Government Economic Policies

Part of Opposition Day – in the House of Commons at 9:43 pm on 20 January 1987.

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Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment 9:43, 20 January 1987

I shall not give way. I have used almost all my time.

That decline has taken place most heavily in places that were most dependent on heavy traditional industry. This fall in employment in manufacturing industry has been taking place in the Western world. The loss of jobs in manufacturing industry was faster in the late 1960s and early 1970s than it is now. The reason why it was so severe in 1979, 1980 and 1981 was that we inherited over-manned and uncompetitive heavy traditional industry, so the fall became most marked.

Out of that, the Opposition tried to construct the north-south divide. As Opposition Members often do, they turned to the hon. Member for Dunfermline, East (Mr. Brown) to produce an analysis of an article in the Department of Employment Gazette to try to reveal new facts to support their case. No hon. Member could explain how the hon. Member for Dunfermline, East arrived at his conclusion that 94 per cent. of jobs lost were in the north of England figure. I shall explain it at length afterwards. I know how he did it. It was a clever analysis of a document that he got three days ahead of publication. In fact, manufacturing jobs have been lost in the manufacturing areas, but 28 per cent. of the manufacturing jobs lost have been in the south of England. According to the Labour party's definition, 40 per cent. have been lost. But that loss of jobs is not the problem that we are facing. We should be facing the situation of rising total employment. If there is a problem, it is that the additional jobs are increasing more rapidly in parts of the south than in parts of the north. But that is not the analysis put forward by the Opposition.

Over the past three years, a net growth in jobs has been taking place in each region in England—3 per cent. in the northern region, 1 per cent. in the north-west and 4 per cent. in Yorkshire and Humberside. Unemployment is falling steadily—that is the Opposition's problem. Over the past year, the fastest fall in unemployment has been in Wales, the north, the north-west and the west midlands. Youth unemployment is falling everywhere and is falling faster in the northern regions. Since 1983, 6 per cent. more jobs have been created in the south-east and in the south-west. In East Anglia there has been a 13 per cent. net additional growth in jobs. Now that we have growth, better economic performance and competitive industry, the growth in output and employment is occurring faster in some parts of the country than in others.

Like my right hon. Friend the Chancellor and some of my hon. Friends who have spoken in the debate, I am a northern Member. We must tackle the problem. Our approach when we see that the recovery and the growth of new jobs is occurring faster in the south than in the north is to address ourselves to the problems of making the north as attractive a place for new investment and new business as the south and of ensuring that it widens its economic base and attracts those types of industry that give rise to growth in the south.

We are looking forward to a new northern economy. We are bringing in new ideas to stimulate growth. We are encouraging enterprise and entrepreneurship there. Nevertheless, the Labour party takes a different view. it looks back to the heavy traditional industrial base of the north, talks about the old policies that it followed and tends in its pronouncements, especially simplified ones, to feed southern prejudices and images of the north which it has created with cloth-cap poverty and deprivation—the picture that Labour Members like to paint.

Labour Members have not addressed themselves throughout the debate to all the policies that are beginning to attract new industries to the north—what we are doing to put money in to clear up the derelict land; the urban development corporations which we have have set up on Tyneside and Teesside and at Trafford Park to speed up development; the enterprise zones, which we have set up in the middle of the industrial cities there; the enterprise agency network, which we have set up across the country; and the work of the city action teams and inner city teams in Leeds and Middlesbrough, which are bringing new training and new employment opportunities to people in those places.

Labour Members have not addressed themselves to the way in which we are developing a public-private sector partnership, working beside groups such as Business in the Community and putting money into the Prince of Wales' youth business trust to get young people trained for a more modern economy. It is by giving people in the north more training, not just in skills, but in entrepreneurship, and by making the area more attractive to new investment that we have enabled people to take advantage of the lower costs in the north and build on that growth in new jobs, which, I repeat, is already taking place there.

Unemployment is falling faster in the north, than in the south. It will be helped by better industrial relations in the north, by the fact that Nissan is attracted to Washington new town and by the ability to have a single union deal with the union that will promote flexible working practices—the type of things that the TUC and half the Labour movement spend their time resisting. Even when we look at regional pay differentials, as my right hon. and learned Friend the Member for Richmond, Yorks did, horror is aroused in the minds of most Opposition Members.

The Opposition emphasise a totally different approach to regional policy, one based on arguments about grants. It is about time that we acted as we have to make the grants more selective, to stop the waste that occurred under the old system and to concentrate grants, as we do, more on jobs and specific areas and to target them better. Just to defend regional policy in its traditional form, as my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) sought to do, is to ignore the failures of regional policy in the 1970s.

There are those who say that the west midlands is now an example of the north-south divide. It is no good going back to the west midlands and saying that the regional policies of the 1970s, which barred new development in that region, did not contribute to its problems. It narrowed its economic base and that economy collapsed when the vehicle industry failed. It was a victim and not a beneficiary of the Labour party's regional policy. That is the opinion in the region.