The Economy

Part of Orders of the Day — Debate on the Address – in the House of Commons at 8:08 pm on 14th November 1990.

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Photo of Mr Doug Hoyle Mr Doug Hoyle , Warrington North 8:08 pm, 14th November 1990

If ever there was typical complacency, it was the speech of the hon. Member for Croydon, South (Sir W. Clark). Indeed, there has been a series of complacent speeches by Conservative Members, from the Chancellor onwards. At least the Chancellor admitted that Britain is in a recession. Of course, we are not simply in a recession—we are in a deep recession. All that the hon. Member for Croydon, South could talk about was Labour party promises—not what the Government will do to remedy the mess into which they have got this country.

The Government are inept. There has been a high degree of economic mismanagement. They have had £91 billion in oil revenues—they have been positively awash with oil—since they took office in 1979, but we have little to show for it.

It is not much good Conservative Members talking about the new companies that have been created when there were 16,500 bankruptcies in the first nine months of this year and 64 per cent. more liquidations in the third quarter of this year than there were in the same period last year. That is not a record of success—it is a record of failure.

Building employers tell us that there will be 50,000 redundancies this year in the construction industry and a further 50,000 redundancies next year. In the real world in which many of us live, unemployment is increasing. When we talk about unemployment we must remember the misery that it brings not only to those who are unemployed but to their families, who suffer falling living standards, bills that cannot be met and the difficulties of paying for a roof over their heads. That is the real world under this Government after 11 years in office.

Anyone who doubts what is happening has only to consider the Government's unpopularity as shown in the two recent by-elections. That unpopularity has caused such a flurry in the dovecotes that Conservatives no longer know whether they want the Prime Minister.

At long last, whether they like it or not, the Government have had to join the European exchange rate. One can argue about whether DM2·95 to the pound is the right rate. The truth is that it is too high for British industry and British industry is uncompetitive, which means that more firms will go bankrupt, there will be more liquidations and more unemployment. That is the real tragedy of what is occurring.

The Prime Minister is now against EMU. She huffs and puffs like the big bad wolf at the wall, but it was she who erected that wall when she agreed to the single European market, when she took us into the ERM. She is well on the way, whether she likes it or not, and she is the person who is responsible. The Prime Minister may say that she will not accept something, but she always does in the end. That is the tragedy of the record of the Prime Minister and her party on Europe. As a result of that attitude, we are always responding to rather than shaping events.

Next we will have a European bank under the control of bankers rather than under political control. What we should be arguing for in Europe is for more regional aid and for regional policies as outlined by Labour Members. Nor, despite the crisis in British industry, is anything being done to bring about the necessary investment. Investment in industry is already lagging far behind that of our competitors, which means that we shall fall even further behind. We all know that the present situation in Britain means that investment in industry will be cut yet more, making our industry even more uncompetitive.

Labour Members also stress the importance of training, but rather than increasing training the Government will be cutting spending on training by £1 billion in real terms by 1993–94. Here again, we are falling behind our competitors—we do not have the highly mobile, highly trained work force that they have, and that augurs ill for the future.

I realise that there is a crisis of confidence in the Conservative party. There is a little local difficulty. We hear from the Prime Minister that she will not duck the bouncers, that she will not stonewall, that she will knock the bowling all over the field. As a keen student of cricket, I can tell her that the person who plays that kind of game may succeed but may also be bowled first ball. If she does not believe me, let her ask Ian Botham. She may well be bowled first ball in the election that is to take place—I do not know—but I do know that it is not the Prime Minister alone who is responsible. The Cabinet must share responsibility for the situation in which we find ourselves. Whoever is elected will also have to bear responsibility for 11 wasted years. Despite the benefits that should have accrued from oil revenues, we are not in a good position to face competition.

What we need is not a private cricket match but a cricket match in which all can join. We need a general election with a new captain, a new team and a new start. We need a team that believes in industry and in revitalising manufacturing industry so as to create the wealth to pay for our social programme, for education and for a better health service. That is what we need, but without competitive industry we shall not be in that league.

For 11 years there has been a concentration on service industries, but because of our handling of European matters we are in danger not only of losing out on the European bank—the City of London may also lose out and the centre of finance may move from here to Paris or, more likely, Frankfurt. Whether we like it or not, in or out of the Common Market, we are affected by what happens to the deutschmark. We cannot get away from that. The Government cannot lead us forward, nor can we recover from the economic mess in which we find ourselves without a new approach and a new team who will put money into industry and training and prepare us to meet the challenges of the 1990s.