Oral Answers to Questions — Industrial Strategy (Chequers Meeting)

– in the House of Commons at 12:00 am on 6th November 1975.

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Photo of Mr Ian Wrigglesworth Mr Ian Wrigglesworth , Teesside Thornaby 12:00 am, 6th November 1975

asked the Prime Minister if he will make a statement on the NEDC meeting on industrial strategy held at Chequers on 5th November.

Photo of Mr James Wellbeloved Mr James Wellbeloved , Bexley Erith and Crayford

asked the Prime Minister if he will make a statement on the meeting of NEDC held at Chequers on 5th November to discuss new industrial strategy.

Photo of Mr John Cartwright Mr John Cartwright , Greenwich Woolwich East

asked the Prime Minister if he will make a statement on the NEDC meeting at Chequers on the new industrial strategy.

Photo of John Horam John Horam , Gateshead West

asked the Prime Minister if he will make a statement on the Government-TUC-CBI meeting at Chequers on 5th November.

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

At yesterday's meeting of the National Economic Development Council at Chequers, we had a long and constructive discussion on the Government's new approach to industrial strategy. The Government's proposals, copies of which are in the Library of the House, will be published as a White Paper as soon as possible. These proposals represent an approach, not an immediate solution to our industrial problems, but, as the result of yesterday's meeting, it is now a common approach shared by the Government and the representatives of the unions and management on the National Economic Development Council. Now that the Council has endorsed the Government's approach, the full resources of Government and industry will be applied to make it work.

Photo of Mr Ian Wrigglesworth Mr Ian Wrigglesworth , Teesside Thornaby

Is my right hon. Friend aware that this new, united approach to developing a long-term industrial strategy is widely and warmly welcomed on the Government side of the House? Does he not, therefore, regret the carping and unhelpful criticism of the Opposition spokesmen on industry this morning, which sought to bring divisions within that strategy? Is my right hon. Friend satisfied that City institutions responsible for investment—investment is one of the keys to the success of the policy—are adequately represented in the NEDC and discussions with the Government on this policy?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

Yes, Sir. I am grateful to my hon. Friend for what he said. I know that the approach yesterday has been warmly welcomed generally. It was welcomed in our meetings with the CBI and the TUC. With reference to my hon. Friend's remarks about the hon. Member for Henley (Mr. Heseltine), who has apparently made some pronouncements on this matter today, we are used to his going off half-cock on every issue without even understanding what it is about, and of course we realise the problems of the Opposition Front Bench in this matter. I hoped he would have given a little more time and consideration to something which has been welcomed, in its general approach, by the CBI. For some time now—it began under the previous Government—two members of the NEDC have been appointed as being, if not spokesmen, at least able to speak on behalf of City and financial interests.

Photo of Mr Michael Grylls Mr Michael Grylls , Surrey North West

Now that profit is apparently no longer a dirty word, will the Prime Minister tell us what the Government are going to do to increase profitability in industry and commerce, and so get the investment that everybody needs?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

The most important thing is to increase investment and see that it goes to the right places. That is what we were talking about yesterday. We saw the boom of Lord Barber, in which investment went anywhere but into industry. We must also ensure that we get a much better return on investment, in terms of productivity, than we have had in the past, compared with other countries. This matter was very fully discussed yesterday. As to the hon. Member's references to profit, he will be able to study the White Paper when it is published and we shall be most grateful for any constructive suggestions from him, which can be considered in conjunction with the expert proposals of the CBI and the TUC.

Photo of Mr James Wellbeloved Mr James Wellbeloved , Bexley Erith and Crayford

While welcoming the commitment of the CBI, the TUC and the Government to a high-output, high-wage economy may I ask whether my right hon. Friend agrees that the first prerequisite is to get the work force back into full employment, and that major contributory factors towards that would be an urgent interim review of the situation at Chrysler U.K., and for the Government to give serious and urgent consideration to the prompt introduction of selective import controls?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

In the public statement that I made yesterday, a copy of which has been placed in the Library, I referred to a high-output, high-earnings economy based on full employment. We spent time yesterday discussing the present unemployment situation. We are concerned to see that nothing happens in the immediate future which will make it more difficult for British industry to respond to the challenges of expanding world trade. We do not want to see, as we have in past cycles, the removal of constraints operating so quickly that the brakes have to be put on. As my hon. Friend is aware, I had a meeting with Mr. Riccardo on Monday, as I reported to the House. That was followed by meetings between the Chrysler management and my right hon. Friend the Secretary of State for Industry and officials of his Department. Mr. Riccardo subsequently met trade union leaders and, I understand, some hon. Members. The position is now being urgently considered by the Government. This is a highly critical situation and for that reason I do not wish to add to my earlier statement just yet. A full report will be made to the House as soon as possible.

Photo of Mrs Margaret Thatcher Mrs Margaret Thatcher Leader of Her Majesty's Official Opposition, Leader of the Conservative Party

Is the right hon. Gentleman aware that we welcome his objective of a profitable industry and the need for investment to give a good return? Will he spell out a little more clearly than the newspapers have yet done what is meant by reports which say that, in the immediate future, the Government must give priority to industrial investment over social objectives and consumption? What immediate steps does he propose to take to give effect to that strategy?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

When the right hon. Lady has had a chance to study the White Paper—[HON. MEMBERS: "Answer the question."] I shall answer it, but I am not having one sentence taken out of context. The right hon. Lady will have an opportunity to comment on the White Paper after due time for reflection. We have said that there should be much greater emphasis on investment. The right hon. Lady's Government were lamentably unsuccessful in this matter. Most of the money they printed went into property development. [HON. MEMBERS: Answer the question."] The answer to the right hon. Lady's question is the one I have already given in the House on a number of occasions. As we proceed from a situation of world depression and unemployment to recovery and a much higher level of industrial activity, it will be essential to have resources available for investment, exports and expanding production. For that reason, as my right hon. Friend the Chancellor of the Exchequer no doubt explained yet again today and as I have said on many occasions, we are reviewing Government expenditure for that particular period.

Photo of Mrs Margaret Thatcher Mrs Margaret Thatcher Leader of Her Majesty's Official Opposition, Leader of the Conservative Party

In other words, the right hon. Gentleman has no positive proposals, but only talk.

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

I do not know if the right hon. Lady put questions to the Chancellor on these matters today, though I would doubt it. We have made clear that, in accordance with the practice of previous Governments—though, I hope, with much more success—we shall be examining, as one always does at this time of the year, expenditure for two or three years ahead—but not cuts for this year. The right hon. Lady says we have nothing but talk, but I would like her to get up and tell us what she would cut now.

Photo of Mr John Cartwright Mr John Cartwright , Greenwich Woolwich East

If the Government are to achieve the objective of encouraging workers to transfer from declining industries to expanding industries, there will have to be a higher priority for industrial training and retraining and a more imaginative approach to rehousing and other problems. Can my right hon. Friend assure the House that the human questions of manpower planning will be given due weight in the Government's strategy?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

If there was one issue above all others on which we all agreed yesterday, it was the need for continuing to increase the provision for training and retraining. In successive Budgets, and at other times, the Chancellor of the Exchequer has greatly increased the provision for industrial training. It was the view of everyone at the Chequers meeting that we must continue this programme, particularly for training in industry. It is lamentably small compared with some of our competitors, particularly Sweden. Everyone recognised yesterday that with the present speed of technological advance and change, not only are big regional movements needed, but many, perhaps most, of the industrial work force—management and trade unions—will need programmes of retraining once, twice or three times in their working lifetimes.

Photo of Mr Dafydd Wigley Mr Dafydd Wigley , Caernarvon

If the Government's strategy is to increase investment and productivity, but presupposes, if there is not to be increased unemployment, that there must be an increase in demand, how will this be stimulated?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

The hon. Member is absolutely right. Looking beyond the present period of world depression, we were concerned that there should not be constraints, shortage of capacity or misdirected capacity when we get into the boom, as there has been in successive industrial cycles under successive Governments of the two major parties in the past. Our document was related to this and was welcomed, from this point of view, by the TUC and the CBI. I understand that the Chancellor of the Exchequer has been answering questions on this subject today. We are very concerned about maintaining capacity for the future, hence the statement by my right hon. Friend the Secretary of State for Trade on Monday, which I picked up in my statement on Tuesday, on the question of ensuring that industries with a viable future when industrial activity picks up should not be allowed to go under. This is now one of our highest priorities.

Photo of John Horam John Horam , Gateshead West

On industrial planning, where the Government's approach is widely welcomed, and on the more specific issue of Chrysler, will my right hon. Friend consider establishing a foreign investment review board to monitor the activities in this country of multinational companies which also operate in a number of other countries with considerable beneficial effect to both sides in this argument?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

I do not know whether machinery of that kind is required, but the monitoring of these problems is a continuing activity of Government. I prefer to say as little as possible about—[Interruption.] The Conservatives apparently can laugh about Chrysler now. I would prefer to say as little as possible about discussions going on with Chrysler. I think that hon. Members will applaud that statement. I do not want to make things more difficult. However, when the Government are faced with the situation with this particular multinational company, and with all the problems which have arisen, including the problems of new models, and when the Government are presented with a pistol to their head, it is important that discussions should continue and for the House to be given a report as soon as humanly possible.

Photo of Mr Michael Grylls Mr Michael Grylls , Surrey North West

In view of the Prime Minister's refusal to give any details to the House today about his industrial strategy, I beg to give notice that I shall seek to raise the matter on the Adjournment.

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

Order. I called Mr. Baker.

Photo of Mr Kenneth Baker Mr Kenneth Baker , St Marylebone

Will the Prime Minister say what time was spent at Chequers yesterday, apart from the time spent trying to pick winners in British industry, on the whole performance of public sector industries? Is it not a fact that it is the performance of public sector industries, through low productivity and over manning coupled with low output, which is proving an immense burden on the rest of the country?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

I do not agree with what the hon. Member eventually managed to say, but someone with the high reputation he enjoys should not speak in slogans about picking winners in that way. As I made clear at the Press conference, that simple phrase does not describe the basis of our White Paper. I am sure that the hon. Member will have time to study the White Paper and to give us his considered and, I hope, by that time, wise views on this matter.

As for the publicly-owned industries, which were accepted and worked with by the previous Government, we knew of the great problem facing many of them, of being highly labour-intensive—a problem which has affected their economic performance. But an industry-by-industry comparison throws light on this situation. Take the railways, for example. In this country they are a public industry. In the United States they are privately-owned. They nevertheless face common problems, as do railways all over the world. In view of that, the Conservatives should get rid of their ideological preoccupations and apply themselves to the problems.

Photo of Mr John Mendelson Mr John Mendelson , Penistone

The Prime Minister reported to the House that the trade union representatives at the Chequers conference were broadly in agreement with some of the long-term strategy proposed by the Government. Is my right hon. Friend not as aware as anyone that in recent discussions the TUC put on record its firm opposition to the present level of unemployment and to the Chancellor's policy in not proposing effective immediate measures to curb rising unemployment? It has stated that it expects unemployment to rise at least to 1.2 million. Is my right hon. Friend therefore not committed to telling the House, as a result of the Chequers conference and his general policy deliberations in the Cabinet, what Government policy is for dealing with unemployment this winter? What immediate steps are proposed before the Government advance a programme of long-term strategy?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

My hon. Friend the Member for Penistone (Mr. Mendelson) has not fully or quite accurately represented what was said by the TUC or the CBI yesterday, or in separate meetings with them last week, about the forthcoming world economic summit. It is true that they expressed, as does the whole House, an extreme anxiety about the present level of unemployment. In September, my right hon. Friend the Chancellor announced policies of immediate help to the employment situation, including help for school leavers, and it is becoming clear that that kind of help, together with what he did in his Budget to help particular industries, is more rewarding than vast Keynesian inflationary proposals about which the whole House would have many anxieties at present.

Yesterday, we were discussing not only the present problems but the problems of ensuring that industry is able to meet all the demands put upon it when economic activity turns up. For that reason, as I said in the House on Tuesday, at Chequers yesterday and again today, it is essential that we look urgently at the problem of industries which are facing serious checks on their ability to survive. That is Government policy.

Several Hon. Members:

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Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

Order. We cannot have the debate on the Address this afternoon.

Photo of Mr Nigel Lawson Mr Nigel Lawson , Blaby

On a point of order, Mr. Speaker. Would it be in order for the Prime Minister to make a personal statement now to correct the spurious public sector borrowing requirement figures he gave on—

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

Order. That is not a matter for the Chair.