Orders of the Day — Unemployment

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

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

The hon. Gentleman will have a chance to make his own speech. If he wishes to criticise my speech, he will, no doubt, seek to catch the eye of the Chair.

Those five main proposals are put forward by the Conservative Party as its prescription for full employment. In fact, they are nothing but crude assertions, unsupported by economic analysis, the only sure consequences of which will be a fattening of the bank accounts of the well-to-do friends of the Conservative Party and a dramatic deterioration in industrial relations.

As I have said, these nostrums echo and re-echo the ideas which were advanced by the leaders of the Tory Party in the run-up to the 1970 General Election and they are ideas which, when implemented then, had disastrous effects on both employment and industrial relations. If they had those effects then, what makes the Opposition believe that they will have any different effect in the future?

Let us look briefly at some of the components of Tory philosophy. I take, first, the abandonment of subsidies and grants. I have already quoted what the right hon. Member for Leeds, North-East means by that, which is rather different from what was said by the hon. Member for Brent-ford and Isleworth. Does the abandonment of subsidies and grants mean the abandonment of regional policy as practised by the present Government and their predecessors? Does it mean that Scotland and Wales, Merseyside and Sunderland, for example, will be put on a par for assistance or non-assistance with, for example, High Wycombe and Guildford, where the unemployment rates are a fraction of those in the areas that I mentioned earlier?

Does it mean that Rolls-Royce should, after all, have been allowed to collapse, and that British Leyland should not be assisted? Or perhaps there are those on the Opposition Benches who believe, following the small firms philosophy, that British Leyland ought to be dismembered into small units of 50 or fewer. Does it mean that Chrysler should not have been assisted?

There are those among us in the House who believe that the introduction of the Industry Act 1972, which empowers us to use and to apply this assistance, meant that the Conservative Party had learnt the lessons of the follies of the early 1970s. But it seems that there are some people who are completely incapable of learning from their own experience and from history and who want to repeat their follies of the 1970s.

The hon. Member for Brentford and Isleworth says that the Opposition are in favour of the temporary employment subsidy and that they would not ditch it. But it seems to me that that view is wholly inconsistent with the views that were being expressed on 4th July by the right hon. Member for Leeds, North-East. No doubt if I am wrong and if there is confusion or some ambiguity of meaning, the hon. Member for Glasgow, Cathcart (Mr. Taylor) will put the issue beyond doubt. I am glad to see that he is indicating that he will do that. We shall look forward to that.

How these cuts in assistance can save jobs has not yet been explained. But of course, implicit in the views expressed by the hon. Member for Brentford and Isleworth this afternoon is that the cuts in assistance will make resources available for tax cuts. Then the theory goes that the jobs that have been inevitably lost in the Chryslers, Leylands and Rolls-Royces will be a worthwhile sacrifice if the subsequent tax cuts encourage industrial investment. But tax cuts were tried for this purpose by the previous Tory Government, and they did not work. The then Prime Minister had to go to—what was it?—the packed lunch occasion at the Institute of Directors to say to them "We have done all that you asked. We have cut the taxes. We have cut Government spending, and so on. How have you responded? You have done nowt."

What reason have we now to believe that the position would be any different in the future? The fact is that industry and commerce on that occasion just pocketed the money and left unemployment to stagnate as it was.

Perhaps the Tory Party believes that as a consequence of providing for greater personal spending, by reducing the levels of taxation, by removing fiscal restraints and restraints on pay, there will be a greater demand for consumer products and hence more work available for British industry and commerce. Certainly demand will increase. But it is wide open to question whether that increased demand will result in more orders for British industry. On past form of the Conservative Party, and we know that the only certain think will be an upsurge of imports and a return to balance of payments crisis, and, in the main, the extra employment generated will be generated not in the United Kingdom but in Japan, Taiwan or Korea.

In short, we shall be importing unemployment and at the same time fuelling inflation. We shall be fuelling inflation, first, by injecting excessive purchasing power into the economy through unwise and unwarranted tax cuts, and, secondly, by introducing a private sector free-for-all in wages. When we add the industrial relations consequences of the attacks proposed by the Conservative Party on the employment legislation, the cuts in aid to industry, the cuts in MSC spending, the introduction of hotel charges in the National Health Service and the proposed increases in council house rents, it is difficult to see how the social and economic climate that will ensue from that can be other than wholly unfavourable to business confidence and to the growth of investment and jobs.

I believe that, despite the enormous difficulties, the Government's policies to deal with unemployment are showing signs of success. I have referred to the growth in the labour force—almost static between 1966 and 1972; increasing now at the rate of about 170,000 a year. A good deal of this growth has been due to the increasing number of married women who have been entering the labour force for the first time or returning to the labour force and therefore playing a larger part in the unemployment figures than they did in the past, particularly as there is now more inducement for married women to register as unemployed because of the withdrawal from newly married women of the option to drop out of national insurance.

We have had to contend with the most severe recession of the whole post-war period, yet in spite of this the latest employment figures, as the hon. Member for Brentford and Isleworth acknowledged, suggest an upward movement. The trend rate of unemployment has been going down between September 1977 and June 1978. The slight rise in the July 1978 seasonally adjusted figures is too small to be regarded as a change in trend. It is possible that the seasonal adjustments do not yet take full account of the changed pattern of female employment and its effect on the register.

Of course, there can be no room for any complacency whatsoever so long as we have a figure of 1½ million people unemployed. That figure is too serious for that. I readily acknowledge and assert that the downward movement is far too slow. But given the support of workers and management for the Government's policies to reduce inflation and to improve British industrial competitiveness in a world emerging from recession, I see no reason why unemployment should not continue to fall.

I close my speech by doing something which I have always refused to do myself and have urged other Ministers not to do. That is to make a prediction about unemployment. That is to assert now, to make a forecast, that certainly in the short term, by the autumn, the numbers of jobless people will fall and will continue to fall.