Economic and Industrial Policy

Part of the debate – in the House of Commons at 7:29 pm on 5th February 1981.

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Photo of Mr John Stokes Mr John Stokes , Halesowen and Stourbridge 7:29 pm, 5th February 1981

I followed the last economic speech, but it seemed that the missing element was the customer. Industry and this country want more customers. That will come about through the efforts of industry and commerce, rather than by any sort of planned economy.

We all know that the economy in this country has been in decline for about 100 years. At the turn of the century, we saw countries such as the United States and Germany starting to overtake us. A startling illustration of that was at the beginning of the battle of Jutland when Beatty's battlecruisers were blown up one by one. He turned to his chief of staff and said "There is something wrong with our ships, and something wrong with our system. "What was wrong with our ships was that they were not well designed and they did not have very good steel. The German ships were better than ours, the German steel was better, and certainly the German shells were better. I am glad to say that we can now hold our own technically in our Armed Forces. We must hope that our industry will also be at that standard.

The decline in our economy has accelerated in the last 20 years since the end of the boom after the last war. It is no use now blaming those who were responsible in the past. Obviously, management and unions must take much of the blame, but the blame must fall on the attitude of the British people, who seem to want an extensive Welfare State without the wealth-producing base to support it. We must now look to the future. I see several hopeful signs.

I represent a Midlands constituency, where there is very high unemployment and where the firms are going through difficult times. But there is no real depression there—nothing like the depression that we have heard about from the Labour Benches. Management is more on its toes; research, development, design and marketing have been sharpened; overmanning is being dealt with at last, and productivity is improving. There is more realism on the shop floor. In fact, I get fewer complaints from operators on the shop floor than from directors and managers in the offices. Wage settlements are becoming more reasonable, and there is a desire to work hard and to keep one's job. All those are good omens. [Interruption.] I do not know why hon. Gentlemen laugh. Do they not want people to have good jobs? I believe that efficient companies will make large profits next year, and that this time next year we shall see an entirely different industrial scene.

I wholeheartedly support the motion, and I speak not only as a Member of Parliament, but as a person who has been in business for many years, both as a manager and, in recent times, as a part proprietor of my business.

To some extent I understand the bitterness of Labour Members and perhaps of some business men, who, lately, for the first time, have started complaining to me. Nevertheless, I believe that they are mistaken. As I said earlier, industry sorely needs more customers. Customers can be provided only if industry develops and sells products that the public want, both at home and overseas. The large import penetration of the domestic market shows that the demand is there if only British industry can supply it.

I know the difficulties that the high pound is causing, but, after all, in the past the Japanese, Germans and Americans sold their products with a strong currency. When the pound was low, people complained. I believe that the pound will drop a little as interest rates come down, but we must learn to live with a high pound so long as we have oil in the North Sea and so long as we are a stable country in which foreigners like to put their money.

I am puzzled by fuel costs, particularly gas prices, and I hope that the Government can explain what they are doing and, if justified, make reductions in line with Europe.

Other imposts on industry—the national insurance surcharge, which came as a heavy and unexpected blow, and the sick pay scheme—are matters about which small shopkeepers complain most. I believe that interest rates will now start to fall. With inflation falling that is quite possible.

I wish to raise two matters that are of immediate concern to my constituency. They are the future of BL and the future of Duport, an independent steel producer with a large works just outside my constituency. Many of my constituents work at BL Longbridge. Many more are employed in firms that supply components to BL. I am bound, therefore, to be concerned about the future of BL, with the livelihood of so many of my constituents at stake.

When I first went to the constituency 13 years ago and I heard that it contained so many workers from BL Longbridge, I was alarmed and depressed, having heard of the reputation that BL then had for strikes and labour troubles. But on getting to know many of these men personally, many of whom are now my supporters, I found them to be perfectly ordinary Englishmen and not at all the monsters that the press and others have made out.

It is true that there were at that time some bad trade union leaders, but in the main I was convinced that the fault lay with management in not giving the leadership or having the good communications which a large factory requires. Since Sir Michael Edwardes arrived at the head of BL there has been a marked improvement in management. A notorious Left-wing trade union leader has gone from Longbridge, and there is an altogether new spirit about the place. Production levels for the new Metro are continuously improving.

It is against that background that we must judge the new tranche of public money for BL. Its new corporate plan depends on other new models coming out in the next two years and selling well. Of course, it has assumed the level of the £ sterling to be somewhat lower than it is now. We must all devoutly hope that the plan will succeed. I certainly back Sir Michael and his team.

As a Member of Parliament, I must look not only at the interests of those of my constituents—all of whom are taxpayers—who work in BL, but also at the interests of others who are employed in companies in the private sector, which is going through a difficult time and has not received a penny piece of Government aid. I have to balance, therefore, these two interests in a very difficult and complex situation.

That brings me to my final point. London Works Steel, a company in the Duport group, is just outside my constituency. This is a private steel company, standing on its own. It is not part of a conglomerate. It is an efficient company, with new investment in plant and machinery and good labour relations. Last year it made a good profit. This year, with the world slump, the fall in the steel market and, above all, BSC selling steel in competition with it at below market prices it is making serious losses. Already the company has made large economies. Half of the staff and one-third of the work force have been dismissed. The firm is working only every other week. Training centres, canteens and so on have been closed. Meanwhile, everything is being done to find new markets at home and abroad.

I understand that discussions have been taking place about a merger with a part of BSC and possibly others. Whatever happens, it is absolutely wrong that this splendid company in the private sector should go under while BSC is supported with hundreds of millions of pounds by taxpayers. At least I would hope that the Government will make a loan to the company to allow it to continue in business until there is an upturn in the market and profits are being made again. It seems wholly wrong that nationalised industries should receive such largess from the taxpayer while independent companies, which are often more efficient, receive no subsidies or even loans.

When I was a soldier I was told to reinforce success, not failure. I very much hope that this is a lesson which my right hon. Friend the Secretary of State for Industry, whom I much admire, will take to heart.