Orders of the Day — West Midlands (Unemployment)

– in the House of Commons at 6:59 pm on 7th February 1983.

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Photo of Geoffrey Robinson Geoffrey Robinson Shadow Spokerperson (Science) 6:59 pm, 7th February 1983

This is the first time that the House has discussed unemployment in the west midlands since December 1981. In other words, during 1982 the west midlands as a specific region was absent from our debates. It would, however, be wrong to infer that hon. Members on either side have been unaware of the growing unemployment crisis, which is now reaching breaking point. All hon. Members will, therefore, I am sure, welcome this opportunity of putting to Parliament and the people their views on this truly desperate situation and on what is required to put it right.

The manufacturing heartland of Britain has become a wasteland of closed factories. The charge that we lay at the door of the Government is factual, simple and direct. We charge them with the total devastation of the employment structure of the west midlands. We sustain that indictment because in practice the Government's policies have been universally destructive of the west midlands. The charge is total, because the destruction of jobs has been universal and indiscriminate, as the figures will show.

Unemployment in every area within the west midlands has increased, as it has for every part of Coventry, the city that I represent. There are no geographical bright spots. There is no relief between age or category of worker—between white or blue collar workers. There is no difference between the young and married couples; men and women; or long-serving employees. All of them have seen their legitimate hopes of training, jobs, promotion and properly deserved retirement savaged by Conservative policies.

Nor has there been relief for categories of industry. Manufacturing has been worst hit, but employment levels in the utilities—gas, electricity and water—as well as in the service industries have declined year in, year out.

There has been no relief by size of company or institution. Large, medium and small have all declined—with record levels of liquidations in every year of the Government's administration.

There has been no relief as between ethnic groups. White and black have both suffered, but the percentage of registered unemployed belonging to the ethnic minorities in the west midlands is three times larger than that of Britain as a whole. Worse still, the ethnic unemployment rate is likely to rise even faster—a powder keg threatening social stability in the area that we represent.

No statistics can adequately represent the human misery that these plant closures, redundancy notices and never-ending dole queues mean for the people they affect, but we must use the statistics to measure and quantify the comprehensive failure of the Tory policies that have caused them.

We are pleased that the Secretary of State for Employment is present. That is appreciated, even though there is little that we can say in favour of his policies. The right hon. Gentleman's presence is welcome, as it gives us an opportunity to put some straight criticisms to him.

On the right hon. Gentleman's own "cooked" figures, unemployment in the west midlands has gone up from 111,000 in 1979 to a staggering 367,000 at the end of 1982—a vicious increase of 229 per cent. Frankly, it is difficult to comprehend increases of that magnitude. There has been a trebling of the region's unemployment rate, from 5·2 per cent. in 1979 to 16·1 per cent. at present. That is by far the highest rate of increase in unemployment for any region in Great Britain.

The figures are worse still in Coventry. In June 1979, 15,000 people were unemployed. In October 1982—and it has gone up since then—there were 45,000 unemployed, an increase of more than 250 per cent. In 1983 the overall level of unemployment in Coventry will rise to 20 per cent. Indeed, male unemployment in the region as a whole is already 20 per cent.

The results of this tripling in unemployment are to be seen in the tragic loss of material and human resources. In the west midlands as a whole there are now 300 million sq ft of empty factory space. That is a stark reflection of the fact that the west midlands has lost 30 per cent. of its manufacturing capacity, yet the Government still refuse to acknowledge that that represents a structural problem in our industrial performance. Later, I shall comment on the positive recommendations that we shall make to try to get the Government to change their direction and content of policy, to face the misery that they have caused and to embark on a policy of construction rather than one of destruction.

In Coventry, only 15 per cent. of youngsters gain full-time employment. Of the 85 per cent. who join the combination of training and release schemes that the Secretary of State has grudgingly created, only one in four is thereafter likely to get a permanent job.

That can only be described as a wasted generation whose hopes have been blasted by monetarist dogma. What chance do the young have? Apprenticeships have fallen from 600 a year two years ago to under 400 today. The skilled man who has completed his apprenticeship, the person approaching retirement age, but still with a few years to go, and the youngster who has just left school can try their luck with the 58 other people who are now chasing every vacancy. There will not be room to park their bikes, let alone get an interview.

Confronted with a picture as unrelievedly black and desperate as the plight of the west midlands, what has been the Government's response? Under pressure for electoral and other reasons from their own Back Benchers, bombarded by delegation after delegation of local councillors from Birmingham, Coventry and the other districts, and continually subjected to pressure at Question Time, they have done absolutely nothing. Their attitude has been aptly described in other matters of state as "general Micawberism"—hoping that something might turn up.

The Chief Secretary to the Treasury told us a year ago that the evidence of recovery was all about us. We shall be interested to hear what the Minister says tonight. Who are they trying to kid? Can a Government or a Minister be so out of touch? I ask that, because it is clear that the Chief Secretary is no worse than the rest. The Secretaries of State for Industry and for Employment and the Prime Minister herself are just as out of touch as he is.

What can one say of the Secretary of State for Employment? We are told that he is a man of courage and principle, yet he even funks a visit to the production line of Jaguar cars and instead sneaks into the styling studio—

Photo of Mr Norman Tebbit Mr Norman Tebbit , Waltham Forest Chingford

The hon. Gentleman funked every issue under the sun when he was managing director, which led Jaguar into the troubles from which it is now being pulled out. He knows that it was never proposed that I should visit the production line. I wanted to see the R and D section, because I was the Minister who took the decision to finance the XJ40. I showed some faith in Jaguar, which, under the managing directorship of John Egan, has been more than fulfilled. It is a pity that the hon. Gentleman could not achieve those results in his day.

Photo of Geoffrey Robinson Geoffrey Robinson Shadow Spokerperson (Science)

Out of consideration to my hon. Friends, I shall not pursue that argument—[HON. MEMBERS: "Ah!"] In that case, I shall.

Photo of Geoffrey Robinson Geoffrey Robinson Shadow Spokerperson (Science)

Perhaps my hon. Friend will let me deal first with the Secretary of State's intervention. I am grateful to the right hon. Gentleman for allowing me to put the record straight. He really should not have intervened. Production at Jaguar is now about half the number of cars that it was producing when I left. It inherited the model that I left with it. Its profitability is in real terms barely half what it was when I left—[Interruption.] The Secretary of State may not like the facts, but it is as well that he did not go around the production line, because I do not think that he would have been a welcome visitor.

In addition, Jaguar's profits and cash flow are not in real terms as good as they were when I was with the company. Having said that, let me add at once that there are Jaguar factories in my constituency, and no one welcomes more than I the progress that has been made. Equally, no one recognises more than I the progress that must still be made before the confidence of the work force is restored. I am sure that the managing director, unlike the Secretary of State, recognises the importance of good industrial relations.

When the Secretary of State goes to the factory he funks the issue and sneaks into the styling studio. He tries to develop John Egan into the Government's latest pin-up boy in succession to Michael Edwardes. However, it is better to be the Prime Minister's pin-up boy than the Japanese Government's favourite Geisha girl, which is the only title that one could give to the Secretary of State for Employment. When he was at the Department of Industry, there was nothing that he would not do to get the Japanese here. He was crawling on his hands and knees and kowtowing to them in every possible way to persuade Nissan to invest in this country. Has he no faith in British engineers, British skills, British management or British workers? Will he or the Under-Secretary of State answer our questions this evening? Are we to have Nissan, or not? What are we to have by way of investment?

Photo of Mr Norman Tebbit Mr Norman Tebbit , Waltham Forest Chingford

Does the hon. Gentleman want Nissan, or does he want to keep Nissan out?

Photo of Geoffrey Robinson Geoffrey Robinson Shadow Spokerperson (Science)

I shall give the right hon. Gentleman the same answer as I gave him when he made the announcement with such a panoply of glory, only to see the prospect disappear further and further over the distant horizon. I want investment from Nissan on the right terms, but not on the terms which, in his ill-informed and illiterate fashion, the Secretary of State put forward then, when he described his ineffable vision of British workers using and maintaining Japanese-designed robots.

If there is to be a real transfer of industrial and technological know-how from Japan to this country, my answer is "Yes, we will have Nissan". However, the conditions laid down by the Secretary of State and inherited by his successor at the Department of Industry have been whittled away to non-existence in the Government's desperate and abject eagerness to get the Japanese here because the Government are unwilling to back British management or British workers.

That digression was forced upon me by the surprising eagerness of the Secretary of State to come to the Despatch Box, but my main concern is the level of unemployment in the west midlands, which everyone except the Secretary of State agrees to be a very serious problem, and the suffering caused there by the perpetuation of the Government's employment and industrial policy. It is clear from the irrelevant interventions of the Secretary of State for Employment today that we cannot look to him for salvation. Nor can we expect any help from the Secretary of State for Industry. They are two of a kind.

Moreover, if we study the Prime Minister's famous interview with Mr. Walden on London Weekend Television—it has now been issued as a press release from No. 10 under the title "The Resolute Approach"—we see that we cannot hope for much from the Prime Minister either. She spoke about what will happen if we keep our policies firm and do all the right things, you know,"— she may know, but I do not— keep public spending under control, keep the budget deficit low, keep public borrowing down, keep the money supply under control. That is all that we have from the Prime Minister.

What is the relevance of any item on the list that the Prime Minister enumerated with such emphasis and such pride in that interview? It is hard to see how the west midlands will benefit from any of those policies. Indeed, it is in fact hard to see that any of them is being successfully implemented. Inflation came down while the money supply expanded and, even if the money supply is under control, interest rates are now higher in real terms than at any time since the second world war. That took some doing.

Unlike others, I find some glimmer of hope in the Prime Minister, as she is more of a realist than many of her colleagues. She knows that something must be done in the west midlands if the Tories are to have any chance of retaining key marginals there at the next election. She realises that her party cannot go into an election with unemployment continuing to rise at the rate that it has risen and continues to rise in the west midlands, so she is under pressure to do something about it.

As we saw last October, the best way to put the Prime Minister under pressure is for a group of industrialists to visit her, as they usually represent companies with handsome contributions to make to the Tory party. It was not enough that 400,000 construction workers were unemployed, 2 million bricks were stacked around the country and the house building programme was at an all-time low. None of that made any impression, but eight good men and true turning up at No. 10 in their building helmets and telling the Prime Minister that something had to be done made quite an impression. Within a week the Secretary of State for the Environment had stood on his head and instead of saying "Cut, cut, cut," was saying, "Spend, spend, spend" and "Build, build, build." That was nothing to do with keeping borrowing under control or not spending Government money. On the contrary, it means spending Government money to help private industry, but that is what the Prime Minister did for the construction industry, and it should have been done two or three years ago. I am glad that the Secretary of State for Employment agrees.

Let us take the analogy a little further. If that was right for the construction industry, why is it wrong for manufacturing industry? We all know that for every £1 spent by the Government on construction or manufacturing, an average of 70p goes to the private sector for goods and services. The Secretary of State shakes his head as though that were not a fact, but we all know that that is why the expanded public sector spending programme for the construction industry was of such great assistance to the private sector companies, which almost exclusively benefited from it.

If the Government will recognise that they have as important a role in manufacturing industry in toto as in the construction industry, we may yet reverse trends that will otherwise be terminal for manufacturing industry in the west midlands. The example of the eight construction companies is relevant to the west midlands, because the Government cannot simply pass the buck to industry. The Government have as vital a role to play in relation to manufacturing industry as they have in relation to the construction industry.

Whether the Secretary of State and the Prime Minister like it or not, the Government are responsible for the devastation of the west midlands manufacturing base and for the increase in unemployment, which is now 355,000, more than 16 per cent. The proportion of that total who have been unemployed for one year or more is now 41 per cent., or almost 150,000 people. In Coventry, 86 per cent. of youngsters leaving school have no jobs. There are 58 people chasing every vacancy and 300 million sq ft of factory space lying vacant and rotting. Worst of all, there is no sign of improvement and every sign that things will continue to get worse.

To establish what is wrong and to fix responsibility where it belongs is not playing party politics. It is essential to know what is wrong if we are to put it right, but we must not stop at criticism. We must put forward practical and realistic policies to reverse the decline.

Photo of Mr Anthony Beaumont-Dark Mr Anthony Beaumont-Dark , Birmingham, Selly Oak

Did not the Labour Government's policies on industrial development certificates from part of the foundations for the decline of industry in the west midlands? If the hon. Gentleman would analyse the past honestly, we might believe in some of his panaceas for the future.

Photo of Geoffrey Robinson Geoffrey Robinson Shadow Spokerperson (Science)

That is going back a long way. We have had this argument before. I can go back as far as anyone wishes. Let us go back to the 1870s and to 1851 and the great exhibition. Let us go back to the education system that does not produce enough of the engineers, designers and technologists that we need.

I will admit to one mistake that was made by my party when it was in government. As the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) invites me to put the record straight, I can tell him British Leyland, and especially Jaguar, were adversely affected by the appointment of Lord Ryder and the implementation of his lunatic plan for Jaguar. That was the occasion of my resignation from Jaguar.

From then on, bad mistakes were made in relation to British Leyland by the National Enterprise Board, which was set up by the Labour Government. Certainly Jaguar's performance after the report suffered greatly and there has been a wider degree of economic decline than need have happened because of the interim period of poor performance by Leyland, following the report. I am prepared to accept that my party made a mistake, both because it is true, and because it gives me the opportunity to tell the Secretary of State for Employment the reason for my resignation, after which the decline in Jaguar's fortunes took place.

We must be practical and positive. I am aware that many of my hon. Friends wish me to push on. It is a well-attended debate, and time is pressing. I shall compress my speech in a way that will not do it justice to the positive proposals, but I hope to find another occasion to develop the arguments.

My first specific proposal is one to which I hope the Minister will give a clear answer. The whole of the west midlands metropolitan county should be designated as an assisted area. We have had from time to time some all-party support on the issue. Certainly that is so for Coventry. The figures that I have quoted, and further figures that I could quote clearly show that there is structural decline, by any definition. If the designation of the west midlands as an assisted area is resisted, different criteria must be used from those presently established for such a area.

The clear recognition of structural decline brings me to the central importance of the motor industry to the west midlands economy and to the country as a whole. It would be a supreme irony for successive Governments and the Secretary of State for Employment—he served in the Department of Industry, where the Secretary of State opposed plans for investing in British Leyland—if, having poured £1 billion into British Leyland to save our one nationally-owned motor car industry for Britain they now preside over the collapse of the component and capital goods supply industries.

My second proposition is therefore that the Prime Minister should call together the chairman of British Leyland, with leaders of eight major component and capital goods supply industries—as she did for the construction industry—to hammer out a massive and accelerated purchasing programme for British made equipment. Companies that immediately spring to mind are John Brown, Tube Investments, GKN, Associated Engineering, Automotive Products, Dunlop, Lucas and Armstrong Equipment. Nearly all those companies are household names. They are cutting their work force to the bone because of the decline in demand for their goods. If action is not taken quickly, such companies as GKN will turn into vast warehouses for the importation of Japanese and other foreign components.

The Government can count on the full support of the trade union movement. One hundred trade unionists met in Coventry during the weekend and committed themselves to a co-ordinated campaign to achieve for the capital goods supply and components industries the survival which successive Governments have achieved for British Leyland.

Thirdly, the Government must resolve the wretched Nissan project. They have pandered to Japan for long enough. They have lost all self-respect. Let us have the matter tidied up. Is Nissan coming to Britain, or is it not? I know the difficulty, because I have negotiated with the Japanese, as have many hon. Members. But there comes a time when the laughing, the silly behaviour, the chattering, the Secretary of State's behaviour this evening, the trips and the public relations must stop. We must realise that we are dealing with the jobs of real people.

The investment intentions of other companies could be affected by the project. The Government should take their courage in their hands and tell the Japanese that if they do not put the investment under way within three months we shall reduce the Japanese quota by half. An agreed level of about 11 per cent. has been adhered to and this should be reduced to 5 or 6 per cent. if the Japanese do not proceed with the Nissan plan. They might surprise the Secretary of State by deciding to go ahead with it.

Fourthly, there should be selective import controls on Spanish and east European manufactured motor vehicles. We should reduce their market share from 6 to 3 per cent. We could then have a nationally co-ordinated investment policy which, together with import restrictions, would ensure an increased market opportunity for British-based producers, and British Leyland in particular, of up to 10 per cent. of the market.

Fifthly, we must ensure that modern productive capacity is available for that purpose. The £500 million earmarked for the Nissan project—if it does not come to Britain—or an additional £500 million if it does, should be made available to British-based manufacturers under the Government's national selective industrial assistance scheme covering the new science-based and traditional industries.

Because of the pressure of time I shall not discuss the relationship between the new science-based industries and our traditional industries. However, we must realise that the science-based industries need, as major customers for their products, continuing healthy and thriving traditional industries.

I do not suggest that such a five-point package will solve all the problems of our tragically depressed area. But I contend that unless some new programme of specific Government-supported measures of recovery is instigated, the trend of decline will continue irreversibly and will be terminal within a matter of years. That need not happen. We can still find and train the skills that we need. Managers, engineers and trade unions are yearning for a lead. We have inventive and adaptive attitudes and abilities second to none. Tonight, the Opposition say to the Government that they must look at the industrial disaster they have created and the human despair they have spread and change their policies before it is too late. They must get monetarism off the back of the west midlands, and get the west midlands back to work.

Photo of Mr Hilary Miller Mr Hilary Miller , Bromsgrove and Redditch 7:28 pm, 7th February 1983

The hon. Member for Coventry, North-West (Mr. Robinson) will understand if I preface my remarks by saying what a pleasure it is for me and my colleagues to see the hon. Member for Eye (Mr. Gummer) on the Government Front Bench. I congratulate him on his promotion.

I wish to acknowledge the interest taken by my right hon. Friend the Secretary of State, whose presence this evening we all welcome, and also the presence of my hon. Friend the Member for Coventry, South-West (Mr. Butcher) who, although itching to take part in the debate, is debarred by the rule that there should be only one Front Bench spokesman on this occasion. I know that he would wish to make a contribution to the debate, and that he has a great deal to offer.

I thought that the hon. Member for Coventry North-West, when wrapping up his speech, should have wrapped up his case. It was entirely unworthy of the position in the west midlands. He made some cheap political cracks which bore no relation to the position in the area. Nor did they do justice to the occasion. I shall deal later with the rather sketchily presented specific proposals that the hon. Member advanced.

I remind the House that I and my colleagues from the west midlands have been seeing all the economic Ministers in the past 12 months about the problems in the region. Because the hon. Member for Coventry, North-West deliberately ignored it, I shall mention the specific assurance that we were given about the import of Spanish cars. We were told that, if agreement was not reached through EC channels, unilateral action would be taken within three months. I take that to be a recognition of the discrimination against Britain through grossly inequitable tariffs, to which my right hon. Friend the Secretary of State for Industry drew the attention of the public in October 1982.

That assurance is most important to the west midlands. It would also help with the competition from tied imports. Opposition Members may talk about import controls, but the increase in imports, as they should be aware, is largely in tied imports—the so-called in-house manufactures from the big multinationals such as Ford, General Motors and Talbot. In 1975, tied imports represented 1·5 per cent. of registrations, whereas they were 22·5 per cent. last year. That is where the growth of imports has come from. The Spanish action would be a great contribution to that problem, never mind the threat from the new Vauxhall car.

Photo of John Spellar John Spellar , Birmingham, Northfield

As the hon. Member has rightly said, in October, during the Northfield by-election, the Minister said that control of Spanish imports was firmly in the action file. That is now four months ago. When can we expect action?

Photo of Mr Hilary Miller Mr Hilary Miller , Bromsgrove and Redditch

The assurance was given by the Minister shortly before Christmas. We are still acting in accordance with that timetable. I should be happy to give the hon. Member the reply in the form in which we received it and as it was reported in the press.

The hon. Member for Coventry, North-West conveniently forgot that the problem of the west midlands was forecast by the economic planning committee and its predecessors as long as 20 years ago. There have been several Labour Governments since then. The unemployment that is now so tragically taking place was forecast because of the region's unique and continuing dependence on manufacturing industry for employment and its concentration on only five industrial sectors. The world recession, accompanied by the change in industrial production patterns and demand, inevitably led to the circumstances that we have been experiencing.

The region has the lowest output per capita in the country, the most adverse industrial structure and a high proportion of derelict land. Some 33 per cent. of the land earmarked for development in the region is now derelict. All that, coupled with the highest rise in unemployment in the country, means that the region would normally qualify for regional assistance. I am not surprised that the hon. Member for Coventry, North-West put that first in his recommendations, and he will not be surprised that I fundamentally disagree with that recipe. It is a reversion to the old Socialist habit of throwing money indiscriminately at the problem without bothering to get to the root of it.

I am glad that the Government are undertaking, at long last, a fundamental review of regional policy. The case that regional policy has led the creation of new jobs rather than the diversion of jobs from other regions or that regional policy is a cost-effective way of providing jobs is far from established. I hold the same deep-rooted suspicions about enterprise zones with regard to diversion of businesses and discrimination in competition.

As we heard the proposals of the hon. Member for Coventry, North-West I remembered the tired old proposal of national planning. No doubt he will recall planning agreements. Perhaps he remembers that which was concluded with Chrysler. It did not stop the onward march of change. It is like King Canute whose advisers imagine that they can turn the tide of change and progress by Government decree. That is absolute nonsense and the Opposition know it. They know that it contributes nothing to the change in the structural basis of the region—which, to be fair to the hon. Gentleman, he came to at last.

We need new products and technologies in the region. One of the most disturbing things at the moment is the low take-up of the plentiful Government assistance that is available to support the innovation programme in the region. Applicants from our region represent only about 10 per cent. of the whole. In the long term, unless something is done about that by industry—the Government have already made the money available—we shall lag further behind. That is a serious threat, which no amount of planning agreement or regional assistance will solve.

The innovation package—part of the competition package that I presented to the House some 10 days ago during the debate on regional unemployment—recognises the need to improve our technological base in the region. That is why I strongly welcome the recent announcement by my right hon. Friend the Secretary of State for Education and Science to increase the number of research assistants in science and technology projects in universities. That will go a long way to correcting action that was previously taken—

Photo of Mr Hilary Miller Mr Hilary Miller , Bromsgrove and Redditch

Especially at Aston university. Apart from the need to develop our university effort, we must seriously consider the proposals made by the vice-chancellor of Aston university for the institution to bridge the gap that still exists between the university and industry. I hope that that will be considered when it reaches the appropriate ministerial desk.

We must also increase spending on research and development and improve co-ordination of research and development effort. That has not been as prominent in the region as it should have been. One of the problems with take-up of the schemes and further investment in research and development by firms in the region is the fact that their balance sheets have become weakened to the point where the downside risk is too great.

I hope that some thought is given to easing the problem by Government participation, either through the tax system or by setting a floor to the down side risk on a research and development project so that the risk can be shared between the Government and the firm. It is better that research and development should be undertaken by firms that have a commercial use for it and a commercial understanding of the possibilities rather than by Government institutions.

The hon. Member for Coventry, North-West made great play of the needs of the components industry. I also believe that the components industry is in a gravely weakened state and that the Government's assistance so far has been given to assemblers and not to component makers. However, I am glad that, in answer to a question that I asked earlier this year my hon. Friend the Member for Coventry, South-West, the Under-Secretary of State, made it plain that the Government were willing to support applications under the existing product and process development scheme from component firms. I understand that discussions on such proposals have already taken place and that they will be considered favourably if they meet the criteria. Therefore, the Government have moved to meet that problem. We are waiting for a response from firms in the region.

My right hon. and learned Friend the Chancellor of the Exchequer is about to make his Budget judgment. It will come as no surprise to hon. Members to hear that I believe that the Budget judgment must be in favour of those who work in industry. I should like to see a heavy indexation of the tax threshold, accompanied by a further attack on industrial costs. The discrimination against our industries, which are told all the time to become more competitive, still exists in the shape of the national insurance surcharge. Compared with our competitors abroad, our industry still suffers from an unparalleled rate burden. The councils that are dominated by the Labour party have done a great deal to aggravate that.

What better example is there of profligate spending and chucking money at the problems than the West Midlands county council bailing out with ratepayers' money foundry industries that have been unable to compete, thereby weakening the industries that are trying to remain in business? The burdens of the firms that are struggling to remain in existence have been increased. That is a typical Socialist solution, which has aggravated the problem rather than provided an answer. Industrial costs need to be attacked further. Our firms are still competing on an inequitable cost basis with those abroad.

We do not need special measures for the midlands. What is good for industry is good for the midlands. The Government are not yet seen in the country as understanding industrial problems—

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

That is the only sensible thing that the hon. Gentleman has said so far.

Photo of Mr Hilary Miller Mr Hilary Miller , Bromsgrove and Redditch

Honesty is apparently foreign to Labour Members.

The Government are not yet perceived as understanding industrial problems, although I have shown tonight that they have taken many measures to meet the problems that I have outlined. That is why my hon. Friends and I have urged the Government to present a competition package putting together all that is being done, which is not yet understood. I am confident that we do not want to run down the west midlands by depicting the situation there as worse than it is, which would only further reduce morale and drive away any hope of investment or improvement.

Several Hon. Members:

rose

Photo of Mr Ernest Armstrong Mr Ernest Armstrong , North West Durham

In view of the large number of hon. Members who are waiting to speak, I must inform the House that the debate will finish at 9.58 pm, so some restraint would be helpful.

Photo of Mr Gwilym Roberts Mr Gwilym Roberts , Cannock 7:45 pm, 7th February 1983

I also welcome the opportunity of a further debate on unemployment in the west midlands. It may surprise some of my colleagues when I say that such a debate should be carried out with as little partisanship as possible. The problem is so serious that we need to find as much common ground as possible so that we can see whether we can find a solution.

There is some truth in the argument that the problems of the west midlands did not start with the present Government. They have grown much worse during their period of office, but we would be foolish if we argued that all the disasters started in May 1979. In the west midlands, underlying problems affected-industries long before that.

In such debates as this, we return to the same ground. The arguments seem to be the same. The only difference is that the situation is becoming perpetually worse. My constituency has all the problems of the west midlands, only worse. As many hon. Members will know, unemployment is about 22 per cent. in Cannock. There is a small population, but 6,000 people are unemployed. Many school leavers who left school last summer have not yet found real jobs. Many are unemployed and many others are in various schemes. As hon. Members on both sides of the House know, only about one in six of those who embark on those schemes have a chance of finding a real job. Therefore, there are real problems. In a brief debate like this our task should be to try to find some real solutions.

I shall give Conservative Members one serious word of warning. I accept the argument of my hon. Friend the Member for Coventry, North-West (Mr. Robinson) that the Government's basic policies have made things much worse. The Government's policies, unlike those of their predecessors, have deliberately led to the destruction of jobs and the rundown of industry. There can be no doubt about that. There has been a hope that, by destroying some of the older industries, one can restructure industry. We all accept that, while we have oil, we will have some shelter in these desperate years. It will last perhaps 15 or 20 years.

There is a desperate need to revitalise British industry, particularly in the west midlands. The Government have tackled one part of the package. They have run down some of the older and less efficient industries. However, the sad thing is that they have failed to produce the alternative employment and sunrise industries to replace them. The output of British manufacturing industry is now at its lowest for about 17 years. That is the indictment of the Government.

Many industrial manufacturers have voted Conservative solidly, all along the line. They supported the Government in the belief of a revival. There is now evidence that since the beginning of 1983—some Conservative Members will agree—people no longer believe in that revival.

Some large industries which kept their work force in the hope of better things to come are now thinking of ways of reducing their excess labour because they no longer believe in the revival. Many small firms in my constituency have had contracts with large firms but they are finding that those large firms are giving up those contracts because they no longer believe in the recovery about which the Chancellor and the Prime Minister have been telling us since 1981. Industry sees that recovery is not coming, and therefore it is less active. That is dangerous, not just for the Government but for the country. It means that in 1983 we may see a much sharper rise in unemployment and a greater rundown of industry than we have seen during the past couple of years. The position is serious for British industry.

It is difficult to suggest remedies. I shall appeal to the Minister on a constituency basis. The one thing that would be helpful in my constituency would be the speeding up of new developments in the coal industry. Will the Minister convey to his colleagues at the Department of Energy and through it the National Coal Board that if there is to be a revival new pits are desperately needed in constituencies such as mine? Recovery in a constituency such as mine depends upon recovery in the west midlands, which in turn depends upon recovery in the country generally.

I believe that we must have some selective import controls if there is to be any hope for industry in tie west midlands in years to come to allow it to compete with industries in other parts of the world which have benefited from large capital investments.

I agree with the suggestion by my hon. Friend the Member for Coventry, North-West that the Government should bring together the major west midlands industries to see whether they are prepared to accept industrial planning. I understand that the West Midlands county council has already taken some steps in that direction. It needs Government support.

I agree with the hon. Member for Bromsgrove and Redditch (Mr. Miller) that the west midlands does not want assisted area status. I was absolutely horrified at the suggestion by my hon. Friend the Member for Coventry, North-West to designate the west midlands metropolitan county an assisted area. What will happen to an area such as mine that borders this metropolitan county? Assisted areas provide jobs only at the expense of other areas. It is as simple as that. It is no answer. The answer must be a co-ordinated plan to bring major industries together.

Some Conservative Members might not agree with me that there is a need for selective import controls. British Leyland should be consulted about that. In the past British Leyland has bought some of its components from overseas. The House has shown its support for the workers of British Leyland and British Leyland must show its support for the hundreds and thousands of component workers in the west midlands who depend upon it. I accept the suggestion of my hon. Friend the Member for Coventry, North-West that there is a need to bring people together in the west midlands to study some kind of development plan.

The only real answer to the problem, not just for my constituency but for the west midlands and the country, is a vast increase in public expenditure. Public expenditure creates demand. Conservative Members are exponents of the market economy. They know that the key to the market economy is the creation of consumer demand. There is a desperate need to increase public expenditure in the short term and for investment in capital projects in the public sector. It will create jobs and generate demand in the economy.

It is only with such policies that there will be any hope for people in my constituency, for the west midlands and for the economy generally.

Photo of Mr David Bevan Mr David Bevan , Birmingham, Yardley 7:55 pm, 7th February 1983

My constituency is only 148th—what a terrible way to put it—in the league table of unemployment statistics in the Library. It is not the highest in Birmingham, but it represents a significant number of people. At the time of the census, about 15·7 per cent. of males between 16 and 64 were unemployed. It is in the upper quarter of the statistics. It is a wholly new experience for a midlander who has never been at the top of such a table.

The MSC figures are based on travel-to-work areas. They show 118,000 claimants and about 16·6 per cent. of unemployed males, 3 per cent. higher than the national average. When Parliament convened and I was first honoured to be a Member in May 1979, west midlands unemployment was 5·7 per cent., which was a lowish figure. In the two and a half years to October 1981, there was an explosive deterioration and the figure rose to 16·6 per cent. That is the criticism of the Government. However, as hon. Members have said, the criticism is not levelled solely at the present Government. It is not a matter for party politics or bickering. We should analyse where the creative development areas are.

Birmingham was once a city of a thousand trades. It is now, regrettably, a city of far fewer. The city has always been dependent wholly on the metal-bashing industries, general engineering and car manufacturing. Those industries have always been important for employment trends in the area. With the reduction in manufacturing and the work force at British Leyland, we are seeing an internal geographical movement of manufacturing industries and the tilting of a loaded manufacturing gaming table. We witnessed it first in the closure of the Rover plant at Solihull and the internal shifting of the manufacturing centre to Cowley. We have seen it in many sectors, especially in the motor components industry. The ingredient of success in Birmingham and the west midlands now is for the engineering industry to be succoured and for British Leyland to find the success that it needs, especially with its lifeline, the Austin Metro and its derivatives. In a turbulent industrial sea, that lifeline is being threatened by the mountain of tariffs around the Spanish coast, especially Spain's direct tariff of 35 per cent. That tariff barrier, aggregated up with many other figures, brings us to well over 60 per cent. That is what it costs to get one Metro from Birmingham into Spain.

Britons must consider whether we should put up with that iniquity whenever we are fortunate enough to buy a new car. The multinational companies, such as Ford, Vauxhall and General Motors, must consider whether they can subscribe to those policies. The subscription to those external policies has caused a socio-industrial revolution, without bullets or barricades but with the soft shoe shuffle of planners internally and multinational companies externally. We have witnessed those events and we especially appreciate my right hon. Friend the Prime Minister's assertion that she will take unilateral action. We shall look to the Ministers to whom we have submitted our considerations for such action to be taken quickly to protect the Birmingham car industry.

Hon. Members on both sides of the House are horrified by the gravity of the position in Birmingham and the west midlands. In Tyesley in my area, 1,250 workers were affected by the proposed closure of the Lucas Girling works. It was said that 550 would be made redundant and that 500 would be redeployed. A further 1,250 workers were affected the very next week by the proposed closure of Lucas Girling. Where will those redeployed workers go? Birmingham has better skills and has plants equal to any others in Britain. Those redeployed workers will be moved to assisted areas such as Cwmbran, Pontypool and Scotland. Those areas are still attracting perks such as low rents, grants, capital allowances and all the other benefits that were begun by the coalition Government of 1945 and proposed by the then president of the Board of Trade, Mr. Hugh Dalton. Those benefits, which were intended to be temporary palliatives, have become permanent features and they have enfeebled the strong west midlands and Birmingham at the expense of strengthening the weak.

The process continues automatically. In the climate of evanescence—of disappearing to other pastures and places that originally existed in the west midlands and to which a son of Evan does not wish to subscribe—we must ask for more than specific sector aid and for more than the support that hon. Members on both sides of the House agree is necessary. The 10 per cent. car tax must be wiped out and national insurance must be abated substantially or removed altogether. There must be a reduction in rates, and if possible, a reduction in energy charges to industry, and we must ask for other benefits besides.

It does not matter whether Birmingham is called an assisted area. We need financial assistance in the west midlands to ensure that jobs remain in the area and that firms remain manufacturing entities. Although my right hon. Friend the Prime Minister and her colleagues in Cabinet have started to roll back the areas with assisted area status, they still exist and attract industry away from the west midlands. While that is happening, we must ask for equal general support for industry in Birmingham—the iron heart and the manufacturing centre of Britain—so that we can continue to offer jobs.

It is understandable that, when workers are offered redundancy payments, they will eventually reach out and take them, if they are significant amounts. They will take them, as did the dockers, the miners and the car workers, because they are the only alternative. Of course, many of them have entrepreneurial skill. One of my constituents in Tyesley took his early redundancy money from a bakery and started a baker's round with it. He is doing well and has more orders than he can handle. When there is no alternative, the workers of a threatened industry will take the redundancy money because it is their only chance.

There is continual erosion because of this silent socio-economic change and, with that erosion, there is an absolute necessity to set matters right. In singling out the Government for criticism, we must remember the Government of 1945 and the Socialist Government of 1947, who brought in the industrial development certificates that were removed only about two years ago by the present Government. Those certificates prevented firms in the west midlands from expanding—from putting one brick on top of another—and from making substantial developments to their factories, and forced them to look elsewhere to places with other attractions.

Photo of Mr David Bevan Mr David Bevan , Birmingham, Yardley

I should prefer not to, but I shall.

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

I am doubly grateful to the hon. Gentleman. Did the imposition of industrial development certificates or the other matters that he has just mentioned prevent him from keeping his promise to get together a consortium of business men to save the Rover plant at Solihull? Is that one reason why he was not an entrepreneur?

Photo of Mr David Bevan Mr David Bevan , Birmingham, Yardley

I am grateful for that question, although I had hoped that the debate would not lead to party bickering. The initiative for which I was asked to speak could not be successful. One reason for that was the size of the rates bill for that factory in Solihull [Interruption.] The hon. Member for Birmingham, Perry Barr (Mr. Rooker) laughs, but three years ago the rates bill for the main assembly shop was nearly £1 million. The bill for the paint shop was £350,000, and the precept from the West Midlands county council contributed to those rates charges. It would have been prohibitive for an industrialist to take on that factory. Industrialists call for a reduction in rates and in power charges. Birmingham has more than 1 million sq ft of unoccupied factory space. One tenth of that amount around Small Heath, Greete, and Tyseley is still priced at 50p per sq ft, with no takers, because the rates for the areas being offered at 50p per sq ft are based on calculations of £1 per sq ft.

Therefore, we must look for general support. We must look for new answers. We must look to the Front Bench to support the thesis of support, to support new industry and low rating. Although Opposition Members may not like it, the high wages in the public sector disadvantage workers in the industrial sector.

There must be a case, surely, not only for the excellent youth opportunity scheme but for a scheme of national service, whether industrial, social, the voluntary decision of the individual or military to take up the young.

I am certain that the west midlands patient, having been subject to substantial surgery, sometimes intended and sometimes unintentional, must now be put into intensive financial care by the Government. I therefore support the opposition to the terminology of the hon. Gentleman's criticism of the Government.

Photo of Mr George Park Mr George Park , Coventry North East 8:12 pm, 7th February 1983

Today's debate is an "inaction replay" of the debate which took place on 4 December 1981 when my hon. Friend the Member for Walsall, North (Mr. Winnick) won a place in the ballot and chose the same subject. It is a sad commentary that we have to rely on the result of a raffle to highlight again the extent of the disaster that has fallen on the west midlands and have to try again to spur the Government into doing more than utter sympathetic noises.

The companies that I named in that previous debate have continued to go downhill, but so that I will not be accused of trying to attribute all the unemployment to the term of office of the present Government, I will start in 1975. In Coventry since 1975 19,000 jobs have gone from British Leyland; 7,000 jobs from GEC; 6,000 from Talbot; 4,600 from Tooling Investments; 2,300 jobs from Dunlop and 1,300 jobs from Courtaulds, to name but a few. In total during that time, 47,000 jobs have gone and there are more in the pipeline.

Since July 1982 there have been 13,500 announced redundancies from 69 companies in the west midlands. You will note, Mr. Deputy Speaker, that I said "announced redundancies", which means that redundancies of 30 or fewer are probably never mentioned. Last year in Coventry alone 4,500 people lost their jobs. In the same period, 25,500 people were sacked in the metropolitan county area. In my constituency, unemployment is 22 per cent. How many more jobs have to go before the Government stop saying that overmanning is a major issue? Do we have to grind to a complete halt before the Government recognise that the industrial lifeblood of the heart of England is draining away?

Behind these cold statistics lies a tale of human despair, waste and frustration throughout the age range. Each year the job market shrinks for the school leaver. My hon. Friend the Member for Coventry, North-West (Mr. Robinson) told the House that, of the fifth formers who left schools in Coventry last year. 86 per cent. had no job to go to. Of the sixth formers, 84 per cent. had no jobs. The statistics show that the more disadvantaged the school leaver, the worse off he is. Of school leavers from special schools, only one found open full-time employment. How are parents and teachers expected to maintain enthusiasm and a responsible attitude to life from youngsters in those circumstances? There are today more unemployed under the age of 25 than were unemployed in all the age groups on the day the Government were elected. Men and women in their late 40s and early 50s are increasingly being told that they are too old, and for those already out of work for more than a year, the DHSS is creaking under the weight of the claims and is rarely able to abide by the regulations on claims.

We are seeking in the debate not merely a recital of facts that should be only too well known to the Government, but some positive sign that they are prepared to tackle the problem. I know that the Government will tell us about the various schemes, but all my hon. Friends and I can say in reply is that they do not seem to have made any impact so far, and confidence is draining away.

The Government could take some action. For example, there is divergence of opinion about making the west midlands an assisted area—a divergence of opinion that has been voiced in the debate. The Government could agree to inner urban area programme authority status, which Coventry has been seeking since 1978. Coventry has had no reply so far. The West Midlands county council supported Coventry and also supported Walsall and Sandwell for programme authority status. Such status would give us access to EC funds. Investment incentives could be reintroduced to help companies to retool, which would help the machine tool industry and equipment suppliers. The additional car tax and the payroll tax should be removed. Energy costs for industry could be reconsidered. Further money could be made available for the small firms investment scheme.

The Under-Secretary of State, in reply to a letter from me, said that the Government could not operate an open-ended scheme. I can appreciate that, but it is clear from the demand when the scheme was introduced—the Government then added money to it—that there is a pent-up demand and that the scheme rang bells with small firms. The Government should reconsider the position.

The hon. Member for Bromsgrove and Redditch (Mr. Miller) referred to unfair tariffs. He may have had a promise but nothing has yet happened. Positive steps must be taken to eliminate or counter these discriminatory tariffs against our exports. Where public money is invested, there should be a requirement to buy British. Other countries do not seem to have a problem with this principle.

The problem of void rating could and should be dealt with nationally. We should not have the spectacle of industrialists ripping the roofs from factories. What effect will that have if and when there is an upturn? Consideration should certainly be given to grants for the clearance of old factories. Such grants should be increased for clearance in city centres. One can sit in the CBI offices in Birmingham and look out on to acre upon acre of old, derelict factories that should be cleared. If clearance took place, there would be the equivalent of green field sites and it would not be necessary to impinge upon farm land. That is something that could be done.

If anyone thinks that no initiatives have been taken he should remember the science park at Aston, the science park at Warwick university, the development agencies, the unit factories and the new enterprise workshops. I could recite the entire list, but time does not permit me to do so. It cannot be said that we are sitting on our hands and waiting for the Government to do everything for us.

There is a crying need for Government action on a scale which we cannot initiate locally if new hope is to be given to the west midlands and its constituent parts. I urge the Government not to waste time on the irrelevancy of privatising Jaguar but to stem the haemorrhage in industry and provide us with a much-needed transfusion by adopting any or all of the suggestions that I have made. Time is not on our side.

Photo of Mr James Pawsey Mr James Pawsey , Rugby 8:21 pm, 7th February 1983

I hope that the hon. Member for Coventry, North-East (Mr. Park) will forgive me if I do not follow him too far down the road that he signposted. The hon. Gentleman spoke with his usual sincerity. When he speaks in the House he is always listened to with great respect.

Between 1979 and December 1982 unemployment rose faster in the west midlands than in any other region. It is the only area where the number of those unemployed has literally trebled. In May 1979 the west midlands was eighth in the league table of unemployment. In December 1982 it had taken fourth place after Northern Ireland, the north and Wales. This is the first time that the west midlands has suffered unemployment on this scale. That makes the situation even worse as the region has moved from comparative affluence to real depression. It is difficult to avoid the conclusion that the region has to some extent contributed to its own difficulties. Faced with this situation, two questions must surely be answered. First, what are the reasons for the decline in the west midlands? Secondly, what can be done to improve matters?

No examination of the causes can be complete without reference to the motor industry, which for years has been the principal employer. That can be said not only of the great motor plants of Coventry and Birmingham but of ancillary companies such as Dunlop, Lucas, Lockheed and Girling. There is also the host of small engineering companies that is involved in the production of tools, jigs and fixtures and the companies that supply the parts that go into the manufacture of a motor car.

The motor industry continues to be in decline. It seems that there are four basic reasons for this. First, there is the record of strikes, lost man hours and low productivity. Secondly, there have been some poor management decisions. Thirdly, there has been Government interference. Fourthly, there has been the impact of imports, especially from Japan, Spain and the EC.

In 1973 industrial disputes totalled 297 separate stoppages which involved 441,000 employees. The number of days lost in that one year was 2,082,000. Even as late as 1979 there were 165 separate stoppages involving 367,000 workers with over 3 million days lost. That is what I mean when I refer to the west midlands having contributed to its own difficulties.

Disputes are self-inflicted wounds. Throughout the 1960s and 1970s the motor industry increasingly lost its reputation for both quality and quantity. Its work force had the unenviable reputation of being prepared to strike for the most trivial reasons. Labour relations were appalling with misunderstandings and suspicions being generally the order of the day. Restrictive practices were legion and over-manning was rampant. It is a fact that in the British motor industry twice as many workers were needed to produce the same number of cars as their counterparts produced on the continent. Too often trade unions refused to accept new methods or new ideas to improve productivity. They preferred to live in some fool's paradise in which wages increased by 316 per cent. between 1972 and 1982 and in which productivity during the same period increased by only 25·3 per cent.

That in a nutshell is one of the reasons—perhaps the principal reason—why the region, a part of which I represent is in such decline.

Secondly, senior management has made many mistakes. It is difficult to justify the original concept of British Leyland. The hon. Member for Coventry, North-West (Mr. Robinson), who opened the debate from the Opposition Front Bench, recognised that Leyland grew under a Labour Government. That was one of the points that he made especially well. But in effect, management decided to abdicate control of its own plants and sought to buy peace at any price. I believe that to be a real indictment of British management techniques.

Photo of Mr Percy Grieve Mr Percy Grieve , Solihull

We all recognise that there is great truth—

Photo of Mr Percy Grieve Mr Percy Grieve , Solihull

—in the catalogue of failure to which my hon. Friend has alluded. However, does he agree that there has been a great change in the management of the motor industry, especially of Leyland, which is manifesting itself today in considerable achievement?

Photo of Mr James Pawsey Mr James Pawsey , Rugby

I readily concede that. I am seeking to draw the picture in the round and to give the reasons for our industrial decline. It is no good anyone pretending that we can halt and reverse industrial decline in only three years. The faults of the past cannot be put right in such a relatively short period.

Thirdly, successive Governments have grossly interfered. This was best illustrated by the way in which hire purchase was used as a regulator. Governments moved hire purchase deposits up and down and showed a complete lack of understanding of the realities of mass production. Successive Governments appeared to think it possible to turn production on or off like water from some pre-dispute tap.

Finally, imports, especially those from Japan and Spain, have made enormous inroads into the domestic market. Japan must be recognised as a substantial threat. It holds between 10 per cent. and 12 per cent. of the United Kingdom market. An even greater menace than Japan is Spain, which is taking advantage of great tariff differentials. It is time that Britain got to grips with the competition and started playing it at its own game and under the rules that it invented.

I referred to Government interference. It appears that, for the best of reasons, all Governments wish to interfere. It is evidently a fact of governmental life and is presumably hewn on tablets of stone somewhere in Whitehall that everything gets better providing that there is more Government interference. I have formulated Pawsey's law of interference: "Nothing is so bad that it cannot be made worse by positive Government interference." Like the way to Hell, the way of Government is paved by good intentions.

Regional policy is a good example of this attitude. Has it really any worth in today's climate? At a time of depression, existing jobs are simply being moved from region A to region B—a type of musical chairs, except that it is played not with a diminishing number of chairs, but with a diminishing number of jobs. Regional policy has done nothing for the west midlands, but has presided over the movement of factories, for example, from Coventry to Linwood. It has distorted the production infrastructure and weakened the motor and component industries, and has not even provided long-term jobs to those regions that it sought to help. Anyone who doubts that should go to Linwood to find out for himself.

Government interference is more than regional policy and industrial development certificates. It includes other measures, ranging from job protection to health and safety at work legislation, all introduced for the best of reasons, but all blunting our competitive edge.

I do not seek to argue that all Government interference is bad. We must not ignore the enormous sums that have been provided for the motor industry—over £1 billion to British Leyland alone. Most of that money has been spent in the region, although it should be regarded not so much as regional aid, as sector aid. Rolls-Royce has received over £500 million since 1979. The west midlands has received support and the Government have put their money where their mouth is. Clearly, more remains to be done.

I have long argued that there are at least two fiscal measures that would help the motor industry. The first is the removal of the 10 per cent. car tax, a tax that unfairly discriminates against the motor industry, and a penalty that distorts car purchases in the United Kingdom. If that tax were removed, more new cars would be purchased. I appreciate that about 50 per cent. of those cars would be imports, but none the less the balance of sales would still provide a major shot in the arm for our car industry. The hon. Member for Coventry, North-West may disagree with that, and if he does, let him stand up and tell us why. Let me hear him argue the case in favour of the 10 per cent. tax.

The second measure would be to exclude company cars from VAT. According to George Turnbull, president of the Society of Motor Manufacturers and Traders, 70 per cent. of company cars are British. If, therefore, additional incentives resulted in the more frequent purchase of company cars, that would provide an important boost to our domestic motor manufacturers which would, in turn, lift the region.

It might be appropriate for me to say here that the problems that I outlined earlier were not of this Government's making, but had developed under successive Governments. As the hon. Member for Cannock (Mr. Roberts) said, unemployment did rot start in 1979. It has been rising steadily under successive Governments. It is worth while remembering that under the Labour Government, unemployment doubled.

What is new is the world recession—[HON. MEMBERS: "Oh."] Hon. Members may moan and groan, but if they listen they will discover why I make the point about the recession. They represent, as I do, the west midlands and should know that it is export orientated because so many of its products go abroad. It is because of this fact that our region has felt the draught of depression more than most.

Action has been taken. It would be erroneous to assume that the Government have sat on their hands. They clearly have not. The Government have done a great deal and will do more. For example, industry demanded lower interest rates and lower inflation and has had both. That will create a climate in which a recovery can develop. It is worth remembering that the base rate has been reduced by 5 per cent. since October 1981. That is worth about £1,750,000 to British industry in a full year. Inflation is now at about 5 per cent., which is invaluable to the exporting industry of the west midlands and specifically to companies in my constituency such as GEC.

As the inflation rate has fallen, it has been much easier for these companies to quote and secure orders throughout the world. That shows just how successful have been the measures that the present Government have taken—measures that will positively assist our region and our nation. It is no good hon. Members shaking their heads or seeking to deny the facts. They do not like the truth, but tonight they will have to listen to it.

Recent trade union legislation will do much to restore a proper balance in industry—a balance that has become grossly distorted in favour of organised labour, again to the detriment of industry. The Government promised help to small firms, and that help has been given—[Interruption.] The Government have improved the tax climate, reduced bureaucracy and provided more advisory services. My next statement gives the lie to the laughter of Opposition Members. More small firms are being formed than ever before in this nation's history.

Photo of John Spellar John Spellar , Birmingham, Northfield

Is it not also true that there is a record number of bankruptcies in the courts?

Photo of Mr James Pawsey Mr James Pawsey , Rugby

Yes, and that is a fair point. I am always prepared to admit the truth when I hear it. The hon. Gentleman has drawn my attention to the number of bankruptcies but he might have been a little more honest had he stressed the importance of the new companies that have been started and that are generating more work and more jobs. That is what should excite the hon. Gentleman's imagination. He should look forward instead of back. Another facet of Government aid is the great number of people in the west midlands who are now benefiting from the Department of Employment's programme of training measures. The figure ranges from 10,700 people on the temporary short-time working compensation scheme, to 6,600 who are taking advantage of the job release scheme. The number also includes almost 80,000 young people in youth opportunity programmes. In addition, the experimental enterprise allowance scheme in Coventry has undoubtedly proved successful. I pay tribute to the Under-Secretary of State for Industry, my hon. Friend the Member for Coventry, South-West (Mr. Butcher), who has taken particular note of the scheme, and I very much hope that it will be expanded.

I should also like to see the urgent resumption of the imaginative small engineering firms investment scheme. This point was touched on by the hon. Member for Coventry, North-East and I fully agree with his comments. It has proved to be a considerable success and the £30 million allocated to it was taken up in 12 weeks. The majority of that money went into the west midlands and is now helping our small companies to re-equip and retool so that when the country moves out of the recession, they will be in a position to take advantage of the improvement that takes place.

Photo of Mr James Pawsey Mr James Pawsey , Rugby

When the Finance Bill is introduced in March, I hope that it will contain a reference to the resumption of that scheme and in a much expanded form.

Yet, despite all that, it is a mistake to assume that Governments hold all the answers to unemployment. So much could be done if each man or woman, before making a purchase, found out the country of origin and, where possible, bought British. Too often we find ourselves purchasing foreign goods when a sound British alternative exists. It is almost as if it has got to be foreign before it is good, and the cost of that principle is measured in factory closures and job losses that range from steel in Dudley to motor cars in Coventry.

I shall illustrate that point. In the first nine months of 1982, 58 out of every 100 cars bought in Britain came from abroad. According to the Confederation of British Industry, if we had kept the share of home and international markets that we had 12 years ago, there would be 1·5 million more jobs in the United Kingdom. That shows just how much market share we have lost and how much emphasis we should place on supporting our home-based industries.

The recipe for renewal is a mixture of Government measures and self-help. The west midlands still has the benefit of its people's skills, good communications and inventiveness. Our people will have a go and, as the business and industrial climate improves, so will our fortunes. But Government must start the engine of renewal.

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr 8:39 pm, 7th February 1983

The speech that we have just heard did not have much content, but it was remarkable, because the hon. Member for Rugby (Mr. Pawsey) made some positive points. The contrast between his speech and those of his two hon. Friends was astonishing. All that I can say about the hon. Member for Birmingham, Yardley (Mr. Bevan) is that he will not be able to make such speeches in the next Parliament because he will not be back here.

I am sorry that my hon. Friend the Member for Cannock (Mr. Roberts) is not in his place, because I disagree with bipartisan twaddle. I was not sent to this House to do deals and to be nice to Conservative Ministers who are putting thousands of my constituents on the dole. That is what is happening in the west midlands now. It is no good saying that we must not be party political. If we cannot be party political in the House of Commons, where can we be party political? That is why we are here. We are elected to represent and articulate the needs and problems of our constituents. The fact is that in 1983 the biggest single problem in the west midlands is this Tory Government. There is no equivocation about that, and certainly there should be no equivocation on this side.

I do not claim that there was never unemployment before May 1979. Clearly there was. In 1979, it was 5·7 per cent. in Birmingham. Last October it was 18 per cent. That was before the Government used the new fiddled figures. So it went from 5·7 per cent. to 18 per cent. It is true that there was unemployment before 1979, but it was not mass unemployment. That is what we have today.

The economy of the west midlands is unique. I do not say that one region should have more unemployed than another region. I have not fallen into that trap, either in this House or outside. Because of its historical background, the structure of business in the country, and the nature of the beginning of the industrial revolution, the west midlands economy, by and large, is heavily dependent on metal-bashing industries. That is one thing that the hon. Member for Yardley said. There are eight industries—metals, metal manufacturing, engineering and electricals, and vehicles, coupled with construction, professional services, the distributive trades, and the odd miscellaneous services.

Two thirds of the west midlands labour force depends on those eight groups. Over the past few years five of the eight have been more in decline than in advance. Because of this element of dependence and because of the structure of our industry, when external economic pressures are applied to our region, whether because of the present depression, which has been brought about and substantially added to by Government policy, or because of the world depression, or, for example, the three day week, the effect on the local economy is greater than in other regions.

It is for that reason, as the hon. Member for Rugby (Mr. Pawsey) said, that unemployment in absolute terms has trebled under this Government. Under this Government, the big attack has been on manufacturing and industrial output, and because of the nature of our economy we have been harder hit.

I shall give one statistic to illustrate what I have said. Nine years ago this country was on a three day week. Between December 1973 and January 1974, because of the effect of the three day week and the cut in power generation, there was a 560 per cent. increase in unemployment in the west midlands. The average for Great Britain was 207 per cent. We had the highest increase in unemployment during the period of the three day week because of the external pressures applied, in power generation and so on, to the manufacturing base of the country. It happened during the three day week, and exactly the same has happened during the past three years, because the attack has been on manufacturing industry. Those who say anything else fail to take account of reality.

I do not wish to give too many statistics, but one cannot make the case without mentioning some. On the third anniversary of this Government last summer, manufacturing output was 15 per cent. down on the same period in 1979. The CBI's response was to say, "Be bolder with safety." By November 1982, industrial output was 19 per cent. below that of 1979. One in five jobs had disappeared. According to information produced only last month, industrial output was at its lowest level for 17 years. A headline in the Financial Times on Wednesday 19 January read: Manufacturing activity at its lowest level for 16 years. In The Times, the headline was: Industrial output slides to lowest level for 17 years. I understand the technical differences in assessing industrial and manufacturing output. However, whether it is at its lowest level for 16 or for 17 years, that is the reality. Anyone who argues that this state of affairs is due to the world recession cannot have examined what is happening in the world. Between the second quarter of 1979 and the third quarter of 1982, output in the Common Market countries dropped by 6 per cent., in the United States by 9 per cent. and in the United Kingdom, excluding oil, by 15 per cent. Even if oil is included, output fell by 11 per cent. whereas in the OECD it fell by only 4 per cent. During the same period, output in Japan increased by 14 per cent. We have done much worse than the rest of the industrialised world.

Photo of Mr Anthony Beaumont-Dark Mr Anthony Beaumont-Dark , Birmingham, Selly Oak

The hon. Gentleman makes one mistake. Inflation in this country was by far the highest in Europe. The pains of curing it have therefore been so much greater.

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

That has been the Government's main argument since they came to power If it is true, we should have been seeing last year the beginnings of a fantastic upsurge in employment. The remarks of Mr. Steve Rankin, the west midlands chief of the Confederation of British Industry in September 1981, led to a headline in The Birmingham Post stating: Jobless figures may be near peak, industry chief believes. There are now another 20,000 or 30,000 unemployed people in the west midlands. Where are the new jobs coming from?

It will be interesting to hear what the Minister has to say. The hon. Gentleman will have to put some flesh on the remarks of the hon. Member for Bromsgrove and Redditch (Mr. Miller) about the Prime Minister's pledge. The Minister will have to put on record what the Prime Minister stated. We cannot be left with an account of private discussions between an hon. Member and the Prime Minister. There has to be some accountability to the House of Commons so that our constituents know the Government's position. Is it the case that the Government, by the end of March, have to deliver on the issue of sanctions against Spain?

It is from the Opposition Benches that the call for this debate has come. I wish to draw attention to the demise of a number of jobs in particular companies in the west midlands. It is not only the recession in Britain that has brought that about. I want to highlight one or two other factors. I must go back to before the Government took office and I shall use figures taken from the Financial Times on 9 December 1982 from a first-class article on the shape of the shake-out and the effect on jobs and Britain's leading exporters. That article gave employment figures for the period 1973–1982 but I shall take those for 1977–1982 because they give the fairest picture of what has happened in the last few years.

British Leyland dropped 91,000 jobs—53 per cent. All the companies have a strong base in the west midlands. They are household names in the west midlands as well as national names. Lucas Industries dropped 19,000 jobs—28 per cent. of its United Kingdom employment. During the same period Lucas Industries took on new people in its overseas factories. As a proportion of Lucas Industries' worldwide employment, jobs in Britain were decreasing while those elsewhere were increasing. The same can be said of GKN. That company dropped 33,000 jobs—45 per cent. of its British work force. Over the same period the percentage of its British work force out of the total dropped from 67 per cent. to 54 per cent. It was taking on workers elsewhere.

It is well known that we are receiving imports from our own companies. Those imports are not just fully assembled motor vehicles. Lucas Industries is a classic example. Years ago one could walk round the shops such as Halfords and buy Lucas products—simple motor car spares such as contact sets and rotor arms. Mack where? They are not made in a Lucas factory in Birmingham or anywhere else in Britain but in France and Germany, in glossy packaging. It is printed in England but when one looks to see where the product is made it says "France" or "Germany". While all that has been happening, Lucas Industries has shed thousands of workers in Britain to export those jobs overseas.

Dunlop has done the same. Between 1977 and 1982 it dropped 50 per cent. of its British work force—24,000 jobs. It made sure that over roughly the same period the percentage of British employees in its work force worldwide dropped from 48 per cent. to 39 per cent.

Photo of Mr Percy Grieve Mr Percy Grieve , Solihull

Has the hon. Gentleman paused to ask himself why that should be? Is it not because the goods could be produced more cheaply and efficiently elsewhere? Should we not be aiming at counteracting that and producing them more efficiently and with greater productivity here?

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

Yes, of course I have asked myself why this has happened, as so many other people have. However, given the scale of the pull-out from Britain, it is clear that it has been the deliberate policy of many multinational companies to cut out their United Kingdom base and to minimise their dependency on the United Kingdom operation.

I do not know what part the Government's abolition of exchange controls played in this, but some companies have set up overseas financial centres so that they can export capital from Britain and deliberately invest abroad in a way which they could not do before. That has happened in countries where such companies are not known for having good health, welfare and educational facilities. There are South American countries which have damned good armies and police forces but rotten social facilities for the workers. Of course the unit labour costs are low. Nor are they well known for having free trade unions to conduct the free collective bargaining which is so much appluaded by the Government. Nevertheless, there is clear evidence of a major pull-out from Britain by many leading companies.

My hon. Friends have made many proposals for direct action. I speak for the future in terms of what the west midlands and Birmingham chamber of commerce have said. There is no rosy future so far as they can tell. We want to know when the upturn will come. The latest quarterly survey by the west midlands and Birmingham chamber of commerce dated December 1982 shows that twice as many firms as a year ago think that their turnover will worsen. There has been a 50 per cent. increase in firms that have revised investment for plant and machinery downwards. Those firms are told by Ministers, "We are nearly there; it is the bottom," whatever that is: "You have got to invest for the future".

To talk, as did my hon. Friend the Member for Coventry, North-West (Mr. Robinson), about the great unemployment inequalities between the regions, the age groups, the sexes and the minority groups in our society is not scaremongering. The Government have deliberately set out to set neighbour against neighbour and worker against worker. In some parts of the country that is working, as people see no hope whatsoever.

Given the scale of what industry says it will do, which is not very much and given the lapdog attitude of the CBI leaders who promised a bare-knuckle fight with Government, all they seem to do is to export British jobs and queue up for knighthoods while they give their company money, which came off the backs of their customers, to the Tory party. There is no hope in that quarter.

When the last Labour Government asked industry, "What are your prospects? If you want Government assistance come and talk to us about your future plans for production and industrial location", they were told, "No, we are not going to talk to the Government."

Many of those companies cannot wait to shed their labour force. There is no hope whatsoever as long as this Government stay in office pursuing their present policies. It does not matter what they come up with now. The Government realise that in areas such as the west midlands they will lose dozens of parliamentary constituencies. It is too late for the Government to put the gloss on the damage that they have done in the last three years, which Labour Members of Parliament alone have sought to highlight.

Several hon. Members:

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Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

Order. As my predecessor warned the House, this is a three-hour debate. It must end at 9.58 pm. There is great pressure to speak, and I ask hon. Members to bear that in mind. If we have five-minute speeches, I shall be able to call most hon. Members who wish to take part.

Photo of Mr Anthony Beaumont-Dark Mr Anthony Beaumont-Dark , Birmingham, Selly Oak 8:58 pm, 7th February 1983

I agree with the hon. Member for Birmingham, Perry Barr (Mr. Rooker) that a great deal has been said by hon. Members on both sides about the problems facing the west midlands. I disagreed with the hon. Member for Coventry, North-West (Mr. Robinson) when he said that it was factual, simple and direct and that it was all the Tory Government's fault. It was almost as though it was a deliberate policy. I do not think that that kind of comment helps to bring about an understanding of what really happened to the west midlands. It is not simple. What he said was not factual, and it certainly was not directly related to the issue.

In the 1930s unemployment was at a very low level—2 or 3 per cent. People came from Wales, the north-east and Scotland to jobs in the west midlands because we had possibly the only growth industry at that time, which was cars. The midlands—Coventry and Birmingham—were churning them out, as well as Fords and General Motors in the United States of America or Mercedes in Germany.

The problem we have this time is that because during the war the west midlands showed great productive abilities, with lorries, tanks and aircraft, once again people poured into the area. As soon as the war was over there was a great shortage of cars. Cars could not be bought for love nor money. Cars could be sold for double their list price. I remember more than once people being offered cars at double the list price in the papers and in the pubs.

People thought that this great cornucopia of the car industry would go on for ever, and it seemed that it would do so. Indeed, in Whitehall's mind it is still going on. It is felt that this problem is a temporary aberration and that the midlands will soon recover, but we know that it will not, because the car industry has changed enormously.

We must learn from what went wrong. The introduction of IDCs and the shifting of production lines 200 miles to Bathgate or Halewood did not transfer prosperity to those areas. We all know that now, because those plants are dead. Instead, such changes virtually killed an efficient motor industry.

We can now say that companies such as Jaguar and Rover have had a year free of labour disputes, but not so long ago the motor industry was fighting for its life and labour relations were the subject of music hall and television jokes. That may be a thing of the past, but it had its damaging effect.

As the CBI has pointed out, in the last 10 years the RPI has gone up by 278 per cent., energy costs have increased by more than 400 per cent., rates have risen by 416 per cent., and the national insurance surcharge and national insurance payments have gone up by 621 per cent. Consequently, there is a great tax on jobs. That is what the national insurance surcharge is. It is a tax on exporters, not on importers.

The Budget will be of tremendous and profound importance. We do not need the approach of the Institute of Directors. We should not give tax concessions to people who are already in jobs. Directors may want, but do not need, tax concessions. Nor do we need more tax concessions on capital, good as that might be in its own way. We should not talk about reducing the standard rate of tax. Instead, the Government should increase personal allowances, people on the lowest rate of tax should be taken out of tax, and any tax concessions should be given on the threshold. That is no more than common sense and common justice.

When the CBI said that the competitiveness of British industry was 20 per cent. below that of Europe, it was not talking about the value of the pound falling another 20 per cent., as Terence Beckett made clear. It has asked for Government help to back up what industry has already done to reduce its costs. There are several things that the Government can and should do to get industry moving, not just in Birmingham, Dudley or Bromsgrove. If industry improves, the heart will beat faster and will recover quicker.

Energy costs are still uncompetitive for large manufacturers. Something should be done about that. It would only cost about £200 million, but it would be a fillip to industries such as chemicals, paper, board and foundries.

The national insurance surcharge should never have been introduced. It must now be wiped away. It is a tax on jobs and it cannot be justified. What about industrial derating for manufacturers? Why cannot industry be treated like our prosperous farmers? I know that the farmers have a much better lobby, perhaps because many hon. Members are large landowners and therefore understand the problems of land more than the problems of industry. But if farmers can have rates relief, what about our hard-pressed industries? Why not save British Leyland £630,000 in rates? Why not save Guest Keen and Nettlefold £1·2 million in rates? Why not save Birmid's £400,000 in rates? That would help to create jobs. What is good for the farmers is good for industry.

We do not need assisted area status or enterprise zones. We do not need an arrangement whereby a factory at this end of the Chamber gets all the help in the world but if you, Mr. Deputy Speaker, have a factory at your end of the Chamber you have had it, or rather you are not going to have it, because you are on the wrong side of the line. Enterprise zones are all right in great open fields. They are all right in the Welsh hills and valleys where there may be no factories already. Elsewhere, however, they cause great and artificial divisions. Let us have no more of them.

Some people are calling yet again for more help here and more help there, but that is the approach that has sapped the strength of the west midlands. The assisted areas and good-hearted schemes that drive industry here, there and everywhere have caused the poverty. The IDCs and all the similar schemes were based on false assumptions.

Hon. Members on both sides of the House are united in their attitude to Spain and Spanish cars. That great injustice must not be allowed to continue. If Spain will not reduce her duties, we must raise ours. Our oriental friends, the Japanese, must be told once again that talkee-talk is all right but that jobs must be preserved. If the Japanese wish talks to continue, let us give them three months to come to an agreement, or deal with them in the same way.

The cities and county councils must remember that the money they spend comes from the backs of industries which may decide, every time their rates are increased by £1, that someone else must go. If the Government and councils use common sense, without any great ideas about assisted area schemes, we shall survive. The Government have their part to play. What they do for industry on 15 March will decide whether the west midlands prospers or flounders.

Photo of Mr Terry Davis Mr Terry Davis , Birmingham Stechford 9:08 pm, 7th February 1983

We have heard four speeches from Conservative Members and all four have sought to excuse the Government's record. The hon. Member for Bromsgrove and Redditch (Mr. Miller) began it by saying that a decline in the west midlands was forecast 20 years ago. He is right about that, but he is wrong to imply that a decline of such magnitude was ever forecast before the present Government came into office. The hon. Gentleman also said that the adverse industrial structure of the region was partly to blame for its problems. He is right in that, too, but he did not say it in 1979.

In March 1979, on the eve of the general election, the hon. Gentleman published "A Manifesto for the Midlands" with his right hon. Friend the Member for Worcester (Mr. Walker) and his hon. Friend the Member for Loughborough (Mr. Dorrell). In that manifesto he wrote: It is not a region packed with dying industries. It is a region well equipped to meet the challenges of a modem world. Today, however, the hon. Gentleman talks of an adverse industrial structure.

Photo of Mr Hilary Miller Mr Hilary Miller , Bromsgrove and Redditch

I think that the hon. Member will agree that the region is well equipped with communications, skilled people and opportunity.

Photo of Mr Terry Davis Mr Terry Davis , Birmingham Stechford

I stand speechless before the hon. Gentleman's excuses for the Government and his apologies for his own words in 1979. He did not tell the people of Bromsgrove and Redditch, of whom I am one, that the adverse industrial structure of the west midlands would lead to a trebling of unemployment during the life of this Government.

The charge against the Government is not that they caused all the problems of the west midlands but that they have done nothing to solve them, and have actually made them worse.

The hon. Member for Birmingham, Yardley (Mr. Bevan) referred to the much lower unemployment figures at the time of the general election in May 1979. He was quite right. Unemployment in the west midlands has trebled since his Government came to power. It has risen from 5 per cent. then to almost 17 per cent. now. The figure is even higher in the west midlands county than in the west midlands region. Given that at least 30 per cent. of the unemployed are not registered, unemployment in the county is now nearer 25 per cent., or one in four, compared with one in 12 in May 1979. For every vacancy, there are now 57 people unemployed in the west midlands county compared with 29 in Great Britain as a whole. The west midlands figure is double the national average. Indeed, a factory recently attracted 500 applicants for 15 vacancies without even advertising outside.

The hon. Member for Rugby (Mr. Pawsey) referred to the region's position in the unemployment league table, but the position of the west midlands is even worse than he suggested. The Office of Population Censuses and Surveys recently published a survey of the nine regions in England. In 1979, the west midlands was fourth out of the nine with 4·7 per cent. unemployment, which was also the average for England as a whole. After two years of Conservative Government, the west midlands was first in the league, 12·7 per cent. unemployment, compared with 9 per cent. nationally.

From being the average, the west midlands has become the leader, despite constant promises from the Government of good times just around the corner.

In June 1979, the then Minister, the hon. Member for Basingstoke (Mr. Mitchell) told the House that the results of the Government's policies would be seen by the end of the year, with more to come. He could not have been more right, and there was certainly more to come—more and more unemployment.

This is the fourth debate about the economic problems, the unemployment and the industrial decline of the west midlands since the Government came to power. In June 1980, the then Minister, the hon. Member for Bosworth (Mr. Butler) said that there were grounds for optimism. In March 1981, the then Minister, the hon. Member for Arundel (Mr. Marshall) said that we should take comfort from the fact that four regions were even worse off and that the west midlands had less unemployment than the north, the north-west, Wales and Scotland. Since then, we have overtaken the north-west and Scotland, and only Wales and the north are still worse off. In December 1981, a new Minister, the hon. Member for Norfolk, South (Mr. MacGregor) said that he recognised that industry in the west midlands faced its most difficult period since the war. He said that it was an uphill climb—too right, and every time we push it up the hill the Government push it down again.

Today there is a new face at the Dispatch Box. It looks as though the Under-Secretary of State for Employment, the hon. Member for Eye (Mr. Gummer), will be replying to the debate. Why does a different Minister reply to each of these debates? It is because Ministers are scared that we shall remind them of what they said last time.

In December, the Birmingham chamber of industry and commerce produced a survey of 84 firms. Conservative Members may not like the results, but they cannot run away from what their own friends in industry are saying. The survey showed that, compared with December 1981, fewer firms were reporting increases in United Kingdom orders and more were reporting decreases. Fewer reported increases in export orders and more reported decreases. More firms were working at less than 60 per cent. capacity. More had lower stocks and forecast even lower stocks. More firms reported cash flow problems. More firms reported that their work forces would decrease during the next three months. More firms reported that they would revise their investment plans downwards. Fewer firms were confident that their turnover would improve under this Government. That survey was in December.

What has happened since then in the west midlands? There have been 500 redundancies at Dunlop, 500 redundancies at Lucas Girling with the closure of a factory at Tyseley, 800 redundancies at Lucas Electrical and almost 400 redundancies at Imperial Metal Industries. None of those redundancies is the result of strikes, low productivity or any other of the reasons given by Conservative Members. In January alone the west midlands had 2,500 redundancies. They are running at the rate of 100 per working day. During the past six months the west midlands has lost 14,000 jobs.

Employers declaring the redundancies do not blame strikes, low productivity, trade unions or wage claims. Quite simply, they blame lack of work, drop in business, a slump in orders and a slump in demand. In one word, there is a slump. That is the cause of the job losses, not the adverse industrial structure that we have had for the past 10 or 20 years.

Against that background, we need special measures. The west midlands needs to be put on an equal footing with the other regions whose unemployment levels we have overtaken. Several hon. Members have said that the west midlands is part of the United Kingdom. As the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) said, we should seek to reduce the costs of industry, but there are two ways to do that. The better way is to increase demand and production. That would reduce industrial costs. To achieve that we need reflation and more Government spending instead of less. The Government should not cut back, but should create the demand and create the markets for the goods made by British manufacturing industry.

To get the benefit of that demand, we need import controls, but we will not obtain them from the Government. They will not impose import controls on Japanese cars. Most Conservative Members are opposed to import controls on Japanese cars. Every survey carried out proves that. My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) expressed surprise that goods are imported by multinational companies such as Lucas and Dunlop. He should remember that the same multinationals wanted to take us into the Common Market so that they could switch production to the continent.

We have seen a succession of new ministerial faces at the Dispatch Box replying to debates about the west midlands. But we need new policies. The Government have had plenty of time to change their policies, but they have declined to do so. It is time for the people of the west midlands to change the Government.

Photo of Dr John Blackburn Dr John Blackburn , Dudley West 9:17 pm, 7th February 1983

I am grateful for the opportunity to speak, even if only for a few minutes, in this important debate about the west midlands. There has been wide agreement about the problems of unemployment in that region. I wish to concentrate on only three or four aspects of that. First, it is true and acknowledged on all sides that unemployment in the west midlands did not start in May 1979. In my constituency, there were 4,200 job losses between 1977 and May 1979.

As always in these debates, I am pleased to see the hon. Member for Wolverhampton, South-East (Mr. Edwards) in his place. I would expect him to be here because his area suffered large and savage redundancies with the closure of the Bilston steelworks. Many of its workers live in the northern part of my constituency.

I have spent 22 years of my life walking the avenues of industry in the west midlands, like so many people in the Chamber and outside. During that time I, like everyone else, took a 316 per cent. pay rise and, in contrast, produced only 17 per cent. more goods. I learnt the hard way in the black country that everything starts with an order. An order means production, production means jobs, jobs mean profits and profits mean reinvestment. Everything starts with an order. We must learn the lesson—if we have not learnt it before—that our industry is utterly dependent on orders, on being competitive, and on producing the right models and the right goods for the right markets. I have stood here, with hon. Members from both sides of the House, in debate after debate, urging the Government to invest in the LC10 model, which we believe will have a tremendous impact on the economy of the west midlands. Nevertheless, I am saddened when I discover that many of the components for that model, which is being produced in the west midlands with Government aid, are not to come from the area. We do not produce motor cars in Dudley but we produce components. The car industry is the lifeblood of the engineering industry in the west midlands.

I may not be popular for saying it, but it is part of my psychology that Governments were never elected to run industry. They are not capable of running industry. They are not qualified to run industry but they have a solemn responsibility to create an environment in which industry can prosper. In that connection, I echo what has been said about the 10 per cent. reduction in tax on the motor industry. Nevertheless, it is not the answer. We must ensure that that makes the product competitive and that people buy British goods.

Another important issue is whether the west midlands can compete. I sincerely believe that the people of the west midlands are capable of competing, but on one condition—that the terms are equal. We are not competing on equal terms. I am not one of those who advocate assisted area status.

In the next 24 hours I and several hon. Members, including my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) will be keeping an appointment to see my right hon. Friend the Secretary of State for Industry. I shall plead the cause of the Round Oak steelworks with him. I remember vividly the excellent speech by the hon. Member for West Bromwich, West (Miss Boothroyd) who dealt with the problems at the London works and the Duport foundry.

Capital for investment in the west midlands is available. People are interested in investing in our excellent work force. However, there must be a political will to allow that to happen. That all revolves around the Government's responsibility to create an environment in which business can prosper. In that spirit, I have abundant faith in the west midlands, provided that it can compete on equal terms. In that spirit also, I still believe that there is a future for the fine people of the west midlands and what they produce. It is for the House to give the fine workers there its united vote of confidence.

Photo of Mr Robert Edwards Mr Robert Edwards , Wolverhampton South East 9:23 pm, 7th February 1983

It is always a great pleasure to follow the hon. Member for Dudley, West (Mr. Blackburn). I noticed that a firm in his constituency, Cannon Iron, wanted 15 temporary labourers a few weeks ago. There were 500 applicants. They walked from all over Wolverhampton to get a job there. That gives some idea of the scale of the problem in Wolverhampton and the west midlands.

The facts have been recited throughout the debate, but they are well worth repeating. In 1978, 6 per cent. of the work force in Wolverhampton were unemployed and their number was being reduced. In Bilston in my constituency it is 26 per cent. In one ward in Wolverhampton it is over 30 per cent. The people are in despair. They feel like criminals and outcasts. There is nowhere in this great big world where they can fit in. They are depressed. Some 300,000 in the west midlands receive supplementary benefit. They have to go through the undignified process of applying for it. That has never happened before.

In Wolverhampton, 7,000 children are relying on free meals and extra support for clothing and boots. That has never happened before. The people are in the poverty trap and are suffering all the indignities that that involves. The hon. Member for Bromsgrove and Redditch (Mr. Miller), for whom I have great respect, suggested that no real initiative is necessary and that the market should solve the problem. I am sure that he did not make that suggestion seriously.

The hon. Member for Dudley, West (Mr. Blackburn) suggested that we should have fair competition. With fair competition, the west midlands people, with all their skill and traditional wisdom, will come through. However, what sort of fair competition exists today? The industries are competing against the cheapest labour in the world in South Korea, Malaysia, and now in Communist China.

According to the import figures, 78 per cent. of sporting equipment here is imported. Once, in my time, we dominated the production of sporting equipment. The biggest producers were Dunlop. Its factory in Malaysia now supplies most of our imports. Dunlop, a multinational company, has factories all over the world. It is cutting its British labour force to the bone. It has closed its tyre factory at Speke, and jobs have disappeared as if they never existed. It has cut back its labour force at Port Dunlop in Birmingham. A few thousand jobs will disappear.

Dunlop is now negotiating an agreement with China to build a large tyre factory in China. The firm will be supplied not with Chinese currency, which is unconvertible, but with tyres. The European and British market will be flooded with tyres produced by some of the cheapest labour in the world. It is not so long since Dunlop was saying that it could not produce tyres in British factories because of the cheap tyres that were coming from east European countries. Some of the factories in those countries were built on 50–50 agreements with British and American multinational companies. Those agreements still exist.

The import figures reveal a dreadful state of affairs. For example, 95 per cent. of the cutlery used and sold in this country comes from abroad. South Korea can produce 1 billion knives every year with which to flood world markets. The price of the cutlery is less than the price of steel. How does one deal with such dumping? It roust be stopped by import controls.

Some of the other figures astonish me. Hand calculators could be produced by British Aerospace without difficulty, yet 72 per cent. come from overseas. We can make hand calculators, but our problem is that we cannot compete with the cheap slave labour of Thailand and South Korea.

It is the nth degree of human stupidity to allow our industries to be destroyed and to decline and to cause desperation and anxiety among our people. To maintain our industries we must take steps to stop the dumping of the products made by cheap labour.

Photo of Mr Nicholas Budgen Mr Nicholas Budgen , Wolverhampton South West 9:30 pm, 7th February 1983

The hon. Member for Wolverhampton, South-East (Mr. Edwards), who comes from the same midlands town as myself, demonstrates the desperate thoughts so strongly felt in Wolverhampton at present. When I first went there, almost nine years ago to the night, I found that Wolverhampton had enjoyed about 40 years of uninterrupted prosperity. It had known little unemployment and had the self-confidence that came from believing that it would enjoy a constant boom.

During the past nine years Wolverhampton has been hit and hit again. There are many who, in desperation, look to desperate remedies to solve their problems. The three main shocks that hit Wolverhampton were the increase in energy prices in 1974, the increase in energy prices in 1979 and the crucifyingly high sterling exchange rate which came about at the end of 1979. It is significant that, just as Wulfrunians do not thank Governments for the prosperity that they enjoyed for 40 years, they do not now generally blame the Government for the disasters that they now suffer, sometimes with desperation but always with dignity.

I agree with my hon. Friends the Members for Rugby (Mr. Pawsey) and for Birmingham, Selly Oak (Mr. Beaumont-Dark) in being sceptical of Government solutions. I believe that Governments have an overriding duty to attempt to improve the position, particularly through the tax system.

I agree with hon. Members from all sides of the House who attack, as firmly as possible, the scandalous imposition of the national insurance surcharge. It is a tax on jobs. There may have been some justification for it when it was imposed at a time of higher employment, but there is no justification for it now. Let it be abolished as quickly as possible. I agree with those of my right hon. and hon. Friends who are distraught, even disgusted, about the delay in the way in which the Government have sought to renegotiate our trade agreement with Spain.

We know that it must be carried out through the EC, but if the Government wish to see the west midlands supporting the ideal of Europe, they had better get on with renegotiating that deal with Spain. It is becoming increasingly clear to many of those who supported entry into the Community that, had we been able to negotiate directly with Spain, the treaty would have been renegotiated long ago. Let us hear rather less talk about how it is being done through the Commission and how we have made several initiatives to the Council of Ministers. This matter is urgent and has wider repercussions than many of those in government understand.

However, the Government could make things much worse in the west midlands. It is obvious that the Government are as yet undecided about their policy on the price of North sea oil. On the one hand, the Treasury is delighted that the price should remain high so that the tax take remains high. On the other hand, the Department of Industry understands that low energy costs are good, especially for heavy manufacturing industry. The Department of Energy wishes to have high North sea oil prices because that will encourage further investment in North sea exploration.

However, we in the west midlands are in favour of low energy prices. We wish to see OPEC crack. We do not mind if some of the punters who have had a punt on North sea oil lose a bit of money, because we believe that social stability is one of the most important factors for which the Tory party stands. The laying waste of our heavy manufacturing industry is not good for social cohesion. Let us join those who wish to see OPEC smashed.

There are advantages in a 12 per cent. devaluation. We do not wish to have a managed devaluation of 30 per cent., but there are advantages in a devaluation that has been caused by the market and which will operate as an import control. We must not have higher interest rates in order to increase the exchange rate again.

Several Hon. Members:

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Photo of Mr George Thomas Mr George Thomas , Cardiff West

Order. The Minister has agreed that he will not reply until 9.43 pm.

Photo of David Winnick David Winnick , Walsall North 9:37 pm, 7th February 1983

Everyone knows that the west midlands had many difficulties before 1979. The industrial base was too narrow and new technology industries were required. However, the indictment against the Government is that their economic policies have led to the west midlands, and certainly the black country, suffering devastating blows during the past three years. In May 1979 unemployment in my travel-to-work area Walsall, was 5·1 per cent. Today, even on the new basis on which the figures are calculated, it is 18·8 per cent. Conservative Members have said throughout the debate that there was unemployment in the west midlands before the present Government came to power. They are right, but there was no mass unemployment, nor was there the poverty and devastation that goes with it.

There is little doubt that the true unemployment figure is even higher than 18·8 per cent. It is likely to be nearer 25 per cent., and the same is true of other parts of the black country. An important way in which we can judge the severity and the depth of unemployment is to note for how long people have been unemployed. In a reply that I received last week I was informed that between January 1979 and October 1982 there was an increase of 423 per cent. in those unemployed for more than 12 months in the Walsall travel-to-work area. In Dudley and Sandwell the figure is 562 per cent. and for Wolverhampton it is 374 per cent. For the region as a whole, the increase for those who have been unemployed for longer than 12 months is 379 per cent.

What about young people, who obviously leave school desperately eager to find a job? Between January 1979 and October 1982 there was an increase in the west midlands of 621 per cent. for those under 20 who had been unemployed for more than 12 months.

I have given the statistics, but behind them lies the tragedy of people who cannot find a job. Certainly there are the young people, but let us not forget those in their 40s and early 50s who are not only unemployed but face the daunting prospect that unless there is a change of policy and a change of Government they may never work again. Their crime is to be 45, 48 or 52. They have worked all their lives and now find themselves not only unemployed but daily having to face the terrifying possibility that, no matter how hard they try, or how desperately they seek work, there is no opportunity for them. I hope that the Minister will deal with the plight of those people, who stand little or no chance of being able to earn their living.

My hon. Friend the Member for Wolverhampton, South-East (Mr. Edwards) already referred to a case involving one vacancy. Another case was quoted in the Express and Star last week. There was vacancies for 30 people in a hotel, but 500 people turned up seeking those jobs. That is an illustration of what has happened in the west midlands and the desperate situation in which we find ourselves.

We last debated the difficulties of the region in December 1981. I was lucky in the ballot and initiated that debate. I spoke then of the plight of the unemployed and the tragedy of what is happening in the region. What is terrible, as my hon. Friends have stated tonight, is that things are now so much worse. Unemployment has continued to grow and there is no sign of economic recovery at all. I hope that we shall not hear phoney optimism from the Minister tonight. We know that there is no sign of any economic recovery. However high unemployment is now, in the next few weeks or the next few months unemployment will grow worse in the west midlands and the black country.

We need changes of policy. We need more demand in the economy. Lack of demand, above all else, has been the cause of what has occurred in the past few years. We need a more competitive exchange rate. As my hon. Friends have said, we also desperately need selective import controls. Surely the time for debating that matter is over? If British manufacturing industry is to survive, we must have some protection. That point has been stressed tonight by some Conservative Members as well as by my hon. Friends. We need the restoration of exchange controls. The abolition of exchange controls has been almost a direct incentive for the export of capital.

What we really need above all else, and what would give hope for the west midlands, is a change of Government. We need a Labour Government pursuing economic policies that would reverse the tide of mass unemployment. The people of the west midlands are sick and tired of being the victims of the Government's policies. They do not want to be punished and penalised. They take the view—and we agree with them 100 per cent.—that they have a right to earn their living. They do not want to live the rest of their lives on the dole queue, living on the very minimum. Is it too much to ask that in the Britain of the 1980s our fellow citizens should have the right to work? There is no hope with this Government. The defeat of the Government at the next election and a change of policy is the best hope for the west midlands to be able to survive as a major manufacturing industrial area.

Photo of John Gummer John Gummer Parliamentary Under-Secretary (Department of Employment) 9:45 pm, 7th February 1983

I was hoping, before the speech of the hon. Member for Walsall, North (Mr. Winnick), to follow the advice of the hon. Member for Cannock (Mr. Roberts) and address myself to the issues rather than to bandy party political accusations across the Floor of the House on my first visit to the Dispatch Box. I thank my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) for his kind words. I congratulate the hon. Member for Coventry, North-West (Mr. Robinson), who introduced the debate from the Opposition Front Bench, on his success and that of his fellows in procuring the debate.

It would be wrong to start in any other way than by saying that any of us who pretend that unemployment is a matter which can be dismissed or grinned about do not understand the debilitating nature of being without a job. Many hon. Members, from background or recent experience, are aware of that effect on their own lives and on the lives of their constituents.

It is important to say that in the west midlands there has been quite a sudden change. It was an area of relatively low unemployment and it is now suffering considerably higher unemployment. The change has come so much more suddenly than in areas which have been struck by high rates of unemployment over a long period. The west midlands is suffering the particular pains, difficulties and disillusion that come with that change. It would be wrong for anyone to ignore or deny those facts.

It is vital—

Photo of John Gummer John Gummer Parliamentary Under-Secretary (Department of Employment)

I have very little time to cover the issues which have been raised already. There are hon. Members on both sides of the Chamber, including my hon. and learned Friend the Member for Burton (Mr. Lawrence), who were unable to catch the eye of the Chair and make their contributions because of the time limit.

We should treat seriously the speech of the hon. Member for Coventry, North-West, and perhaps more seriously than some others. The hon. Gentleman made a real attempt to provide alternative answers to the problems which face us. It does the unemployed no good merely to rant and rave about those whom we dislike and the policies that we do not accept. The only answer is to suggest policies that might solve the problems to which we address ourselves.

Photo of John Gummer John Gummer Parliamentary Under-Secretary (Department of Employment)

I shall not give way at this stage. I gave as much time as I could to as many hon. Members as possible.

The hon. Member for Coventry, North-West offered four answers to our problems.

Photo of John Gummer John Gummer Parliamentary Under-Secretary (Department of Employment)

If there was a fifth one, I shall return to it when I have found it in my notes. The hon. Gentleman offered four answers which I suggest were of great importance. The fifth one may have been the general one that was adopted by the hon. Member for Walsall, North, who wants a new Government. The hon. Gentleman's four specific answers do not meet the real issues. First, he suggested that the west midlands should have assisted area status. That argument has been advanced on both sides of the House. Similarly, it has faced opposition on both sides. It cannot be said that it is a suggestion that is accepted as a panacea by everyone in the west midlands.

A review of the policy of area status is taking place and the second stage is about to begin. One of the most important matters to be considered will be the position of the west midlands and the arguments that have been advanced for the west midlands having assisted area status. It would be only reasonable to tell those who are carrying out the review that the argument did not seem to be conclusive as it was adduced on either side of the House. It does not seem to be recognised as such in the west midlands.

Secondly, the hon. Member for Coventry, North-West said that we should have an answer to the question surrounding the Nissan project. My right hon. Friend the Secretary of State for Industry has talked to Nissan's top management. He did so during his recent visit to Japan. It is clear that Nissan is not yet in a position to take a decision on the United Kingdom project. It is equally clear that a favourable outcome is still a real possibility. The contact with the company will continue and I hope that we shall be able to make an announcement. Unfortunately, we cannot make one now.

It would help a great deal if the Labour party dropped its decision and determination to leave the European Community. If there is one factor that is likely to make Nissan think again, it is the feeling that, at the drop of the hat, and with no referendum, Britain might cease to have the major part of its present export market. One has to ask the Labour party to take the responsibilities that are reasonable to an Opposition.

The hon. Member for Coventry, North-West and other hon. Members suggested that we should use selective import controls. For an area that has depended for so long on its exports to go for selective imports seems to me to be little short of madness. It is certainly reasonable to protest strongly about unfair imports, and I agree with many of the points made about Spanish cars. The word that has been used, and I use it again, is that the arrangements that we have are "grotesque". I repeat the assurance that the negotiations are continuing.

My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) made the point that negotiations always take time in the European Community. His scepticism on the Community is well known. However, I assure him that later in the month the Commission is due to report the results of those negotiations and the Secretary of State for Trade will be visiting the west midlands at the end of the month to discuss the matter with the industry.

Photo of John Gummer John Gummer Parliamentary Under-Secretary (Department of Employment)

We shall see whether it is a big deal. The hon. Member for Nuneaton (Mr. Huckfield) may be leaving the west midlands as he feels that he cannot be reelected there, and is in no position to say "Big deal".

Photo of Mr Nicholas Budgen Mr Nicholas Budgen , Wolverhampton South West

Will my hon. Friend please give some prediction to the House as to when these "grotesque" arrangements will be changed?

Photo of John Gummer John Gummer Parliamentary Under-Secretary (Department of Employment)

The anouncement of the results of those negotiations will be made to the Council later this month. The Secretary of State for Trade will then discuss the matter with representatives of industry in the west midlands. I can give my hon. Friend that clear and categoric assurance, but I cannot give him the results of the negotiations, or there would be no point in having them.

The proposals made by the hon. Member for Coventry, North-Esat were supported by a number of hon. Member, including some of my hon. Friends. Where I am unable to answer hon. Members' points in the short time that I have, I shall write to the hon. Members concerned. My hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) made an important point when he asked Labour Members how it was the they continued to talk without mentioning one of the most important effects on industry in the west midlands—the high rates levied upon it.

If Socialist-controlled councils would put to the forefront restraint in their spending, and make their contribution to the improvement of industry in the west midlands, it would be a good example to central Government. It is a sad thing that in seeking to attack the Government, Labour Members did not take the opportunity to bring home to their supporters the fact that they have within their own hands a means of helping industry in the area about which they are concerned.

The main burden of the argument of the Labour party has been that the way to deal with the problems of the west midlands is to pump more money into the economy as a whole. The hon. Member for Coventry, North-West said that he felt that what the Government had done up to now was a hotchpotch of relief schemes that the Secretary of State had grudgingly agreed.

If the hon. Member feels that the large numbers of important schemes that have been taken up widely in the west midlands are merely that, he is flying in the face of everything that other people of all political parties would say about the west midlands. He may ask for further relief and further schemes, but to suggest that the considerable package of schemes that has been seen to be very successful in many parts of the west midlands is merely a hotchpotch grudgingly agreed is flying in the face of the facts.

Photo of John Gummer John Gummer Parliamentary Under-Secretary (Department of Employment)

I have only five minutes more and I cannot give way. The hon. Member made the longest speech so far this evening and it is reasonable for me to want to finish in the quarter of an hour that I have been allowed.

Behind all this, the major demand of the Labour party is for a large input of cash into the economy. That came out most clearly in the speech of the hon. Member for Birmingham, Perry Barr (Mr. Rooker). He said that he did not want to go in for bipartisan twaddle. He certainly did not go in for bipartisanship, but we heard a great deal of twaddle. He suggested that the problems of the west midlands had been caused by this Government since 1979. He then proved that that was quite untrue.

In so far as he went in for facts, the hon. Gentleman's major case concerned Lucas and the fact that for several years Halfords had sold goods that were manufactured abroad. He then said that those goods had been manufactured in countries that had strong armies and police forces but not much else. The hon. Gentleman then cited the countries, and they were France and Germany—[Interruption.] I have a note in front of me. The hon. Member for Perry Barr can look at the record, but he said that Lucas was manufacturing in France and Germany. In those countries wage rates are higher than in Britain. The provision for workers is better than in Britain. Why is Lucas manufacturing in those countries? The answer is that productivity in those countries has for years far outstripped that in Britain. Therefore, the case is proved.

Over the years the west midlands, largely through the ineptitude of the trade union leadership, but also through the appalling record of industrial relations that has marred its industries, has sadly not kept up in competition with other countries. I refer not to some sad little country in South America but to France and Germany, which can compete with us right across the board.

I considerably respect the hon. Member for Wolverhampton, South-East (Mr. Edwards), but I was sorry to hear him make that speech. He spoke about imports from Malaysia, but hon. Members should realise that some of the imports from developing countries are essential to the lives of those nations. To hear the Labour party becoming little Englanders not only towards the European Community but towards the poorest nations on earth is little short of disgraceful.

We face high unemployment in the west midlands, which is part of the worldwide legacy of the recession. However, it is worse in Britain and in the west midlands not because of this Government but because of years of neglect, a refusal to face the reactionary labour policies of the trade union movement and the way in which this industry has been destroyed by those who have put money before increases in productivity and have demanded more money for less work. By putting those basic facts right, this Government will achieve a rejuvenation of British industry throughout the country and, above all, in the west midlands.