Economic and Industrial Policy

Part of the debate – in the House of Commons at 8:08 pm on 5th February 1981.

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Photo of Mr Fred Silvester Mr Fred Silvester , Manchester, Withington 8:08 pm, 5th February 1981

The hon. Member for East Kilbride (Dr. Miller) said that industrialists are concerned about their markets. That is true. We have not time to discuss every subject, and hon. Members have ranged widely in their speeches. I shall, therefore, concern myself with that point. The problems of inflation and unemployment have dominated the debate. However, there is one essential ingredient in our discussions, and one alone. It is seen in many documents and in many speeches from all parts of the political spectrum. I refer to the realisation that the wholesome development of the British economy depends on one thing, namely, greater responsiveness to consumer needs and wants. That is the one factor that has done us down in the past and that will do so again.

Between 1968 and 1977, the rate of growth of output per head in the United Kingdom was below that of any other developed country in all but a few sectors. It was roughly half the pace of the rate of growth found in those other countries.

The signs are, as the Government motion indicates, that there is evidence of a greater competitiveness emerging. Let us hope that that is true. But I do not think that anybody in the House believes that we have gone far enough or that we can be confident that when the upturn comes we shall continue to improve to the degree that is necessary. This, to me, more than anything else, remains our central dilemma. The hon. Member for East Kilbride spoke of import controls, but he must forgive me for saying that there is no way in which a country such as ours can shield itself from the growing efficiency of others. We must face the fact that that efficiency will increase and spread to wider and wider areas of activity.

I do not believe that we can solve this problem simply by importing other people's solutions. It is not that easy. We cannot accept the trade union structure of Germany, the industrial organisation of Japan or the civil service of France. They have been developed by those cultures, and we cannot transport them here. So it is, I believe, with much of the theoretical discussion that has taken place today. It may help us to keep on a straight path and to retain our sense of direction, but the policies that we propose will work only in the context of the historical and cultural background of this country—the country to which they apply. When we speak of the natural rate of unemployment, expectations or attitudes, we are actually talking about deeply ingrained habits and beliefs which are specific to our country. Therefore, if we seek change, as we must, we must act with the grain.

That is particularly true on the question of competitiveness. My right hon. Friend the Prime Minister, in her splendid speech, made the point clearly, which we all know to be true, that some companies are being successful even at the present time. But it is unfortunate that there is no necessary relationship between the co-operation of the work force and the reward. The textile industry, for example, complains that despite its efforts it has suffered more dramatically than others. On a personal level, the man who is made redundant, and thereby improves the competitive position of his former company, is not the one who directly benefits from the improvement. That is true of the regions. In the North-West, we have 11½2 per cent. unemployment and the rate is similar or greater in other areas. It is therefore not surprising that people are reluctant to embrace change. We are now asking them not only to embrace change but to do so with ever-increasing frequency. I believe, therefore, that we must turn our attention not only to the physical problems but also to the psychological problems at the present time.

I wish briefly to indicate three things which I believe are necessary. First, there is what I would loosely call hope. It is necessary to show what the future could be. I am pleased at the tremendous support that the Government are giving to the unemployed generally, and also the very large commitment to steel, British Leyland and other areas. In view of some of the criticism of that help, I am especially glad that it is being combined with a new vigour in management and marketing. There is no reason to suppose that because we have failed in the past we shall necessarily do so in the future. Indeed, that is something which in our present circumstances we cannot allow ourselves to believe.

These massive investments, however, are in a sense an investment in past glory, in industries which will increasingly be open to more and more difficult competition from abroad. If we try to look forward—and we all know the hazards of that—I think that there will be wide agreement that the opportunities for our work force are greater in service industries, in energy-related industries, in bio-technology, in information technology, in microelectronics applications and in construction and capital work for developing countries, with the natural increase that goes with a higher standard of living.

I was delighted that my right hon. Friend reaffirmed her faith, which I share, that there will be creation of physical wealth from the unknowable wealth of human invention which lies abundant in this country. But there are many people—in the North-West, for example, and in other hard-pressed regions—who need to feel that impulse in their own personal lives. I therefore hope that the Government will turn their attention to selective support. I know the arguments against this. We can, and do, make errors. Any Government or civil service will undoubtedly make errors, but by this method we shall be able to offer hope and example.

I have in my hand a copy of a speech made by my hon. Friend the Minister of State, Department of Industry at a conference on business telecommunications in June last year, in which he put forward a 10-point plan for a national strategy for information and technology. The fruits of that may soon be seen. I believe that action of that kind is necessary. It has been mentioned by others in the debate and I hope that it will be taken on board.

Secondly, I believe that there is a need for the Government to be seen to be fighting alongside private industry. It is no accident that there has been increased interest in the French system. As I have said, it is not exportable to us, but it has the commonly noted feature of a close enmeshing of private industry with Government officials. I do not think that it is evidence of backsliding or an abandonment of our central strategy to ask whether there can be some amelioration of some of the sharper points of our policies.

In international trade, we should perhaps ask ourselves whether we should not merely be vigilant against the breach of rules by other countries but also be rather more wily in the application of those rules to ourselves. Perhaps we should ask ourselves whether some possible amelioration could be achieved in our policy on energy pricing. We should perhaps ask whether we have actually organised ourselves to the best extent to get the benefit from EEC funds. Perhaps we should ask, as many hon. Members have asked in this debate, whether we should make a distinction between one kind of public expenditure and another. I know that that is a dangerous road, which can lead to many false conclusions. But there are many things that will have to be tackled at some time—perhaps even the sewers in Manchester—and investment of this kind may be a useful small addition to our activities at this time.

Thirdly—and I say this as a Member of Parliament representing a Manchester constituency—we shall have to watch very carefully the grave danger of division of the country. I hesitate to mention this because I think that it can be overdone, and there has been a great deal of doom and despondancy around the place today. But the longstanding problems of the North of England, Scotland and Wales, are being added to by new problems of the kind that I have described, and the need for adjustment is becoming much more difficult to meet. I therefore believe that we must make some special effort to ensure that the people in the North feel that they are as much a part of the helping hand of the Government as the people in the South.