Orders of the Day — Autumn Statement

Part of the debate – in the House of Commons at 8:39 pm on 19th November 1992.

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Photo of Roger Godsiff Roger Godsiff , Birmingham Small Heath 8:39 pm, 19th November 1992

When the Chancellor of the Exchequer made his statement last week, there were scenes of wild delight on the Government Benches and much shouting in parts of the Tory press that the economic recovery had begun.

There may have been wild delight on the Tory Benches, but if Ministers had cared to visit Birmingham and the rest of the west midlands—the real world outside this place —they would have found no wild delight. On the contrary, they would have found disbelief, anger, bitterness and real frustration among the people of Birmingham and the rest of the west midlands who have no jobs or spending power, and who have seen their industries destroyed in the past 13 years. Those people were saying, "Why have the Government missed their opportunity yet again? Why have we gone through all that, and seen the Government make so many U-turns? Why, even in the autumn statement, which takes half a step forwards towards a Keynesian policy, are the Government still not prepared to admit the mistakes that they have made in the past and do something to regenerate British industry?"

Let us see how good the autumn statement was, and how much it will do for British industry. What will it do for GDP and growth? The forecast is for 1 per cent. growth in 1993—and that will follow a drop this year. What will the statement do about unemployment? Unemployment now stands at 2·8 million, but everyone in the House knows that the unemployment figures are massaged and that 2·8 million is not the true figure. Everyone knows that the true figure is nearer 4 million. What will the statement do for those 2·8 million-plus people who are unemployed? By 6 o'clock this evening, anyone who cared to look at the ticker tapes of news coming in could see that in one day a further 10,000 jobs had disappeared. What did last Thursday's statement do for those people?

Will investment increase? On the contrary, it is still falling. Will the balance of payments improve? Will we suddenly see a great narrowing of the gap? That will not happen. We have only to examine the Government's own forecast.

What about public borrowing? In 1988 the Prime Minister said that public borrowing of £25 billion was unacceptable. He asked why we should pass on to the future the burden of the follies of the present. The figure was £25 billion then; it is £37 billion for 1992; and it will be £44 billion for 1993. Why should we pass on to future generations the burden of the follies of the present Conservative Government? That is what the Prime Minister asked in 1988.

The Chancellor told us that from now on we could spend some of our capital receipts, that the money received for every public asset—every council house, school playing field or piece of land—which local authorities sell between now and the end of 1993 could be used for new capital projects. Local authorities throughout the country are saying, "Thank you very much, Mr. Chancellor of the Exchequer. That is very kind of you. That will really solve our problems. Here we are in the middle of a massive recession, property prices have collapsed, and for everything that we can sell—if there is anything that we have not already been forced to sell, and if we get a decent price for it—we shall be able to use the money for new capital projects."

What about the £5 billion which is locked away and which the Chancellor will not allow local authorities to spend? Why will he not allow them to spend that money to build desperately needed houses, to improve roads which are falling apart, to improve the infrastructure of the inner cities, to improve people's quality of life and make some amends for the follies of the past 13 years? "No," says the Chancellor, "You cannot spend that money—you must use it for debt repayment."

Outside in the real world, the Chancellor's statement was greeted as a nonentity. In my constituency, 26 per cent. of the population is unemployed. There was one small cheer for the Chancellor's statement: my constituents were grateful that their social security benefits would not be cut. Most of them are on social security. They do not have jobs—their jobs have disappeared—and they were thankful that the Tory Government who destroyed their jobs did not intend to victimise them again by cutting their social security.

That small debt of gratitude was more than outweighed by a feeling of despair and anger. In Birmingham, four out of 10 people have been unemployed for longer than a year. That may be of little concern to certain hon. Members, and to others it may be an irrelevance, but it means a lot to the people who have experienced it.

I do not know how many Conservative Members have ever joined a dole queue and waited to sign on. I am sure that some of them have, but I think that most of them have not. I wonder if many of them have even gone to see what the process is like. As somebody who experienced unemployment, although for a relatively short time, I can tell them that it is not a pleasant experience, and certainly not an experience that we should want to pass on to others. The present Administration seem impervious to that.

The west midlands used to manufacture cars and export them all over the world; it was the hub of the British car industry. The motor manufacturers were pleased that the car tax was abolished last week. Hon. Members may think that throughout Birmingham people will stampede down to the car showrooms with £10,000, £12,000, £15,000 or £20,000 in their pockets wanting to buy brand new cars and save £400 in car tax. I must enlighten them: anyone with that sort of money who wanted to buy a new car could go into any showroom in any part of the country and name his price. Hon. Members will know that my point is valid because many of them will have done just that. One can get any discount now, because the car salesmen are so desperate to unload their cars. The idea that £400 will suddenly provide a massive boost to the British car industry amounts to sleight of hand.

The abolition of the car tax is welcome—anything is welcome when one is lying flat on one's back—but it will not regenerate the British car industry. Why not? Why did I begin by saying that most people greeted the Chancellor's autumn statement as a nonentity? I said that because our problem is one of confidence. The hon. Member for Havant (Mr. Willetts) referred to confidence. Yes, there is a crisis of confidence. That is what it is all about. People do not have confidence in the Government or in their policies. They are not going to dash out and spend money—