Orders of the Day — Industry and Employment

Part of the debate – in the House of Commons at 4:37 pm on 12 November 1984.

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Photo of Mr John Smith Mr John Smith , Monklands East 4:37, 12 November 1984

As the hon. Gentleman should know, the major difference between BL and General Motors is the far greater demand for the product in the United States due to policies which created demand and thus allowed companies to be successful. If the hon. Gentleman lectures the trade unions, I hope that he will urge others associated with some of his economic endeavours to make the same sacrifices as he recommends to the unions. Directors in British industry have had substantial increases in the past year. If they were prepared to accept the same restraints his advice might be more credible.

I shall no doubt be accused of being unfair to the Government and unduly pessimistic. We shall be told that things are on the mend and will soon be better. The notion that somehow things are about to get better has been put to us every year for the past four or five years. In 1981 the present Chancellor said: We expect output to be on a rising trend during 1981–82". On 25 June of that year the Prime Minister herself said: There are now clear signs that the worst of the recession is over". In November 1981 she said: We are reaching the trough of the recession and it will start to turn up towards the end of next year". In January 1982, the present Home Secretary, then a Treasury Minister, said: We said in late 1980 that we were going to reach the low point of the recession in the spring last year: we did. We said in last year's Budget that we would then embark on a path of steady recovery: we have. In March 1982, the Prime Minister claimed: We are beginning to see the success that we knew our policies would produce … After nearly three years of battling, we are beginning to see the regeneration of our economy. Worst of all, in his famous statement on 17 May 1982 the present Home Secretary stated: The evidence of recovery is all about us. Not even the most blinkered pessimist could fail to see it.

After all that, the Government having been proved wrong in 1980, 1981 and 1982, why should anyone believe them in 1983? Even then, however, some trusting people listened to the Chancellor's claim in his speech to the Leicestershire Young Farmers Club on 2 December 1983, when he said: I was lambasted for my 'optimism'. The bringer of good news is scarcely better treated than the bringer of bad.But the critics must be beginning to worry.For this week's seasonally adjusted figures were the third in the last four months to show a fall in adult unemployment. This is news which all should welcome …In short, it looks as though unemployment is now levelling off …The strategy is on course. We shall stick with it. The price of our sticking with that policy has been 140,000 more unemployed since the Chancellor uttered those words.

The penny then began to drop, however, and there was a noticeable change between that speech and the Chancellor's words to the IMF on 25 September this year when at last it was gouged from a Minister that The one outstanding worry is unemployment, which is not only far too high but continues to rise. Some of us were greatly encouraged by the thought that the truth had finally penetrated, but the Chancellor then went on to describe his vision of the future in which Britain was turned into a trading post for other people's products — a series of Kentucky fried chicken franchises stretching from one end of the country to the other in which, he says, the future for our young people will not be in the jobs of the past and that those of the future will be not so much low-tech as no-tech. That is the Chancellor's vision for this country—not even low-tech but no-tech.

That is where we are now. There has been some recognition by the Government of the immensity of the problem, but they have not the faintest idea what to do about it. That is clear from the Queen's Speech. The Government are off on more diversions, more privatisation. What on earth has that to do with Britain's industrial recovery? It is utterly irrelevant to our economic circumstances and it will be used more and more as an exercise in selling off the furniture to make the books balance. There are platitudes about competition and about freeing the labour market. That has little to do with the lack of demand in the economy. To free the labour market probably means to abolish wages councils and to remove protection. [HON. MEMBERS: "Hear, hear."] I am glad to note that that torpedo struck its target. It is not in the Gracious Speech, but Conservative Members will press for it to be included. The Government's prescription for curing our economy is to depress the wages and conditions of our poorest people. Worst of all, we await the ominous announcement about regional development policy. We fear that the Government will cut £10 billion from regional assistance during the next five years.

The Government do not know where they are going. Therefore we must urgently start a new debate about our industrial future and what will happen when our oil runs out. My fear, which is proclaimed by my right hon. and hon. Friends and which is even more widely shared, is that we shall face the non-oil 1990s with two problems in industry: outdated technology and a relatively unskilled work force. The time is now ripe for us to start a debate about Britain's new industrial policy.

The debate should be based on six pillars. The first is a new attitude to investment. The Government should be responsible for ensuring long-term investment on favourable terms for the key industries on which Britain will depend in the future. Secondly, we need a massive research and development programme related to the development of new products for the markets of the future so that we can lead, not trail, our competitors in new technology. Thirdly, we must launch the most expansive training and retraining programme in our history, instead of tinkering about with the youth training scheme. There must be a minimum of two year's education and training for all school leavers. That must be followed by extensive training and retraining throughout their working lives.

Fourthly, we must reshape the relationship between Government and industry so that the Government reinforce the efforts of industry to make new products, capture new markets and manage trade more effectively. Under the Government we have reached the appalling position in which we have a deficit in manufacturing trade for the first time in our industrial history. Recently I read a prediction that in the reasonably near future we may have a deficit of £1 billion in information technology products. That prediction was made by a bank, which is not known to favour my propositions specially.

Fifthly, we need a new approach to regional policy. We need to breathe new life into the proper distribution of industry and resources and to bring an end to the deadly divide between the prosperous south and the poverty-stricken north. Sixthly, we need to build a new partnership within industry. We must stop the constant sniping at the representative institutions of working people. We must start to build a new consensus within industry to achieve agreed targets, which are necessary for our industrial recovery.

I fear that that will not happen quickly. The Government have wasted our assets and squandered our opportunities. Nevertheless, it is not too late to begin the task of rebuilding our industry and economy. The Labour party in the House and especially next year when we launch our jobs and industry campaign will continually and relentlessly call the attention of the nation to that end.