Debate on the Address

Part of the debate – in the House of Commons at 6:21 pm on 20th November 1980.

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Photo of Sir Anthony Meyer Sir Anthony Meyer , Flint West 6:21 pm, 20th November 1980

Anyone who thinks that import controls will save more jobs than they destroy—in a country where one-third of the jobs are dependent on exports—is clearly happy to be within the Labour Party.

The Gracious Speech makes it plain that the Government's overriding priority is the control of inflation. The Government are quite right to say that until we have got our inflation down to the level of that of our overseas competitors, British industry will be unable to sell its goods in export markets or to compete with imports in the home market. If it is not competitive, British industry, which provides the bulk of jobs in this country, will be unable to go on providing those jobs, to pay decent wages or to create the wealth to finance social services for the whole population

So it is that the conquest of inflation is the essential precondition for getting back to full employment. But it is not the only precondition, nor is it the major contribution. One has only to look at the levels of unemployment in countries that have managed their economic affairs a great deal better than we have to realise that the present unemployment is not caused by inflation, any more than it is caused by the policies of this Government to control inflation. Nothing is more extraordinary than to listen to one hon. Member after another from the Labour Benches talking as if this were the only country in the world to have the present levels of unemployment.

High interest rates and the strong pound are not the major causes of the present level of unemployment. Unemployment in this country—as in France, as in the United States and as even in Western Germany—is caused almost entirely by the world recession, the most severe for a generation. It takes a party as pigheadedly stupid as the British Labour Party to suppose that a British Government can, by purely national action, eliminate the effects of that recession.

Anyone else can see that only international action can accelerate the end of the recession. It follows that by far the best thing the Government can do to restore full employment is to contribute to international action, and to do so in the only effective way open to us, through our membership of the EEC, which is the most powerful trading group in the world. What the Labour Party proposes at this point is that we should impose import controls and thus set an example that would intensify the recession, and that we should leave the EEC and thus throw away our chief weapon for combating it. I most warmly welcome the very firm statement of the Government's commitment to making our membership of the EEC a success.

International action, because it is far more likely to succeed than even the most intensive national action, must therefore take precedence, and any national policies for dealing with unemployment should be set aside if they are prejudicial to effective international action.

The world recession will come to an end; sooner if there is international action, and later if there is not. When it ends, those countries that have mastered their inflation will get back to full employment quicker than those that have not. But I do not believe that full employment will ever again have the same meaning as it had in the years up to 1973—not that it was the oil crisis that brought about the change. All that the oil crisis did was to accelerate dramatically a fundamental shift that was occurring anyway.

The fact is that the economies of the so-called industrialised countries rely, at any rate for the provision of jobs if not exclusively for the creation of wealth, on semi-skilled work, which can now be better done in countries where the workers will do more work for less money.

Within a short time—certainly before the beginning of the next century and probably before the beginning of the next decade—the industries that now provide hundreds of thousands of jobs—motor car assembly, basic steelmaking, textiles, footwear, hosiery, food processing—will be employing only tens of thousands. We cannot hope to save those jobs by subsidies or import controls or any other form of purely national action. We can put off the evil day a little longer by policies of protection within the EEC and perhaps gain five years, or possibly even 10 years, of breathing space that way.

What I am talking about is not long-term; it is here and now. What I look for in the Gracious Speech and in ministerial contributions to the debate is evidence that the Government are aware of this and are doing something about it now in this Session of Parliament. The Japanese—the world's most successful car assemblers—have already realised that this cannot be the industry of the future for them and are acting accordingly.

I warmly welcome the Government's expanded programme of job creation. I saw some of it in my constituency last weekend. I was very impressed by what was being done. Though socially necessary, it is only a palliative, but it is far more justifiable than the use of resources in propping up jobs in car making, steel or shipbuilding. The long-term answer, which is already five years or more overdue, is to accelerate the trend away from traditional industry and employment and to facilitate the emergence of new industries and, above all, new services. It must be almost entirely from private enterprise that these industries and services will spring.

The Government have a subsidiary role to play in persuading the financial institutions to back new ventures along the lines suggested by Lord Lever in his articles in The Sunday Times. I would not rule out the Government's having a role to play in setting up institutions for this purpose.

The Government have a much larger role to play in improving our educational and training services so as the better to equip people to face the changed world of the 1980s. Very big changes in education and training are needed. One has only to ask any industrialist to realise that.

By far and away the most important thing that the Government have to do is to recast fundamentally and urgently our tax system to give a real stimulus to the setting up of new job-creating industries and services. In particular, my right hon. and learned Friend the Chancellor must not allow himself to be deflected from that upheaval of the capital tax structure that he has been promising us for so long. When he does it, let him do so with only one thing in mind—not social justice, attractive though that may be, for that is the fig-leaf that has covered Britain's economic collapse, nor the protection of living standards that we sustain only by selling the seed corn, but the regeneration of British industry through the emergence of many thousands of new firms blossoming among the ruins of nineteenth century industry and in the sunshine of a tax system aimed at creating jobs rather than winning votes.