Unemployment

Part of Orders of the Day — Supply – in the House of Commons at 8:45 pm on 27th July 1982.

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Photo of Michael Ancram Michael Ancram , Edinburgh South 8:45 pm, 27th July 1982

I hope that, to save time, the hon. Member for Battersea, South (Mr. Dubs) will allow me to respond to some of his remarks during my speech rather than immediately.

It has become clear that remarks and imputations made by some Opposition Members about Conservative Members not caring about unemployment or the unemployed have at last died the death. Every speech made by a Conservative Member has shown that we are equally horrified by high unemployment. I hope that my speech will confirm that. We realise that unemployment is a human tragedy and a social evil and that it is soul-destroying and creates resentment.

We are particularly sensitive to this problem in Scotland because we have a history of economic deprivation. We cannot take lightly the 15 per cent. rate of unemployment. As the hon. Member for Glasgow, Maryhill (Mr. Craigen) said, traditionally Scotland takes longer to recover from recessions than other parts of the United Kingdom. The deep recession that we now face is serious.

I condemn the easy promises made by the Opposition. I exclude the right hon. Member for Heywood and Royton (Mr. Barnett), who said that making easy promises is perhaps more dangerous to the unemployed than not making them. The right hon. Member for Chesterfield (Mr. Varley) seemed to wave his hand as if it was a wand and in two sentences pretended that the Labour Party had a complete solution to unemployment. I tried hard to gather from his speech, and the speeches of his hon. Friends, what that solution is. I have studied the plan put forward. It must rank as one of the most unpromising building operations since the tower of Babel. That failed because the constructors spoke with different voices at the same time. It is a mass of contradiction parading as a whole without even the elementary principles of counterbalance that, architecturally, can hold unlikely edifices together.

The hon. Member for Battersea, South dealt with a number of those points. The plan promises jobs by introducing lower interest rates, but it is based on borrowing that can only force interest rates up. It promises jobs and an increase in the standard of living by controlling inflation, but proposes to finance the programme with the very fuel that rocketed inflation in the past. The plan promises jobs with a programme of vast public spending, but the nature of financing that spending can only tear at the hearts of those industries that can provide jobs for the future. In a sense, the plan is new jobs for old, but at an exchange rate that will inevitably increase the number of people without work after it is carried through.

Neither the Labour Party nor the SDP can escape reality, even when in Opposition. Their policies—and some hon. Gentlemen have admitted it—will raise interest rates and inflation. We know from experience that that will lose jobs faster than they can be created while present conditions last. In exchange for rising unemployment, falling interest and inflation rates, the Labour Party and SDP are offering the unemployed a brave revisited world of rising interest and inflation rates, as well as further unemployment.

France has demonstrated that in one short year of Socialism. Hon. Gentlemen may find that surprising, but why, if Socialism in France is working so well, did the French Government only a month ago reverse their policies and turn them on their heads? Perhaps the right hon. Member for Stepney and Poplar (Mr. Shore) can explain that. I hope that Opposition Members will look across the Channel and perhaps, for once in their history, be wise before the event.

Jobs can never depend on public subsidy in anything but the shortest term. It is doubtful whether jobs can be created by public spending at any cost that does not ultimately create a greater loss elsewhere, unless those jobs are legitimately earned. The Government cannot create lasting jobs, except of the least productive and most wealth-consuming kind. Industry creates jobs, but in a world recession that is no easy task. Industry and the Government must create the base and background for creating jobs in future. Industry will expand and invest in new jobs if the atmosphere is right.

That atmosphere has certain requirements. It requires a buoyant market, which will require the world recession to end, and international co-operation will have a great part to play in that. It requires an economic climate where endeavour will be rewarded, and that requires the right tax regime and lower interest rates. It requires the right labour force with stable industrial relations and the skills needed for new industries. It requires the right environment, which means the right amenities and facilities for people who wish to set up in business. Above all, it requires a good prospectus. It must be positively sold. One of the most damaging things in my part of the country is the continual talking down of the Scottish economy by Labour Members. That is now positively putting off people who would otherwise invest and create jobs.

The arguments against massive reflation and greatly increased public spending are broadly correct, but I trust that they will not cloud the Government's judgment on where spending must be undertaken, such as in the replacement of necessities—sewers have already been mentioned—where failure to act now will cost more later. Such expenditure is merely good husbandry. Nor should the Government's judgment be clouded on the investment of public money where it can show a net return, as I believe it can in energy conservation and environmental improvement. This is the argument of the net savings which, after all, has been the justification for the building of a number of power stations before they were needed. If we can do that, we can do it on a wider scale.

I do not believe that this will create a vast number of jobs, but it will help and it can be justified at the present time. Nor do I believe that we have closed our eyes in the past to job-creating or job-saving projects. Scotland certainly has not. There is the power station at Torness which, among other reasons, is being constructed to preserve jobs in the nuclear industry and to create jobs in the construction industry.

There are now proposals for the electrification of certain railways, a proposal to build a new exhibition centre in Glasgow, and only last week the Scottish Development Agency announced a scheme for Dundee that will create 1,200 jobs at a cost of about £39 million. That is a flexible response to the gravity of the problem and is a declaration of the Government's concern about unemployment in Scotland.

None of this can obscure the long-term economic reality that, if we are to succeed, we can do so only if we compete effectively. Increased demand cannot help job requirements if it is not for our own goods. It should never be part of our task to help reduce unemployment in other countries before we reduce our own.

Competitiveness may be a harsh word, particularly where it requires job reductions, but, where it is the key to survival and future expansion rather than collapse, there really is little choice. In the long term, our task must be to prepare for the upturn so that we are ready to take advantage of it, particularly in Scotland where endemic economic problems are that much worse than in the rest of the United Kingdom.

The Scottish picture is not all black. Last week's much maligned CBI survey, which was perhaps gloomy, talked about Scotland suffering from lack of improvement rather than deterioratior—that we were on a plateau. The Scottish Register of Companies has announced a 23 per cent. increase in the number of companies incorporated this year compared with last year. That may not be immensely significant, but it is the seedcorn for jobs in future.

The increase in Scottish unemployment has been much less than the average for the rest of the United Kingdom. While that might be cold comfort in terms of the history of the Scottish economy, it is exceptionally significant for our chances of recovery in the future.

We must still prepare the ground for that long-term recovery. We have to produce jobs which will last a generation. That is the only honest answer to our unemployment problem. We have to train our youth, as the Government are doing with youth training schemes, and increase our competitiveness by modernisation. We need to look for jobs, as the SDA and Scottish Office are doing, and make sure that the right facilities are available when the upturn comes. That can be done only when the Government and industry work with the labour force and the unions—if they are able to set politics aside.

The Opposition recently called upon the Prime Minister to show the same determination and courage in tackling unemployment as she showed when dealing with the Falklands crisis. They were right to say that, because the Falklands success was achieved not only because of the Prime Minister's determination and courage, but because the country was prepared to support her and realised that there was no easy answer and that people had to graft to succeed.

If that same mentality could be fostered to deal with unemployment, and the Opposition were prepared to put all their fine words and easy answers to the test against such co-operation, we could solve the problem once and for all.