Regional and Industrial Policies

Part of Orders of the Day — Supply – in the House of Commons at 6:37 pm on 14th July 1982.

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Photo of Mr John Osborn Mr John Osborn , Sheffield, Hallam 6:37 pm, 14th July 1982

This is the first time that I have caught your eye, Mr. Deputy Speaker, and I welcome the fact that you are in the Chair. I pay tribute to the excellent maiden speech of the hon. Member for Coatbridge and Airdrie (Mr. Clarke), which proves that a route to the House of Commons can be through local government, especially if the hon. Member has distinguished himself.

There have been many debates on industry and on regional policy and development since I entered the House of Commons. We have just heard an interesting speech from the right hon. Member for Stockton (Mr. Rodgers). To intervene constructively is difficult. However, the next debate that I attend will be in the Assembly of the Council of Europe in September, when I shall refer to this matter.

My roots are in Sheffield and more than 40 years ago I began to work with new technologies, work study and process control. Fifteen years ago I saw a factory to which I referred in one of my early speeches being sold and taken over by another—the name of that factory was Osborn Precision Casting. About 30 years ago I, with some directors from my group of companies, pioneered a rationalisation scheme that resulted in a company called Osborn Steels in Ecclesfield. I have seen that firm close in the past six months and the final closure of the work of some 25 years, and a lifetime, in industry.

Today I am worried about the thousands of people who look to me, and others, for leadership and jobs and I return to Sheffield with mixed feelings. That is what regional policy is about and this week I shall attend a meeting of the trustees of the founders and benefactors of the company with which I was associated to see how we can help those who have no job and who have no prospect of obtaining one for some time. I say that because it is said that Conservative Members do not care. I hope that Opposition Members realise that I have lived through an experience that has as it were, "burned my soul" and made it difficult even for me to think about the future. On the other hand, as I go round my city—or the Peak District of Derbyshire—in this fine weather, I find people walking and cycling, and the shops are still crowded. So perhaps there is another side to the scene of despair that I have outlined.

I cannot support the word "appalled" in the motion, but I deeply regret the increase in unemployment and I deeply regret, too, the decline in Great Britain's industrial base. I listened to the speech of my right hon. Friend the Secretary of State for Industry, and I agree that inflation has been controlled and controlled without the impedimenta of bureaucracy. That makes the prices and incomes policy of four years ago a farce. There has been an increase in productivity. The wage costs per unit of output have decreased. Interest rates are coming down.

However, this summer, one or two other stark realities have come home to me. What I feared for 30 years as inevitable has materialised. As a young man, after the Second World War, I was worried that what has come home to roost in the 1980s could have descended on Sheffield, Great Britain and its basic industries in the 1950s. That is why, as a young manager and then as a director of a basic industry company, I was keen on overseas sales, overseas investment and overseas manufacture as essential components of rationalisation, reorganisation and modernisation—in my case, in Sheffield. Those policies, incidentally, have been resisted by the Opposition throughout my life.

Over the past 20 or 30 years there have been pressures in Britain—and, for that matter, in Western Europe—on the basic industries, of which management of ten, 20 and certainly 30 years ago was unaware. Let me give one example about which I have spoken in the House before. In 1964, I intended to set up a company in India, and I visited Jamshodpur and particularly Durgapore. I saw Davy United people, with the help of United Steels and other companies, training people to run a steel works in India, with cheap power, and of course, with the raw materials. In 1970, on an IPU visit, I visited the new steel works on the Orinoco. It had the ingredients for a steel industry. In 1953, and again two years ago, I saw the same in Australia. So there are economic changes that we must live up to and accept.

During the past three months Great Britain has faced the challenge of the Falklands crisis. The hon. Member for Kingston upon Hull, East (Mr. Prescott) mentioned this. The Prime Minister faced the challenge with resolution. It stirred up patriotism and unity in the country. Perhaps it is disunity, promoted by various factors in our country and cities, that has caused some of our biggest troubles. The right hon. Member for Bristol, South-East (Mr. Benn) has not made the Government's policy in the Falkland Islands easy. Nor did his followers in Sheffield and on the South Yorkshire county council. Those are the people whom the right hon. Member for Sheffield, Park (Mr. Mulley) and the hon. Member for Sheffield, Heeley (Mr. Hooley) must hold responsible for their non-reselection as candidates.

Why do I say that? Local government in my city has not been easy for a Conservative Government to handle or encourage. My right hon. and learned Friend the Chancellor of the Exchequer wanted to have an enterprise zone in Sheffield, but the ideals of the city of Sheffield were so contrary to those of a Conservative Government that it was not possible. Thus, the agonies of the citizens increase.

This week I should be attending—I cannot do so, because of other commitments—an economic development advisory committee, run mainly by the Sheffield city council, but Members of Parliament are invited. Unemployment in Sheffield is 12·5 per cent. compared with the national figure of 12·4 per cent. In some areas it is as high as 16 per cent., which is an increase on last year's figure. The agenda will be urban development grants, the local campaign for assistance, and particularly the statement made by my right hon. Friend the Secretary of State for Industry, which was the theme of the speech of the hon. Member for Sheffield, Attercliffe (Mr. Duffy) on May 25. Hidden subsidies are dangerous, but if there is assistance, particularly on a European scale, it should be available in Britain, and assisted area status makes that much easier. I hope that my hon. Friend the Minister, in winding up, will say a word about that. Then, too, there is the enterprise allowance scheme, which I should like to see in my city.

One thing that will not be on the agenda in South Yorkshire and my city is the steel strike that took place two years ago. It destroyed the resilience of the private sector, and posed a challenge to BSC, in spite of what was said in the annual report yesterday.

Redundancies have been announced, and in Sheffield there is obviously worry about the future of Phoenix 3. There must be rationalisation, but I shall come back to that matter later. I do not oppose Phoenix 3 if it provides future security for the steel industry.

Another item which will not appear on the agenda is the cost of transport. I could refer to the statement made earlier this afternoon, but the activities of Ray Buckton and, Sidney Weighell and the problems of reducing transport and rail costs, if not successfully accomplished, will ensure more unemployment in Sheffield. That, too, will not be on the agenda.

An article in The Economist last week reminded us that electricity is now manufactured from coal. In fact, 82 per cent. of our electricity comes from coal, instead of 68 per cent. two years ago. The NUM leader, Arthur Scargill—to judge from cartoons and from what he has said—will present a dilemma. Increasing miners' wages and increasing the cost of coal will guarantee more unemployment in the steel industry, which depends on electricity produced from coal-fired power stations. Those are the dilemmas that must be faced. France, shortly after the Macmillan programme, embarked on a nuclear energy programme. Fifty per cent. of its electrical energy will be nuclear by the middle of this decade.