Orders of the Day — Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 6:43 pm on 20 March 1985.

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Photo of Mr Dave Nellist Mr Dave Nellist , Coventry South East 6:43, 20 March 1985

I could not for a moment accept that. It has been due to the appalling inability of those who have had the real stewardship of British industry, the employers, for refusing to invest in industry and who, instead, have allowed £50 billion to leave the country in the last five years.

Trade unions do not have control of those investment decisions. Indeed, even Parliament does not have control over them. We have never been presented with a Dunlop (Closure) Bill, a Courtaulds (Reduction of Workers) Bill or a GEC (Subsidy for Short-time Working) Bill. Decisions of that type are made in boardrooms by the directors and major shareholders of British industry. They are responsible for our lack of competitiveness and for all the money that has flowed abroad in the last five years.

The British economy will, once again, be heading for recession in the coming year or two, but it will be far worse than it was in 1974, 1976, 1979 or 1981. Already, Britain is seen abroad as a nation comparable to a Third-world offshore tax haven. In The Economist on Saturday appeared an advertisement relating to a report which could be purchased for £60, and another for $120, headed, "United Kingdom as a tax haven". It claimed: With low effective tax rates, reinforced by a wide range of government assistance to business by region and sector, the United Kingdom is a tax haven for those who know their way around. That is what the Government have turned our economy into.

It can more accurately be described as a rentier economy, an economy that depends on the ownership of shares, materials and investment abroad, rather than investment in our manufacturing industry. That spells future further massive attacks on the living standards of working people in Britain. That is the real reason why the Ridley report was written in the mid-1970s and enacted by the Conservatives to attack the NUM, hoping to demoralise the union and strip away the power of trade unions to defend their members.

What has the Budget done for Coventry? Ten years ago, two thirds of the people working in that city were employed in manufacturing, mainly for 15 companies which produced cars, engines, machine tools and telecommunications equipment. About 60,000 jobs have gone from those industries in the last 10 years. I told the House a couple of weeks ago that in one ward in the centre of the city—Coventry, South-East, which I represent—the unemployment rate was 32 per cent. It has now risen to 36·9 per cent.

When young workers, men over 60 and women workers who are not allowed to register for supplementary benefit are added to the total, the real rate of unemployment in that city centre area is over 50 per cent. For those workers, the cosmetic approach of the Budget means nothing.

The Chancellor says, "Hang about. The Government have no responsibility or ability to create jobs. Only the economic climate can create employment." That is not true in Coventry, nor, I suspect, is it true of other parts of the country. Many of Coventry's job losses have been due to Government decisions, particularly the closure in recent years of major parts of British Leyland.

Now, almost two in five—50,000 out of 135,000—workers there depend on central or local government spending for their livelihood. The largest is the city council, with 10,500 full-time and 7,000 part-time workers. yet Coventry city council has lost £80 million in the last five years as a result of Tory cuts, for example, in housing subsidies. Money spent by that means could have created jobs for building workers and provided better homes for people in the city.

When one adds to that the number of jobs lost through cuts in the NHS, DHSS, Inland Revenue, which once employed 9,000 people, and other public services, such as the university; in nationalised industries such as the gas, electricity and coal boards; in nationalised companies such as Rolls-Royce; in part nationally owned companies such as British Telecom; and in all the other companies which rely on Government contracts in, say, defence, such as Alvis, GEC, Dunlop and Courtaulds, and other firms which supply those companies, we find that 40 per cent. of the jobs in Coventry are dependent on decisions made by the Government. Thus, the reduction in the number of workers in that city has been caused by decisions taken by the Conservatives in the last six years.

The Chancellor spoke of five years of successful economic recovery. Several of his leading supporters in boardrooms are talking of a new golden age in British capitalism. If prospects are so good, why has £50,000 million left the United Kingdom and gone abroad during the past five years to low-wage anti-trade union economies, such as South Africa, Brazil, Korea and Argentina? Where is the so-called patriotism of those directors that they would rather invest abroad than in British companies and jobs?

The little increases that we have seen in the British economy have been largely due to North sea oil. Without that crutch, there would be an even more calamitous drop in capitalism compared with our overseas rivals. Last year, for the first time since the days of Queen Elizabeth I, we imported more factory-made goods than we exported. At one time, we were known as the workshop of the world, but now we are more accurately described as the warehouse of the world. We have lost those world markets because of a lack of investment, especially during the past 25 years, and now we are also losing domestic markets.

We have seen the rise of the Chancellor and the Prime Minister — the representatives of finance capital as opposed to industrial capital. The Tory Cabinet has the ludicrous idea that manufacturing industry does not matter, that it can be replaced by service and financial industries. Some Tory Back-Bench Members have even talked about a rise in tourism as providing jobs, as if unemployed ship workers, car workers and steel workers can get jobs as beefeaters at the Tower of London. That is a stupid idea.

The service sector is entirely dependent on manufactuing for its products. Bankers depend on computers, hairdressers on scissors, hotels on furnishings and journalists—not many are present now—on typewriters. The production of real wealth is based on the production of manufacturing wealth. Yet that is the sector that the Government seek to ignore.

More than 30 per cent. of industry is now idle, and nothing that the Chancellor said will get that unused capacity moving. The Library estimates — I have challenged Treasury Ministers on this figure — that £200,000 million of investment would be needed in manufacturing industry merely to catch up with Germany, Japan and America. That is 40 times the present annual rate. Even on an exponential of that figure, under present policies it would take until the year 2025 before British industry was as competitive as those countries. There is no prospect of this Government or the capitalist system following that path. The Government and its supporters have given up re-tooling industry at that rate. They have convinced themselves that the only road to economic salvation lies in a further massive decline in the living standards of the British working class. That is why we have had a cheap wages Budget.

The Budget will not work. The next economic downturn will expose British capitalism still further, and squeeze foreign and domestic markets, with a consequent rise in unemployment. Nothing in the Budget will fundamentally alter the long-term decline of the British economy.

For that, we need an early general election and a new Socialist Labour Government. We need public ownership, and workers' control and management of industry and finance across the commanding heights of the economy. We need a proper Socialist economic plan, which will not provide profits for a few thousand friends of the Chancellor and the Government, but fulfil the needs of millions of people. It must be based on a shorter working week with a maximum of 35 hours, early retirement and other measures to share work. It must end low pay and set a national minimum wage of at least £100 a week, with pensions to match. It must provide a massive boost to public expenditure to build thousands of schools and hospitals, and the millions of homes that are needed.

At present, 400,000 building workers are unemployed, yet millions and millions of bricks are stockpiled. Money is sloshing around in the financial system and people are living in 6 million damp houses. The Government cannot, and do not want to, match the needs of working people with the skills that can fulfil their needs. For that we need a Labour Government with Socialist policies. For those reasons I call on the House to reject the Budget, to demand the resignation of the Chancellor and to tell him to take the rest of the Government with him.