Orders of the Day — Unemployment

Part of the debate – in the House of Commons at 12:00 am on 24 July 1978.

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Photo of Mr Harold Walker Mr Harold Walker , Doncaster 12:00, 24 July 1978

No, if the hon. Gentleman will forgive me. I have been interrupted continually before I have been able to utter more than two or three consecutive sentences. If Tory Members want me to express the Government's view on the debate so far, they will have to let me get on with it.

We have sought to revive economic activity by the £2½ billion stimulus by way of reliefs in personal taxation that were provided for in the April Budget. In that way we have given proof of our determination, and we must expect our friends in other countries to apply their own appropriate measures. However, the extent to which their efforts will produce the desired result is beyond accurate prediction.

Everyone accepts that excessive inflation injures employment. The hon. Member for Brentford and Isleworth touched on this point. The Government, supported by the trade union movement, have brought down the rate of inflation from 27 per cent. during 1975 to 7·4 per cent. now. We aim to bring it lower. An important factor in achieving the present level and a lower level is bound to be the attitudes and the response of unions and management. Here again, exact prediction is out of the question, but we shall go on seeking to sustain and to build on what we have already achieved.

Crucially important to future levels must be industrial policy. We must all aim to make British industry competitive so that it will win a larger share of domestic and overseas markets. Yet here again success depends not solely on the Government but on the response of industry itself—both unions and management. We have initiated the industrial strategy exercise and we have provided financial incentives to investment and to modernisation and to the restructuring that is needed to improve industrial efficiency. There are signs that industry is responding. On the latest available estimates, Britain's share of world exports of manufactured goods rose from 8·8 per cent. in 1976 to about 9·25 per cent. in 1977.

The results for 1978 and 1979 will depend on the continued efforts of all sectors of industry. I believe this is the surest—I am sure that the hon. Gentleman was in some way saying exactly the same thing—way to reduce unemployment, by providing that strong base in manufacturing industry from which alone we can secure the expansion of our health, our education and all the other important social services which our people have every right to expect.

The hon. Gentleman was right to stress the importance of small firms. He was right to express the view that we would share his view. Of course we look for an expansion in small firms. The Chancellor of the Duchy of Lancaster announced at the time of the April Budget a number of financial measures designed to help small firms. We shall continue to seek ways of helping them to expand.

In the assisted areas and in the inner city partnership areas my Department has introduced the small firms employment subsidy. Although the subsidy was operating on an experimental basis only until June, it has already helped a number of small firms to expand. It is now open to a much larger range of firms, and it will give greater help.

I reject entirely the allegation that firms have been deterred from recruitment by the employment protection legislation. The report of the Policy Studies Institute has effectively answered that ridiculous charge. The hon. Gentleman alleged that the review by the Institute had not included the smallest firms, those with fewer than 50 employees. He knows full well that together with the review carried out by the Institute my Department instituted a study of the smaller firms, the report of which we are still awaiting.

The Institute's report pointed out that the most onerous piece of employment protection legislation for the firms it had consulted was the unfair dismissals provisions which were introduced, not by the Employment Protection Act or by the present Government, but by the Industrial Relations Act 1971. It strikes me as extraordinary that all these years have passed with those provisions operating year in and year out without Tory Members making any complaint until this Government start to improve them and operate them through their own legislation.