Unemployment (West Midlands)

Part of Opposition Day – in the House of Commons at 5:34 pm on 22 February 1983.

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Photo of Mr David Knox Mr David Knox , Leek 5:34, 22 February 1983

The point that has come out most strongly in most of the speeches so far in the debate is that unemployment is the most serious issue in the west midlands at present. That is certainly the case in my constituency.

I suppose that it is not surprising that unemployment has risen more sharply in the west midlands than in other regions in the past decade. The west midlands is, after all, the manufacturing centre of this country and manufacturing industry has been particularly badly affected by depressed world markets, by currency fluctuations and by domestic Government policies since 1974. Indeed it is significant that manufacturing output peaked in early 1974 just at the time when the last Labour Government took office. Since then it has declined by almost a quarter. It is an inevitable consequence of this decline in manufacturing output that unemployment in the west midlands has risen from well below the national average to well above it. It has risen from just over 46,000 in February 1974 to about 350,000 today, or from 2 per cent. in February 1974 to about 16 per cent. today.

The Labour party would do well to remember that it has been in government for rather more than half the time since 1974, so it shares the responsibility for this severe decline in manufacturing output and for the steep rise in unemployment during the past nine years. Obviously, I am particularly concerned about unemployment in my constituency which, for the 30 years after the war, enjoyed an exceptionally low rate of unemployment. Early in 1974 when the Labour Government took office, 650 people were out of work in my constituency. Now, 5,500 people are out of work in the Leek parliamentary constituency.

Despite this steep rise in unemployment, my constituency receives no special help, apart from assistance which the Development Commission has provided for the town of Leek and the moorlands area surrounding it. We are grateful for this help, which is making a real contribution to helping small businesses. But, given the problem, it is not very much.

Unemployment in Leek is accentuated by the fact that it borders Stoke-on-Trent. Many of my constituents are—or before they lost their jobs were—commuters to that city. We are told in the Leek constituency that we cannot have any special help because a good deal of the constituency is in the Stoke-on-Trent travel-to-work area, and that the unemployment rate in Stoke-on-Trent is just about the national average. However, that argument does not take into account the fact that my constituents are disadvantaged in getting new jobs in Stoke-on-Trent compared to those living in the city.

When my constituents seek employment in Stoke, in competition with residents of Stoke, employers inevitably tend to take the person who lives nearer the job rather than someone who lives five or 10 miles away, particularly given the winter weather in north Staffordshire. My constituents therefore find it more difficult to find new jobs than those living nearer the jobs and, consequently, unemployment tends to be higher in my constituency than in other parts of the Stoke-on-Trent travel-to-work area. I ask my hon. Friend the Under-Secretary of State to consider this matter again. It is a problem which faces not only my constituents but constituents in other parts of the country bordering large cities.

We are told that the present high level of unemployment is a consequence of excessive wage claims, restrictive practices, overmanning, bad labour relations, managerial incompetence and lack of investment. Industries in my constituency cover a wide range of manufacturing activity and the work force has a wide range of skills. The people are hard-working, but not highly paid. Labour relations have always been good and there have been few strikes. Firms have invested in new plant and equipment. My constituency has a good labour force that is engaged in efficient factories and mills. Management and unions are puzzled by the fact that, having done all the right things, they have not avoided the consequences of different behaviour. High unemployment has afflicted the area despite the exemplary behaviour of both management and workers.

The steep rise in unemployment during the past nine years must provide a strong case for special help. But, much though we would appreciate such help, it is important to recognise that the best way to help Leek and the west midlands is to revive the national economy. Leek and the west midlands were prosperous and enjoyed full employment when Britain was prosperous and enjoyed full employment. But a return to prosperity will not happen automatically. The Government must act to raise aggregate demand for goods and services and, in turn, the demand for people to produce those extra goods and services. There are three ways in which this can be done.

First, the Government should cut industrial costs by abolishing the national insurance surcharge and by reducing energy prices to industry. Secondly, they should undertake worthwhile public sector investment projects. Thirdly, they should cut direct and indirect taxes and so leave people with more money to spend, which will create demand for goods and services, and so create demand for people to produce those goods and services.

The effect of those proposals would be to increase employment, which is what all hon. Members wish. We wish to bring the unemployed back into employment. Under-utilised capital equipment should be more fully used instead of standing idle or partially idle as it is now. If there was high demand, there would be more wealth for all of us to share. Unemployment in the west midlands is a waste of resources. It is socially damaging and divisive. Its reduction should be the Government's first priority.