Unemployment

Part of Opposition Day – in the House of Commons at 8:32 pm on 8 December 1992.

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Photo of Angela Eagle Angela Eagle , Wallasey 8:32, 8 December 1992

I had intended to deal with that issue later and to examine the quality as well as the quantity of jobs created. The structure of employment in Britain has changed in the past 14 years, away from secure and skilled jobs to more insecure, low-paid and part-time jobs.

Apart from the obsession with monetarism in the early 1980s, Conservative ideology believed that the superiority of market forces would provide, so that the Government could sit back and wait for the market to provide perfect solutions to every problem.

We are now in our second recession. We have lost massive chunks of manufacturing industry, and only 4 million of the 50 million people who live in this country now work in manufacturing. Great swathes of skilled people have been put on the dole and many healthy industries have gone to the wall simply because, as Lord Gilmour said, the Government's reaction to what is happening in the economy has been much more dogmatic than that of the Christian Democrat Governments in Europe, all of whom admit that there is a role for intervention.

Intervention has a role not only in events in a sector of the economy but also in affecting demand. The level of demand in the economy seems to be taken as something that is handed down from Heaven and on which the Government can have no effect. The Secretary of State said that the Government can simply provide supply-side polices to retrain and provide skills so that people can better be matched to jobs. She did not say how the Government could increase demand in the economy to create more jobs.

I therefore looked at whether the autumn statement contained anything about creating demand. I must admit that it contained a small dash of intervention in the form of construction projects, which the Chancellor of the Exchequer hopes will create employment. But many of them do not start until 1996. I wonder whether that is a clue to the date of the next general election or simply my musing about what might be on the Prime Minister's mind.

The autumn statement was presented to the House in the aftermath of the most humiliating and expensive economic debacle that we have seen for a long time, when we were forced out of membership of the ERM. We then had the spectacle of a Government in search of an economic policy. The autumn statement is meant to be it. It contains just a little touch of expansion but also a public sector pay freeze. It is not clear to me—it has not been mentioned by Conservative Members—whether the autumn statement's overall effect will be deflationary because of the spending power that it will take out of the economy, and whether that will make unemployment worse. Time will tell.

The Government have been pursuing their own ideological dogmas and have been content to let unacceptably high unemployment persist. I want to discuss how that affects my local area. It is apposite that I discuss that matter after last week's announcement of the final closure date for the Cammell Laird shipyard, which is to be next July if the Government and Vickers Shipbuilding and Engineering Ltd. are allowed to proceed. As my hon. Friend the Member for Barrow and Furness pointed out, he is in a similar position. Birkenhead and Wallasey have been built up around one industry. When that industry is threatened with closure, the results are catastrophic for the surrounding area.

I applaud and join my hon. Friend the Member for Birkenhead in his determination to ensure that the yard does not close. We shall do our level best, with the help of the community, agencies and, I hope, the Government to ensure that it has a future as a shipbuilding yard, out of VSEL's control, to maintain skills and jobs in that important area.

Wallasey and the Wirral were much weakened by the monetarist experiments of the 1980s. Indeed, 15 per cent. of the manufacturing industry in that area disappeared during that period. We now have another turn of the screw, which will ratchet down unemployment even further in an area already weakened by the Government's economic mismanagement. If the yard goes, almost 1,000 direct jobs will go immediately. Up to 6,000 other service jobs will go as an indirect result of the closure. Some 600 local firms that have supplied the yard will be at risk. During its history, Cammell Laird has been notable for always going to local firms for supplies. Consequently, the effect of its closure on the local community will be all the more devastating because of its acceptable and responsible purchasing pattern.

The local borough council estimates that £30 million of spending power will be taken out of the local economy. One in seven people is out of work in the area. The official unemployment figure for Wallasey, where many of the people who work in Cammell Laird live, is almost 14 per cent. In addition, because of the cost of unemployment, retraining and other issues that have been mentioned, it is estimated that the closure will cost the public purse £111 million in the first year. It is economic madness to close the yard and put out of work one of the most skilled work forces in the country, given that the industry is likely to be revived in the world market within a couple of years. We have some of the best shipbuilding facilities in the world. Because it is so mad, the Government will probably decide to let it happen.

The Wirral area has 19,000 people on the dole before the potential economic holocaust that the closure would unleash. Wallasey has above average unemployment, with 18 per cent. male unemployment, 7 per cent. female unemployment and an overall level of 14 per cent. There would be a 2 per cent. increase immediately if the shipyard went. Moreover, 37 per cent. of that unemployment is long term—people who have been on the dole for more than a year. I meet constituents who have been out of work for most of the decade and have little prospect of a job.

Another disturbing aspect of unemployment in the area is the large number of youths unemployed. People in their mid to late 20s have never worked since they left school. It is easy to imagine why we have one of the worst drug problems outside Edinburgh and London. It must be connected with the despair and hopelessness that accompany years of unemployment with no prospect of getting out of it. That should concern hon. Members on both sides of the House. We must reintegrate people who feel that they have been forgotten and neglected, that the Government do not care about them and that the political system excludes them. Unless we do, we are simply racking up problems for the future and must deal with the economic and political whirlwind that will come about if we ignore it now.

When the Government first came to power, the then Prime Minister, on the steps of 10 Downing street, used a quote by St. Francis of Assisi. I remind hon. Members of what she said: Where there is discord may we bring harmony. Where there is error may we bring truth. Where there is doubt may we bring faith. Where there is despair may we bring hope. That is none out of four. Unless the Government do something to deal with those serious and persistent issues and social problems caused by the high unemployment that they are creating, that quote will remain the sick joke that it represents to most people who are on the dole or live in fear of it and the problems that it brings.