Dafydd Wigley – 1978 Speech on the Welsh Economy

Below is the text of the speech made by Dafydd Wigley, the then Plaid Cymru MP for Caernarfon, in the House of Commons on 22 June 1978.

I am glad of the opportunity to raise a subject which has been a theme in previous debates on Welsh Days, in Welsh Grand Committees and, indeed, in debates on the economy in general over the past four years and longer. In opening the debate, my mind goes back to the very first week after the March 1974 General Election. On that occasion I remember that there was an opportunity to debate the economic problems facing Wales. The fact which at that time stared everyone in the face was the failure of successive Governments to bring forward a pattern of balanced economic development in Wales.

I remember speakers who had just joined the Government Benches understandably criticising the previous Conservative Administration for its failures in this direction, as well as the tragic economic developments of the last few weeks of 1973 and the first two months of 1974. At that time, hon. Members of all parties were looking forward to a way of working ourselves out of the economic mess into which we had got ourselves. In doing so, we wanted to ensure that it was not just a search for a boom which would bring benefits to the South-East of England and the Midlands. We also wanted a pattern which would ensure that Wales did not retain the same sort of economic blackspots that it had suffered in the 1920s and 1930s and, to a lesser extent, since the war. Examples of that pattern also, no doubt, existed in other parts of the United Kingdom. There were areas which had suffered because of the changing economic patterns over the last century, the rundown of major industries and the failure to ensure that in their place were developed balanced economic opportunities.

I initiate this debate not because the economy is an end in itself but because, unless we get the economic circumstances in Wales right, there is no prospect of ensuring the survival of our communities. The possible loss of communities—as we ​ have seen happen in the Heads of the Valleys in Glamorgan and Gwent and the old slate quarrying villages of Gwynedd—means that we also lose our culture, language and everything else which is dear to us. Therefore, the objective of obtaining balanced economic development in Wales is one which is a service to the community as a whole and not an end in itself. But unless we get that balance in development, we shall continue to see declining villages, schools being closed, young people leaving, an ageing population, an increase in the pressure on the social services which that leads to, and the decaying of the whole fabric of a community.

I am sure that hon. Members of all parties will accept as an objective the need to ensure that there is as reasonable an opportunity as possible for the maximum number of people to have adequate job opportunities, and a future within their own community. Since 1925, Wales has seen the collapse of the coal industry as the major employer. At that time, 225,000 people were employed in the Welsh coal industry. That figure is now about 35,000. In one generation that represents an astronomical decline.

A decline of similar proportions is now taking place in the steel industry. which is another major industry in Wales. As steel plants close, so again—as in the history of the coal industry—whole communities can be written off. We know the fear that has been experienced in places such as Ebbw Vale and Shotton because the people know that when these industries end there is a very great doubt about the ongoing viability of their communities.

It is not only in terms of manufacturing industry that we see these problems facing us. We see them also in the agricultural sector and the rundown that there has been in agricultural employment. As a species, the farm labourer has almost gone out of existence. The figures are minuscule compared with what they were only just after the war. With this, we have also seen the amalgamation of farms into large units and the purchase of farms by institutional investors and people from outside Wales, and even from outside Britain, which have themselves led to difficulties facing young people going into agriculture, leading to a position which has aggravated rural depopulation.

The industries which have grown in the wake of the decline of the old industries have been scattered and sporadic and they have not in themselves brought a full answer to our problems. Since the war we have seen successive Governments trying, by various policies—development areas, special areas and the rest of it—to induce growth from outside and to transfuse industrial activity from sectors outside Wales. In some areas this has succeeded to some extent, but I do not think that anyone will deny that it has been patchy.

We have seen some firms move into Wales and succeed. Perhaps I should declare my own past interest, having worked at one time for Hoover, at Merthyr Tydfil. When I was there, the company employed about 5,000 people. Now, in an expansion plan, it is hoped to increase that to 7,500. That is one of the instances of a major modern manufacturing concern coming into Wales and succeeding. But many of the branch factories which have come into Wales have come merely in order to get the grants available to them and, sadly, we all know of examples of those which, after a few years, have packed up and left.

A characteristic of those which have succeeded and stayed—I include amongst them even the largest, the Hoovers of this world—is that, being branch factories and manufacturing plants, they cannot give a balance of employment opportunities. They have not succeeded in ensuring that jobs are available for management staff, office staff and technical staff at the Welsh level. Very often these jobs are at head office level and outside Wales, so that the job opportunities in many of the Welsh plants have been stilted and geared towards factory floor employment and very often without as great a proportion of the technical and commercial opportunities that would arise in the company as a whole throughout the United Kingdom.

Where we have succeeded in getting development, we have not always had the right development. But, sadly, there are many more areas which have not had any development. I think of my own constituency and the failure that there has been to fill the empty advance factories standing there. We accept that advance factories are useful in themselves. They make it easier to attract developments when the economy is improving. But advance factories standing empty for a long period can become a depressant upon a community. People start to think—especially people from outside—”Why is it that these factories are standing empty with no one coming in?” So far, we have failed to get a structure of policy which has led to the filling of these factories as well as the construction of them.

There are reasons for this, and we have laboured those reasons in the past, but it is right to underline them again. The development of the infrastructure is fundamental. The M4 in Glamorgan has been developed, and we have seen in the case of the Ford project at Bridgend how the infrastructure in terms of road and rail communications can play a vital part in locating a major plant. Unfortunately, in many other parts of Wales—this is true of the counties of Gwynedd, Clwyd and in Mid-Wales—we have not had this type of modern road network which is so essential for manufacturing industry. I know of companies which have thought of setting up in my own constituency but which have felt that the communications have not been adequate.

It is not only road communications which are important, and at a time when we have 90,000 people out of work one would have thought that there was a good case for pressing ahead even faster with the development of road communications —I think of the A55 and the A5 in North Wales. Increasingly important is air communications. Only this week, I had a letter from an electronics company in America interested in the possibility of developing in Gwynedd, having links with the University College of Bangor which had led the company to consider Gwynedd as a location. But one of the prime considerations was the availability of air connections with Gwynedd.

As we know, although there has been a welcome development of an air link from Hawarden down to Cardiff airport in the last few months, with connections through to international flights from Brussels, there has not been any development of air links through to the more westerly parts of Wales. We would do well to look at locations such as Valley, in Anglesey, Llandwrog, in my own constituency, Llanbedr in Merioneth, down in Pembroke and in Swansea, as possibilities for an integrated air service which ​ could link through to Cardiff and to Brussels for international flights. That is an important consideration in the development of industry.

The other sector of industry that we have seen developing at a very fast rate in the past two decades in my part of Wales, in Gwynedd and in Dyfed, has been the tourist industry. However, that industry is perhaps an example which underlines the imbalance in our economy and the need for engendering balanced economic development. For climatic reasons, unfortunately, the season in Wales is relatively short—two or three months. We have a period between the middle or end of May and the first week in September when all the tourist sector has to make the money which will keep it going for the rest of the year. We have an economy working at 200 per cent. capacity for a few weeks in the summer and at 10 per cent. capacity for the rest of the year. This is a classic definition of a state of dis-economy. We have an industry, with all the investment that it entails, working for a short period in excess of its capacity but for most of the time way down below capacity.

In the tourist industry itself we have seen some developments at the least beneficial end of the industry which have soaked up and saturated the tourist market in Wales and yet have not brought as great a return as one would have hoped. The hope always is to see the maximisation of the type of tourism which brings the most revenue that will stay in Wales. Perhaps the day trippers are the sector which brings in least in this way. We have heard of the people who fill their car with petrol and bring their sandwiches with them leave their litter and drive home having spent virtually nothing.

In looking at the development of tourism as one of the inputs into the economy, we must consider not only the extension of the season but the balance between various parts of the tourist sector, not least the international sector. Tied in with all this, looking especially at the replacement of jobs and the need for manufacturing industry, we must face the reality that there are many fewer footloose supranational companies now than there were 10 years ago. The pattern has changed. I cannot help feeling that we ​ must look in the future to the possibility of putting more emphasis on encouraging young people who have the talent and who have the ideas to develop those ideas themselves in their localities. This means not only having the right incentives and the right assistance available to them through the agencies that we have, but also engendering the right approach, especially in our education sector.

We want to make sure that we do not develop the brightest of our people to a state where they leave college or university, perhaps at the age of 21, feeling that they must go into a secure job and to be reluctant to take a risk. These are the people who can be planting the acorns which will grow into the big trees of employment in the future.

That has not happened sufficiently in Wales in the past, for a number of reasons. One is security of employment, which is totally understandable, given the Welsh background. Another is the experience that these people have in their own areas, and of course we have not had the background and experience in industry in the way that we might have had in an area such as Birmingham. We need a new emphasis in this direction to give young people the motivation to go out and start enterprises for themselves. If they succeed, the companies which they found will grow, will develop job opportunities, and will, optimistically, persist in the future and not be the type which close down at the first ill wind of economic recession.

Finally, I draw attention to the role of the various agencies in this question of getting a balanced economic growth in Wales—particularly the Welsh Development Agency and the Development Board for Rural Wales. These two bodies were set up with the very ambitious objectives of cracking the problems that we face. To some extent they have made a good start. In the more limited time that it has been in existence the rural board has achieved more than the WDA.

We are worried that the Welsh Development Agency and the rural board are to some extent working in a vacuum. I do not apologise for underlining once again that unless these agencies have guidelines in terms of quantifiable objectives and a strategy for reaching those objectives, geographically and sectorally ​determined, we will not get the maximum benefits that we could out of these agencies. In a nutshell, we need an economic plan for Wales.

More and more bodies have been pressing for this. The Council of the Principality, the report on “Overseas Investment in Wales”, and a number of influential individuals have also pressed for such a plan. Some of these individuals have not previously accepted the case for the plan, but in the last six months they have admitted that the case for it is now unanswerable.

Unless we do get this movement, we shall continue to have the imbalance of the past. In the dying days of this Parliament—perhaps this is the last debate we shall have on economic development in Wales—I hope that we shall see the end of argument against a background of rejecting this type of economic approach. I hope that in the new winds of a new Parliament at least we shall have an opportunity of moving forward with a new approach.

Mr. D. E. Thomas (Merioneth)

Before my hon. Friend leaves this salient point will he comment on the fact that county councils in Wales now undertake far more economic planning and long-term projections of job needs than the Welsh Office? Does he agree that in the structure plans of each county there are projections based on population and current job opportunities, and projections for job shortfall? There are no national projections. Will my hon. Friend urge the Minister to tell us, when he replies to the debate, whether it is now the intention of the Welsh Office to use the data in the structure plans to produce at least a job shortfall calculation for Wales as a whole?

Mr. Wigley

I am grateful to my hon. Friend for bringing in that point. Although we have seen development plans for every part of Wales, with quantified figures—some more questionable than others—of the number of jobs needed in each area, it strikes us devastatingly that one cannot have county development plans in isolation. For example, take the comparison between Gwynedd and Clwyd. It is true that there is an interface between these two counties. The same thing must he true of the interface between ​ Mid-Glamorgan, South Glamorgan and perhaps even West Glamorgan. The roads cross the county borders and there is a mutual travel-to-work area. To take these countries in isolation is not good enough. They are woven together. Therefore there must be an overall package—an all-Wales development plan.

I can see the Secretary of State smiling and I have no doubt that he is thinking that an all-Wales development plan has interfaces outside Wales as a whole. Of course it does. In the present context of United Kingdom economic development, and within the economic development of the EEC, we must consider how to divert more towards the infrastructure in Wales.

Unless we have it right at the Welsh level we shall lose the opportunities of the agencies that have been set up in Wales. Therefore, if it is not already in the manifesto of the Labour Party for the next election, I suggest that the Government should consider writing in an economic plan for Wales now. This could be one of the best bits of good news that we have had for a long time for overcoming the problem of unbalanced development in the economy of Wales.