positive analysis of the economic plight of Wales. It is not enough for the hon. Gentleman to say that, if working class people in Wales were prepared to tolerate a further drop in their living standards, suddenly all the problems would be solved.

The structural problems of the Welsh economy go deep and have been with us for a long time. They are the same problems as those that bedevil other regions—in England and in parts of the continent of Europe. They are problems that we experience with the decline of capitalism in Britain and in other European countries. It does this House no credit to give a simplistic analysis which would make us the laughing stock of any O-level economics student.

I do not want to look at the structural problems of capitalism as they affect Wales today. I want to look at the individual problems that face those who are made unemployed. I do so deliberately, because it is a dimension that is often neglected in our debates. We can now look at that dimension because the Welsh Office and the directors of social services in Wales have recently produced a working party report that ought to be read by all hon. Members and ought to have a wide circulation outside the House.

It was Beveridge who said, nearly 60 years ago, that the most important practical question with regard to an unemployed man was not how he came to lose his last job but how it came about that he could not get a fresh job. That is the question that has to be faced and answered by each unemployed man and woman, and by each young person leaving school in Wales and unable to find a job.

There is a growing body of research, to which the joint working party of the directors of social services and the Welsh Office has drawn attention, linking unemployment with a range of factors—mental illness, deviance and family violence—all of which point to the real cost of unemployment, in individual and family terms. The Government are supposed to believe in the nuclear family but families have been put under increasing stress as a result of the deliberate policies of the Government.

Unemployment does not fall evenly across the working population. The fit and the skilled are more likely to escape unemployment. The unemployed are more concentrated among the youngest and the oldest sectors of the community. We are still hearing what increasingly appears to be the empty rhetoric of the International Year of Disabled People—a year in which a higher proportion of the sick and disabled are now having to suffer from unemployment. In Wales and in other regions, the semiskilled and unskilled manual workers are far more likely to be unemployed than those in the more skilled or the so-called professional jobs.

The first problems that face unemployed people and their families are money problems. In all the studies of unemployment, over 70 per cent. of those made unemployed were found to be deeply concerned about their financial position. Nearly 60 per cent. of those interviewed in the surveys have mentioned the social or pychological costs of unemployment.

The usual financial difficulties are those relating to gas, electricity and heating bills. Those difficulties have affected many families during the recent cold spell. There are the problems of having to pay higher rents inflicted on people by the Conservative Government. There are the high costs of mortgages and the difficulties in ensuring that those costs are met.

The economic and financial burdens of unemployment are only the direct costs. There are also the hidden costs, or the costs that follow later, within the shorter time scale, up to five years, and within the longer time scale.

The Secretary of State for Education some years ago peddled a new social theory concerning some kind of cycle of disadvantage. The Conservative Government are deliberately perpetuating disadvantage, social and economic, in Wales and in the rest of Britain. Not only is there immediate disadvantage from the financial causes that I have mentioned. There are indicators linking mortality rates as well as levels of deviance and mental illness with the extent of unemployment. The House will be familiar with the work of Professor Harvey Brenner of Johns Hopkins university in the United States, who recently visited Cardiff, where the social, individual and family costs of unemployment were outlined at a major conference, to which a close friend of mine gave a paper outlining the psychiatric effects of unemployment.

On the basis of the work of Brenner and others the joint working party of the Welsh Office and directors of social services estimated in March this year, when considering a level of only 150,000 unemployed, that over the next five years there would be 2,500 extra deaths, 3,195 extra admissions to psychiatric hospitals and 695 extra prison sentences in Wales as a result of unemployment. If the Government are really concerned about the prison population, they should reverse their economic policy rather than pretending that the problems can be solved by shortening or cutting the number of sentences.

Not only mental illness but actual physical illness arises from unemployment. Studies screening workers expecting redundancy in Europe, Britain and the United States show clear physiological effects of unemployment stress on men, women and children in such households. There are both physical and mental effects on individuals facing the failure to readjust to inability to find work. There is, first, the shock and grief at initial unemployment. There is then very often over-optimism about the possibility of finding a job, followed by prolonged depression, anxiety and deepening pessimism. The result of that pessimism and of the pressures on the unemployed now affect more than 170,000 of our population.

Last year, the NSPCC pointed to the link between unemployment and non-accidental injury to children. Yet the Government pretend that by keeping registers and trying to ensure that the National Health Service informs personal social services departments of such injuries the problem may be alleviated. If the Government are serious about solving the problem of non-accidental injury to children in Wales and indeed throughout Britain, they should reverse their economic policy and not pretend that the problem can be reduced by means of registers.

Women's Aid and other women's aid organisations in Wales have pointed to the link between unemployment and domestic violence. Again, rather than giving occasional grants to such organisations, welcome though such grants are, the Government should face the fact that their policies are increasing the amount of domestic violence in Wales and in other parts of the United Kingdom.

Finally, the Welsh Office and the directors of social services estimate that the actual cost of unemployment for the personal social services alone—with which, as the House knows, I have personal and family links—will amount to £2·7 million over the next five years to keep pace with the predicted levels of mental and physical illness and deviance arising out of the effects of unemployment in Wales. They state:
"At November 1980 prices…by the fifth year following a sustained increase of 1 per cent. in the unemployment rate, an additional £520,000 would be needed to maintain these services. For instance, in 1982–83 an extra £410,000 would be required…Over the following three or four years, if the further 5·2 per cent. increase in the unemployment rate which has taken place since March 1978 were to be sustained, then an extra £2·7 million would be needed".
Those are the costs shown in the Welsh Office's own document.

Will the Minister tell us, now or at a later stage, whether he accepts those figures and what he intends to do about the problem? Does he accept that the Government's economic policies are placing an additional burden not only on the personal social services in Wales but on the clients of those services? They are creating a generation of youngsters brought up in a culture of unemployment. Those of us who are concerned about social policy have delivered this warning over the years in all situations of high unemployment. I have referred to Beveridge, whose views were repeated by many people in the 1930s. Following that period, there was a new initiative associated with Keynesian economic management. We are now beyond the solutions that were then open. The Government must realise that the strident repetition of the virtues of lowering living standards and wage claims that we have heard from Conservative Members are no answer to the reality of the structural economic problems that Wales faces. The Government—and, indeed, the Labour Government—have presided over the continuing decline of the Welsh economy and they will reap the harvest of that decline in the deepening social malaise of Wales and in the sad and depressed lives of so many of our young people.

5.56 pm

The hon. Member for Merioneth (Mr. Thomas) said that he did not intend to base his speech on the failure of capitalism, which we know to be his favoured form of address. Nevertheless, he managed to instil into it some of the acid that those in his area of the political spectrum always throw around. I think that I speak for all my colleagues when I say that we feel most strongly at being charged with "deliberately perpetuating disadvantage." We understand full well the problems of the unemployed, the sick and the disabled, the break-up of family life and all the other aspects of social disadvantage to which he has referred.

Regrettably, however, the difficulties faced by this and other Western countries are the result of years of neglect, failure to pay attention to basic economic realities and, more immediately, the cut in living standards imposed on Western industrial nations by the enormous rise in oil prices—not only in 1973–74, but even more in 1979–80 when purchasing power was sucked out of the Western economies by the oil-producing nations, dislocating all of us. Most Western industrial nations should at that point have reduced their standard of living temporarily in order to win back their position, just as a family which finds itself overspending must cut back in order, later, to recover its position. Some did this sensibly, but others did it too slowly. Britain certainly did it too slowly and has paid the penalty.

In addition, unfortunately, we had reached the end of the road in terms of the long-standing inefficiency of so many of our industries. I think that every hon. Member here today was aware of the overmanning in the South Wales steelworks. It was blatant and well known. I had step-in-laws at Port Talbot. Everyone connected with it knew of the scandal of the low productivity of our works. When the crash came, nobody should have thrown bricks or accused anybody else of being inhumane. We had got away with it for far too long.

In calling for an enormous subsidy for the Margam pit, the hon. Member for Ogmore (Mr. Powell) is going some way down the same tempting path. There is nothing politicians like more than giving away money, particularly when it is not their own fairly small contribution but that of the other 30 million taxpayers. They can therefore be irresponsible. The costings of the Margam pit that I have seen would be wholly uneconomic and could be achieved only by taking jobs away from other areas of the economy or other parts of the coalfield. Indeed, one of the grave difficulties facing the National Coal Board at present is to find money for investment because so much is sucked out in wage costs. I understand that, of the more than £102 million on offer in the current pay round, £40 mullion is covered by the planned productivity increases next year. Therefore, of the current offer, £60 million is covered by non-productive work. That is a serious point.

When talking about youth unemployment, I hope that Opposition Members will welcome the young workers scheme that is about to come into operation. That is a sensible and realistic attempt to try to price our young workers on the same basis as those in West Germany.

There a young worker is recognised as someone who does not produce as much, or work as much, as an older worker. There is, therefore, a case for employing them at lower rates of pay. This is not a wicked way of introducing youth slave labour. The alternative of high pay for youngsters simply means that they will not get jobs, not least at a time of recession and at a time when a record number of youngsters have come on to the market. It is sad that the recession and this enormous number of youngsters coming on to the market should have coincided, but that is a fact of life and could not be avoided.

The hon. Member for Ogmore talked about the increased amount of coal going to Aberthaw power station. Those of us who have visited the power stations know of the CEGB's complaints about the quality of the coal that it receives—for example, the amount of stone and rubble that the coal contains. Everyone knows that many British coal importers and merchants can and would buy cheaper abroad but for the fact that successive Governments have erected a protective wall to help our mining industry. That is a socio-political decision., but it does not necessarily mean that our coal is competitive. Even if we mined Margam and got at the coking coal there, who would buy it? I recall that a number of hon. Members from North-East steel constituencies were not that keen on British coking coal at the time.

The hon. Member for Newport (Mr. Hughes) gave an extraordinary answer to an intervention from the hon. Member for Wrexham (Mr. Ellis). The hon. Member for Newport spoke of the possibility of Datsun establishing a plant in Britain, particularly in Wales. When challenged that this was because Britain and Wales were in the. EEC, the hon. Gentleman baldly stated outright opposition to our membership as though somehow or other that explained Nissan's decision.

The hon. Member for Ogmore did not refer to our membership of the EEC or to his party's position on it. He said that the major Sony plant at Bridgend had received a loan of £2·3 million from the EEC to take on 120 former redundant steelworkers from Port Talbot. Sony would not have gone to Bridgend in the first place but for our membership of the EEC. By the same token, it is highly unlikely that the Ford engine plant at Bridgend would have been established but for our EEC membership.

National Panasonic would not have its European headquarters in Cardiff unless we were in the EEC. Time and again, surveys have shown that Japanese inward investment has come to Britain not least because we happen to be English speaking and they wanted a foothold inside the EEC before any protective barriers were erected against their exports. They have come to us because we are in the Community.

More than 50 per cent. of American inward investment to South Wales has occurred since we have been members of the Community. Just as obviously, how many British people would invest in British export companies inside a Britain that was excluded from the European Community rather than investing directly inside a major market? Indeed, many European firms think it wise to invest inside the giant American market so that they are inside any protective barriers that are imposed.

I hope that the kind words that have been said about the newly-elected president of the NUM will come true, but I was alarmed to read in the newspapers this morning that he had attended a celebratory function for Mr. Willie Gallacher, the late Communist Member of this House. Apparently, Mr. Scargill said:
"I can think of no more appropriate way to celebrate the centenary than that each and every one of us will take part in that campaign of mass opposition".
He was referring to opposition against the Government, and the mass campaign is a means of using the NUM's strike weapon to try to bring them down. Mr. Scargill believes that he managed to do so in 1974. He should remember that the present Government have a couple of years to run rather than a few months; that we are under a determined leadership; that we support the coal industry, but not at any price; and that we appreciate the necessity to build nuclear power stations in Britain that would make us as competitive in energy as the French. The French are now beginning to undercut the Germans on energy pricing because the Germans have a lunatic environmental lobby that will not allow them to build what they should. Unfortunately, they must import enormous amounts of oil to balance their accounts.

I hope that Mr. Scargill will recognise that Conservative Members are realistic and will accept that pits must be closed. For example, of the 23 pits that were allowed to remain open at the beginning of the year, five have already closed. As The Economist said on 17 October:
"So long as the board is stuck with the old mines it cannot open new mines and put in the new investment necessary to make new or better jobs".
At present, South Wales is making greater losses than the trading profit of the NCB.

At a time of stagnant or low growth, Britain also faces the extraordinary difficulty of having indexed much of our social spending. Since the mid-1950s, the number of pensioners has tripled. Has our production and wealth done so? Regrettably, the answer is "Not quite". Health spending has been maintained, despite what the hon. Member for Ogmore said. It has been increased in real terms. Most of that spending goes on increased pay. If such money is pre-empted because of pay, it cannot be used for equipment and the various labour-saving and lifesaving machines that are so often paid for by appeals that are launched, not least in Wales.

Will the hon. Gentleman confirm that the Government are now arguing that working people, pensioners, those on fixed incomes, supplementary beneficiaries and the unemployed should all take their fair share of a reduction in living standards?

The hon. Gentleman could not have been paying attention. Pensioners will not take a cut. Pensions will be fully indexed. Pensioners—that huge engine of growth—will be paid a pension that will keep pace with the rise in the cost of living, at a rate which, frankly, the economy cannot bear. If the economy were growing, we could all bear it, but the Government are already preempting a higher proportion of our wealth in order to honour those commitments. So be it; that is our decision.

The hon. Gentleman referred to Keynes. He never anticipated that a Government would try to spend their way out of a recession, certainly one faced with the plateau of expenditure with which the present Government have had to deal. The Government have increased expenditure. So much for the accusations that they have been cutting all over the place. In fact, we have never spent more. If anything, the Government could be accused of overspending.

As my hon. Friend the Member for Brecon and Radnor (Mr. Hooson) said, Britain is part of Europe and the wider world, and there is a stoppage on economic growth virtually throughout Europe and in the United States. That fact should alarm us. Of all the countries with which we compete and compare ourselves, we depend more than any other on our exports and international trade. Together with West Germany, we export more of our production than any of our competitors, in many cases by a substantial margin. Any slump in world trade is particularly damaging to this country, to jobs and to our people. However, there is now less short-time working while overtime has been increasing.

Although growth is static in the world, our manufacturing output is up. With a bit of luck, we can expect a considerable increase in manufacturing output next year provided that pay settlements can be kept moderate. Output per head is expected to be 10 per cent. higher by the end of this year. GDP rose by 0·25 per cent. in the third quarter, the first rise in almost two years. Manufacturing output increased by 3 per cent. in the period from May to September. Industrial output was up by 0·5 per cent. in the third quarter. The hon. Member for Merthyr Tydfil (Mr. Rowlands) makes noises when he hears facts that he does not like. He sits and chatters in a high voice. It is a well known habit of his. Engineering output—

Order. I know that the hon. Gentleman was provoked. I do not want to get provoked.

The hon. Gentleman seemed to be attacking me without rising to his feet, so he has already had a good crack. Gross trading profits were up 4 per cent. in the second quarter. Pay is dropping. Average earnings are beginning to go down. Why did we ever get into the habit of thinking that we get an annual pay rise regardless of what we do, the skills we have, how hard we work and how profitable is the company for which we work? Where did we get this crazy idea that, come hell or high water, one is always paid more? Why and how did it start? If we can moderate or even stop this approach, our country would be in a fabulously strong position. One has only to contemplate what the Germans and the Japanese would give for our coal and our oil in order to be self-sufficient in energy. Those two countries would be out of the stratosphere if they possessed our advantages. What a mess we have made of things for so many years.

Hon. Members would perform better as representatives of the people of Wales if they indulged in some plain, straight and honest talking. It is necessary to recognise that the only firm and true jobs—those which can be taken by our children and grandchildren and in which they can feel pride—are jobs that can be paid for and supported by a profitable and productive industry. We need productivity that increases steadily year by year. Unless that position is achieved, we shall have these debates year in, year out. All too often, in the view of the people of Wales, we have engaged in such debates over the last 30 years or more.

6.13 pm

The hon. Member for Cardiff, North (Mr. Grist) has referred to what he describes as small but encouraging signs of improvement. Many economists say that a short, restocking period is inevitable because of the present low level of stocks but that this process is likely to peter out towards the spring or summer of next year. The hon. Gentleman talked about the bonus provided by oil. What is happening, sadly, is that the possible bonanza of oil is being used by the Government to pay for the long queues of unemployed.

There has been reference to the human cost of unemployment. The situation is a world away from the glossy picture presented in May 1979. I recall during the election campaign seeing a vast advertisement near High Street station, Swansea, with the words "Labour isn't working". Anyone reading that poster would have imagined that the Conservative Party at the time had the answers and intended to take action. The picture now, two and a half years later, is that unemployment has increased in Wales by 95 per cent. Although the figures for the United Kingdom as a whole have declined marginally over the last two months, those for Wales have continued to rise, month after month. It is a picture of massive failure in spite of the promises made at the time of the 1979 election.

The extent of the unemployment was clearly not foreseen by the Government. When the Secretary of State's then permanent under-secretary came before the Select Committee in March 1980 he said that the assumption of the Welsh. Office—I do not know whether he was carpeted for this remark—was that unemployment would rise to 125,000 at its peak. The figure is now 170,000 and rising. This shows the extent to which the Government were not prepared for the increase in unemployment. The Select Committee, in its report in July 1980, pointed to the job chasm that was arising as a result of the Government giving priority to tackling inflation through monetarist policies.

There was a certain inevitability about the increase in unemployment in Wales. It is true that unemployment has increased throughout Western Europe. However, the figure in West Germany, with a larger labour force, is 1·6 million—a far cry from the figure in this country. The inevitability arose partly because of a fall in the numbers ' employed in steel production and partly as a result of Government policies in the public sector, which affect Wales especially because of its dependence on the coal and steel industries and local government expenditure. Another factor was the dismantling by the Government of the regional development structure inherited from the Labour Government.

Is there not a statistical fact underlying the remarks of the hon. Member for Cardiff, North (Mr. Grist) which indicates that unemployment in manufacturing in Wales must rise considerably in the next few months? I should welcome my hon. Friend's views. If productivity is rising, as claimed, by 7 per cent., but if the Government are holding back the level of increase in manufacturing to 3 per cent., this means that there is a 4 per cent. shortfall and that unemployment must therefore rise considerably in Wales in the next few months.

I accept my right hon. Friend's economic expertise. It would appear even to me that as night follows day—as Treasury Ministers would say—the shortfall of 4 per cent. will mean increased unemployment.

The regional development structure is being weakened considerably. There was a reduction in July 1979 jai the areas and the amounts spent on regional funds. Last week, there was the abolition of the IDCs which, however small their effect, were a symbolic commitment of Governments in the past.

As the hon. Gentleman is apparently in favour of very unselective identification of areas for development, does he resent the fact that Swansea was chosen as the very first enterprise zone created in Great Britain?

That is a different point. In principle, I do not approve of enterprise zones but if one is to come to South Wales, I would want it in my area. I shall come to the point that the hon. Gentleman makes.

The IDCs have been abolished. This affects the regional development structure. All that the Government provided in response to the steel cutback was an investment of £48 million. On the basis that £30,000 of Exchequer subsidy is needed to create one job—this updates Dr. Marquand' s figures in a report for the Department of Industry—there are likely to be created only 1,600 new jobs, very small in terms of the need in Wales.

I turn to the position in West Wales. In the Swansea travel-to-work area male unemployment is now over 19 per cent. We are still not part of a development area, let alone a special development area. There is no evidence of any new technological ventures coming to our area. Some people talk about the golden triangle of South-East Wales, Inmos and Mitel and so on. Nothing of that nature has come to the area. There has been no Japanese investment further west than Bridgend. That is the picture that faces West Wales.

If the Government will not make the U-turn that the Opposition propose, even on the Government's criteria various aspects of selective investment may have a disproportionate job effect in the public sector. We know, for example, that the Government changed the rule with regard to rail electrification after the joint Department of Transport and British Railways Board report was published earlier this year. Under the new criteria involving not an 11 per cent. return but apparently a 7 per cent. return, perhaps only one main line, and that not in South Wales, will be electrified in spite of the energy-saving and job creation effects that would follow.

By changing the rules the Government are ensuring, by their own induced recession, that perhaps no more than one line will meet the new criteria. If rail electrification went ahead there would be an immediate effect on a number of companies in South Wales in both the public and private sectors. The steel industry at Llanwern and Port Talbot and companies such as South Wales Switchgear would benefit. The small companies that would benefit from electrification seem to be concentrated on the Bridgend area. There would be an immediate effect on a number of important Welsh companies from electrification.

The same applies to housing. The degree of unemployment had a certain amount of inevitability about it. The Welsh Office predicted that over the period 1980–84 there would be a 46 per cent. reduction in public investment in housing. The job effects were bound to follow. Yet, in terms of the proportion of unfit housing in the housing stock and the proportion of pre-1919 houses, Wales is in a worse position than any other part of the country. The Government should give more funds for improvement grants. In the past the Conservatives have espoused that policy to ensure that the housing stock does not slip further into obsolescence.

Such a move would have little if any import content. It would have an immediate effect on construction workers, who make up about 25 per cent., of the total unemployed in Wales. It would have immediate human and economic effects. Yet in many parts of Wales the district housing authorities have virtually cut out discretionary grants. In my authority they are restricted to the disabled and to people in housing action and general improvement areas. A comparatively small investment in housing could create many more jobs.

The hon. Member for Brecon and Radnor (Mr. Hooson) referred to enterprise zones. My local authority has unearthed a fact in relation to small firms in the enterprise zone. It is that although the annual rate concession is an enormous bonus to the firms, more important to the small companies in that area and outside would be a reduction in social security taxes and in particular in the national insurance surcharge.

For one small enterprise, for example, the value of the annual rate concession is about £1,900 per annum. The estimated annual national insurance employment surcharge in respect of the same small enterprise is over £4,000. I hope that the Government will examine that matter carefully when they consider the second half of the Budget in April next year. I hope that they will consider introducing some alleviation of the national insurance surcharge for small firms, because that could have a major effect on job creation.

I hope that the Government will consider my ideas sympathetically and accept the need for change if the yawning job chasm referred to by the Select Committee and by my hon. Friend the Member for Ogmore (Mr. Powell) is not to be increased. If there is no change the prospect for Wales will be one of continuing decline and increasing human misery, as described by the hon. Member for Merioneth (Mr. Thomas).

6.25 pm

I agree with the hon. Member for Swansea, East (Mr. Anderson) that the expenditure of a relatively small sum on home improvement would be an effective way of increasing employment. I also agree that the removal of the national insurance surcharge should be given high priority by the Government.

I have only a short time, and I wish to speak about the importance of training. I am convinced that tomorrow the Secretary of State will unveil an ambitious training programme. It will probably include allowances for training that are lower than the unions wish and more comparable with those available in Germany.

I am on record as saying that under no circumstances would I be prepared to support a cut in unemployment benefit. I stick to that, but I certainly would support a cut in the allowances to people who are training, even though that would intensify the poverty trap.

We must ask what we are training young people for. If we achieve a training system that is as effective as that which operates in the Federal Republic of Germany, will the trained people find jobs? There is still a shortage of skilled personnel. Why has unemployment fallen so cruelly on the young? We must face the answer fair and square. It is because for years we have faced every crisis in every firm with a policy of no redundancies but of natural wastage.

The appalling level of youth unemployment is a tribute to the strength of the unions in defending the jobs of their existing members. We had better face that fact if we are to make any sense of it. Training is fine, but what are we training young people for? We must recognise that industry has not yet completed the process of slimming down. There must be further slimming down if industry is to be competitive. Without that industry will not provide the hundreds of thousands of jobs that are so desperately needed.

Small businesses can offer a lot in terms of extra employment. I spent some time the other day seeing what was being done at the site of the old East Moors steelworks. British Steel Corporation (Industry) Ltd is doing splendid work there. We could do more to train and encourage young people to set up as entrepreneurs. In one small workshop after another we were told of people who, having discovered what people wanted, were prepared to work all hours to provide them with exactly what they needed. One person said "Recession, what recession?" I do not suggest that that is a generally true story, but it is true of those who are prepared to be elastic in meeting public need.

However, let us face it; the great majority of jobs will not come either from small businesses or industry. It is time to stop looking at industry as the provider of jobs. We should look at it as primarily the creator of wealth that can be used to finance public and private services, which are necessarily labour-intensive, and to finance much earlier retirement. With the present product of industry we could not conceivably afford early retirement on a decent pension on a scale big enough to make an impact on unemployment. If industry could produce the wealth that it is capable of producing the product of that wealth could be used to finance earlier retirement.

One thing worries me about the attitude into which the Conservative Party has settled. It constantly fosters the idea that, because they are more expensive than we can afford at present, in themselves public services are bad and we must cut them down, as an end in itself. I accept that at present even the current inadequate level of services is beyond our capacity to pay for, but the Conservative Party must never lose sight of the fact that a civilised society must have expanding and improving social services. Our policy must be to create the wealth to pay for them. The party to which I belong fundamentally believes that. The Labour Party would cheerfully inflate the public services with extravagant wage claims until they burst. Therefore, I feel secure in my allegiance.

The EEC has been mentioned. I shall not go into the moneys that come in and go out, but the much vaunted adverse trade balances with Western Germany and other member States are, as a proportion of our total trade, minuscule. As a proportion of the whole, our trade imbalance with Japan is 13 times what it is with the EEC.

As we are creating so little wealth, there is little chance in our lifetime of being able to set aside enough to finance the new jobs that we desperately need, so they must come from inward investment. Speaker after speaker pointed out that they will come only from other countries using Britain as a base to trade into the Common Market. Let me give one statistic. Before the Common Market was formed, Britain got 50 per cent. of all United States overseas investment. When the Common Market was formed with us outside it, American investment in Britain sank to 10 per cent. of its total overseas investment. Now that we are in the EEC, it has risen to 40 per cent., which represents a great many jobs.

6.33 pm

We are indebted to my hon. Friend the Member for Ogmore (Mr. Powell) for initiating the debate, which has ranged widely over the problems that confront our people in Wales and that arise from the unfortunate unemployment situation.

Many issues have been raised. The hon. Member for Merioneth (Mr. Thomas) is right to remind us of the social and mental stresses that have arisen from the recent massive unemployment. Only when one has been in a family afflicted by unemployment can one really understand the hardships.

My hon. Friend the Member for Ogmore spoke with passion and understanding of the problems that confront the part of Wales that we are both proud to represent. Those problems are a curse on the whole of Wales, as well as the rest of the United Kingdom. My hon. Friend was knowledgeable about the difficulties that have arisen from the closure of the Coegnant colliery, which has caused substantial job losses.

The hon. Members for Brecon and Radnor (Mr. Hooson) and for Cardiff, North (Mr. Grist) attributed a Luddite attitude to miners. No one understands better than the miner that one day the coal in his pit will run out and the pit will close. That is a fact of his life, but he cannot accept that he will then have no job.

We welcome my hon. Friend's comments about the possibilities of redeployment in the St. John's colliery, and I stress the need for the proposed development at Margam. The Government should give the go-ahead and make the money available to the National Coal Board. It is an investment in Britain's energy resources and will ease problems, such as those at Coegnant, which may arise in other parts of the South Wales coalfield.

The latest unemployment count shows the need to debate the problem today. At the last count, 12,948 people were registered as unemployed in the constituencies of my hon. Friend the Member for Ogmore and my right hon. and learned Friend the Member for Aberavon (Mr. Morris). If we add to that 4,638 in my constituency and 16,805 in the Swansea employment office area, we see starkly the mess of unemployment over which the Secretary of State for Wales presides.

Does the hon. Gentleman recall a Labour sub-committee in 1976, presided over by the right hon. Member for Lanark (Dame Judith Hart) and of which the right hon. Member for Leeds, East (Mr. Healey) was a member—whose report was so secret that it was published in The Observer —which forecast 2½ million unemployed by 1980? The reason given was the baby boom of 1960.

In my constituency at that time unemployment stood at under 6 per cent. but today it is 18 per cent.

The figures that I have given for unemployment in West Glamorgan and Mid-Glamorgan are not the end of the story. Over the weekend we learnt of more workers being made unemployed. Ninety-six workers at the Kenfig plant of Borg-Warner are to be made redundant, and 120 workers have joined the dole queue as a result of the Mitel closures. On Christmas Eve, further redundancies will occur at the Port Talbot steelworks, which has already taken considerable steps to improve productivity.

References were made to the militancy of Welsh workers. It is right to nail that myth in this debate, because there is no truth in it. Evidence of it being a myth can be pointed to by the success of Japanese investment in Wales. The co-operation of Welsh workers and the quality of their work is further testimony of that.

Let me make it clear today, as I did at the time of the announcement of a possible investment in Britain by Nissan-Datsun, that a welcome awaits such an investment, especially in Wales. I hope that in his reply the Minister will tell us something about the progress of the Nissan-Datsun development.

I conclude by quoting some words that should be familiar to Conservative Members because they were written as a means of returning them here at the last election:
"There is one task that is even more urgent in Wales than elsewhere: the need to establish an economic climate in which wealth and jobs can be created."
Two and a half years have passed since those words were written and in that time thousands of Welsh jobs have been destroyed, not created. My hon. Friend's motion demands for the Welsh people an end to the destruction and a little more creation.

6.42 pm

I am sure that the House is grateful to the hon. Member for Ogmore (Mr. Powell) for raising the subject of employment in Wales. I am particularly grateful to him because he couched his motion in positive terms and talked about employment. I recognise that the reason was the background of unemployment generally and unemployment in his constituency particularly. Apart from Members of the Liberal Party who have not been present during the debate, and Members of the SDP, who made a fleeting visit, Members of all the major parties in Wales have made serious contributions to the debate.

No one can dispute the fact that Wales, along with the rest of the United Kingdom, is facing a major economic difficulty. Wales has been particularly badly hit by the rundown of its more traditional industries—coal and steel. Both have been contracting, and the decline in steel making in particular has been marked. I do not underestimate or understate the problems. No one can minimise the personal hardships that go hand in hand with unemployment. Hon. Members referred to them today. Anyone who recognises the importance of work in the fulfilment of character and personality will at least have some appreciation of the frustration of unemployment, particularly of young people unemployed for a long time. That appreciation and understanding is not confined to one side or part of one side of the House of Commons.

I also stress, because I have to respond to the theme of the debate—employment—that there are some grounds for optimism. The problem of training was not one that arose last week. It did not become a national interest just after we won the election in 1979. The problem has been with us for a long time. My hon. Friend the Member for Flint, West (Sir A. Meyer) referred to the need for training. I have no doubt that we all recognise the problems of the young. Over 44,200 people are currently being helped by special employment and training measures. In November 1981, about 17,300 youngsters were participating in YOP schemes in Wales—one-third higher than in November 1980. A substantial package of special measures for the next year was announced by my right hon. Friend the Prime Minister in July, and my right hon. Friend the Secretary of State for Employment will make an announcement soon about further measures in the form of a comprehensive training scheme for the young.

We are all agreed on the important role that effective training can play, both in the development of individual potential and in the strengthening of the economy for the creation of a better-trained work force. The Government have fully endorsed the objectives of the MSC's new training initiative and we shall make a statement later in the Session about the role that the Government and others can play.

Before I come to the specific question of Margam, I should like to draw attention to the developments in industry and commerce that hold out the promise of employment in Wales in the future.

I genuinely apologise to the hon. Gentleman for not giving way. I do not have much time, so I hope that he will forgive me. He knows that I normally give way—even though I have a bad reputation with the right hon. and learned Member for Aberavon (Mr. Morris). I apologise to him for that.

With regard to factory allocations, we have been particularly concerned to provide the infrastructure needed to encourage new industrial developments. In Wales, we have undertaken a major programme of Government-financed factory building and site preparation, and new factory units are being completed at a fast rate. At the end of October, 211 Welsh Development Agency factories were under construction covering 1·4 million sq ft, and a further 249 are planned covering another 1·1 million sq ft. However, the important and immensely encouraging point is that we are not just providing the buildings—we are getting them occupied. I emphasise again what the Secretary of State said during the last Welsh Question Time—that is a truly remarkable achievement providing much more than the previous Administration and during a period of recession, too.

This year, the number of Government factories formally allocated total 270 and carry the promise of just over 6,000 new jobs. We see little ground for pessimism that the level of interest in Wales will fall away and this successful bubble burst. Industrialists continue to be attracted by what we have to offer in Wales. So far this year, we have received almost 500 inquiries, which have resulted in nearly 200 visits.

Inward investment was referred to by the hon. Member for Newport (Mr. Hughes) and by my hon. Friends the Members for Brecon and Radnor (Mr. Hooson), Cardiff, North (Mr. Grist) and Flint, West. We have continued to make a special effort to attract inward investment. In the last 18 months, the Secretary of State has led two inward investment missions to the United States and one to Japan. They found immense interest in what we had to offer and a great awareness of the advantage of setting up manufacturing units in the United Kingdom. The hon. Member for Newport referred to the possibility of a major company coming into that area. The inward investment of so many companies depends on our continued membership of the EEC. It is no good his replying that he has always been opposed to membership of the EEC. He is not on the board of the companies that will be making the inward investment. Every time they will make the decision in favour of a member of the EEC.

I was recently in Gorseinon, opening an extension by the Minnesota Mining and Manufacturing company that will involve about 180 extra jobs. The company made it clear that it is in Gorseinon because Gorseinon is in the EEC. It recognises other advantages, too—the considerable advantages of the work force in that area and the good industrial relations. However, it made clear that its reason for expansion is that Britain is a member of the EEC. That is the only way in which we shall attract major companies to come to give the people of Wales the jobs that they require.

I turn to the subject of high technology. Among the types of firms that we need to attract are those which relate to new technology. We are all agreed about the crucial importance of new technology both in the development of a competitive industry and in the way that it will affect all our lives. We must continue to look to industrialists and innovators for their ideas and initiatives, but there will be a place for the Government to add their support and help, especially in research, and we must all have regard to this British development, especially in our purchasing programme.

On the more specific front, the Government are committed fully to promoting information technology. I need mention only a few schemes. In education, two schemes are directly relevant. The first is the microcomputers-in-schools scheme, which aims to have a microcomputer in every secondary school by the end of 1982. The more generous-minded Opposition Members will grant that this is an initiative which came from this Government, but that the need for microcomputers has existed for a considerable time. It might well have been taken up by the previous Secretary of State for Education and Science, who is now a member of the SDP.

The Department of Industry, with the MSC, is setting up information technology training centres under the YOP scheme, and training places are also provided under the training opportunities scheme and through the support of the Engineering Industrial Training Board. But if we are to develop this new technology to its highest extent, we must make sure that everyone is involved fully to train people and keep up to date. Next year is Information Technology Year, and we hope that Wales will make a considerable mark in that year. I know that Swansea is launching it in January.

I turn to what the Government are doing for small firms. Although I have placed most emphasis up till now on large firms, small firms are tremendously important to Wales, and the present Administration have been especially active in this area. The Welsh Office has been eager to help. We have set up a number of small firm clinics at various locations throughout Wales. The entrepreneurial spirit is very much alive in Wales. Two business opportunity conferences were held only last week in Cardiff and Llandudno at which 500 people turned up. There were 900 applications. These are people eager to start new jobs.

When we talk in the House about firms closing and about redundancies, sometimes we paint the gloomy picture that is there. But how many times do we record the small firms which are starting up? An enormous number of small firms are starting up in Wales and from these small beginnings can come economic and commercial success, bringing more jobs.

I draw attention to the importance of our urban programme. I am able to announce for the first time that the programme for Wales is to be increased in size from a planned £11·6 million to £15·3 million. That is a significant improvement. It is much in excess of 30 per cent. I hope that the House will welcome that announcement because it will be translated into new opportunities jobs and into social activity which will help the Welsh people and those who are especially deprived and burdened. Therefore I assume that it will be widely welcomed by the whole House.

Time is moving on, and I run the risk of not being able to deal with the specific subject of Margam. That being so, I shall not comment on the steel industry. Instead, I shall move straight to the subject of coal.

Here is an industry which in the 1950s provided directly more than 100,000 jobs in South Wales. Over the decade since then, the figures have reduced from 80,000 in 1960, to 61,000 in 1965, to 32,000 in 1975 and now to 25,000. Hon. Members will remember the difficulties of the 1960s. Since 1979, the National Coal Board has found it necessary to close six collieries which at the time of closure employed more than 1,800 men. These were closures of pits where the geology made it impossible to envisage any longer an effective life.

There will still be cases of that kind, which the board and the unions will have to consider. But there are also pits which are doing well and which give encouragement for the future. They will justify further investment. The hon. Member for Ogmore pressed the case for completely fresh investment in a new deep mine at Margam, and this was echoed by other hon. Members, including the hon. Member for Neath (Mr. Coleman).

I understand the attractiveness and importance of the proposal and the local interest in it for the hon. Member for Ogmore. But this would be a major project and has to be considered within the national context. The South Wales coalfield is part of the national coal scene, and decisions on investment and production have to be taken in that light.

Let us be clear that there is no difference between the two sides of the House about the need to maintain an effective and viable industry. This Administration believe that the coal industry has an important future, and we hold to the aim that it should return to financial viability as soon as that can be achieved.

I am pleased to acknowledge the real improvements in performance achieved by both sides of the industry in Wales and in other parts of the United Kingdom. Productivity and output per man-shift have seen significant improvements. The news that the South Wales coalfield recently achieved the lowest ever absentee rate for the area is welcome. The losses in South Wales would be greater were it not for the closure of some of the heaviest loss-making collieries such as Coegnant. But these losses remain very high. The South Wales coalfield loses more per tonne of coal produced than any other coalfield in the United Kingdom. A great deal still needs to he done to reduce these losses.

Let there be no misunderstanding. We believe that the industry has a vital part to play in our current and future energy requirements, but that future and the good Longterm employment opportunities that go with it rest squarely on attaining the efficient and competitive production of coal.

My right hon. Friend the Secretary of State has discussed the Margam project with the chairman of the NCB on a number of occasions, and most recently last month. The enthusiasm for this project of the hon. Member for Ogmore is such that, when he addressed the nation on radio last Friday morning, he rather overstated the facts in saying that the NCB had already spent vast sums of money on survey work, and he quoted a figure of £20 million. He may like to know that the NCB puts the cost of surveying at nearer £2·5 million. But I do not quarrel with the hon. Gentleman. At least we can agree that a full survey has been carried out. It shows that Margam would inevitably be a high-cost operation. It is a very deep mine. The geology is difficult. The seams are relatively costly to mine. If the project is to have a future, it is important that these costs should be reduced as far as possible.

The NCB also wants to assess very carefully the expected market and price for the high quality coking coal reserves in Margam. United Kingdom usage of coal for coke production has fallen substantially in recent years. In 1977, 17·41 million tonnes of coal was used for coke. By 1980 that was down to 11·61 million tonnes. The contraction of the steel industry during the past decade, which I should have mentioned earlier, obviously contributed significantly to the decline in the market, but so, too, has the reduction in foundry coke usage.

Because of recessionary influences and technological improvements, the number of companies using foundry coke fell from 745 in 1975 to 590 by the end of 1980. Therefore, the NCB could proceed with the Margam project only if the costs were right, if the market were right and if it made sense within its overall investment plans. It is misleading to think otherwise and thereby encourage expectations that may be too great.

It being Seven o'clock, the Proceedings on the Motion lapsed, pursuant to Standing Order No. 6 (Precedence of Government Business).