Economic Policies and Unemployment

Part of Opposition Day – in the House of Commons at 5:37 pm on 3rd June 1986.

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Photo of Mr Jack Dormand Mr Jack Dormand , Easington 5:37 pm, 3rd June 1986

That is an interesting point, and I hope that my hon. Friend catches your eye, Mr. Deputy Speaker, in order to develop it.

The theory was — I hope that it is still not the position—that the private sector would take over the necessary economic action. It simply has not happened. There has been no sustained capital investment. The level of manufacturing investment is still 17 per cent. below what it was in 1979 when the Government came to office. I add my voice to the many who are advising caution on the Government who are presently placing so much importance on investment in the service industries. Certainly tourism and so on have a role to play, but to make the service industries our major sector would be dangerous and, in my view, a fundamental error of policy.

There must be a major increase in public sector investment if we are to have economic recovery and reduce the army of the unemployed. The Labour party has spelt it out many times, my right hon. Friend the Member for Sparkbrook said it today and we repeat with all the force at our command that there is a need for spending on schools, roads, hospitals and railways, to say nothing of the crisis in housing.

Last week I was re-reading the first book by my distinguished predecessor in the House, Manny Shinwell, to whom the nation paid justifiable and proper tribute recently. He was writing about unemployment, which he called "The scourge of idleness". He was speaking of Glasgow where he lived for so many years when he wrote: Think of the whole absurd situation. Thousands of men normally engaged in the building trades are almost permanently unemployed, yet there is a crying demand for houses for the people, an obligation of human decency to clear our great industrial cities of acres upon acres of insufferable, rat-warren slums. That was written in 1943. Here we are 43 years later with 400,000 building workers unemployed and the same crying and desperate need for houses and all of the other projects which I and others have mentioned.

The region which has been hardest hit by the Government's policies is my own, the north. Apart from Northern Ireland, we continue to have the country's highest percentage of unemployment. One person in five is out of work, making 240,000 people. The recent decisions on shipbuilding, engineering and pit closures will considerably add to the devastation. One third of manufacturing industry in the north has disappeared in the past seven years.

Those of us who have the honour to represent the northern region have known for some time that we have a branch factory economy. That is confirmed in Newcastle university's recent regional development study, in which it says: The north has one of the weakest indigenous manufacturing sectors of any region in the United Kingdom. That requires the most urgent attention by the Government. It is an aspect of the north's problems which the newly formed Northern Development Company will be looking at. I hope that the Government will give an assurance that they will be supporting the company. The Paymaster General probably knows that it was formed by the trade unions, the northern Confederation of British Industry, local authorities and some individual companies. Such co-operation shows how widespread is the concern in the north.

For many years I have called for a northern development agency. The development company is the nearest thing we are likely to get to such an agency in present circumstances, and I welcome the fact that the present Secretary of State for Trade and Industry recently met senior members of the company to discuss its role and its future. He and the Ministers present today should be under no illusion that if the chronic unemployment in the northern region is to be effectively tackled its resources ought to match those of the Scottish Development Agency and the Welsh Development Agency; nothing less than that will do the job. The help which the company is to receive will be a measure of the interest and support which the Government are likely to show for the north and its unemployment.

Draconian measures have been taken in the coal industry, on which the northern region has depended for many years. As an afterthought, in November, during the coal strike, the Government decided to establish NCB (Enterprise) Ltd. Its purpose is to create alternative employment in the mining areas now that the pits are being closed without any regard to the catastrophic social consequences. The impact of NCB (Enterprise) Ltd. on the north, particularly on my constituency, has been negligible. We are told that more money is available if and when necessary, but the conditions imposed on applying for that help constitute a straitjacket. I hope that the Paymaster General will pay attention to that because it is important. The scheme is being referred to as the "last stop" because an applicant must first have applied and been refused by every other agency empowered to help.

Another important factor is that loans only can be made. Grants cannot be made, and partnership with local authorities is not permitted, despite the fact that many councils are doing fine work in that area. Partnership or co-operation with the NCB (Enterprise) Ltd. would be a big step forward.

Those are just three examples of the difficulties that beset the scheme. No wonder that some applicants describe it as an obstacle race. Its inanity is matched only by the Government's proposal to abolish the three new town corporations in the north-east. In 1985 Peterlee, in my constituency, brought in no fewer than 1,050 new jobs. and during the past six years it has brought 8,000 jobs to the area. The corporations are the only job-finding agencies that we have, yet the Government propose to abolish them. The Tory chairman of the Peterlee development corporation, who has done an excellent job, has been driven to criticise the Government publicly for that proposed act of vandalism.

I beg the Government to reconsider the future of the new town corporations. Their record in finding new jobs speaks for itself. If the Government persist with this doctrinaire attitude and in not recognising the facts of life, they will deal a serious blow to employment in the areas which the corporations serve.

I do not say that there are any easy solutions to the problem of unemployment. During the debate the Labour party has been criticised, but we are merely saying that in government we will reduce the number of unemployed by 1 million in two years. No one can say that that is other than a modest objective. It is realistic and the British people will realise that. The Government should be honest with themselves and with the British people. They should say that their economic policies have failed, and recognise that the lives of millions of people have been ruined. Nothing less than a fundamental change in policy is necessary if the horror of mass unemployment is to be brought to an end.