Autumn Statement

Part of the debate – in the House of Commons at 6:42 pm on 14 January 1988.

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Photo of Mr Michael Foot Mr Michael Foot , Blaenau Gwent 6:42, 14 January 1988

During this debate, and at the time of the Autumn Statement, there has been talk of a national recovery and indeed, in some cases, of an economic miracle. In this debate I wish to present the contrasting situation in my constituency and in many parts of Britain. No economic miracle has yet appeared in those areas and no economic recovery which could be dignified with those terms. We still have a level of economic activity far below what it was in 1979, and a level of unemployment higher than it was in 19'79. Therefore, it is an insult to talk in those terms and represents a distortion of what is really happening in Britain.

If the economy is being run with such success, why are we confronted day after day, case after case, with fresh evidence of the squalor, the shoddiness, the injustices and the dangerous undermining of well-tried institutions that are most essential to preserve civilised society in Britain?

I know that many right hon. and hon. Members wish to speak in the debate, but I should like to refer briefly to some of those examples, the most notable of which is the National Health Service, which already has been mentioned in the debate by Opposition Members and others. The presidents of the royal colleges showed that they knew better than the Prime Minister what was happening in the National Health Service.

The right hon. Member for Shropshire, North (Mr. Biffen) made some extremely pointed and important remarks on that subject. However, I should like to give him one warning. The right hon. Gentleman quoted from a particular pamphlet. It was once said of Bernard Shaw that he was a good man who had fallen among Fabians. I hope that the same fate does not befall the right hon. Gentleman, who quoted from a Fabian pamphlet as if it was an authoritative statement on the subject, and I hope that he will think again.

Most of the problems with the National Health Service are not novel. The same problems and calculations existed in 1948 when Aneurin Bevan established the National Health Service. I remember it better than any other hon. Member because I am the only hon. Member here who was present during those controversies. The controversies were about how one would unloose an infinity of demand. Had Bevan listened to those arguments, heeded them, accepted them — they came from so many quarters, from Conservatives, Liberal Benches and Labour Benches — the National Health Service would never have been founded in 1948. We have a Health Service because he said that we must represent the claims of that service above any other area of social services, and because he presented them with such daring, comprehension, understanding and compassion the Treasury was prepared to listen.

The problems are not easily solved now, but the sort of figure that the right hon. Member for Shropshire, North mentioned should be presented to the Cabinet today. Perhaps one of the reasons why the right hon. Gentleman was removed from the Cabinet is that the Prime Minister feared that he would present that argument. I hope that some other members of the Cabinet will do that, but I doubt that they will present it as persuasively as the right hon. Gentleman could present it. If they do not, they will be overwhelmed, because the demand throughout the country is growing strongly all the time. The Government will have to yield. The fact is that £200 million is insufficient. The Government will have to yield much more at the time of the Budget, and the sooner they do that, and the better grace with which they do it, the better it will be for the health of the National Health Service and of the nation.

The National Health Service is not the only example where the screw has been turned. According to the figures, there has been an expansion in the total amounts allocated, but elsewhere — I speak for a constituency where we feel the consequences of those measures—the Government have imposed cuts which are taking effect now. But the Government still dare to talk about a national recovery. During the next few months some of the special cuts that they have inflicted on social security will be brought into operation. They will be applied through discussions such as those that took place yesterday in the House about child benefit.

Other provisions will be applied to cut what many hon. Members believed had been established as the best social services to deal with family problems. Conservative Members have said during the past few days that the demand for family allowance was an all-party demand at the end of 1945. Child benefit was a great improvement on the family allowance. It was consolidated by the last Labour Government on a more ambitious scale so that child benefit was paid to the mother without any means test, and sustained at its original value. All those principles are being undermined by the Government. That is a very serious matter. It will have serious consequences, particularly in areas such as mine where people are dependent on these provisions. The vast increase in homelessness in many big cities and in other places is another example. So what is meant by all the talk of a national recovery?

Then there is what the Government have done to so many other institutions, including universities. Surely at a time of technical advance the Robbins principle of a university education for every boy and girl, man and woman, who can take advantage of it should be carried out. That was one of the finest principles that came out of the second world war. It was accepted by us all. I would have thought that it was a civilised principle of the first order. The Government have done nothing more disgusting than to abrogate that principle. There is great competition in that sphere. It is dreadful that people who themselves have apparently had a first-class education should introduce measures that will deny a similar education to other people who are just as capable of benefiting from it. [Interruption.] Let those who wish to deny what I say talk to the leaders of the universities and people at universities who have been protesting against the policies operated by the Government over many months. There is talk of the Government withdrawing some of the offensive clauses from the Education Reform Bill. I hope that they will do so.

Another part of the Government's programme which affects people directly is the extraordinary White Paper published on Tuesday by Lord Young and his Department. Huge sums of taxpayers' money are being used to publicise the document as though it had been accepted by the House. When one reads the document, one realises how taxpayers' money has been misused to publicise Lord Young and his Department. The explanation I offer to the House is that the document was not prepared originally to be presented by Lord Young's Department but would have been presented by him if he had been appointed chairman of the Conservative party. He seems to have decided that, as he had drawn up the document, he might as well get the taxpayers to pay for it.

If hon. Members think that I am exaggerating, let them look at page 2, where it is explained that 1979 was supposedly the turning point of the century in our economic life. Lord Young is not so modest as to think it was a turning point just in the postwar period, but in the century. In glorifying his achievements and his prospects Lord Young does not even mention that North sea oil has made some contribution to the economy over the past few years. That is not even mentioned in the document, which supposedly describes the whole economic position of the country.

The same Lord Young comes forward with proposals for changes in regional policy. I am not saying that the previous policy was perfect; of course, it was not. Many cuts imposed under that policy hit areas such as mine. That is why we pleaded with the Government to listen to what we had to say before they introduced a new regional policy.

The idea of having discretionary grants as a substitute for guarantees for different industries is dangerous; it is a principle that is difficult to work sensibly. It is not only we in the Labour party who say that. Three ex-Ministers from the Department of Trade and Industry asked questions about it yesterday—the right hon. and learned Member for Richmond, Yorks (Mr. Brittan), the right hon. Member for Chingford (Mr. Tebbit) and the right hon. Member for Henley (Mr. Heseltine). I have to be careful about applying zoological terms to the right hon. Member for Chingford—if I do, I may get complaints from the Animal Welfare Trust—but when three worms turn on the same afternoon, asking the Minister to look properly at the proposed change, the Government ought to take note.

We are deeply concerned about the Government's proposals in the area I represent. The changes will apply not just to areas which have been badly hit but to considerable parts of Wales, Scotland and the north-east. There should have been much more discussion about how to have a more effective regional policy.

One obvious way which we had worked out and which was being applied in 1978 was special development assistance for the areas which were hardest hit, the areas threatened not just with a 2 or 3 per cent. increase in unemployment but with a doubling of unemployment. Unemployment went up to the then appalling figure of 12 per cent. in areas affected by the steel crisis. But over the next three or four years, under the wonderful recovery programme of the Conservative Government, unemployment went up to over 20 per cent. What we sought to provide under the Labour Government's regional policy was special development assistance over and above the general development area assistance. It worked. There were plans for getting new industry into my area. Other areas too had special development area status. It enabled us to get on with the job of rebuilding, as local authorities and industries are eager to do now. We are determined to rebuild industry. We wish the Government had listened to what we had to say about how a sensible regional policy should be worked out.

Even at this late hour, if only Lord Young can set aside his propaganda leaflets, cannot we have a proper discussion? Most of the affected areas are represented by Labour Members and by Labour local authorities that are passionately eager to join in the task of rebuilding. The idea that local authorities are hostile to trying to get on with this major task is ludicrous. To get more jobs is the number one priority of many local authorities. But, partly because of their insane hatred, detestation or suspicion of local authorities, the Government have not been prepared to join in such activities. I hope the Government will consider that afresh.

That is just another example of how fraudulent is the claim that we have had a national recovery. Whatever else there may have been, it is certainly not a national recovery. Until it is national, the Chancellor of the Exchequer should be more reticent in the claim that he makes for himself and his achievements.

The hon. Member for Horsham (Sir P. Hordern), with his usual delicacy, properly rebuked the Chancellor for lecturing the Americans. If, at the beginning of the Reagan regime, the Americans had pursued similar policies to those pursued by our Government in 1979, 1980 and 1981 there would not have been a recovery in the United States or throughout the world. The world would have been plunged into an even deeper slump perhaps than in 1929. There would not have been a recovery here. The Chancellor thinks that he governs these things, but he is just the fly on the wheel. He thinks that he makes the wheel go round. What happens in the United States economy is far more important than anything he does. Therefore he should have been a bit more careful about looking back.

Some people prophesied what was going to happen in the American economy. Professor Beckerman, an old fashioned Keynsian—which means that he is absolutely up to date; he has got the policies which the Chancellor is looking for for next month — said way back, as anyone can check, before President Reagan came to office, that of course he would prefer a Democrat to be elected, but the incoming American Administration would not carry through a full monetarist policy, as they were claiming they would. Because tax cuts were popular and public expenditure was not popular, they would carry through, not by intention but by accident, a Keynsia n policy of reflation no matter what it might be called.

That is what they did for five or six years, and when the American economy recovered we managed to clutch the coat tails in the last four years. That is what really happened, so it does not become the Chancellor to make a holus-bolus criticism of what Americans may be doing now. The situation may be different, but the idea that economic problems which we have not solved can be solved by encouraging the Americans to go in for a full-scale cut in their deficit is absurd. All that will happen is that there will be the kind of slump that there would have been if the Americans had embarked on that policy six or seven years ago.

This does not mean that I agree with the American policy. I think that they could spend their money much more sensibly. If only they would divert a huge amount of that public expenditure, as they could, from armaments into these other fields, it would be much better for all of us. So I certainly think that we should encourage that. But the suggestion that all economic wisdom rests with the Treasury Bench and the Chancellor of the Exchequer and that all that is necessary is for the Americans to copy what the present Government have been doing is absurd. First of all, they would have to explain which of their policies they wished the Americans to copy—the one that they tried with such appalling results in their first period of office or those that they are following now, although they are trying to conceal the fact that they have come round that far.

I know that several Tory Members are trying to entice them further along that road of sanity and I do not wish to interfere with that process because I think that it could be beneficial for the country as a whole. Some of the benefits of such a policy might eventually get through to the great areas that some of us represent that have seen the tragic failure of the Government to understand what is happening. But Government Members do not come to those areas; they do not know the areas and they do not see what is happening in our places. So we have got to tell them.

In the meantime, I hope that we can stop the Chancellor of the Exchequer preaching to others when he has himself found the right gospel only in the last few weeks. I hope that he will change his habits in a way that may be helpful to us all instead of causing the kind of injury that might follow the sort of prescriptions that he has been giving in the last few years.