Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 1st March 1966.

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Photo of Mr Geoffrey Rhodes Mr Geoffrey Rhodes , Newcastle upon Tyne East 12:00 am, 1st March 1966

I hope that the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) will forgive me if I do not refer at length to his picture of contemporary society in the United Kingdom, except to say that my experience of life without is completely alien to the kind of egalitarian Welfare State conception which he appears to have. I would remind him—this was one of the big mistakes made by the Leader of the Opposition during the debate on the Welfare State last week—that the number of people living in dire poverty in this country even today is far more than any nation with a social conscience can adequately afford.

In the earlier part of his speech, the hon. Gentleman casually made the remark on the current Tory propaganda line that the increase in pensions had been cancelled by the rise in prices. This, of course, is sheer rubbish. The pension increase was 20 per cent. and not even the Conservatives, with their extraordinary imagination, can conjure out any statistical evidence to prove that that 20 per cent. has been cancelled by the rise in prices. In view of the Government's measures in relation to rates relief for the elderly, in particular, concessionary fares legislation—a very small Measure, but important to many elderly people in my constituency—I would suggest that, if we are to have a sensible debate, we should for the moment forget the coming election and talk sense.

The Motion contains the words: …to plan more rapid economic growth and a better balance between the Regions. It is this sentence upon which I want to speak this evening. I am happy to support the Motion on this sentence, but I want at the same time to make a number of perhaps critical but, I hope, objective remarks about the state of the economy in the North of England at present.

The economic situation in the last 12 months was the same kind of crisis, in many respects, which we had in the early 'sixties. During the early period, during the indiscriminate credit squeeze economy and the era of the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd), the impact on the north of England was disastrous. During the peak of the unemployment of that period, 80,000 people were out of work in the northeast of England. Before that, the tip of the iceberg had been showing. Before the squeeze, there was always a somewhat higher percentage of unemployment in the North than in the rest of the country.

Of course, when the heavy squeeze was put on the economy a major part of the iceberg became visible and we found the deep depression in the shipbuilding industry, in engineering and coalmining, from which for a century the North has drawn its life blood. When the new Government came into power, faced with an economic situation which had similar characteristics to the earlier one, there was a danger—I did not fear it, because I knew something of the kind of priorities which the Government had in terms of regional planning—that in squeezing the economy or in dealing with the economic crisis facing the country, measures would be taken which would drive the North-East economy down to the same depths of despair which it had reached in 1962.

This simply has not happened. In spite of the measures which had to be taken by the Chancellor of the Exchequer to deal with this economic crisis, the north of England continued to get the lion's share of the new jobs which were being created. The north of England was exempted in many respects from the restrictive measures which had to be put on the economy. The shipbuilding industry was stimulated, in the words of the shipbuilders themselves, by the measures taken by the Government to encourage foreign ship-owners to buy ships built in the yards of the Tyne, the Tees and the Wear. Consequently, and in spite of measures taken to deal with the economic crisis, there are, at the moment, 50,000 people at work in the north of England who were not at work three and four years ago.

For those hon. Members of the Conservative Party who sometimes hint in their propaganda speeches that there are many unemployable people about, the fact is that there are 50,000 workers who were out of work when they were in power in a region where there is now increasing confidence. It is of great interest to me that the last time the lion's share of new jobs created in this country went to the north of England was in the period between 1945 and 1950. I would suggest that, if the last 20 years are anything to go by, a greater degree of priority will always be given to the North by a Labour Government than by a Conservative Government.

However, there are still certain underlying weaknesses in the economy of the north of England which it would be fatal for any Government, of any party, to ignore. There is still very heavy dependence, in terms of the percentage of the manpower in that area, on two basic industries, coalmining and shipbuilding. It is perfectly clear that the streamlining which is going on in coalmining will mean a considerable contraction in employment prospects in that industry in the future. In spite of its current prosperity, it is clear to everybody with any knowledge of the shipbuilding industry that it is not an industry about whose future there can be complete confidence. A great deal needs to be done in that industry in order to build up a sense of security which has been so lacking in the past.

For example, there needs to be an end to the restrictive practices within the industry on both sides. This is particularly true, for example, in relation to the means of carrying out industrial apprenticeships. The steps already taken by the management and the men in the shipyards of the Tyne area to come together to discuss their problems and discover ways and means of abolishing restrictive practices in future represent a move in the right direction.

I am pleased that the Minister of State, my hon. Friend the Member for Barnsley (Mr. Mason), visited the region recently and had some controversial things to say about restrictive practices. I am glad that he said what he did. The majority of people in that area agree very much with what he said and feel that the sooner we can get down to the problem of building a shipbuilding industry relevant to the needs of the second half of the twentieth century the better.

Also lacking in that region is the growth of a major new expansive industry. I am convinced that the establishment of a major growth industry—I have previously mentioned the development of a motor car manufacturing plant—would be a tremendous boost to the whole of the northern economy. This is the kind of decision which must not be left entirely to the whims of private enterprise. The decision can be influenced by a Government who have their priorities right.

It is vital to hold on to the highly skilled technical people in the complex industries. I will quote two relatively small examples in terms of the number of people involved in two organisations in my constituency. There is in my area—this is perhaps somewhat unique in the House—a plant for the manufacture of astronomical telescopes. This involves the employment of tremendously skilled staff. I am sure that with proper Government planning—financial encouragement and so on—involving universities, observatories and similar institutions much could be done in a sphere which is highly important in the international trading sense.

Another example of fine work being done is that of the International Research and Development Corporation Ltd. The work of the corporation is often not fully exploited by industry in other parts of the country but, with adequate Government encouragement—I will not be more precise than that now because I do not wish to delay the House—much could be done to retain the highly skilled staff which exists in the north of England.

An underlying weakness in the northern economy is that although we have a much higher level of employment today than has been the case for many long years, we under-employ women in industry in the area. The percentage of women who go out to work in that part of the country is markedly lower than in other regions. Because we are not tapping these resources of labour, the under-employment of women to some extent hides the basic weakness which exists there.

The region requires much greater opportunities for non-industrial employment, such as the development of clerical and executive employment. In my constituency 8,000 to 9,000 people are employed at the headquarters of the Ministry of Pensions and National Insurance. It is time that more Government Departments were located in the north of England. This would mean greater opportunities for the young people who are inclined towards non-industrial employment, remembering that there are far too many young people in commercial courses and so on at colleges in the north of England, particularly those taking advanced courses, who can find an outlet for their skills perhaps only in the Midlands and the South. While the situation is improving, complacency would be fatal for the economy of the North.

There also needs to be a considerable extension of industrial retraining facilities. The Government have announced the establishment of new retraining facilities in parts of Northumberland and elsewhere, but the facilities at present available and those likely to be available in the foreseeable future are not adequate. We cannot be satisfied with the present plans. Much more is needed.

Although I have outlined some of the weaknesses in trying to be fair and objective about the state of the economy of the North, I am, nevertheless, pleased that the rate of unemployment in the region has been reduced to such a low level that we are now getting up against the hard core—the very small hard core—of what might be described as the unemployable. By and large, a man who wants work in that region today can get it. This situation has been a long time coming and we are thankful for it.

I will refer briefly to a remark made by the Leader of the Opposition when he spoke rather disparagingly about the abandonment of the concept of the growth zone—which, he said, was a topic which he had pursued in the past—and seemed sceptical about the Government's decision to make the whole of the north of England a development area. Under the growth zone policy a large part of the North was left out of things; at least, it felt that it had been left out. These were what my hon. Friend the Member for Durham, North-West (Mr. Armstrong) referred to as the "travel-to-work areas", particularly in west Durham. In these areas there were considerable threats of major pit closures. The idea of making many of the people there travel great distances to work might have meant a great deal of the social capital there becoming under-used. It might have meant under-using housing facilities in parts of Durham on the western side.

I know the economic arguments about the main lines of communication being along the mouths of the three rivers and the fact that the main line between Darlington and Newcastle on the eastern side would be the major growth area. But the Leader of the Opposition said that the decision to declare the whole of the growth area a development area—thus bringing in those parts of the west of Durham—was a political decision. That was an astonishing statement and I found it curious because all the marginal constituencies of the North-East are in the eastern part of the North-East. And the constituencies which most benefit from the decision to declare the whole area a development area are, I should have thought, those in the western part of the North-East, where the safest Labour seats lie. If the Government were playing a purely party political game it is arguable that they would not have taken a decision which would encourage work in the areas of heavy Labour votes, as distinct from those areas of the Tyne, Tees and the Wear where all the marginal seats are situated.

The trouble, of course, is that the Leader of the Opposition smells a political rat under every bed, so to speak, and cannot conceive the possibility of the Government taking a decision based on social priorities—a decision which is sensible, reasonable, right and proper for the mining community of the western parts of Durham.

Although my constituency is in one of the growing and more prosperous parts of the North-East Coast, I do not oppose the Government's policy in this matter because it would have been wrong to expect thousands of miners and their families to be shunted across many miles of country and zoned into the points of least commercial resistance.

In 1962, 80,000 people were out of work in the region and many were on short time. Now we have got down to the small hard core of people who are unemployed. This core is less than half what it was. Although I have fired a few cautionary shots and pointed to some weaknesses, the Government are to be congratulated on the fact that, despite the measures which they have had to take on the international front, the northern economy has continued to grow, prosper and recover—an achievement which could never have taken place had the Conservatives been in office.

The northern economy cannot yet be described as a prosperous one. However, it is becoming increasingly prosperous. The confidence of the people of the area in their economy will be clearly displayed in the results of the General Election.