HC Deb 24 November 1980 vol 994 cc189-90
4. Mr. Barry Jones

asked the Secretary of State for Industry what new policies his Department will initiate to stimulate industrial activity in the regions; and if he will make a statement.

14. Mr. John Evans

asked the Secretary of State for Industry if he plans any changes in his regional industrial policies.

Sir Keith Joseph

No new policies are in mind, because the existing policies of reducing public spending and borrowing so as to reduce inflation and interest rates and thus encourage private enterprise are, coupled with existing regional policies, the best way to achieve growth in industrial activity in the regions.

Mr. Jones

Does the right hon. Gentleman recognise the mounting and desperate fear in the regions over 1920s-style unemployment queues? Will be consider new policies that will entail more intervention and more and more subsidies, in order to save jobs in coal, textiles and steel? Would not that policy be better than one of brutal indifference to the deindustrialisation of our country?

Sir Keith Joseph

No, Sir. I do not believe that there is any comparison with the 1920s or 1930s. Secondly, further intervention would have to be paid for by some means that would do at least as much harm as the present decision. Thirdly, there is something that the hon. Gentleman could influence that could improve activities all over the country, including the regions. All objective observers realise that a number of jobs are being and have been lost because some trade unions and work forces are demanding unrealistic pay increases, unaccompanied by higher productivity, and are obstructing the higher productivity that improves competitiveness and is the only base for new jobs.

Mr. Evans

Is the Secretary of State aware that his complacent answer will be treated with contempt and anger in the regions, which have suffered an appalling increase in unemployment since he became Secretary of State for Industry?

Sir Keith Joseph

Opposition Members do not help their constituents by denying that our main weakness and the main cause of unemployment, in addition to the recession and the strong pound, is lack of competitiveness, and that at the heart of that is uncomprehending and obstructive trade unionism.

Mr. Rippon

I do not dispute the truth of a great deal of what my right hon. Friend has said, but would he not regard it as right, in the present circumstances, to consider using a higher proportion of public expenditure to create new wealth and new jobs in regions, such as the Northern region, by using Government power, as the major purchaser of buildings, goods and services, to create something that will strengthen the country?

Sir Keith Joseph

My right hon. and learned Friend assumes that it is possible to cut public expenditure in some areas in order to shift resources. That theory is impeccable, and my right hon. and learned Friend will improve his case if he gives us examples of where to shift resources from.

Mr. Eastham

The Minister spoke about high wages being demanded by workers. Is he aware that, recently, ICL and Courtaulds did not give that as the reason for high unemployment and redundancies?

Sir Keith Joseph

No, indeed not. I was making a generalisation, which, as a generalisation, is true. I did not refer to high wages. I referred to high wage claims, unaccompanied by a willingness to work towards higher productivity. It is high relative unit labour costs that are destroying jobs in this country.

Mr. Maxwell-Hyslop

Will my right hon. Friend ease the public sector borrowing requirement and reduce the burden on the private sector by grasping the nettle and requiring British Shipbuilders to sell its London headquarters, which is a gross extravagance, and the ship repair yard at Falmouth, which it should never have bought in the first place?

Sir Keith Joseph

My hon. Friend can be assured that the new chairman of British Shipbuilders has announced his intention to sell the London headquarters, and he will certainly consider the other alternative.

Dr. John Cunningham

Is not the Secretary of State's claim about high wages manifestly untrue in the textile industry, the steel industry and a great many other industries in the regions which are now suffering principally because of the value of sterling and high interest rates, following his adherence to monetary policies? Is not the real problem for industry in this country that the Government have two Chancellors and no voice for industry in the Cabinet? Ought not the right hon. Gentleman to resign?

Sir Keith Joseph

The hon. Gentleman is wrong in his analysis. We have a lethal combination of low real pay and even lower real output compared with our competitors. The result is that we have relatively low buying power out of wages because output is so relatively low. Compared with our competitors, our productivity, and therefore our competitiveness, is, overall, disastrously low. That can largely be rectified by a more comprehending attitude by many trade unions.

Dr. Cunningham

If that is so, why is the right hon. Gentleman pursuing policies that are preventing industries in the regions from investing? Are not the right hon. Gentleman' s policies producing a catastrophic drop in investment in industry?

Sir Keith Joseph

No. Investment is far more discouraged by overmanning of so much existing investment and the inability, as a result, to earn profits from it than by any other factor.

Mr. McQuarrie

I accept my right hon. Friend's desire to provide regional development status to create wealth where it is needed, but does he agree that because of those policies certain indigenous industries, in, for example, the Grampian region, which rely on gas and oil are suffering severely because they are unable to create the necessary investment, due to the lack of work in those industries?

Sir Keith Joseph

I am not sure that I understand my hon. Friend's question. I should be grateful to him if he would write to me or see me about it.