HC Deb 14 July 1982 vol 27 cc1051-126 4.29 pm
Mr. Speaker

I have selected the amendment in the name of the Prime Minister.

Mr. John Prescott (Kingston upon Hull, East)

I beg to move, That this House is appalled at the drastic increase in unemployment throughout every region in the United Kingdom, and the continuing decline of Great Britain's industrial base; condemns the Government's regional policies and the recent proposals on assisted areas as totally inadequate; and calls for the implementation of the policies of the Labour Party's 'Plan for Jobs' which would lead to increased investment and employment. The motion addresses itself to the disastrous three years of unemployment that have been imposed on Britain. In three years of Tory rule we have had the highest level of unemployment, the largest fall in total output and the greatest collapse of production since the 1920s, and the end is not yet in sight. Against that background, no regional policy, however generous and powerful, can possibly hope to achieve its objectives—to end regional disparities, both economic and social, within our regions.

In the past six months I have spent at least four days in every region of the United Kingdom, along with my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry). We have witnessed the despair and the tragic waste of human and capital resources in the regions. Today, there are over three million registered unemployed—12.8 per cent.—in our employment exchanges. For every 100 people unemployed at the time the Labour Government left office, the Government have added to the dole queue in the Saatchi poster a further 227 people.

I have no desire to hide the fact that there was increased unemployment under Labour. I take that as a measure of the increasing economic crisis that many of the developed economies are beginning to face in the future as in the past decade. That should give us some idea of the policies that are necessary to solve our problems. However, the depth of a recession and the scale of unemployment are directly related to the policies of any Government. In the five years of the Labour Government up to 1979, despite unemployment doubling, we were able to increase jobs so that at the end of our term of office a quarter of a million extra people were employed as a result of our regional and central policies.

Under the three years of Tory Government the scale of job loss has been phenomenal. It makes even the three-day week under the Heath Government look good. Under Labour, unemployment grew by 160,000 a year over five years. Due to deliberate Government policy, unemployment has grown at the rate of 566,000 a year—3.5 times the rate of increase in unemployment under Labour. The Government have certainly set about creating unemployment with a vengeance.

No doubt the Secretary of State will tell us today, as we were told last week, that such unemployment is due to world recession. That is reflected in the amendment to our motion. Funnily enough, we did not hear much of that from the Conservatives when they were in opposition.

I have been to the Library to look at the OECD figures in order to see the scale of that world depression. Between 1964 and 1979 Britain's unemployment followed the middle way of the seven largest developed nations. Average unemployment grew from 2.9 per cent. in 1964 to 5.6 per cent. in 1979. Increasing levels of unemployment and inflation in all developed economies were coupled with reduced returns on profits and growth. Those factors inevitably create conflicts, difficulties and crises, particularly in developed economies experiencing stagflation.

However, between 1964 and 1979 the United Kingdom's unemployment record stayed in the middle range of percentage of unemployment for OECD countries. The present average rate of unemployment in OECD countries is 7.5 per cent. Britain's growth in unemployment at 12.4 per cent. is 3.5 times greater than the average increase in OECD countries.

With that measure it is possible to quantify the effect of the world depression upon the various economies, particularly upon the British economy. While it is a crude estimate, it is reasonable to suppose that if we had stayed on the middle course of the past 15 years, there would have been an increase in unemployment of approximately 400,000 people. If that figure is deducted from the unemployment created by the Government, it can be seen that for one reason or another, directly or indirectly, they have presided over an economy that has produced 1.3 million more unemployed than in the similar economies of OECD countries.

Mass unemployment is inevitably the result of Government policy and was predicted when they made clear their belief in the monetary policies that they intended upon. Some Tories have professed surprise at the scale of what has occurred. Other people, such as myself, believe that it was part of a calculated policy. The Government are committed to reduce inflation at the direct expense of jobs and growth as a result if their fanatical devotion to monetarism, high interest rates and the abolition of exchange rate controls. The results were predicted by the relevant economic forecasting institutions.

The increase in unemployment is not the result of any coincidence or natural law. The Government are committed to public expenditure cuts, although looking at the figures as a proportion of the gross domestic product, public expenditure continues to increase due to unemployment pay. However, the main effects of Government policy have been upon capital expenditure, investment and job creation—as has been borne out time and time again in debates in the House. One sees that effect in local authorities housing programmes, for example, and in investment in nationalised industries such as British Rail. The inadequacy of British Rail investment did not begin in 1979 but the effects have accumulated. British Rail is today attempting to close workshops to save 8,000 jobs and £18 million while at the same time the Government are considering giving £180 million to bring Nissan to Britain for 5,000 jobs. I come from one of the areas that are bidding for that project. I hope that the Secretary of State will give us a statement on the latest position. I am sure that many of my hon Friends would like to hear what he has to say. One well understands the concern about that in view of the present rate of unemployment.

The Government's priorities in public expenditure programmes are reflected in cuts in housing and nationalised industries in order to increase spending on defence, law and order and increased benefits for more and more unemployed. Therefore, it is no surprise to see an acceleration in the many thousands of jobs that have been lost in the public sector.

The Government's high interest rate policy has inevitably caused a collapse in demand. The mass private sector has collapsed with a record number of bankruptcies and there has been an accelerated reduction in manufacturing investment which, compared with when the Labour Government left office, is a 24 per cent. reduction in real terms. All those factors inevitably contribute to the reduction of available jobs.

A major area for attention must surely be the manufacturing sector. Cuts there have had tremendous effects in the West Midlands and other areas. There has been a loss of 2 million jobs in the manufacturing sector since 1976. All that must be added to the lunatic policy of capital outflows, which was debated in the House last night, and which has resulted in the net flow of over £6.5 million out of Britain to investment abroad.

My hon. Friend the Member for Edinburgh, Central (Mr. Cook) pointed out that in one year alone three companies were responsible for one-third of that cash outflow and that they had contributed to the loss of over 17,000 jobs through lack of investment. Indeed, 22 per cent. of British investment goes abroad, whereas in Japan 0.6 per cent. of investment goes abroad. In other manufacturing countries, no more than 5 per cent. is invested abroad. I think that I have made the case that in this country investors invest abroad rather than in our industries. The Government's policies have directly encouraged that.

No doubt we shall be told that the real problem is high labour costs. Although Britain's workers have the lowest wages in Europe, and although Britain's investment per man is the lowest in Europe, we shall no doubt again be treated to the Government's argument about the problem of labour costs. The Government's words will have a hollow ring compared with the examples that can be cited in both the private and public sectors. For example, in the textile industries of Yorkshire, Humberside and the North-West, 300 plants and 50 per cent. of the labour force have been lost, although, even according to the Government, productivity is as high there as elsewhere. Nevertheless, the market cannot be protected without import controls or some quotas as the Government are doing.

British Steel has witnessed a massive cut in manpower and it can now claim that its productivity is as good as that in Europe. However, even with those high productivity levels, no one can give any guarantee or assurance about the future size of that industry. Perhaps the Secretary of State will give us some idea of the future for those industries, as their problems have given rise to considerable concern in most of the regions that I have visited.

Against that economic background, no regional policy has any chance of working. If the Government do not get the central economic policy right, regional policies will be unable to work effectively to reduce unemployment. However, in 1979, the then Secretary of State for Industry, the right hon. Member for Leeds, North-East (Sir K. Joseph), proceeded to dismantle the regional policy that then existed. He scrapped the planning economic councils, which the counties are now desperately trying to replace with some form of organisation. He gave a commitment to review assisted area policy so that he could save money and he decided to abolish industrial development certificates. The market place was to determine everything and there was to be a reduction in regional development grants.

Given the catastrophic effect on employment, I should have thought that the Secretary of State would have reconsidered his policy when he realised its results. However, in our debates last week we were treated only to the news that another 1 per cent. of the population may be covered. Given the scale of unemployment, that news is not worthy of comment.

Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak)

Since 1976, £3,740 million has been spent on regional aid. Does the hon. Gentleman really believe that that aid has created new jobs that have not been lost elsewhere?

Mr. Prescott

We must all address ourselves to that fundamental point. The Select Committee was right to query whether the £5,000 million spent has been deployed effectively. However, that is not to say that we should not allocate resources to disadvantaged areas or that regional policies have not provided extra jobs. However, regional policy can no longer be directed towards minority areas. There is mass unemployment in every part of the United Kingdom and regional policy has a major part to play. Nevertheless, I accept that we must rethink its role.

Today, we are dealing with the Government's record. They have had two years in which to consider the problem. They have begun to review the situation. Last week, there was a statement on their conclusions. Unemployment stands at 12.8 per cent. and many travel-to-work-areas have unemployment rates as high as 30 per cent. and even 40 per cent. or 50 per cent. Unemployment in every area has doubled. I notice that there are not many Conservative Members in the Chamber from constituencies in the South-East. I am sure that the Tory Party has more Members of Parliament for constituencies in the South-East than the one or two Conservative Members now nodding their heads.

In the South-East and the West Midlands, unemployment has increased faster than in many of the traditional areas of unemployment. Even in the traditional areas, unemployment has doubled. The usual approach has been to consider the traditional areas of high unemployment such as Northern Ireland, Scotland and Wales, whose problems have doubled since the Conservative Party came to office. The West Midlands now joins those areas and wants development area status. It ranks with the traditional areas in terms of the percentage of those unemployed.

However, in any consideration of regional policy, the absolute levels of unemployment must be taken into account. The absolute levels become important when considering the mass unemployment that faces us today, which is likely only to increase. For example, the South-East now accounts for 24 per cent. of unemployment and the problem is particularly severe in the London area. Unemployment in that area has increased from 337,000 to 700,000. The West Midlands now accounts for 12 per cent. of unemployment and unemployment there has increased from 132,000 to 350,000. Those two areas are not traditional areas of high unemployment, yet they are now responsible for 36 per cent. of unemployment and for 1.5 million of the unemployed. That fact cannot be ignored by any Government. Unemployment has doubled in the traditional areas and even the most profitable wealth-producing areas have been reduced to problem areas.

It is sad to go to the West Midlands and to be told that it is now a candidate for development area status. Last week, the Secretary of State told us that he had not received any representations from industrialists to make the West Midlands a development area. Can he honestly say that about the local authorities that have been knocking on his door asking for something to be done about unemployment? Against that background, the Secretary of State told the House that he would carry out a new review which would bear in mind two principles. First, there were to be acceptable limits. Presumably, that means money. When the Government lay down conditions, they always involve money. Secondly, the Government said that they wanted to concentrate aid where it was most needed.

I shall examine the Secretary of State's proposals and measure them against his own criteria. I have suggested that the acceptable limits refer only to saving money. To reduce the areas covered by two-thirds and to make aid available to only 26 per cent. of the population, will produce a saving of only £200 million or £300 million. After the announcement I looked at the figures that had been given for regional aid. The Secretary of State told us that in 1982, he proposed a limit of £850 million, which would fall, by 1983, to £768 million.

I asked the Library to put those figures against a common base line. The reality is that between 1964 and 1974, we spent £350 million on regional aid with ½ million unemployed. Between 1975 and 1980 we spent £520 million per annum with 1 million unemployed. The amount was almost doubled in line with the increase in unemployment. However, the Government now propose to reduce the sum to £324 million, when unemployment stands at 3 million and is rising. Dated back to 1975, £324 million is the real figure, according to Library sources. The Government apparently intend to spend as much as was spent in 1967 on the same minority areas although the problem is six times greater than it was then. Anyone who can consider devoting resources under those circumstances cannot have thought about their proper use. Judged by the criteria of the 1960s and 1970s, because of the percentage of unemployment, most areas would be eligible for aid.

Mr. Frank Hooley (Sheffield, Heeley)

The hon. Gentleman is absolutely right, but, in addition, there is the compounding effect of the massive cuts in housing, and the cuts in public expenditure that have shown that there is a lack of interest in regional policies.

Mr. Prescott

The point is a powerful one. I am sure that it is not lost on this side of the House. These points are constantly made during debates and at Question Time, but they do not appear to have a great deal of effect on the Government. Scotland, Wales and the North, which are traditionally areas of high unemployment, have double the problems that they had when the Government took office. Those areas account for 29 per cent. of the country's unemployed people, but due to mass unemployment that has reduced to 26 per cent. The Government propose to increase aid to those areas from 56 per cent. to 65 per cent. of the money available. I do not question that those areas need every penny that they can get. In Yorkshire, Humberside and the North-West unemployment remains at 45 per cent. and there has been a cut from 34 per cent. to 17 per cent. in assisted area status. The rest of the United Kingdom accounts for 44 per cent. of the country's unemployment and yet they receive no aid under the proposals.

The Government seem to believe that unemployment in the regions is concentrated in a minority of areas on which a minority of the money is to be concentrated. That was their thinking in the 1960s. It flies in the face of the evidence and reflects their ignorance of what is happening in the peripheral areas of the country. We should want to correct that in any new regional policy proposals. I believe that the Government's regional policy is underfunded and wrongly conceived.

It is not surprising therefore that local authorities with high levels of unemployment should try to do something about jobs in their areas. Counties such as the West Midlands or the GLC, which are Labour authorities, are developing enterprise boards connected to pension funds, and are beginning to create jobs. District authorities, such as Sheffield, Norwich, Hull and many others that we visited, are not just dealing with land use planning, but actively using their money to create permanent jobs. They have shown what can be done by local authorities and a possible way forward. They have used section 317 and the 2p rate as a means of financing such activities.

A report from the Association of District Councils—most of which, I believe, are Tory controlled—demands from the Government more power and resources to develop jobs in their areas. It points out that every unemployed man costs £4,380 a year. I am using the figures from the report. That is 70 per cent. of the average wage. If that sum was added to local authority public expenditure programmes, they could at a stroke contribute effectively to reducing unemployment in their areas. A powerful case is made out for that.

What has the Government's attitude been towards local government? They attacked local government about the 2p rate and sought to reduce it. They failed to achieve that in the House of Lords because the Tories revolted against the Government denying local authorities the chance to do something about their problems.

The Government have set up urban development corporations and enterprise zones and sent a busload of bankers around. They all undermine the role of the local authority and give power to outside bodies. They remove accountability for public money from local people and deny them the opportunity to deal with their own problems. Regional policy must reflect the fact that local authorities have a powerful role to play in developing indigenously their own economy. The day of mass mobile industries roaming our country being tempted with bags of gold, has gone. We are saying not that we do not want them, but that that is not the answer to the problem. A great deal of money was given away with a lack of corresponding accountability and was largely concentrated upon manufacturing.

I look at the Government's policies to see what might happen in the future. I look at what the Cambridge Economic Policy Group says—I have about six various institutes' projections here—and it has projected that by 1990, if the Government's policies continue, 4½ million people will be unemployed. It predicts that 3.4 million people will be unemployed by the end of the year. The Government have rejected those figures, but Sir Terence Beckett said last night in this Palace that he believed that that would be the figure by the end of the year.

It seems that the Cambridge Economic Policy Group is on target with this year's figures. They are better projections than the figures given by the Government during the past year. At least half a million jobs a year must be created to reach the employment levels the people are entitled to expect. We believe that the mixed economy and market forces cannot produce that growth in the rate of jobs. It cannot produce the rate of growth necessary to obtain extra investment and create jobs.

We commit ourselves in a detailed policy statement to reaffirm a principle that was embodied in the 1944 White Paper which we have included in our "Plan for Jobs". It states: The Government accept as one of their primary aims and responsibilities the maintenance of a high and stable level of employment. We reaffirm our commitment to that. We reject that the control of inflation is a precondition to achieving high growth in employment. By our "Plan for Jobs" we aim to reduce unemployment to at least 1 million in four years. We have detailed our plans for expansion in the public sector in all the documents that we have produced over the past few months. I do not have time to go over all the details, but they are published and no doubt people will study them. We might hear something about them from the Secretary of State today.

We spell out what we believe to be the way forward. We have not yet completed all the details of our proposals, but we are continuing to work on them. We have plans for expansion. We shall effectively operate import quotas to protect our industrial base. We shall have exchange controls and work on exchange and interest rates to provide resources for growth and job creation.

The Cambridge Economic Policy Group has assessed our alternative strategy and has said that it will reduce unemployment to 2 million. We dispute that figure, because we believe that we can achieve more than that. The different figures that it gives for our policy and the Government's—a difference of 2 million—justify our policy. People believe that our policy is feasible. I accept that it will not be easy to achieve.

We seek to implement our policy against a framework of industrial democracy and plans at both national and regional levels. Our policy at national level is one of major planning intervention. That is identified in the alternative economic strategy. It will be necessary to reflect that in the regions. We shall give all the regions planning boards and development agencies. We shall actively encourage local authorities to develop their indigenous economies. We shall make such bodies accountable to the regions and in the regions. That will ensure a positive regional policy with resources to match, determining its priorities and co-ordinated within a national economic strategy, to reduce the curse of unemployment.

More work is being done on the interface problems between regions and the centre, the instruments of accountability and the criteria of need and resource allocation. We believe that those plans are necessary to achieve our goal—deeply committed to it as we are—of returning our people to fun employment, using all their skills both at national and at regional level. We reject a Government who call on men to produce ships and to man them in that South Atlantic war, and then after the war to say to them "You cannot build the replacements. You cannot sail on the ships, because you are too expensive." Our policies, combined with the talent and energies of our people, can throw off the scourge of mass unemployment which has been deliberately impressed upon us by this Government.

4.59 pm
The Secretary of State for Industry (Mr. Patrick Jenkin)

I beg to move, to leave out from "That" to the end of the Question and to add instead thereof: 'this House, whilst sharing the deep concern for the unemployed, recognises that today's unemployment reflects a loss of competitiveness over many years as well as the effect of the world recession; supports Her Majesty's Government in their objective of creating conditions in which all parts of the country can prosper; further supports Her Majesty's Government in concentrating their regional industrial policy in the areas of greatest need; and rejects the proposals of Her Majesty's Official Opposition as leading only to higher inflation and more unemployment.' We do not often hear the hon. Member for Kingston upon Hull, East (Mr. Prescott) speaking from the Dispatch Box. By any standards, he made a forceful and effective speech and I congratulate him. He has earned a reputation for doing his homework. His speech was studded with figures and facts, the product of his efforts and those of the hon. Member for Stalybridge and Hyde (Mr. Pendry). Hon. Members will wish to study those facts and figures.

The gloss that the hon. Member for Kingston upon Hull, East put upon the policies that would be pursued by the Labour Party if it came to power scarcely reflects reality. I shall draw the attention of the House, and of employers and employees, to what might lie in store for them if the Labour Party ever comes to office again and the country has the misfortune to live under a Labour Government. Labour Weekly did a signal service in alerting us to the horrors in store. The hon. Gentleman referred to few of them.

I shall set out the position of British industry as I see it. The hon. Member properly concentrated on regional policy and I shall say something about that. We can agree that all the regional policy in the world will not solve the long-standing, deep-seated problems of many areas which go back over many decades, unless we get the health of our industry right and the economy once again producing the wealth that we need. I shall examine the main thrust of the Government's industrial policy, where it is succeeding and where there is still much progress to be made.

The hon. Gentleman made some wild charges. I resent the accusation that the Government deliberately set out to create unemployment. I hope that we can debate the issues without flinging around such accusations. I hope to present the House with a more balanced picture.

Mr. Bob Cryer (Keighley)

Will the right hon. Gentleman give way?

Mr. Jenkin

No. I have only just started my speech.

When we put our policies before the country at the last election we made it clear that after many decades of relative industrial decline and lost competitiveness, we would not be able to put things right in a year or two. We said firmly in our manifesto that the job would take two Parliaments. We are just one-third of the way through that period.

Mr. Jack Straw (Blackburn)

Where was that in the manifesto?

Mr. Jenkin

If it was not in the manifesto, it should have been.

The hon. Member for Kingston upon Hull, East made no reference to the word "competitiveness". My proposition is one of such stark and obvious truth that even the hon. Gentleman might be prepared to accept it. It is that the success of British industry lies in winning markets and providing jobs for the people of Britain. That depends upon industry being competitive. It means being competitive not only on price, but in design, technology, quality and reliability, in delivery and in after-sales service. Where we are competitive we can hold on to our markets and win new ones.

In the course of my peregrinations round the country I have had contact with many splendid firms—large, medium and small—which are doing just that. Many are taking on extra people and increasing their share of the market. Many are exporting between 60 per cent. and 80 per cent. of their output. We have lost markets generally because we are, or have become, uncompetitive.

The second fact which we must keep firmly fixed in our minds is that between 1975 and the beginning of 1981, industry in Britain became about 50 per cent. less competitive in terms of unit labour costs vis-à-vis our main industrial competitors. There is no magic in the period that I have chosen. The figure was given in the recent paper that the National Economic Development Council discussed last week. By far the biggest cause of our disastrous decline in competitiveness is the fact that wage and price inflation over the period sent our costs and prices rocketing. At the same time North Sea oil was coming on stream. That underpinned our currency and prevented the slide in the value of the pound which such inflation would otherwise have produced.

The hon. Member for Kingston upon Hull, East used the word "inflation" twice when talking about the Organisation for Economic Co-operation and Development in general. At no stage did he recognise that Britain's inflation record over a long period, not just when the Labour Government were in power, has been significantly worse than that of most of our industrial competitors. Our relative lack of competitiveness goes back many decades during which productivity in other countries advanced faster than in Britain.

When world markets were rising strongly our falling share of world trade still allowed us to expand our markets. and so to achieve over the years a modest rate of economic growth. The repeated oil shocks; by slowing down the growth of world trade, left us losing absolutely as well as relatively and brought home to us starkly how far we had lost competitiveness compared to the rest of the world. The prime aim of any Government must be to restore the competitiveness of British industry.

Mr. Albert Roberts (Normanton)

Does the right hon. Gentleman agree that to become competitive inducements must be given? No inducements have been offered by the Government. If workers do not receive inducements they do not give of their best.

Mr. Jenkin

I agree with most of that. I welcome the hon. Gentleman's recognition of the role of incentives. An incentive was provided by cutting the rate of income tax. People are only human and they respond to incentives. That philosophy has been at the heart of my party's policy for many years.

If inflation coupled with lack of productivity is the most serious cause of our loss of competitiveness, winning the battle against inflation is perhaps the most valuable thing that we can do to help industry. The good news is that inflation is now in single figures. The prospects are that the rate of inflation will come down steadily for the rest of this year and into next year. The trend is firmly down, and I hope that that can be common ground between us.

I have said on many occasions that the Government's first task is to aim to create the conditions and climate in which industry can prosper. Curbing inflation is by far the most important element in that task. I shall remind the House yet again that on present trends the Government will be the first since the 1950s who will face the electorate with a lower average rate of inflation than the Government they followed.

Mr. Straw


Mr. Jenkin

I shall come to the connection between inflation and jobs in a moment. The key to becoming competitive is to reduce inflation. The key to getting more jobs is to become more competitive. That is the essential truth. In the 10 months that I have held my present office, I have met hundreds of industrialists of all shades of opinion. I have met hardly any who do not accept, first, that the control of inflation is the most important single benefit we could bring to their businesses and, secondly, that the Government's policies to achieve that must be sustained if they are to succeed. Of course industry is concerned about high interest rates. Of course industry is worried about the costs imposed on it by central and local government.

The hon. Member for Kingston upon Hull, East sought a much larger role for local government in job creation. I am convinced that more jobs are lost by the impost of high rates on industry than are ever created by all the well-meaning efforts of local government to create employment. Of course industry wants to see its markets expanding so that it can make and sell more goods.

Mr. Straw

Is the Secretary of State aware that the Government's figures show that rates, as a proportion of manufacturing industry's total costs, are 0.66 per cent. of the total, a tiny proportion, particularly when compared with interest charges, which are very much greater? It is the increase in interest charges, created by the Government, which has lost thousands and thousands more jobs than rate increases.

Mr. Jenkin

The hon. Gentleman is entitled to his opinion. When I go out on the Terrace of the House and see that ridiculous banner on County Hall and know that the GLC put a 93 per cent. rate increase on commerce and industry in the Greater London area, I wonder whether profligacy can go further than that.

Mr. Cryer

The GLC poster has really hurt the Secretary of State.

Mr. Jenkin

It does not hurt at all because it is humbug.

Industrialists are realistic. They recognise that high interest rates, rising public sector costs and falling markets are some of the results of high inflation.

As I go round the country I am left in no doubt whatever that if we were now to embark on policies which would lead inexorably to the resurgence of inflation, we would forfeit, and rightly forfeit, the confidence of the great mass of British industry. Higher growth, higher employment and higher investment are our objectives. But they will not be achieved unless we first master inflation. That is why sticking to the medium term financial strategy is absolutely crucial to the health of industry and, the overwhelmingly majority of those responsible for managing industry in this country support that to the hilt.

If it is the Government's responsibility to control inflation, it is industry's responsibility to become efficient, to raise productivity and to win back market share. Let us consider productivity. Part of the cause of our loss of competitiveness lies with past productivity performance which, when compared with our neighbours, has not been good.

Productivity rose rapidly last year. In the first quarter of 1982, output per head in manufacturing industry was 12 per cent. higher than at the end of 1980 and 5½ per cent. higher than the average for 1979, a peak year in the productivity cycle.

I would not deny for one moment—here again there should be common ground—that this marked improvement in productivity is partly the result of the straightforward reduction in overmanning, which has been one of the symptoms of the British disease. Of course this has contributed to the present distressingly high unemployment figures. However, it must be good for Britain, for instance, that the same amount of steel is now being produced at Port Talbot in South Wales by 5,500 men when it used to take 12,000 men to produce. It must be good for Britain that, on the production lines at Longbridge, productivity has improved 100 per cent. over the past year. It must be good for Britain that up and down the country firms large and small are beginning to get their costs under control, their output per head rising fast and their goods priced more competitively. Pay is a vital element in costs, and the more moderate pay settlements of the past year have greatly helped to improve competitiveness and so to save jobs.

The link between pay moderation, unemployment and the creation of new jobs is vital to the understanding of the problem of unemployment. The combined effect of rising productivity and more sensible pay settlements has been to improve dramatically the rate of increase of unit labour costs. Compared with a rate of over 25 per cent. 18 months ago, in the year to the first quarter of 1982, unit wage and salary costs rose by only 2½ per cent.—a rate on a par with Germany, and better than Japan, America and France. That is the way that we shall win back markets. That is the way to create jobs. There is no other way.

There is another lesson.

Mr. Nigel Spearing (Newham, South)

I noticed that the right hon. Gentleman has not denied the assertion of my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) that labour costs in Britain are smaller than those of many of our competitors. Does he agree that the unit labour cost figure, which he has just quoted, includes the use of that labour, the skills of management and the costs of many other factors? He should admit that the cost of labour in relation to our competitors, particularly in Europe, is a vital factor, which has been kept down despite inflation.

Mr. Jenkin

.I was comparing the movement in unit labour costs. We lost 50 per cent. of competitiveness, measured in terms of unit labour costs, over the six years between 1975 and 1981. We have won back a part of that but we have a long way to go.

Mr. Straw


Mr. Jenkin

If this improvement—there has been a worthwhile improvement—is to succeed it must be sustained over many years. As I said a moment ago, we regained about 10 per cent. of the 50 per cent. we have lost. We have a long way to go even to get back to the relative position that we held in 1975. That is why my right hon. and learned Friend, the Chancellor of the Exchequer was absolutely right to stress as he did the other day that there can be no let-up on pay.

All the efforts of industry to raise efficiency, to come out with improved designs and competitive products, to fight for markets across the world, and to create employment at home will come to nothing if the whole benefit is swallowed up in higher pay and if labour costs are allowed once again to run out of control.

On the contrary, as inflation falls, it makes sense from every angle that pay settlements should also come down. Indeed, we must continually hammer home the message that higher pay must be earned by higher output. Those who determine the level of pay claims need to have at the forefronts of their minds the simple truth about the link between pay and unemployment. If higher pay pushes up costs faster than those of our competitors, the consequence can only be lost jobs and longer dole queues.

While pay moderation cannot guarantee employment—no one can guarantee employment—it will be a powerful help in sustaining employment. Some hon. Members may think that I am labouring the point too much.

Mr. Prescott

Hear, hear.

Mr. Jenkin

The hon. Gentleman may be right because I believe that those essential truths are becoming well understood on the shop floor of industry. Much of the moderation and the common sense that we have seen in the past year or two is—

Mr. Stanley Orme (Salford, West)

If the Secretary of State is laying such emphasis on pay policy, where is the justice in the Government giving judges and senior civil servants pay rises that are far in excess of what is being offered to Health Service workers and many others?

Mr. Jenkin

I have no doubt that the right hon. Gentleman, with his customary care and meticulousness, has studied the comparative figures over a period. He will know that those covered by the Top Salaries Review Body were never subject to the catching-up exercise, which, when I presided over the Health Service, increased the pay of people such as nurses by more than 50 per cent. in two years.

That essential truth about the link between pay, competitiveness and employment must be understood by everyone. Some people talk about making sacrifices for the common good. I do not want to use that language because it is a matter of sheer common sense and self-interest.

We all want to see industry succeed. We all want to see faster growth, rising standards of living and better social services. We shall achieve them to the extent that we as a nation, through our industry, manufacturing and services, can earn them by our own efforts. Yes, we are beginning to win back lost competitiveness, but we have a long way to go.

If the defeat of inflation and the restoration of competitiveness is our first object, the second is to remove obstacles in the way of industry's greater success. Much has been done. We have abolished pay, price, dividend and exchange controls. The burden of United Kingdom Corporation tax now compares favourably with other countries. With the improvements introduced by this Government, we have a system of capital allowances and stock relief among the most generous anywhere. [Interruption.] The hon. Member for Blackburn (Mr. Straw) jeers at those things, but they affect the ability of industry to compete. We have cut the top rates of personal tax, which were inhibiting enterprise in industry, we have improved the tax treatment of share options and we have made a start on cutting the national insurance surcharge, a direct cost on industry, which was imposed by the Labour Party and increased by the Labour Party. We have begun to cut it back. We have taken measures to reduce the burden of the public sector on industry.

Mr. Michael McGuire (Ince)

Will the Secretary of State give way?

Mr. Jenkin

I have given way many times. I must continue my speech. I know that many hon. Members wish to speak.

Wherever possible, nationalised industries, or parts of them, are being returned to real public ownership and the disciplines of competition.

Mr. Prescott

The profitable ones.

Mr. Jenkin

They are the only ones that anyone is prepared to buy.

Mr. McGuire

On the question of assistance—

Mr. Jenkin

I shall not give way.

The list of firms returned to public ownership is long, including British Aerospace, Cable and Wireless and the National Freight Corporation. There are others in the pipeline. Competition is being opened up. I have licensed the world's first competive telecommunications network in Mercury, to compete with British Telecommunications. Where we cannot have competition, we must have exacting performance targets backed up by financial disciplines and monitoring.

There should be common ground across the House about small firms. Lord Lever persuaded the Labour Party that small firms had an important role to play. They have faced a wide range of obstacles in obtaining the appropriate finance and advice. The Government have introduced over 90 specific measures to help new and existing small businesses, including perhaps the most successful, the loan guarantee scheme.

Mr. McGuire


Mr. Jenkin

Since its introduction in June 1981 the loan guarantee scheme has provided nearly 5,000 guarantees to small firms for bank loans totalling over £166 million, every penny of which must have meant the safeguarding or creation of jobs.

There is a new understanding by the banks, the City, local authorities and Government Departments of the significant role that small firms play in our economy. However, we need to do more to see that they know what help is available and what changes have been made in their favour.

Mr. McGuire

On the question of assistance—

Hon. Members

Give way.

Mr. Jenkin

I shall give way, as I am fond of the hon. Gentleman.

Mr. McGuire

I am grateful to the Secretary of State. Is he aware that in his office he has on file a request for assistance for a company named Hughes International which, if it receives that sensible assistance from the Government, which other Governments are giving to its competitors, will create 1,000 jobs in Skelmersdale, where there is one of the highest rates of male unemployment in the country? All that firm wants is a sensible appreciation by the Minister of the fact that the export credit guarantee system is too rigid at present. Jobs are being lost. There are people on the dole who could be working.

Mr. Jenkin

I have listened carefully to the hon. Gentleman. I know thoroughly the position in Skelmersdale. That request is not on my files but on the files of the Department of Trade, but as the hon. Gentleman has raised the matter on the Floor of the House I shall look into it and see that he receives an early reply.

We want to see that small firms know what is available. Following the successful business opportunities programme last year, we are considering how best to spread the message to small firms and their advisers—the bankers, solicitors and accountants—up and down the country.

Mr. Michael Grylls (Surrey, North-West)

The loan guarantee scheme has been outstandingly successful. Does my right hon. Friend recognise that it has made the financing of small businesses as good as in any other industrialised country, which was not so before? Will my right hon. Friend extend the upper limit of the loan from the low level at which it started as a pilot scheme, of £75,000, to £250,000. This would bring in the medium-sized company, which still finds it difficult to raise money for expansion. Such firms could create many new jobs.

Mr. Jenkin

No one is more assiduous than my hon. Friend in pressing the interests of smaller businesses. I take careful note of what he has said. He will know that my hon. Friend the Under-Secretary of State has been reviewing the operation of the loan guarantee scheme. A report has been made to the House. We shall consider the result of the review and determine how best to carry it forward in the future.

Our third purpose is to encourage innovation and new technology. That is crucial to future competitiveness. We need to spend more on investing in the future and less on supporting the casualties of the past. There can be no doubt about that. We have begun the task of moving the balance of industrial expenditure away from nationalised industries and the public sector and towards measures to help industry to innovate.

My hon. Friend the Minister for Industry and Information Technology has been tireless in his championing of schemes to support product and process research and development, microelectronics, robotics, flexible manufacturing systems, fibre-optics and optoelectronics, advanced office systems, computer software and biotechnology. Support has more than doubled in real terms since the Government came to office and that is a measure of our commitment to the advancement of innovation. Only recently I announced an increase in the level of grants under the Science and Technology Act and for innovation-linked schemes under section 8 of the Industry Act from 25 per cent. to 33⅓ per cent. That was much welcomed by the industries that use those grants. Our scheme to give a shot in the arm to small engineering firms—intended as a temporary boost—which need to invest in new, advanced equipment was an outstanding success, so much so that despite increasing the resources from £20 million to £30 million we had to close the list to applications much sooner than we had anticipated. In the event, the sum to be offered will be about £35 million, which is nearly twice the sum originally planned. I can reassure those who are concerned with these matters that that can be met by switching sums from other heads in my programme. I know that there was some disappointment that we had to halt the scheme. However, the effects of the small engineering firms investment scheme on machine tool and other industries will be felt for some years yet.

We have introduced many other measures to stimulate industry and encourage enterprise. The enterprise allowance scheme is just one. It is being piloted in several hard-pressed areas. I am glad that by 30 June 1982 almost 800 applicants for the enterprise allowance had been accepted and that 724 are now in business and receiving the allowance of £40 a week. Those new firms are spread across a wide spectrum of industry. The jibe that they are all window cleaners is untrue—there are fewer than one in 100. The favourite sectors are construction, distribution and services such as motor repairs and catering.

The Department's small firms service is heavily involved in the scheme, especially in the provision of management advice. I shall give just one example of the effect of the scheme. One of our counsellors, who is involved with the pilot area in North-East Lancashire, has reported that of 33 people whom he has advised, 27 have started in business. During the previous 12 months, before the pilot scheme operated in that area, only three out of 97 people whom he had advised had made a start in business. That shows that, although it is a pilot scheme, the results so far are encouraging. We shall review those results fully.

The experimental enterprise zones are intended to test how far commercial and industrial activity can be stimulated by easing tax burdens and cutting out bureaucracy. Early results in Swansea, Clydebank, Dudley and Corby are encouraging. There has been considerable promotion effort in those areas. The financial institutions are becoming involved. There is ample evidence that enterprise zones are stimulating economic activity and creating jobs which would not otherwise have resulted.

I was astonished that the hon. Member for Kingston upon Hull, East attacked urban development corporations. I understand that he comes from Merseyside and knows the area well. Anyone who is aware of the tremendous improvement in the south docks of Liverpool, the general environmental improvement, the industrial development and the creation of jobs can bear witness to the effectiveness of the Merseyside development corporation. Where is the evidence to suppose that local authorities in the area would have been able to achieve half as much? My right hon. Friend the Secretary of State for the Environment set up the new urban development corporation there because they could not.

The hon. Member for Kingston upon Hull, East rightly spent much time on regional industrial policy.

Mr. D. N. Campbell-Savours (Workington)

Does the right hon. Gentleman agree that the only real benefit of enterprise zones is rate relief? Does he agree that the Government could make a national concession in that regard and that it would have a significant impact on the economy?

Mr. Jenkin

The hon. Gentleman makes an interesting point. He cannot expect me to comment on it now. I do not agree that it is the only benefit of enterprise zones. There are others, such as substantially less bureaucracy, substantially simplified planning procedures and exemption from development land tax. It is never possible to isolate the effects of each. If he is suggesting that a high rate burden on business is a disincentive, many of my hon. Friends would agree passionately.

The Government are as committed as anyone to help, by encouraging industrial and other development, areas that have intractable problems of structural unemployment. We aim, as did the Labour Government, to reduce economic imbalances between different parts of the country. The issue between us is how that may best be done.

Regional policies have been with us for half a century. In the 1930s the decline of traditional industries led the Government of the day to adopt measures that were designed to attract new industry to develop in the old industrial areas. In the 1960s, the emphasis moved from merely unemployment to other factors such as population changes, migration, communications and remoteness. Regional policy is based on travel-to-work areas. They have been used by all Governments because they are relatively self-contained labour markets and the smallest geographical areas for which reliable unemployment figures can be provided.

The hon. Member for Kingston upon Hull, East referred to small pockets of high unemployment. It is impossible to devise a regional policy that can be selective in that way. By 1979, assisted areas covered nearly half of the country. Differentials were so narrow that the drawing power of the incentives was gravely weakened. Regional policy had become an instrument for massive subsidies at the taxpayers' expense. One must always measure the jobs that are lost against the expense to those who must pay the taxes to finance the schemes.

Mr. Beaumont-Dark

Does my right hon. Friend agree that one of the problems of regional policy is not so much that it has created new jobs but that it has taken jobs from established areas at huge cost without creating wealth? It has been an illusion—rather like a rabbit coming out of a hat—rather than a creation of real prosperity.

Mr. Jenkin

As I said in my statement, it is notoriously difficult to measure the effects of regional policy. Nevertheless, there is evidence that unemployment and the creation of new employment has responded to it. The loss of jobs elsewhere is dependent upon the general movement in the economy.

The huge spread of funds narrowed the differentials. Industrial development control was hampering decisions and preventing necessary development. In 1979, therefore, regional policy was a mess. The Government have done three things. We have reduced, and are continuing to reduce, the coverage of regional industrial help to the areas that are in greatest need. We have widened the differentials and we have suspended industrial development control. The effect of this has been masked by the quadrupling of unemployment since the mid-1970s. It is difficult to measure the impact of individual measures. Nevertheless, in spite of the detailed figures that the hon. Member for Kingston upon Hull, East produced, the proportionate rise in unemployment in assisted areas has been less than that in the rest of the country, although the absolute figures are higher. That is some evidence that regional measures are having some effect.

When my right hon. Friend the then Secretary of State for Industry announced his policy in June 1979, he said that there must be time for people to adjust. He undertook to listen to the evidence, especially from those areas that were losing assisted area status. He said: unless we have greatly misjudged the circumstances, I would be wrong to hold out hope of correction in the proposals announced."—[Official Report, 24 July 1979; Vol. 971, c. 364.] Nevertheless, we were convinced that there were some areas in which the relative deterioration in employment—relative, that is, to the country as a whole—called for adjustment. I shall not weary the House by repeating all the changes that I announced in my statement two weeks ago.

I knew that we would be criticised whatever we did. Contrary to what appeared in some West Midlands papers, the great mass of industry in the West Midlands was greatly relieved that we did not opt for a massive extension of the development areas. The problems of the West Midlands are essentially those of competitiveness, not those of remoteness or the lack of a proper industrial base. Many industries in the West Midlands are making heroic efforts to regain markets that have been lost to their competitors. They would not be helped if they were within assisted areas.

We gave a commitment to maintain stability in regional industrial policy until the end of this Parliament. If we now start chopping and changing on a major scale, the credibility of regional incentives will vanish. Of course we have not abandoned regional policy. Regional measures are costing £800 million this year, so it scarcely lies in the mouths of Labour Members to talk of the Government having abandoned the regions.

The hon. Gentleman asked about Nissan. One of the most effective ways of using regional assistance is for inward investment. Over the years, this country has had a marked success in attracting investment—and with it jobs, technology and the rest—from overseas. After Canada, this country has the largest volume of American investment overseas and 60 per cent. of Japanese investment in Europe has come to this country. There are major investments by overseas industrial companies in all parts of the country and they make a notable contribution.

Mr. Campbell-Savours

What about British investment?

Mr. Jenkin

Representatives of the Nissan company will be visiting Britain later this month and discussions are continuing about the project. It will be for the company to decide, in the light of its own assessment, whether to go ahead with the project and, if so, on what scale and in what location. It would not be helpful if the House sought to press the Government to disclose details of the discussions at this stage. By any standards, this will be a most important investment project for Britain. The Government made it abundantly clear to the company that we would welcome such a major investment in a car-making facility in Britain.

We now have an economic, industrial and regional policy that is beginning to work to produce a genuinely efficient and competitive economy. That is the only basis from which industry can expand.

There is welcome news, too, on production. Yesterday's figures show that industrial production was up in May and that, in the three months to May, manufacturing output rose by 1½ per cent. The underlying level of output is expected by most forecasters to rise in the second half of this year.

There is a new and welcome sense of economic realism right across the country—except in the Labour Party, which now poses the greatest threat to the sustained recovery of British industry. Labour Weekly has published the facts. It is vital that the country should be made aware of what the Labour Party wishes to do.

I suspect that the hon. Member for Kingston upon Hull, East does not accept all the proposals put forward by the Labour Party. Indeed, it would be interesting to know whether the right hon. Member for Salford, West (Mr. Orme) supports all that Labour Weekly puts forward as he has had experience in the Department and knows a thing or two about these matters.

We are told that there are a number of key elements in Labour's programme. A massive increase in public borrowing lies at the heart of it. Either this will trigger off a new wave of inflation, or it will starve private industry of funds for investment and jobs. Probably it will do both. The Labour Party also claims that it wants a clamp-down on prices while allowing wages to rise without limit. That is a prescription for bankruptcies, closures and unemployment". Those are not my words. They are the words of that realistic trade union leader Mr. Sid Weighell.

The Labour Party has acknowledged that its programme would involve a massive devaluation of the pound. The Guardian said of the Labour Party's economic proposals: Confidence in sterling could be sapped so quickly that the pound would drop like a stone. With so much sterling held by foreigners, exchange controls would be of limited value". The Labour Party further proposes that Labour Ministers and Whitehall civil servants should step in and tell companies how and from whom they should buy their supplies and when and how much they should invest. If the companies refused to obey, control would be taken out of the hands of the directors and placed in the hands of a new State commissar, the Official Trustee.

Mr. Prescott

That is what the Government are doing in the North Sea.

Mr. Jenkin

The Labour Party would not stop there. It proposes the State takeover of our most successful companies. Moreover, this would be done not by an Act of Parliament in each case but by statutory instrument, thus suppressing all the processes of primary legislation. That is perhaps as disturbing a suggestion as any for our democratic parliamentary procedures. Is the Labour Party really prepared to nationalise companies by statutory instrument? I hope that the right hon. Member for Salford, West will give a clear answer on that when he winds up the debate.

The Labour Party then proposes to make industry more democratic for the workers. At least, that is how it is described, but the small print makes it clear that the proposal is to hand over power not to the workers but to the trade unions. The ASLEF dispute is scarcely the best propaganda either for more nationalisation or for more trade union power.

Economic reality is scarcely allowed to intrude into the Labour Party proposals. There is no mention of inflation or competitiveness, of the right goods at the right price, of the need to keep costs down or the need for profits to keep people in jobs and to create new investment and new jobs for the future. British industry must be clear about what the Labour Party is offering.

The whole thrust of the Government's industrial policy is to lay firm foundations for sustained and sustainable growth in British industry. That is being achieved by cutting inflation, by industry becoming more competitive, by increasing productivity, by removing obstacles, by encouraging the growth of small firms, by regional policy, by supporting innovation and by encouraging the industries of the future.

I urge the House to support the Government amendment because it is the only way forward.

5.47 pm
Mr. Tom Clarke (Coatbridge and Airdrie)

I am delighted to have caught your eye, Mr. Speaker, so early in my time in the House. I invite the tolerance and the forbearance of hon. Members during my maiden speech, in what I accept—and I am sure we all accept—is one of the most crucial debates of this parliamentary Session.

I am sure that I speak for the whole House when I pay tribute to my immediate predecessor, the late James Dempsey. Jimmy Dempsey had many qualities, but principal among them were common sense, dedication and kindness. Those qualities will never be forgotten in Coatbridge and Airdrie. I know from my short time in the House that the affection for Jimmy Dempsey is widely shared not only among hon. Members, but among members of the staff, including the police. His courage will, I think, inspire us all for many years to come.

I should like to say a few words about my constituency. I must say that there were times during the recent election campaign when I did not exactly appreciate or even understand some of the descriptions that I read. Indeed, I did not always appreciate or understand some of the descriptions of myself.

I do not complain, though, about what was said about my local outdated sewage plant. I say to the leaders of the other parties that if their candidates fail to turn up again in my constituency at the next election we should not be too hard on them. It would probably have a great deal more to do with the smell from the sewage works than the prospect of yet another lost deposit.

I also assure Mr. Keith Raffan of the Daily Express —who seems to have a nose for these matters—and, perhaps more important, my constituents, that a solution to the problem is extremely important. If we had received a fairer share of regional aid in the past we might, as local authorities, have been able to deal with it more speedily.

For example, the Scottish Office graciously conceded £45 million, or 20 per cent. of the Scottish share of regional aid. Even a fraction of that could have helped my constituency to deal with those and some of our many other problems.

Coatbridge and Airdrie has a proud industrial heritage going back to the Airdrie weavers and the Coatbridge colliers in the eighteenth century, to the halcyon days of the "Iron Burgh" of Coatbridge which exported all over the world. In recent years, we have perhaps become famous as the bowling capital of the world. Our indoor bowling stadium has been used for the annual bowling world championships. That stadium is an example of improving the environment for our people, while its construction provided jobs.

I had fully intended to mention Monklands district hospital. However, it might be more appropriate for my hon. Friend the Member for Berwick and East Lothian (Mr. Home Robertson) to do that in his capacity as a consumer. We are proud of that hospital. I stands as a constant tribute to the Administration headed by my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan).

I shall not dwell, much as I am tempted, on our industrial, social and cultural past. For example, I am tempted to mention the Boots factory in Airdrie which produces cosmetics and toothbrushes—to be used at a time convenient to those who buy them. However, in view of the industrial and economic deterioration in my constituency and elsewhere in Scotland I am compelled to contrast our great industrial past with the gloom and despair that has descended upon my constituency and the rest of Scotland.

In these debates we quite properly hear statistics, but we must never forget that these problems involve families and individuals, and are about dashed hopes and broken dreams.

The two jobcentres in Airdrie and Coatbridge deal entirely with that area and to some extent some of the villages in the constituencies of my hon. Friend the Member for Bothwell (Mr. Hamilton) and my right hon. Friend the Member for Lanarkshire, North (Mr. Smith). In that area 22.9 per cent. of all eligible workers are unemployed. In Airdrie the male register of unemployed stands at a staggering g 31.5 per cent. On 10 June 10,285 people had registered for jobs. There were exactly 218 unfilled vacancies.

For young people the scene is even bleaker. On the same day 1,534 youths had registered for work. There were no notified vacancies. The situation has not changed in the past few weeks. The Bannermans shirt factory in Airdrie, which was doing extremely well in selling its products and finding new markets, employs 250 people. Suddenly it has found the official receiver on the doorstep. Tomorrow those employees will be receiving redundancy notices. I fully realise that it had the misfortune to be part of a group that was not as progressive as Bennermans itself.

The Scottish Development Agency and everyone involved in trying to rescue the firm should be given all possible support by the Government and by the Secretary of State for Industry. Not only do those employees have the right to work and to continue to sell, but it would be a tragedy for industry and the employees if the company went to the wall and its markets were taken over, as seems inevitable, by our overseas competitors.

Three weeks ago Strathclyde regional council advertised for 31 apprentices. It received 3,585 written applications. I cannot possibly condone any suggestion that those young people should take to the streets or show public rebellion and disorder against the Government's policies. However, it is naive in the extreme to offer those young people the prospect of being history's forgotten generation and not to expect repercussions from them.

There is nothing new in what I have said. We have been warned in the past. In his book "Full Employment in a Free Society", written in 1944, Sir William Beveridge made that point. It is appropriate when, over the past few weeks, we have heard a number of references to the end of a war elsewhere. Sir William said: Full employment is something that the British democracy should direct its Government to secure at all costs, save the surrender of essential liberties. Who can doubt that full employment is worth winning at any cost less than surrender of those liberties. If full employment is not won and kept, no liberties are secure, for to many they will not seem worthwhile. Our young people, especially, respond to those words. It is despairing in the extreme to say, as a society, that there is no alternative. Of course there is. There are the alternatives that have been discussed even in today's debate. There must be a clear commitment to increasing investment in the private and public sectors, aimed at providing essential jobs. The construction industry has appealed for more public works and more homes, for motorways and for sewers. The Government should respond to that appeal.

Local government should have the right to reassert itself. It can thus make a major contribution to job creation and to job opportunities.

The Secretary of State mentioned rates and their impact on jobs. When I served as president of the Convention of Scottish Local Authorities I had the privilege to lead the negotiations on finance with three successive Secretaries of State of different political persuasions. I say in all candour that rate increases reflected far more central Government's decisions on rate support grant than the influence of any one local authority.

We ought to build more hospitals for all our people, not forgetting our handicapped and geriatric friends. In so doing, we are entitled to look at the equipment that is used. Where we can do so, we should encourage hospital boards to buy British equipment. I am sure that that should be done, because of the employment implications.

The resources available for an attempt to secure full employment include our great natural indigenous resources such as coal, oil and steel. Lanarkshire Members like myself are particularly concerned about the future of Ravenscraig and Gartcosh. I hope that before the end of the debate we shall be assured by a ministerial statement that those who have given their lives to the steel industry in Lanarkshire will be able to feel that they and their families have a future and that Ravenscraig and Gartcosh will be saved.

Our finest industrial and regional development asset is our people; our success depends on society making the best possible use of our people. That is why our education system should be geared to the industrial challenge that lies beyond school, college and university. I am not absolutely certain that that is the case today.

I have the privilege of representing a constituency which in the eighteenth century exported iron and equipment for railway construction in Russia and America and which has never been insular or introspective. It is a constituency that has always been concerned about the wider problems of the world. Our concern now is that, as the Brandt report indicated, we live in a world where 9 million children die of hunger each year, yet in my region, men, mills and machinery are standing idle.

We believe that world poverty offers a greater challenge to peace than any other consideration. We are convinced that by reinvigorating all our regions we can change Britain's industrial pattern and make a contribution towards solving the problems of an increasingly disenchanted world.

6.3 pm

Mr. Peter Hordern (Horsham and Crawley)

The hon. Member for Coatbridge and Aidrie (Mr. Clarke) delighted the House with his warm and witty speech. He spoke first of his predecessor, whom all of us well remember, sitting in his corner seat just below the Gangway. He was a warm and gentle man whom everyone in the House counted as his friend.

The hon. Gentleman spoke with obvious and detailed knowledge of his constituency. Not everyone knows as intimately as he does the exact location of the local sewage works. It is perhaps possible that the hon. Gentleman has more reason for doing so than some of us. He also spoke with deep knowledge of the industry in his constituency, his constituency's history and the state of employment in the area.

It is not for nothing that the hon. Gentleman is known as the burgomaster of Coatbridge, such is his intimate knowledge of his constituency. He also spoke with obvious knowledge about poverty, the works of Beveridge, education and the evil effects of unemployment. The House will welcome the hon. Gentleman speaking again on these subjects, but it should not surprise him if on other occasions he finds it more difficult to entertain us.

I should like to follow the hon. Gentleman's remark about our assets, in particular our possession of coal and oil. It is a paradox that our possession of oil has created considerable difficulties. The impact of that oil has been felt sharply in the past three or four years. It has meant that we have not imported anything like the same quantity of crude oil. It has also meant that the price of our exports has been higher than it would otherwise have been. The consequence has been visited severely on employment, especially in our industrial areas.

My right hon. Friend the Secretary of State made that point in an excellent speech. He also dealt fairly with the Labour Party's proposals. It is extraordinary that anyone should talk about the economic policies of the new Cambridge school as though they should be followed, but I suppose that the Labour Party must try to claim some academic distinction for its policies.

If the Labour Party's policies were followed, there would literally be no floor for sterling. One need only look at the experience of France to see what would happen. The French have greater reserves and a lower public expenditure as a proportion of GNP than we have, but within a few short months they have had to give up their dash for growth. They are now suffering from high interest rates, a six-month prices and incomes freeze and all the difficulties that occurred in 1964 under the Government of the right hon. Member for Huyton (Sir H. Wilson) when they tried to pursue similar policies. Exactly the same would happen again.

As my right hon. Friend said, there are some encouraging signs. Notable among these is the fact that wage costs per unit of output are now even lower than at the beginning of the year. If world trade recovers, as everyone hopes, we shall be much more competitive than for a long time past. I have no doubt that we shall recapture a larger share of world trade because of our more competitive position. However, I wish there were a sign that world trade would recover soon or that there was the natural increase in demand that we should all like to see.

My right hon. Friend also mentioned British Telecom and the involvement of his Department with the corporation in the frontiers of science. That I commend, but we would advance investment in British Telecom more if it were denationalised. It could then stand the test of the market and would not depend upon the Treasury for borrowing from the PSBR. There is no escape from that. British Telecom will either expand because it stands the test of the market, or my right hon. and learned Friend the Chancellor of the Exchequer will have to judge whether money should be advanced. I have no doubt that British Telecom should stand the test of the market so that the market can judge how far investment should proceed, and it could proceed far.

With all these encouraging signs, there are nevertheless serious difficulties, which no hon. Member can doubt. I refer to the high levels of unemployment not only in the North-West, the North-East, in Scotland and in Wales but increasingly in places where it was unheard of before, such as the South-East, where unemployment is growing rapidly. The clouds are not so dark in the South-East as they are in other parts of the country. However, because of the part that oil plays in our economy and the fact that we no longer have to export so much to command the same price for our currency, the effect on our manufacturing industry has been very striking.

In 1965 manufacturing industry employed 8.4 million. The number has now declined to 5.7 million. Those who represent constituencies in the West Midlands will know the position much better than I do but, in 1965 unemployment in the West Midlands was below 1 per cent. Today it is over 14 per cent. in what was once, and still is, the heartland of manufacturing industry.

It is true that a large sector of this population has moved into service industries, and the public sector in particular. This movement puts a greater strain on productive industry than it used, because public service industries have to be provided for by the private sector. It is not only in the West Midlands. In places such as Northern Ireland the problems are severe. About 20 per cent. of workers in Northern Ireland are unemployed, which obscures the fact that nearly one-quarter of men in Northern Ireland are out of work. It is not as though Northern Ireland is such an exception. In Wales and the North, unemployment is over 15 per cent., and in the West Midlands 14½ per cent.

I can give more detailed figures for Northern Ireland. In Belfast 17 per cent. are out of work and in Cookstown, Dungannon, Newry and Strabane one-third of the working population is out of work, and if we take men alone it is over 40 per cent. We have to look closely at our regional and industrial policies to be sure that they are the most appropriate for the conditions of employment.

Whatever the hon. Member for Kingston upon Hull, East (Mr. Prescott) may have said and thought about regional policies under the Labour Administration, he has to remember that a serious review carried out by Professor Marquand in his Department was able to establish only that it was difficult to see whether any impact had occurred because of regional policies carried out under the last Administration. I do not think that the present regional policies that are, as my right hon. Friend explained, better than our predecessors' are necessarily alone those that will generate further employment. We therefore have to look at other practices and strategic blocks on progress in our economy and industry.

I am not talking about trade union restrictive practices, about which we have heard a great deal. I am talking about other practices, that have gone on for a long time, in particular practices such as those of the wages councils. I do not dispute that the wages councils do good work, but is it any longer appropriate that a system of wages councils, which was in many cases started before the first World War, can now be considered appropriate when unemployment and supplementary benefits exist where they did not before?

As it is, about 3 million workers are employed in wages councils and determine wages and conditions of work for many people. They determine what an employee in a tobacconist shop in Horsham may get as being the same wage as somebody who works in Tesco. The result can only be that many apprentices and young people are not offered the chance to work. Therefore, why do we not scrap them? It appears that we are bound by the International Labour Organisation convention of 1928, but we may denounce ratification in June 1985 and go our own way, just as the Americans have always done.

We should not continue to be bound by a convention which causes such heartbreak to the people it is designed to protect. If it is decided that we cannot immediately scrap the wages councils, we must change them. There are at least five wages councils which award young workers of school-leaving age a minimum rate of pay in excess of £40 a week. In West Germany, the country with the lowest ratio of youth to adult unemployment of all the OECD countries, the average pay for vocational trainees is equal to 20 per cent. to 40 per cent. of the initial wages of the skilled workers. In Britain, the minimum rate of pay in a typical four-year apprenticeship is about 70 per cent. of the adult minimum wage in engineering and nearly 75 per cent. in the construction industry.

For that reason among others, the number of apprentices fell by one-third in Britain between 1970 and 1980. Not only are there about twice as many qualified craftsmen in the German work force as compared with the British work force, but twice as many are now being produced. All of us hope that the new youth training scheme, for which the Government deserve every credit, will transform our record in vocational training, which is at present, and has been for many years, virtually the worst in the EEC.

That is for the future, but what of the present? There are already powerful incentives in tax reliefs, rate reliefs and investment allowances, which, as my right hon. Friend said, are among the best in Europe. However generous, they are not achieving their purpose, which is to restore full employment. In America there are foreign trade zones, which exempt imports from customs duties until they are moved to other parts of the United States. Is it not time to try such an experiment in some part of the country to see whether it works? What more suitable place to try than in Northern Ireland?

Payments of mainstream corporation tax by companies operating solely in Northern Ireland are estimated to be running between £35 million and £40 million a year. What would happen if corporation tax were abolished for all such companies in Northern Ireland? Companies might change their structure to take advantage of the new position, and more revenue might be lost, but what would undoubtedly happen is that many more companies would be formed, stimulated by the prospect of earning much more money, which they would be allowed to keep. This process would transform Northern Ireland into a corporate tax haven, generating many more jobs and reducing the strain of unemployment and supplementary benefit. I have concentrated rather on the particular problems of Northern Ireland because they are the worst in the United Kingdom, but they are not unique.

Of all the damaging effects of inflation, perhaps the worst is the high price of land and property which stands in the books of our public authorities. In the life of an ordinary person or a company, spending more money than one receives means selling assets, but not so in the public sector. There they sit, our local and statutory authorities, borrowing money to hold land they cannot use now, or in the foreseeable future. It is a shameful misuse of banks', taxpayers' and ratepayers' money, which impoverishes us all. These public authorities are behaving like elderly spinsters counting their pearls, while we pay their bills.

The 360 local authorities in England have now reported that they own 87,280 acres of land, all of the plots being over one acre, which could be developed, and which are not. My right hon. Friend the Secretary of State for the Environment has the power to order local authorities to sell their land, and he should use it. To argue, as some authorities do, that the market cannot support such sales is to substitute their judgment for that of the market, and to do so at our expense. When we consider that that judgment is preventing the sale of land that could be developed and used for production and employment without delay, we realise that it is a highly offensive judgment. The money gained from such sales by local authorities should be used to repay their bank debts that amount to about £10,000 million.

The same paralysis of thinking about assets siezes the minds of those who run our nationalised industries and health authorities. Unused or underused assets—and I refer only to those—tie up vast sums that ought to be used for the production of goods and services and would be so used if they were released. We should remember that those who provide the wealth of our country do so, for the most part, from the private sector. They not only provide the cash for a vast body of public servants, but find that their own access to the cash is blocked, to some extent, because it is financing unused assets in the public sector. When will we be allowed to make the best use of our potential?

We read so much about trade union restrictive practices, which are damaging enough, but it seems to me that the greatest restrictive practice is that which excludes the profitable use of national assets at the right price, which is their present market value. It is time that we put all our national assets to work.

6.21 pm
Mr. William Rodgers (Stockton)

I join the hon. Member for Horsham and Crawley (Mr. Hordern) in paying tribute to the hon. Member for Coatbridge and Airdrie (Mr. Clarke) who made such a fluent and confident maiden speech. I found it difficult to disagree with anything that the hon. Gentleman said, and I greatly enjoyed his graphic description of his constituency.

The hon. Gentleman referred to his constituency as the bowling capital of the world. He certainly quickly bowled himself into the sympathies of the House and made what many of us regard as one of the best maiden speeches for a long time. One of the special qualities of the hon. Gentleman's speech was that it was relevant to the debate. Many of us will remember that that was not a characteristic which we were always able to combine with what we wanted to say in our maiden speeches.

The hon. Gentleman's description of the problem in his constituency and his reference to families' dashed hopes and broken dreams summed up vividly the subject of the debate. Although the title is the Government's Regional and Industrial Policies we are actually debating unemployment—and rightly so.

Unemployment is the largest single issue for Britain and for the House, and it should be the largest single issue for the Government, whether we are discussing the economic consequences in terms of wasted resources, or the social consequences in terms of personal failure and disappointment. The hon. Member for Coatbridge and Airdrie was right to refer to William Beveridge and full employment in a free society. Those two ideas have been linked in our minds over many years and are coming back vividly today.

We recognise that international and other factors make it difficult for any Government to promise to get rid of the vast burden of unemployment in a short time, but there is a danger that we may become complacent and think that unemployment is inevitable and inescapable. At one stage we began to live with inflation in double figures and did not believe that it could be otherwise, and there is a danger that we may begin to believe that we can live with three million unemployed without having to bother further. We have not yet reached that point, but we could do so.

Each of us has his prime concern among the various aspects of unemployment. History's forgotten generation of school leavers is one such aspect, but I am deeply worried about people over 50 who lose their jobs and have no prospect of ever working again. They are the saddest men and women of all. We are living longer and those people have longer to live with nothing to do, with all the consequences for their self-respect, their families and the sort of home life that they ought to have the right to enjoy.

The other aspect that bothers me greatly is the number of long-term unemployed, which was not referred to by either Front Bench speaker. About 1 million men and women have not worked for a year. We may accept that people will have to be out of work for a while when changing jobs and we may recognise that that period has become longer, but a year is a very long time.

Another figure encapsulates the nature of our problem. More than 160,000 people have been out of work for three years. It is as if all the able-bodied men and women in Bristol ceased to work three years ago and have not worked since. That is the depth of the problem that we face.

It may be argued that our problems are not wholly domestic. I agree with that, but unemployment in the big seven industrialised Western countries was 5 per cent. in 1979 when unemployment here was 5.7 per cent. Unemployment has risen to 7.4 per cent. in the big seven, but here it has risen to 12.4 per cent. and it is still rising. It is an international problem, but it is far worse in Britain, largely because of the Government's policies.

The Secretary of State put an optimistic gloss on the indicators that are pointing in the right direction, but even he was extremely cautious in quoting the most favourable statistics and he said, not once, not twice, but three times, that we have a long way to go. Indeed we do.

The hon. Member for Jarrow (Mr. Dixon) sought leave earlier to move the Adjournment of the House to discuss the desirability of placing the order for the new "Atlantic Conveyor" in this country. I share the hon. Gentleman's concern, as does most of the House. It is tragic that after the high investment in shipbuilding, the industry's decline—with acute consequences for the Clyde, the Tyne and other parts of Britain—and after three years of this Government, with their emphasis on competitiveness, either the British shipbuilding industry is not competitive enough or the Government are not prepared to intervene when other countries make competition unfair by giving subsidies to their shipbuilding industries.

Industrial profits have declined, with serious consequences for the country, fixed investment is 25 per cent. down from the modest peak of 1979 and there has been a decline in competitiveness. One set of figures demonstrates the situation vividly. Between 1971 and 1981, our exports of manufactured goods rose by 52 per cent. That may seem a good record, but the imports of such goods rose in the same period by 132 per cent. That is further evidence that we have been dangerously uncompetitive. If we want another measurement, we can look to the North of Britain where GDP per head fell by 8 per cent. between 1980 and 1982.

Against that background, both the Government and the Opposition have been looking for false remedies. The Government, with their monetary squeeze, deflationary fiscal policy and obsession with the public sector borrowing requirement, have been concerned more with selling bits of the public sector than with making the public sector do an efficient job. The story of Amersham International is a shameful one.

Nor should the main preoccupation of the chairmen of nationalised industries be to prepare parts of those industries for privatisation. I am in favour of efficiency. There is much to be said for an audit commission to ensure that monopolistic nationalised companies are efficient, but to change the frontiers between the public and private sectors in that way is a misdirection of energy.

For the most part, the hon. Member for Kingston upon Hull, East (Mr. Prescott) made a good and thoughtful speech, but his party does not attach priority to the issues that matter most to him. He mentioned a plan for jobs and we must all welcome such plans from whatever source. But those who read "Labour's Programme 1982" will conclude that it is a plan for fewer jobs and perhaps none. The result of much of what is proposed in that document would be a siege economy tightly controlled from Whitehall by Ministers and civil servants who are incompetent to make the necessary decisions. The plan would produce a vast centralised bureaucracy that would do nothing to solve our main economic and industrial problems. The only additional jobs that it would create would be in the central planning bureaucracy.

Our debate is not only about broad industrial development but about regional development. The vast apparatus of central planning and control would do nothing for the needs of the regions. Every hon. Member who has a constituency or a special interest in those regions that are far away from the South-East has demanded for many years that regions should have a larger say in their own affairs.

As a member of a Labour Government, I was privileged in 1964 to play a part in setting up the regional economic planning councils. They pointed in the right direction. My regret was not that they were allowed to decline, so that their abolition would become the natural step for a Government such as the present one, but that they were not developed into something much more effective in providing regions with more identity and a larger say in their affairs. I should have wished those nominated regional economic planning councils to turn into elected regional governments.

Mr. Barry Sheerman (Huddersfield, East)

Why did the right hon. Gentleman not do it then?

Mr. Rodgers

I expressed my view at the time and I regret that the regional planning councils did not move in that direction. I do not criticise any individual but, with hindsight for those who did not see the opportunity, and in retrospect for those of us who did, I say that elected regional government would have given important responsibilities back to those regions with the most acute problems of industrial decline and high unemployment.

Mr. Sheerman

Why does the right hon. Gentleman ignore the words of my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott)? He spoke about the Labour Party's commitment to a fresh examination of the relationship between democratic control and regional structures. His speech contained one of the most important and innovative ideas that we have heard for a long time.

Mr. Rodgers

The hon. Member for Huddersfield, East (Mr. Sheerman) could not have heard me when I paid tribute to much of what the hon. Member for Kingston upon Hull, East said. Time prevents me from reading substantial chunks from "Labour's Programme 1982", the thrust of which goes against the grain of what the hon. Member for Kingston upon Hull, East said, and which is against the idea of giving more power to the regions. Today many documents emanate from the Labour Party, including "Labour's Programme 1982", "Plan for Jobs", and the document to which the hon. Member for Kingston upon Hull, East referred, which was published today. Many of those documents are contradictory and some are better than others, but their general thrust is towards a more corporate State with more public ownership, more central planning and control and, in the end, less say for the people who live in the regions who should be allowed to determine much of their own future.

I have paid so many tributes to the hon. Member for Kingston upon Hull, East that he will become embarrassed, but I agree with what he said about the shortcomings of mobile, large-scale industry. We have all been disappointed by firms that open branches and subsidiaries in our constituencies and then, once the climate changes, close them. That is not the road for the future. I hope that there will be much more emphasis on indigenous industrial schemes. We have something to learn from the experience of the British Steel Corporation in Corby. I hope that we can have cheaper loans through an industrial credit scheme. I could advance a detailed proposal if the House wished, which is contained in an excellent document entitled "Partnership for Prosperity". I shall make free copies available to all hon. Members.

In the regions we should put the emphasis on innovation and technologically-based industries. It is crazy that the growth in high technology and service industries is within 100 miles of London. That is the verdict on the attempts of successive Governments—I make no narrow party point—during 10, 20 and even 40 or more years since the special areas were set up. We have an immense task and much more power to the regions—with regional development corporations if that is the right way—will do much to remedy the position.

The Government must have an industrial strategy. Governments cannot fail to intervene, although they should do so with the market. Non-intervention was the policy of the Secretary of State's predecessor and although the Secretary of State is trying to do a delicate and unspoken U-turn, it is still the Government's philosophy that they are not prepared to intervene even if it means moving with the market. But if we cannot rely upon market forces, nor can we rely upon centralised planning and a massive extension of public ownership.

Industry is or should be the top priority for every Government if we are to get Britain back to work. But we shall get Britain back to work only if the Government seek a genuine partnership with industry. That is the route to a balanced approach and to achieving a prosperous Britain that would also be a caring society.

6.37 pm
Mr. John H. Osborn (Sheffield, Hallam)

This is the first time that I have caught your eye, Mr. Deputy Speaker, and I welcome the fact that you are in the Chair. I pay tribute to the excellent maiden speech of the hon. Member for Coatbridge and Airdrie (Mr. Clarke), which proves that a route to the House of Commons can be through local government, especially if the hon. Member has distinguished himself.

There have been many debates on industry and on regional policy and development since I entered the House of Commons. We have just heard an interesting speech from the right hon. Member for Stockton (Mr. Rodgers). To intervene constructively is difficult. However, the next debate that I attend will be in the Assembly of the Council of Europe in September, when I shall refer to this matter.

My roots are in Sheffield and more than 40 years ago I began to work with new technologies, work study and process control. Fifteen years ago I saw a factory to which I referred in one of my early speeches being sold and taken over by another—the name of that factory was Osborn Precision Casting. About 30 years ago I, with some directors from my group of companies, pioneered a rationalisation scheme that resulted in a company called Osborn Steels in Ecclesfield. I have seen that firm close in the past six months and the final closure of the work of some 25 years, and a lifetime, in industry.

Today I am worried about the thousands of people who look to me, and others, for leadership and jobs and I return to Sheffield with mixed feelings. That is what regional policy is about and this week I shall attend a meeting of the trustees of the founders and benefactors of the company with which I was associated to see how we can help those who have no job and who have no prospect of obtaining one for some time. I say that because it is said that Conservative Members do not care. I hope that Opposition Members realise that I have lived through an experience that has as it were, "burned my soul" and made it difficult even for me to think about the future. On the other hand, as I go round my city—or the Peak District of Derbyshire—in this fine weather, I find people walking and cycling, and the shops are still crowded. So perhaps there is another side to the scene of despair that I have outlined.

I cannot support the word "appalled" in the motion, but I deeply regret the increase in unemployment and I deeply regret, too, the decline in Great Britain's industrial base. I listened to the speech of my right hon. Friend the Secretary of State for Industry, and I agree that inflation has been controlled and controlled without the impedimenta of bureaucracy. That makes the prices and incomes policy of four years ago a farce. There has been an increase in productivity. The wage costs per unit of output have decreased. Interest rates are coming down.

However, this summer, one or two other stark realities have come home to me. What I feared for 30 years as inevitable has materialised. As a young man, after the Second World War, I was worried that what has come home to roost in the 1980s could have descended on Sheffield, Great Britain and its basic industries in the 1950s. That is why, as a young manager and then as a director of a basic industry company, I was keen on overseas sales, overseas investment and overseas manufacture as essential components of rationalisation, reorganisation and modernisation—in my case, in Sheffield. Those policies, incidentally, have been resisted by the Opposition throughout my life.

Over the past 20 or 30 years there have been pressures in Britain—and, for that matter, in Western Europe—on the basic industries, of which management of ten, 20 and certainly 30 years ago was unaware. Let me give one example about which I have spoken in the House before. In 1964, I intended to set up a company in India, and I visited Jamshodpur and particularly Durgapore. I saw Davy United people, with the help of United Steels and other companies, training people to run a steel works in India, with cheap power, and of course, with the raw materials. In 1970, on an IPU visit, I visited the new steel works on the Orinoco. It had the ingredients for a steel industry. In 1953, and again two years ago, I saw the same in Australia. So there are economic changes that we must live up to and accept.

During the past three months Great Britain has faced the challenge of the Falklands crisis. The hon. Member for Kingston upon Hull, East (Mr. Prescott) mentioned this. The Prime Minister faced the challenge with resolution. It stirred up patriotism and unity in the country. Perhaps it is disunity, promoted by various factors in our country and cities, that has caused some of our biggest troubles. The right hon. Member for Bristol, South-East (Mr. Benn) has not made the Government's policy in the Falkland Islands easy. Nor did his followers in Sheffield and on the South Yorkshire county council. Those are the people whom the right hon. Member for Sheffield, Park (Mr. Mulley) and the hon. Member for Sheffield, Heeley (Mr. Hooley) must hold responsible for their non-reselection as candidates.

Why do I say that? Local government in my city has not been easy for a Conservative Government to handle or encourage. My right hon. and learned Friend the Chancellor of the Exchequer wanted to have an enterprise zone in Sheffield, but the ideals of the city of Sheffield were so contrary to those of a Conservative Government that it was not possible. Thus, the agonies of the citizens increase.

This week I should be attending—I cannot do so, because of other commitments—an economic development advisory committee, run mainly by the Sheffield city council, but Members of Parliament are invited. Unemployment in Sheffield is 12.5 per cent. compared with the national figure of 12.4 per cent. In some areas it is as high as 16 per cent., which is an increase on last year's figure. The agenda will be urban development grants, the local campaign for assistance, and particularly the statement made by my right hon. Friend the Secretary of State for Industry, which was the theme of the speech of the hon. Member for Sheffield, Attercliffe (Mr. Duffy) on May 25. Hidden subsidies are dangerous, but if there is assistance, particularly on a European scale, it should be available in Britain, and assisted area status makes that much easier. I hope that my hon. Friend the Minister, in winding up, will say a word about that. Then, too, there is the enterprise allowance scheme, which I should like to see in my city.

One thing that will not be on the agenda in South Yorkshire and my city is the steel strike that took place two years ago. It destroyed the resilience of the private sector, and posed a challenge to BSC, in spite of what was said in the annual report yesterday.

Redundancies have been announced, and in Sheffield there is obviously worry about the future of Phoenix 3. There must be rationalisation, but I shall come back to that matter later. I do not oppose Phoenix 3 if it provides future security for the steel industry.

Another item which will not appear on the agenda is the cost of transport. I could refer to the statement made earlier this afternoon, but the activities of Ray Buckton and, Sidney Weighell and the problems of reducing transport and rail costs, if not successfully accomplished, will ensure more unemployment in Sheffield. That, too, will not be on the agenda.

An article in The Economist last week reminded us that electricity is now manufactured from coal. In fact, 82 per cent. of our electricity comes from coal, instead of 68 per cent. two years ago. The NUM leader, Arthur Scargill—to judge from cartoons and from what he has said—will present a dilemma. Increasing miners' wages and increasing the cost of coal will guarantee more unemployment in the steel industry, which depends on electricity produced from coal-fired power stations. Those are the dilemmas that must be faced. France, shortly after the Macmillan programme, embarked on a nuclear energy programme. Fifty per cent. of its electrical energy will be nuclear by the middle of this decade.

Mr. Lawrence Cunliffe (Leigh)

Does the hon. Gentleman concede that British coal is still the cheapest in Western Europe, and that mining production, in the main, has risen constantly for half a decade? We are producing more tonnes per man shift than we have produced during the past five years. Does that not contradict what the hon. Gentleman says? Is it not imperative, as the Government recognised two years ago, that there is still a call for massive investment in the mining industry so that we can obtain the full fruits of production and thus further reduce the cost of coal?

Mr. Osborn

The costs here for those who run industry and depend on electricity are considerably higher than the electricity costs of their competitors. This is a problem that any Government would have had to face.

The hard facts are that, in Sheffield, steel and engineering orders have not come in during the past three or four months. I have had meetings with the chamber of commerce and with the Engineering Employers Federation. It may just be a low ebb, and orders could pick up. However, Sir Terence Beckett spoke to a Conservative committee yesterday, and it appears that the optimism in industry of six months ago has taken a slightly more depressing turn.

There are, of course, other problems. Reference has been made to the protectionism of the United States. I have pressed that issue in the United States and in the House. Anyone in Sheffield who exports to the United States must show his books for examination. Can the Minister assure me that anyone who exports steel to Britain is exposed to the same detailed examination that is demanded by the State Department of the United States of America?

The demand for steel will not double this decade. Therefore, I should like a world review of Canada's and America's problems and of the cost of production.

The import of manufactured goods into Britain should not increase but the danger is that it is increasing. The exports of manufactured goods is contracting, although this country has an advantage from oil exports. There are issues on which I have yet to question the Secretary of State for Trade.

My right hon. Friend the Secretary of State for Industry outlined many new technologies. Biotechnology and certain aspects of information technology have been considered by the Select Committee on Education, Science and Arts, of which I have been a member. Britain must not only have a lead in design and technology; production costs must also be competitive.

It must be borne in mind that whoever is in Government in Western countries is being challenged by an Opposition, whether it be a Social Democrat Government, as in the case of France and Germany, or even a Republican Party Government, as in Washington. Therefore, I welcome the fact that Britain's problems are also discussed in the European Parliament and in the Council of Europe. It can be seen from the OECD reports that unemployment in the OECD countries will approach 30 million—16.5 million from Western Europe.

At Usinor in France, I gather, the concern is so great that some of the workers set fire to their headquarters. Old industries in France also have their troubles. For a country that is not well endowed resources are another factor.

Mr. Sheerman

Did the hon. Gentleman refer to the setting fire to the premises with relish? During the travelogue that we have been listening to, that seems to be the one thing that he felt intensely about.

Mr. Osborn

That is an irrelevant remark. Who would relish the fact that certain headquarters have been set fire to? That is typical of the destructive statements that are all too frequently made.

The provision of food is all important, in view of the world-wide increase in population, as is dependence on the Middle East for energy. All those factors affect Western Europe and Britain.

The OECD reports on unemployment and such solutions as work sharing, reduction in the working week and acquisitions of new skills are positive approaches. They can increase the quality of life in Britain and in Europe. I hope that there will be a change, and I welcome the fact that the Government have given so much encouragement to small businesses and new industries, even in those areas that are struggling.

6.53 pm
Mr. Nigel Spearing (Newham, South)

The House must listen with concern to any hon. Member from Sheffield, with its industrial commitment, certainly to the hon. Member for Sheffield, Hallam (Mr. Osborn) who has been concerned with one of its firms.

I do not wish and have not the time to take up the hon. Gentleman's points in detail, although I would fault a great deal of his logic. I understand, for example, that 50 per cent. of electricity costs are for transmission. They are not necessarily only dependant on the cost of coal, and as has been pointed out, miners' wages are not the only factor in that cost anyway.

I am pleased and proud to be the first member of his party to congratulate my new hon. Friend the Member for Coatbridge and Airdrie (Mr. Clarke). He made an outstanding speech because of his humanity.

We must remember that the Beveridge report, "Social Insurance and Allied Services", brought out in the middle of the war, appealed to the hopes and fears of men and women everywhere. It was a report about security and now all regions of Britain are facing insecurity. I cannot help feeling that the Government, and many hon. Members who support them, are dismantling the post-war concordat that was reached between the parties as a result of that conflict, of which the Beveridge report was one element. The Beveridge report and the Education Act 1944 came out under a Conservative Government. The Government are certainly dismantling local government, of which there has been some mention today.

As a Londoner, I intervene briefly to point out one or two matters concerning London's regional policy. I understand the position of other hon. Members and shall not take long.

First, London has lost a third of its manufacturing industry in the past few years. It has 344,000 unemployed. Conservative Members who travel in official cars to the airport might notice at the Chiswick roundabout that a modern factory is being demolished. That was built in the last 10 or 15 years and now it is being replaced by an office block. I question the free enterprise economics that make such a thing possible, and I hope that Conservative Members will do the same.

The hon. Member for Hallam mentioned the Sheffield enterprise zone. He may have been illogical, because the main point of enterprise zones is the rate relief that they enjoy which cannot be replicated elsewhere. I do not think that they will be successful, but if they are I do not believe that they will provide a genuine solution. They are like a flush of blood to a sick patient's cheek—they are not fundamental.

While urban development corporations might be successful in certain parts of Liverpool because the conditions there may suit their methods of administration, I do not think that the one in London—perhaps the biggest feature of the Government's policy for London—is successful in the way that it was imagined it would be.

First, it takes over from local government and gives the Secretary of State considerable powers. It gives a planning board the powers of local authorities but without the requirement of proper meetings, minutes or, at the moment, good information services. Planning consents are no quicker than they were before, and I understand that that can be statistically illustrated. Planning delays are sometimes blamed on local authorities, but I suggest that they are often due to developers wanting too much cream rather than as a result of an awkward local authority.

My local chamber of commerce and the London chamber of commerce have said that the London Docklands development corporation is not very good at communicating. East London is an area of considerable unemployment. There are 14,000 unemployed in the London borough of Newham, 14,000 in the London borough of Tower Hamlets and 28,000 in the north docklands alone. Unemployment must be almost 35,000 or 40,000 in the area as a whole. However, the Secretary of State said that the urban development corporation would be dynamic and would attract industry just as the new towns did. That has not happened yet.

In East London there is considerable controversy about the corporation's work in relation to land and the building of private homes. However, I do not wish to go into the details or to overemphasise, in what is—I hope—a constructive contribution, the central factors in its establishment and operation. Nevertheless, if the Government are to have a successful regional policy for London they must pay attention to two factors. First, the GLC is planning a rapid transit system which could become part of a new deal for transport in London. Everyone wants that. Secondly, the royal docks cover an enormous area, equivalent in size to Hyde Park and Kensington Gardens put together, and they are now available for development.

This week, I sent a short memorandum—which I also made public—to the Secretary of State setting out the concept of a trading estate, with road, rail and water transport connections. As some hon. Members know, there has also been talk of an airstrip in the docks. That would not necessarily cost any money. If it was founded on all-party agreement there would not be the controversy of the past and the estate could outlast the London Docklands development corporation.

In this sorely tried area of London the Government have an opportunity to ensure that there is proper transport and that the administration of the royal docks goes well beyond the remit of the LDDC. In doing so, they could show the way towards developments in other sorely pressed parts of the country. It is clear that industrialists and the work force will be confident only if there is agreement in both local and central Government about the policy for those areas. The Government have not provided that and unless they do so the regions that face such high unemployment will not get the social, human and physical infrastructure that is so necessary for their recovery.

7.2 pm

Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak)

We have had many debates on regional development. Indeed, I made my maiden speech in May 1979 in a debate on industrial policy and employment. I should like to make some of the same points again today, because they were true then and are true today.

However, I shall begin by quoting an extract from a speech that I made in the House on 20 June 1980. I said: Since 1947 one good-hearted and woolly idealist after another has introduced one good and woolly idea after another in an attempt to get industry to go here, there and everywhere. [Official Report, 20 June 1980; Vol. 986, c. 2016.] As a result of industrial development certificates and the regional policies followed by one Government after another, 77 firms moved into Birmingham after 1945, creating 9,500 jobs. However, Governments love to issue "holiday brochures" telling people how good things are in the North-West, Wales, Scotland and so on. As a result of those offers of gold, 337 firms moved out, costing Birmingham 114,000 jobs. The situation would not have been so bad if those jobs had been transplanted and if, like flowers, they had blossomed into more jobs. However, let us consider what happened to the firms that moved from Birmingham or that were asked to have production lines 200 miles long, just as British Leyland was asked to have. Very often those firms have not grown but withered. As I pointed out to the hon. Member for Kingston upon Hull, East (Mr. Prescott) £3,730 million has been spent on regional aid. But to what effect?

The problem with politicians is that they think that they can create jobs. I heard it said this afternoon that people look to us to create jobs. However, all I would accept is that they look to us to create the environment in which industry can grow. Labour politicians, like many of us, are sometimes unable to learn from the past. There is one thing that will not restore prosperity. If the Labour Party wins the next general election, it intends to create a planning department with substantial new powers, but that will not do any more good than the economic planning councils did.

A national planning council that has more resources than any existing body will not do anything either. Indeed, I tremble even more at the thought of a national planning college for key planners, managers and trade union planners. However, I agree that that will create jobs; by Jove it will. It will create many more planners who will get in the way of those who make the money to pay for them. Therefore, the Labour Party's plan is just a busybody's charter.

However, there are things that Governments, including the present Government, can do. We need stable costs in the nationalised industries. The enormous increases in the electricity and gas charges, like the oil increase, were nearly disastrous. In addition, we must get rid of the restrictive practices in nationalised industries that cause such increases. I am sure that all hon. Members read The Guardian. It pointed out that more than £600 million of the money that British Rail was getting was going to feather-bedding restrictive practices. Such practices must go.

Mr. Donald Stewart (Western Isles)

How does the hon. Gentleman account for the fact that when the British Gas Corporation had profits of £300 million the Government obliged it to raise its charges?

Mr. Beaumont-Dark

One reason for that was the competitive price of oil.

We also need stable rates. Rates that used to be a small burden on industry have once again become an almost catastrophic burden. Local authorities bear a heavy responsibility when they talk about creating prosperity by increasing rates so that they can spend the money on creating jobs that they destroyed in the first place.

In his next Budget, I hope that the Chancellor of the Exchequer will reconsider the national insurance surcharge because it needs again to be reduced. If we are to help industry, we must also look again at the short-time working subsidy. That scheme will end in September or October. Given the state of industry, I hope that that scheme, or something similar, will continue so that industry can carry on its delicate return to prosperity. The Department of the Environment's inner city area scheme is one of the most useful aspects of regional aid. Money does not have to be thrown at one area or another. We cannot buy industries and set them down in areas as if we were playing Monopoly. However, many of us represent the older cities and we can ensure that their inner city areas are attractive for those who live and work in them. Morey spent on that is money well spent and I hope that the scheme will be enlarged yet again.

I want to say two things on behalf of the motor industry upon which Birmingham, Coventry and the whole of the West Midlands depend. Hire purchase restrictions were imposed when the motor industry was too successful and taking labour and resources from elsewhere, and I hope that they can be reduced to the same as those applying to other goods—a 25 per cent. deposit with three years to pay. That would mean that 70,000 or 80,000 more cars would be built which would bring attendant prosperity to component manufacturers.

We should make sure that we compete fairly with people who import goods. I am not in favour of one restriction after another, but if we let people import goods we should be allowed, fairly, to export to them. Our Japanese friends do not compete honestly and fairly with the motor industry in this country. I should like to see many more Japanese cars stripped down so that one could make sure that all the numbered parts are correct. That is what many other countries do.

My hon. Friend the Member for Sheffield, Hallam (Mr. Osborn) talked about problems in the steel industry. Let us make sure that the imposts are right, because there is no sense in allowing people to destroy our industry by unfair competition. I am not asking the Government to give Birmingham or the West Midlands another £500 million and to build this, that or the other, but they should make sure that the imposts on our industry are no worse than they are in other countries. The nationalised industries, about which private industry can do nothing, should not be allowed to charge so much that private industry cannot compete.

Regional aid has cost the West Midlands and the rest of the country dear. It has not created new jobs. It has shifted them about like deck chairs on the "Titanic". We have to make sure that there is genuine free enterprise to enable industry to grow. If industry is left alone, it will grow and prosper, usually in spite of Government intervention, not because of it.

7.12 pm
Mr. Richard Wainwright (Colne Valley)

The Secretary of State for Industry tried for no less than 48 minutes to revive the spirits of the Government Benches. Judging from the speeches that we have heard so far, he did not succeed. I am not surprised. I have considerable sympathy for the Secretary of State because he is required to preside over an area that has been made a desert by his senior colleagues. He reaps the appalling harvest sown by the Prime Minister and the Chancellor of the Exchequer. I am surprised that a man of such spirit and decisiveness as the Secretary of State, is prepared to put up with it. It is an intolerable job, and not all the resourcefulness, determination and episcopal gravity that he possesses is capable of making up for the appalling economic background against which he is required to man the treadmill.

The Secretary of State tried to hoodwink the House by speaking rapidly towards the end of his speech and referring to the alleged surge in industrial output during May. He should have taken the precaution, that I am sure Members of all Opposition Parties have taken, to inquire of the Central Statistical Office what effect the spring holiday had had on the May figures, as it came at the end of that month. A seasonal adjustment is made of several days' production in the monthly figures in respect of a bank holiday. In Yorkshire we all take the Tuesday, including Members of Parliament. The Central Statistical Office said that in view of the unusually late bank holiday Monday the May figures are useless unless they are taken with the June figures. That was an unfortunate claim by the Secretary of State.

It was odd that, having been a member of the National Economic Development Council since September 1981, the Secretary of State made only one passing and hurried reference to a powerful report that the NEDC has just issued. It categorically denied the Government's central article of faith, that economic recovery will be spontaneous once certain economic intermediates have been brought into a miraculous conjunction. The Secretary of State denied that. It suggested that the NEDC should be instructed to carry out a survey of methods of reflation and the extent to which they could be safely embarked upon. I and my colleagues believe that we need an engine of recovery. Recovery will not take off like a balloon when specific economic factors enter a certain conjunction. I protest at the Government's extraordinary shibboleth that the public sector is to be either dismantled or put into the doghouse and shunned.

Surely the Government can see—I have some evidence of this from friends of theirs—that most of the public sector provides essential orders for the private sector. The National Coal Board does not make its own equipment, the National Health Service does not manufacture operating tables and sterilisers and so on. Recovery can be partly got off the ground by a timely and selective expansion of some of our public services based on value for money. That was plainly shown by the report of the House of Lords Select Committee on unemployment. Conservative, Labour, Social Democrat, Liberal and independent Members of the other place were unanimous in urging that kind of anti-unemployment scheme upon the Government.

It is appalling that the Government should have reduced our manufacturing capacity so that it cannot take up the available spending power and so that there is a surge of imports, as in the last three months, whenever a little more money is spent. Until the Government allow British industry to provide for our needs they will have a great deal to answer for.

I shall give one example. In my constituency employers, employees and the local community did the right thing according to the Government's book. Employers in an engineering firm decided to branch out into producing coal-face mining equipment for the National Coal Board. The employees came from three mills in the small township of Marsden where they had been employed none for fewer than 15 years, in wool textile weaving. They realised that their jobs were about to be lost—and that is another story. They accepted a completely different type of work—welding by a new process. Great ingenuity was displayed by all. They were filled by a spirit of enterprise and within five weeks the weavers, all in middle age, were turned into welders. The firm secured some good orders from the NCB and four years ago the project seemed to be going well.

Because of Treasury restraints on the NCB and the Government's prejudice against any public ownership, that admirable enterprise had to close and the mill is once again a vacant sepulchre. There are many examples in the public sector of how a little more understanding and less prejudice would help private industry to revive and provide more employment.

I can be brief about the regional aspects of the debate. My right hon. and hon. Friends believe that the only way to provide the regions with real and lasting help is to take their wishes into account. That is impossible at present because the regions have no means of giving full expression to their wishes. If only the regions had had a proper say in the appalling white elephants which Governments of both parties have inflicted on them we should not have experienced the false priority of the Humber bridge, for example. If the regions had had a say we should not have experienced the de Lorean disaster or that absurd and ugly white elephant the Kielder dam in Northumberland to provide water which is not needed until the middle of the twenty-first century. Regions can flourish only if they are given a voice.

Mr. Neville Trotter (Tynemouth)

I should have thought that nobody would be stronger in pressing the case for regional and local white elephants than the members of the regional bodies to which the hon. Gentleman refers.

Mr. Wainwright

I hope that I made it clear that the bodies that I propose would be directly and regularly responsible to the electorate. The trouble with our centralised system of government is that although we all tut-tut about disasters such as de Lorean, because they are dispersed throughout the United Kingdom they are not brought home properly to any unit of Government. There may be a shudder in the higher ranks of a Government Department until everyone has forgotten the scandal, but no losing of political office or electoral disaster results from such blunders, as they would if we had democratic regional government.

I remind the Government what their appointees have said about their policies. The Department of Industry is required by the Industry Act 1972 to lay an annual report before the House. The annual report for 1981 contains statements from each of the industrial development boards. The Northern industrial development board states: The chemicals sector suffered a large fall in output … in common with those by other industries … as a result of the high value of the £ sterling and the relatively high prices of feedstocks and energy. In many instances imports replaced domestic production … The resulting lower domestic outputs were less able to absorb the costs of overheads and thus added to the difficulties occasioned by the high exchange rate". That does not tie up with the boast that industry is becoming fitter and leaner. Industry is becoming starved and emaciated and unable to carry its overheads.

The Yorkshire and Humberside industrial development board reported: The year under review has seen industry in Yorkshire and Humberside contending with a progressively deepening recession of a severity not experienced since the inter-war years. High interest rates, the strength of sterling and rising fuel costs were among major factors which contributed to squeeze company profits and liquidity. Faced with these very difficult conditions many companies were forced to cut back their production … and this was reflected in a rising toll of … plant closures and short-time working. The CBI director for the Yorkshire region said only at the end of last week that so far as he could tell industry in the area was as "dormant as a dodo".

The East Midlands industrial development board reported: Those industries dependent on public sector contracts such as aerospace, telecommunications, electronics and mining equipment are showing increasing problems with the cut-back in public expenditure. The North West of England industrial development board included the following in its long and dreary report: In the past year imports have extended their market penetration with the higher pound sterling. In none of the reports is there any paean for the Government's policy or any of the gratitude which apparently is showered on the Secretary of State whenever he makes his royal progress.

Mr. A. J. Beith (Berwick-upon-Tweed)

Has my hon. Friend noticed that no Minister from the Department of Industry is on the Front Bench to hear our views?

Mr. Wainwright

I have noticed that. Since the Secretary of State regaled us for no less than 48 minutes it is a little hard that he is not here to hear our comments, even if he does not relish them.

On regional and industrial policy the Department of Industry is crippled and shackled by the Government's perverse economic policies. Until the policies are reversed and constructive measures put in their place there is no hope for our unemployed or for those responsible for industry.

7.28 pm
Mr. Lawrence Cunliffe (Leigh)

I shall confine my remarks to the distressed North-West region. That region, with its great industrial history and its magnificent wealth of aptitude, experience and expertise, going back to the Industrial Revolution and progressing through most of this century, has experienced a tremendous upheaval in its industrial base.

Conservative Members must not delude themselves. The Secretary of State said today that prosperity was on the horizon; a new spirit was within industry and the Government's economic policies were at last succeeding. But what has happened in my region? I do not like entering into statistical slug-outs about numbers, but the scale of unemployment reflects the fact that Government policies in the main have failed abysmally. A Government who have pursued such suicidal economic policies over the past three years with their basis in an obsessive adherence to monetarism, which has resulted in the highest interest rates for industry and commerce in the past two decades, cannot say that unemployment and job insecurity can be used as psychological weapons to hold down workers' earnings. It is nonsense for Ministers to suggest that.

Parliamentary representatives of the North-West region went to see the Secretary of State's predecessor in August 1979 when he introduced proposals for downgrading 80 per cent. of the North-West area. He said that it was an honour and a privilege for an area to be downgraded and that there was hope in such a downgrading. He was suggesting that viability and stronger competitiveness would arise in the region through Government policies. I have heard the old saying that if one lives in hope one dies in despair. There is now a great deal of frustration and hopelessness among the region's unemployed.

The North-West has the second highest number of unemployed of all the regions, with the exception of the South-East and Greater London. There are 441,000 unemployed in the region. Of the adult working population, 15.7 per cent. are unemployed and 32 per cent. of school leavers are unemployed. The Government have the audacity to remove in the main all forms of regional incentives. It is a crying shame that that should be done at this time.

The North-West industrial development association is an expert body composed of industrialists, trade unionists and people in local government, who are drawn from all parts of the region. The association has suggested measures which, if they were adopted by the Government, would go some way towards solving most of the economic problems in the region. The association wrote to the Prime Minister, but she declined on that occasion its request for discussions with her. The association thought that it had been snubbed.

The North-West region is the second largest in Britain and is larger than Scotland or Wales and second only to the South-East. One in seven of the labour force in the North-West is unemployed and we are conscious of the tragic waste of labour resources. Both in human and economic terms this is a tragic waste of human resources, which are untapped just because the Government believe that if we wait long enough the recession will come to an end and all our problems will come right, rather than adopting a sensible and mild reflation of the economy. We do not suggest that we should dash away like an unbridled horse. A sensible and methodical reflation is needed in the expectation that the world recession will end and that we will turn the corner sooner or later.

My region has and will continue to claim a greater share of public investment. The region has a proud record. It has served the nation well and has made a wonderful contribution to the nation's resources. We shall endeavour to use our parliamentary strength to achieve our objectives.

I turn now to regional aspects of the debate. I have certain scruples about the types of regional financial instruments that we should use. I welcome the new thinking on this issue and I should like to see a closer and more detailed examination of the criteria we use for development areas. Lord Pilkington of Pilkington Brothers, the glass company of international renown, was once my teacher. He told me that he was given a grant simply because his factory happened to be seven-eighths of a mile within the ring fence. He said that he received £750,000 in Government grants in a year. The company was a great innovator. Lord Pilkington said that he had £14.5 million in assets that he could plough back in investment. Such grants should be based on need and accountability.

I turn now to travel-to-work areas in the industrial areas of Britain. Why should there not be elements in the criteria for granting finance that recognise mass urban obsolescence, the cost of urban renewal, the problems of communications, travel and transport? Those elements should be examined in detail with a view to drawing up new criteria. I am not convinced that unemployment should be the principal element on every occasion when making a judgment on whether one should invest in a particular area or attempt to interest, by financial inducements, a firm to move from one area to another.

I must be careful not to stray from the subject, but my constituency has an interest in this matter. There are difficulties. Recently, the Minister wrote a letter saying that the regional social security and insurance office was to be moved from Manchester to Liverpool. Liverpool and Manchester are both in the North-West, so the Government are robbing Peter to pay Paul. We are used to that. That was not a surprise to many of us.

The Government cannot carry on with this silly, obnoxious and abysmal industrial strategy. It has not worked in the region that I have talked about. According to the contributions that have been made by other right hon. and hon. Members, it will not work.

I remember when the Secretary of State's predecessor said some time ago that the Government's policies would produce a galaxy of entrepreneurs. We are still waiting for that. He said that industrialists need to be set free. They did not need financial help because they could stand on their own feet. We have witnessed that. Many of them are now on their backs. Thousands of family firms in my part of the world have closed and will never open again. That is the great tragedy of the Government's nonsensical strategy.

The right hon. Member for Stockton (Mr. Rodgers) made great play of the fact that, in its programme for jobs, Labour has never hidden the fact that, in any circumstances, increased public spending would have to be paid for. We have said that that will be the basis of Labour's jobs programme for the future. It is no use Conservative Members trying to make it appear that we were saying that that could be done as if we were pulling a rabbit out of a hat. The Government have said that we must switch resources from the wealth-consuming public sector to the wealth-producing private sector. A balance would have to be struck, where the two could come together in some form or another. I am not saying that there should be a partnership. It is difficult to get a redistribution of resources. That is one of the problems of regionalisation. There are too many in-built disparities in the system. There is no comparison between the North-West and the South-East in per capita spending, health, education and industrial investment.

The problem could be solved by regional instruments. If we get value for money, and put our money in the right place at the right time for those in the greatest need, with a sense of urgency, and if we pursue policies that will give firms encouragement, we can try to re-establish confidence in industry. Although interest rates are high, firms could take heart to proceed, borrow cash and move in the right direction towards creating jobs not just in the North-West but in the whole country.

7.44 pm
Mr. Neville Trotter (Tynemouth)

We are not looking wide enough in our discussion. The first thing that occurs to me when I consider the future of our industry is the world scene.

Reference has been made to the "Atlantic Conveyor", which will be replaced in the near future. It is a long story and I shall not go into it fully now. Two proposals were made by the Opposition about the reason why the order might not go to this country. The first was that we were not competitive—in other words, that productivity was not high enough in our shipyards. The second was that unfair advantages were being given to our competitors overseas. That was a wise summary of the problem.

However, it is a question not just whether the "Atlantic Conveyor" is replaced in this country but whether so much of our productive industry can compete in the world against competition from developing countries, for example, which pay low wages. I have seen shipyards in the Far East where the hours worked are twice as long as in this country and the rates of pay are perhaps one-third of the rates in this country. It is against that competition that not just our shipyards, but a large part of industry, must succeed if we are to have a future. Unfair competition is not always, but sometimes, encountered when we deal with foreign competitors.

When we consider the serious problems of unemployment and the misery that goes with it, which every hon. Member understands, we must remember that that problem is not confined to this country, but is to be found all over the Western industrial world. In the United States in 1980–81, the car industry lost over $5 billion. Shipyards have closed from one end of Europe to the other. The steel industry world-wide is in desperate circumstances. That is the result of a world recession on a scale that we have not seen since the 1930s.

We are suffering badly from the recession because of decades of fudging the issue in our industry. Perhaps we have been living in cloud-cuckoo-land. When I listened to the interesting speech by the hon. Member for Kingston upon Hull, East (Mr. Prescott), I felt that he was living in cloud-cuckoo-land because of the proposals that he made for dealing with our problems. There is no way that planning boards, committees, planning Ministers and civil servants will be able to solve the problems facing our industry in the North-East, or any other region.

Mr. Prescott

The Japanese do.

Mr. Trotter

If the hon. Gentleman is suggesting that we should adopt Japanese practices, I do not think for one moment that we can say that their method of operating is possible for our country or any other. Japanese start in the morning with prayers for the management and owners. Their way of life and philosophy is completely different from ours. It is unrealistic to suggest that it can be adopted here.

Mr. Prescott

Why is Nissan coming to this country?

Mr. Trotter

I hope that Nissan comes to this country and that it comes to the North-East. I suspect that it will be for other reasons if it does not come. Opposition Members have been pessimistic and have made unhelpful comments about taking us out of the Common Market, thereby reducing the size of the market available to us. They have sneered about foreign investors in this country as if all foreign people who did so were evil. However, I believe that in almost every case, foreign firms that have invested in this country have brought sustained employment and benefit to the areas in which they have invested.

There is a suggestion that one can spend one's way out of those problems. The hon. Member for Kingston upon Hull, East said that the Government have a terrible monetarist policy. The Government are at fault in not having defended their fiscal policy resolutely enough in the past two years. The figures that I obtained from the Library after the hon. Gentleman's speech show that in the first two years of the Government's period of office, the public sector borrowing requirement in real terms was 15 per cent. higher than in the last two years of the Socialist Government.

Mr. Prescott

That is what I said.

Mr. Trotter

It is not possible for the hon. Gentleman to have it both ways, and imply that the Government's monetarist policy is based on not spending money when the statistics show that they are spending more now than was spent during the Labour Government's period of office.

Mr. Prescott

There is a difference between the quantity and quality of the investment. I was talking about capital investment problems.

Mr. Trotter

The hon. Gentleman also commented on the Government's general monetarist policy, which I thought meant the total spending of the Government. Capital investment under the private sector has held up in the past couple of years to the same level—if not higher—as it was before the change of Government. If the hon. Member for Kingston upon Hull, East disagrees, he is at liberty to pay a short visit to the Library as I did after his speech. No doubt it will give him the same statistics. I do not have the exact reference but no doubt the Library

The hon. Member for Kingston upon Hull, East accused the Government of creating excessive interest rates. I cannot understand how any right-thinking or sensible person can suggest that even more money can be spent and yet interest rates will be reduced at the same time. If one spends more borrowed money, interest rates will increase. That is a fundamental law of economics.

There is a cry that more should be done to aid industry. I was heartened by what Mr. Duncan McDonald, the chairman of Northern Engineering Industries, said recently. That company is successful and is managing to weather the storm in heavy engineering. He said that the Government have a role to create an environment in which businesses can operate successfully and that industry is not looking for grants on a charitable or begging bowl basis. He said: I do not shirk from accepting that ultimately the responsibility for success or failure rests with management. That is our job, and ours is the responsibility to obtain maximum unified thrust from management, the work force and the unions. The management, work force and unions in that company have succeeded. They are an example to us all.

Regional aid programmes have been with us for some time. Without them, there would be greater imbalance between the regions. Although we must defend the regions, we must be careful not to become too involved in any one of them at the expense of another. It is sometimes said that the North-East receives less aid than Wales, but it is forgotten that we receive more than the Scots. One gets nowhere on that argument. We must continue with the policies, but we must not set one region against another.

The future of British industry and our standard of living depends entirely on industry's productivity. It is growing. Our record in the 1970s was appalling. Between 1970 and 1980, productivity in Britain rose by little more than 2 per cent. a year, whereas it rose by 5 per cent. a year in the rest of Western Europe. Increasing our productivity to match that of our competitors is a serious problem. Much is being done to that end.

The Government are right to concentrate as much as they can on industries that have a clear future—those in which there is more automation and advanced technology. It may be argued that that will lead to a reduction of jobs in manufacturing industry. That is a world-wide feature that cannot be avoided. Machinery will take over from brawn and, to some extent, from brains. We should not run away from that.

Many jobs are extremely dull and repetitive. If they can be done by robot so much the better, provided that alternative jobs can be found for the work force. The future lies in the leisure industry and the public sector. I strongly favour a larger public sector, but we have enlarged the public sector before the country can afford it. I have confidence in Britain's long-term future.

The hon. Member for Kingston upon Hull, East interrupted my right hon. Friend the Secretary of State to correct him about our manifesto at the last general election. It is encouraging that he has read and remembered every word of it.

Mr. Prescott

I have a copy with me.

Mr. Trotter

Irrespective of whether we stated that the long-standing faults of British industry would take more than five years to correct, that is the case. That was in my mind and those of my colleagues at the general election. The deep-seated problems will not be put right in the short term. It will take two Parliaments to achieve that. We are on course to enjoy the full benefits of an improvement in employment and prosperity on that time scale.

7.55 pm
Mr. Harry Cowans (Newcastle upon Tyne, Central)

I am glad to have the opportunity to speak at last. I listened to the Secretary of State's speech. One need not wait for a Supply Day to hear him claim successes. For a moment I thought that I had wandered into another Chamber, far from these shores. Having listened to him I could not believe that there were 3 million people unemployed. He mentioned everything but that figure.

The right hon. Gentleman accused my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) of not mentioning inflation. I shall make a counteraccusation. The right hon. Gentleman mentioned unemployment but never the unemployed. The hon. Member for Colne Valley (Mr. Wainwright) summed the matter up neatly. He said that even the Secretary of State's employees do not agree with him. The Secretary of State missed the hon. Gentleman's pearls of wisdom.

The Secretary of State said that he had travelled all over the place. If that is so, and the people whom he employs do not agree with him, one can only assume that they were out when he reached their district. Has the right hon. Gentleman ever been to the Northern region?

Mr. Patrick Jenkin

I had two interesting days in the North-East a few weeks ago. I visited Teesside and several factories in Durham. I look forward to a visit to Newcastle and some factories there later in the year. I try to get around a little. I hope that I shall visit the hon. Gentleman's constituency.

Mr. Ron Lewis (Carlisle)

What about Cumbria? It is also in the Northern region.

Mr. Cowans

I hope that the Secretary of State will visit my constituency, Durham and Cumbria. If he has time during the recess, he could make a different type of visit. I am willing to take him to places that he will never see on official visits. Perhaps he would then get the true picture of what is happening.

Mr. Cryer

The problem is what the Secretary of State does after he has made a visit.

Mr. Cowans

The House's first opportunity to debate the Northern region after the Government came to power was in January 1980. My right hon. Friend the Member for Houghton-le-Spring (Mr. Urwin) was aghast at the unemployment figure at that time—8.5 per cent. Conservative Members said that they were not responsible. They have repeated that today. They said that the problem was inherited from the previous Administration which had caused the problem. That argument cannot be valid now. The Conservatives have been in power since 1979. What has happened? I welcome the debate as it gives us an opportunity to examine the glowing successes that the Secretary of State described.

If the Government's policy had been successful, the 8.5 per cent. unemployment rate would at worst have remained and at best would have been reduced. Yet in the period from June 1979 to December 1981 the Northern region lost 85,000 manufacturing jobs. In other words, 20 per cent. of the region's manufacturing base has disappeared as a result of the Government's policy. Total employment fell by 151,000, or 12 per cent., in about 18 months. That is one area in which productivity has been achieved—the Government have been getting rid of jobs faster than anyone could have dreamt. My right hon. Friend the Member for Houghton-le-Spring would have more to complain about than he had in 1980 because unemployment in the region has effectively doubled.

One would have thought that a caring Government would have looked into the matter and tried to do something about it. Indeed, they have done something. That must be acknowledged. They have progressively weakened regional policies to their lowest level in 20 years. That is the kind of action that they have taken, but there is worse yet. In their expenditure plans from 1982–83 to 1984–85 the Government anticipate a further reduction of 30 per cent. in regional assistance. That is bad enough, but still worse is to come in the second phase of the marvellous policy put forward by the Minister today to reduce the number of areas with assisted area status, to be implemented next month. Conservative Members have trotted out parrot fashion the idea that aid should be concentrated in assisted areas and special development areas, but the effect will be to reduce the percentage of the nation's employed who are in assisted areas from 40 per cent. to 27 per cent.

The Minister said that he had visited the Northern region. Even he must admit that a tremendous number of jobs have been lost. For example, Consett's Scotswood, the Workington steel works and the textile industry have been ravaged. There is a significant factor in each of those cases. Without exception, the people there played by the Government's rules. They increased their productivity, and that is on record, but they ended up on the dole.

Sir William Elliott (Newcastle upon Tyne, North)

The hon. Gentleman says that Government policy has reduced employment in the region from which both he and I come. We were both involved in doing our best to keep Vickers Elswick in being. I hope that in his remarks on a motion claiming that Government policy has not worked he will not forget to mention that the enterprise zone secured a £7 million injection of capital for that company which will guarantee 700 jobs. There is a good side to what is happening in the North-East, as well as the aspects that he has mentioned.

Mr. Cowans

The hon. Gentleman makes a valid point. After every downpour, small puddles are left. Without any doubt, the Elswick factory has been saved. It has moved into the enterprise zone and I welcome the number of jobs that remain, but the total work force has been reduced. I welcome the new factory and the fact that the firm still exists, but there has been a net loss of jobs. That must not be forgotten. Of course I welcome any jobs. If I could find jobs in the North-East for all Conservative Members I would be happy to send them there.

Mr. Bill Homewood (Kettering)

The Government constantly advertise Corby in my constituency as an example of the success of regional development aids. There is no difficulty in getting Ministers to come to my constituency. They queue up to come. But even in that success story that the Government claim for their regional development programme we are losing jobs as fast as we are attracting them.

Speaking with local people this morning, I heard that 500 jobs were to be lost from the local steel works. That equals the total gain in the past 15 months. I welcome the regional policies, but—

Mr. Deputy Speaker (Mr. Paul Dean)

Order. The hon. Gentleman's intervention is turning into a speech.

Mr. Cowans

Perhaps my hon. Friend will be able to finish his speech if he succeeds in catching your eye later, Mr. Deputy Speaker. I welcome my hon. Friend's remarks as he helps to make my case. The idea that the Government's policies are working is an illusion. We are pumping in a great deal of money, although the Government are trying to cut the amount, and we are running as fast as we can, but we are not even standing still.

The idea that the Government can slash public expenditure and still put their hand on their heart and say that they are trying to create jobs is the biggest myth ever to be perpetrated. It is amazing that when the Government talked about cutting public expenditure so many business men in the Northern region jumped out of their chairs and cheered. Less visible were the number of letters that I received when they suddenly found that because of the cuts their contracts with local authorities ceased. There were no more housing contracts. The same applied to equipment, stationery and everything else. That is another adverse effect that the Government have caused, and they could do something about it immediately. Nobody is saying that they should go berserk about it, but it is about time that this policy was reversed in the Northern region, albeit on a gradual, phased basis. It must be recognised that the Government's policies have not worked.

What is in the pipeline for the region? Unfortunately—again, this is Government policy—due to the failure of an amendment to the Finance Bill yesterday there is the prospect of a further 10,000 redundancies on Teeside. The hon. Member for Tynemouth (Mr. Trotter) mentioned the "Atlantic Conveyor". If the Government do not take a realistic view — it is not yet clear that they will—about ordering the replacement of that vessel, the shipbuilding industry in the North-East could come to an end right now. The situation is as bad as that. Perhaps on his next trip the Minister will visit the shipbuilding areas in the region.

The seriousness of the position applies not only to shipbuilding. Whenever a major company in a region closes down, there is a spin-off affecting the subsidiary firms that supply it. In shipbuilding that could lead to a loss of 12,000 jobs.

The Minister made great play about the British taxpayer. He was concerned that the taxpayer had to pay for this and for that. If the taxpayer is to pay for anything, it should be on projects where he gets a return. In the replacement of the "Atlantic Conveyor" we have the logic of the lunatic asylum. The British taxpayer is pouring money into compensation for a vessel that was lost in the service of this country, but that money will provide jobs in Japan. The people who received strong praise from Conservative Members during this crisis, and who toiled night and day to get the "Illustrious" out eight weeks ahead of schedule, are now to be told "It is a pity, but it looks as though there will be no jobs for you because we are paying money to make sure that the jobs go to Japan."

The hon. Member for Tynemouth (Mr. Trotter) argued that we live in the real world and that everything costs money. One does not need to be a Conservative Member to know that. Everything costs more since the Conservatives came to power.

It is argued that there is a difference between the tenders from Japanese companies and those from British Shipbuilders, but what will placing the order abroad cost the British taxpayer? First, he will have to foot most of the bill for the work going to Japan. Secondly, he will have to face the cost of redundancy payments, social security and unemployment benefit. He will be paying for the luxury of putting 12,000 of his fellow citizens out of work. By any standard that is the logic of the lunatic asylum. Perhaps the Minister will explain to the public how he works that out. It is because the second part of the bill—redundancy payments, social security payments—do not appear in the Government's ledger. If they did, the people would halve a very different attitude towards the Government.

Shipbuilders on the Tyne have increased their productivity. They have a record second to none in building warships. They have a very good record in building merchant ships. They have done everything the Government have asked to increase productivity. The reward for the workers is the dole. These are the facts of life in the Northern region. The Minister may paint a picture of success, but, unfortunately, I am living right beside some of the failures. The dole—or "unemployment" if he prefers that word—is increasing across the board. It is 16.7 per cent. There are pockets in Sunderland—for example, Consett—where unemployment is 50 per cent. and other areas where it is between 40 per cent. and 50 per cent.

Even in Cumbria, a rural area, unemployment is much higher, but we arrive at that average of 16.7 per cent. However, the Minister has the audacity to paint a success story.

Mr. David Watkins (Consett)

The Government are always telling us about their alleged successes—I use the word "alleged" deliberately—in dealing with the unemployment that followed the shutdown of the Consett steelworks. However, only about one-fifth of the unemployed people in my constituency are from the Consett steelworks. The Government are talking about an alleged success for a fraction of the population. The reality is that the Government have brought about the complete collapse of the economy in the area. The Secretary of State visited my constituency in 1966 when he canvassed against me in that year's election.

Mr. Cowans

Before I refer to Consett, may I remind the House of a tune that I think everyone in the House at sometime in his life has either sung, hummed or whistled. That tune is appropriate to the shipbuilders in the Northern region. It is called "Land of Hope and Glory." The shipyard workers are being told that they have had their moment of glory and now they are to be given very little hope. The Minister has the power to turn that round.

In these debates the Government frequently refute any arguments that they may be abandoning the North. I have warned the right hon. Gentleman that he might not like some of the facts. If he says that the Government are not abandoning the North, will he explain to me and to the people in the North how, when the group of Northern Members wrote three letters seeking to meet him—not to do any damage, but to talk about the financial arrangements for NEDC—we were refused? That was scandalous. It would have been common courtesy for him to meet us. He would have heard some of the facts that I have been stating tonight and I would not have needed to make this speech.

Mr. Patrick Jenkin

The hon. Gentleman met my hon. Friend the Minister of State and had a long discussion on the subject of NEDC financing. I am sure that the hon. Gentleman will confirm that.

Mr. Cowans

The Minister of State did meet me, but there must be some misunderstanding. We did not discuss NEDC financing. I suggest that the Minister checks his records. I have copies of the letters and the Minister's replies. He must also have copies. Although I met the Minister of State, it was on another matter. I hope that the Secretary of State will not mislead the House.

Mr. Patrick Jenkin

If I am wrong, I apologise. The hon. Gentleman will know whom he met and what subject was discussed. There have been long meetings with my hon. Friend about NEDC, culminating in a letter that he wrote recently and a question that he answered in the House. I beg the hon. Gentleman to believe that we take the problems of the Northern area seriously.

Mr. Cowans

I beg the Minister to believe that granting a meeting would have proved his concern. I have the correspondence in which that meeting was refused. Since then, without his having the courtesy to meet representatives from the region, it is proposed to increase the NEDC financial arrangements. However, this will not be done until the next financial year. That was one of the subjects we would have discussed with the Minister had we been given the opportunity. A meeting would not be too late, even now, and it would be to our mutual benefit. The Minister hardly projects a caring image when he refuses to meet the elected representatives of the Northern region to discuss such matters with him. It is bad for him to project that image and I am sure that he will put that right.

Conservative Members have already mentioned the election that brought the Government to power. The people of the Northern region certainly recall the posters that appeared during the campaign depicting the long dole queues. I shall let the Government into a secret. Some of those posters are still there.

Mr. Robert C. Brown (Newcastle upon Tyne, West)

Saatchi and Saatchi.

Mr. Cowans

I thought that Mickey Mouse and Donald Duck had drawn them up. That certainly appears to be the case now, because those posters are stuck on empty factory walls. At that time, the Conservative Party said that the dole queues were too long. They are now three times as long in the Northern region. It will be impossible for the Government to use that poster again, because they would need a roll of wallpaper to depict the current situation.

Neither the Secretary of State nor hon. Members should get carried away with the illusion that we are doing very well. The right hon. Gentleman has talked about successes and for the umpteenth time we have been reliably informed that the situation is getting better. I cannot speak for other regions, but it is getting no better in the Northern region.

I shall give the right hon. Gentleman an audience if he wishes to challenge that view—one that is superior to the one sitting here tonight. I shall accompany the Secretary of State, because I might be needed. Perhaps he will tell 300 young kids in Newcastle who applied for one vacancy that things are getting better, but I doubt whether he will be able to convince them. In fact, the Government stand indicted of doing too little too late, of robbing Peter to pay Paul and of seeking to conquer inflation off the backs of the unemployed.

Several Hon. Members


Mr. Deputy Speaker

Order. Before I call the next hon. Member, I should inform the House that the wind-up speeches are expected to begin at 9.10 pm. Many hon.

Members who have been present throughout the debate still wish to speak, and I therefore appeal for short speeches.

8.23 pm
Mr. Barry Henderson (Fife, East)

The hon. Member for Newcastle upon Tyne, Central (Mr. Cowans) wanted to get a great deal off his chest, but, in view of what you have said, Mr. Deputy Speaker, I hope that he will forgive me if I do not take up his remarks.

Curiously enough, despite the extravagant terms of the Opposition motion, I detect some surprising areas of consensus. It may be trite to say that there is agreement that unemployment is a bad thing. It is recognised that certain areas of the country suffer from particularly severe unemployment. As a result, there is an onus on us all to ensure that Government assistance should go especially to the areas with the greatest problems. In other words, there is a consensus that, as far as practicable, we should try to create one nation of reasonable equality.

There is also a feeling that regional policy is a good thing, but hon. Members have questioned whether the way in which that policy has been carried out in the last 20 or 30 years has done very much good.

There is a paradox that although we think regional policy is good we are not sure it is working. We are not clear whether we are talking about that aspect of the policy concerned with improvements to the infrastructure to improve opportunity for development, or whether regional policy is about the amount of money given by the Government to encourage someone to do something that he might not otherwise have done. I hope that the debate will further stimulate thoughts about the nature, content and precise definition of regional policy in the future.

Scotland has done particularly well from the concentration of development area status on those areas most in need. That does not include most of my constituency, but 72 per cent. of the Scottish population live in areas with assisted area status, and more than half the population live in special development areas.

Having said that, I believe that the best way to use public funds is to encourage the growth, development and starting up of new firms. My right hon. Friend referred to the 90 new measures that have been taken to stimulate and assist small business. That kind of assistance has been extremely helpful, probably more directly helpful in the creation of jobs than much of what has traditionally been regarded as regional policy, which, as some hon. Members have suggested, does not create many new jobs.

We should perhaps take a radical look at the principles of regional policy and decide on the incentives that will be most useful in the creation of new businesses and jobs. We should consider making those available in the first instance regardless of geographical area. We could perhaps relate a percentage increase to a basic level of entitlement, depending on the level of unemployment in a particular employment exchange area where the business is being carried out. I put that as a thought arising out of the nature of the debate.

We have to recognise something that Labour Members seem reluctant to recognise. That is that jobs come from employers, and that they depend for their business on customers. The prosperity of those employers and employees alike in business depends on the satisfaction of the customer with the goods and services that they have provided. Among those things that have positively harmed employment is brute force trade unionism and slack management. So often, short-term cheap popularity can be gained easily by the manager who turns a blind eye to bad practices. In the same way, cheap popularity may be gained by a slack Government who turn a blind eye to bad practices in the nation. There have been too many of these, and the Government have now turned a sharp and beady eye on some of them.

Not least among these practices is the way that some State-backed monopolies have gone about business in the past. One Labour Member referred to British Airways and said that the Government were doing horrid things to them. However, here is a classic example of a major national resource which has increased the cost of business, industry and individuals because of slackness about its manning.

For donkey's years we have been told in Scotland that the Highlands and Islands air service could never he run at a profit, and BA resisted the suggestion of anybody else being allowed to run it. It said that it could not be run at a profit and that they required substantial funds from the taxpayer. They have now found that they can run the air service at a profit and with a better service for the customers. That is only because of the pressure of events and the encouragement of the Government.

Mention was made of the coal industry, which is heavily subsidised. For every person employed in the coal industry £35 of taxpayers' money is paid out every week of the year. There is also the case of British Leyland. The cartel that it has organised throughout the country is costing the people and the business community thousands of millions of pounds. The typical price of a car in this country, even a British-made car, is between £1,000 and £5,000 more than the price for which the car is available on the Continent. If that is multiplied by the millions of cars registered every year in this country, one realises that it costs the country thousands of millions for the benefit of the small number of people in the British motor car industry.

We heard much about British Rail and its overmanning earlier today. It received £870 million of taxpayers' money this year, which would provide much infrastructure for the regions.

I wish to make one brief constituency point. My constituency is a microcosm of the national position. Broadly speaking, we have fractionally under the national average unemployment. We have had more new firms starting up than have closed by a substantial degree, although there has been a net decrease in employment. We have one unemployment black spot in Levenmouth which has a special problem with a particular firm. The problem results from the company falling between two stools in a deal between multinational companies. I am grateful to my hon. Friend the industry Minister at the Scottish Office for what he and his Department are doing to ensure that no artificial measures can be taken to prevent the continuing of a viable business in that plant.

Last, but not least, I emphasise that one of the most helpful things that could happen in my constituency is not the handout of money to individual firms, but the rapid establishment of the East Fife regional road.

8.34 pm
Mr. George Park (Coventry, North-East)

The Government, in their amendment, once again repeat that their policy is to concentrate regional aid in the areas of greatest need, although in making that statement, which on the face of it sounds eminently fair, less attention is paid to the fact that they may be reducing the total amount of cash available by about £230 million. They do not shout too much about that and they are not forthcoming about how they identify "need". We in the West Midlands have been trying for months to find out how the Department of Industry defines need, but we have had no success.

The judgment cannot be based on crude unemployment figures, but Ministers are coy about discussing the other factors that they take into account. Inevitably many hon. Members seek to prove that their areas are in the greatest need and that that should be recognised. The sad fact is that the whole of Britain is in difficulty and the Government's policies have contributed substantially to that.

The scourge of unemployment has followed those who came to the West Midlands from all over the country seeking work. Our percentage increase in unemployment, at more than 190 per cent., is the highest in the land. Even the relatively prosperous East Midlands is finding that, because of Government policies, basic industries in that part of the country, such as knitwear, are being undermined.

We have to tell those who advocate that the unemployed should travel round to find jobs that in the West Midlands there are 55 candidates for every vacancy, compared with six in May 1979. The 1981 census showed an unemployment level of over 30 per cent. in the Deritend area of Birmingham and that more than 30 wards in the West Midlands county council area have unemployment of over 20 per cent. of the working population. The youth unemployment figures are even worse and are as high as 40 or 45 per cent. in some areas. And still the numbers increase. Last month more than 3,500 people lost their jobs, taking the county's unemployment figure to 225,000—over 16 per cent. of the work force. We shall have to add to that number the summer school leavers for whom there will be few jobs.

The human tragedies contained within the cold statistics must not be forgotten—tragedies such as a man of 40 or 45 years of age being told that he is too old and the youngster who will never have even the chance of a job.

For those in work there is constant tension and insecurity. We have the spectacle of Alvis in Coventry winning the Queen's award for exports and making one-quarter of its labour force redundant the next week. Coventry Climax, another of the disposables from British Leyland, is embarking on rationalisation, which is a euphemism for redundancies.

British Aerospace is closing a plant with an excellent record in Leicestershire in order, we are told, to concentrate in other areas. The Government wash their hands of any involvement because the firm has been privatised, but the company is telling all and sundry that unless there is funding from the Government it will have no future. If the company requires Government funding, why, apart from reasons of dogma, did the Government privatise it?

Improvements in productivity in the car industry, of the order of 40 per cent., at Talbot and British Leyland, Longbridge, have resulted in short-time working. The employees have worked themselves out of a job.

The Government may not be too keen to listen to Labour Members, but perhaps they will listen to the new president of the Society of Motor Manufacturers and Traders. He wants an end to fiscal discrimination against the car and reciprocal action against those using tariff and non-tariff barriers against British exports. He wishes to lower fixed costs to industry, including energy costs, and he wishes greater Government investment in industry for research and development.

Alternatively, the Government might heed the West Midlands CBI. In a recent survey, it said that success in raising competitiveness can be sustained only if the Government act to remove some of the externally imposed constraints on companies. The West Midlands CBI also calls for an immediate increase in capital spending by the public sector to provide an initial stimulus to economic recovery. There is plenty of work to be done and it must be tackled at some time. The longer the work is left, the greater the problems will become and the more expensive it will be to do this work. Examples where stimulus should be provided include new housing, housing repairs and renovations, roads, sewers and railway electrification. All those projects are bedevilled by Government policy and all have the potential to take people off the dole. North Sea oil resources could be used to rejuvenate our economy instead of paying for social benefits. Even the initiatives taken by local authorities to encourage new industry are in jeopardy if the amount of money allocated for this purpose is reduced.

What consideration has been given to the effectiveness of the present regional strategy? The Public Accounts Committee tried to find out what benefits had accrued to regions after the injection of financial aid. The Committee could not reach any conclusion, and that casts doubt on the Government's present policy. Judging by ministerial statements, there also seems to be a conviction that aid given to British Leyland—the hon. Member for Fife, East (Mr. Henderson) is under the same illusion—is all retained in the West Midlands. That is untrue. I understand that that conviction is one reason why the Government decided that the West Midlands should not be given assisted area status. That decision in turn denies us access to European funds.

In a gravely weakened economy, where we already have two nations—the employed and the unemployed—in which, even if there is an upturn in the economy, major industries will never again employ the numbers that they formerly employed, great stress has been laid by the Government on the formation of new small businesses. It is appropriate that the Minister responsible for small industry should be sitting on the Front Bench. In itself, the encouragement of new small businesses is laudable, but such measures are completely inadequate to meet increasing unemployment, especially in the Midlands, where 500 businesses went bankrupt in the past six months. That figure is 8 per cent. higher than for a similar period the previous year.

Even when the Department of Industry hit upon a scheme that was attractive to small business men, the Treasury soon put a damper on it. The Treasury provided one extra sum of £10 million and then the lists were closed. The Minister of State knows that that is true and that there were many more potential customers for that scheme.

The current regional aid is nowhere near equal to dealing with the increasing problem of bankruptcies and unemployment and any reduction in that aid will exacerbate the problem. A complete reappraisal of regional policy is required, in greater depth and scope than the most recent one, so that specific rather than general aid is provided. The major objective of that reappraisal should be the reduction of mass unemployment. But given the Government's dogmatic approach, I doubt whether they are willing or able to take an objective view. The only alternative is the return of a Labour Government—

Mr. William Wilson (Coventry, South-East)

Will my hon. Friend confirm that it has been estimated by the West Midlands county council economic unit that, as a result of unemployment, that area is now losing £960 million every year, which represents massive purchasing power?

Mr. Park

I had noticed that statistic, but I have tried not to give the House too many statistics because we have had a surfeit of them today. The problems of the West Midlands seem to have been noticed because both Front Bench speakers and other hon. Members have mentioned the rapidly deteriorating position.

The only alternative is the return of a Labour Government committed to a policy of expansion.

8.45 pm
Mr. Gordon Wilson (Dundee, East)

I pay tribute to the maiden speech of the hon. Member for Coatbridge and Airdrie (Mr. Clarke). It was amusing, relevant and effective, and I look forward to hearing him again.

In Scotland today 341,000 people are unemployed. That is a monument not just to the Government but to the rundown of the economy in Scotland and in the United Kingdom. It is clear from our debate that there is an inter-relationship between the overall economy and regional policy.

I do not wish to deal with industrial policy but to concentrate on regional economic development. We must realise that in Scotland we have lost 42 per cent. of our manufacturing industries in the past decade. Part of the employment losses have been made good in the service industries but there has been a substantial increase in unemployment. People have begun to turn a jaundiced eye on regional policy because, although it has made a contribution, it has not been the miraculous solution that we once expected.

John Pollock, president of the Scottish Trades Union Congress, in his speech at this year's conference, made some enlightening remarks about industrial development. He put his finger firmly on the need for the decentralisation of economic policy. He said: On past evidence, I do not believe that the United Kingdom Parliament is capable of introducing overall economic policies for the United Kingdom which, without substantial modification, are flexible enough to meet the particular needs of all areas in the United Kingdom. That is why the General Council of the STUC has used one of its three motions before the Congress to reiterate its determination to achieve a Scottish Assembly with legislative and economic powers … A Scottish Assembly must have the power to influence significantly the economic and industrial health of Scotland. He also said that, as there is evidence of a flow of employment opportunities towards the South and South-East of England, Scotland's economic strength and its mineral wealth should be used to counterbalance the drift south. That is one of the strongest points that the STUC president could make, because there is no doubt that, although Scotland has suffered badly from unemployment, it is a wealthy nation and its resources have not been put to work in order to build up employment opportunities.

The Monopolies and Mergers Commission, in a series of reports, the last of which dealt with the Royal Bank of Scotland, said that there were continuing problems with the centralisation of industry. It said that every time firms were taken over there was a loss of talent, opportunity and power of direction in the Scottish economy and that, overall, it was unhelpful. In other successful economies on the Continent and in the United States there tend to be political and economic counterbalances in the system, so it is not necessary to put all the money into regional policies, as the highly centralised United Kingdom Government have done.

It has been said that the public sector presents one of the best opportunities for future growth. I accept that economic growth depends frequently on the amount of investment that central Government are willing to put into any area of development. However, it is equally significant that nationalised industries do not operate an economic policy that is designed for the particular needs and circumstances of the Scottish economy, and I think that the same argument could be applied to other areas of the United Kingdom. Nationalised industries are responsible to Departments in Whitehall, and major decisions on economic policy affecting Scotland are taken in London by Departments such as Industry, Trade, Employment and the Treasury. So many nationalised industries in Scotland are merely regional branches whose function is to carry out the policies that are dictated by the centre and designed to serve overall English needs. That is a severe weakness in the United Kingdom, and it is one that we should view with fresh eyes, in view of the pressures that are now being put on the Government to spend more money on areas of the United Kingdom that in the past have not made those demands.

The world recession has caused many factories—many of them in multinational ownership—to close their doors. We all know that those doors will not easily be reopened. Nor will replacement jobs appear from outside. We are in competition with countries throughout the world for a share of the international investment. That is why more and more of us now believe that it is more important to build up indigenous industries, although of course we welcome what jobs and new technology we can get from abroad. Unless we can create employment through entrepreneurial activity in our country, we shall get nowhere.

I shall truncate my remarks, because I know that other hon. Members wish to speak. I ask the Minister to look closely at the operation of regional policy. Between 1945 and 1971, using the figures that were provided by Mr. R. R. MacKay of Bangor university, the net employment gains in Scotland were 15 per cent., in Northern Ireland 32 per cent., in Wales 36 per cent. and in the North of England 25 per cent. Too many employment grants go on plant and machinery, and too few on employment creation. Regional policy can also be criticised in that much of the money goes on projects that would probably have come to a given area anyway, because the industrialists concerned found that it was the best site.

Dundee in my constituency has special development area status. Certainly, it has been useful, but it has not proved to be the manna from heaven that many areas think it is. Probably the best advantage of that status is the help and asistance and cheap loans that the area can get from the EEC. Without special development area status, an area might not qualify for that help. However, few jobs are a direct result of having special development area status.

There have been many spectacular plant closures in Scotland over the past two years. There was the smelter at Invergordon, the Talbot car plant at Linwood, the pulp mill at Corpach, Plessey and Bathgate. British Leyland in Bathgate is in difficulty, and Ravenscraig is under threat. Overall, that points to the inadequacy of regional policy.

Regional policy has not managed to cure Scottish economic problems. So we should turn our attention more and more to decentralisation of the economy, particularly as the United Kingdom Government have not managed to run the British economy in an effective and efficient way so as to provide economic growth. If we cannot do that on a centralised basis, we must rely more and more upon the mechanisms and machinery for development at regional and, in Scotland's case, national level. New ideas must be deployed.

As a result of last night's vote, I am worried about the petrochemical industry. The Labour Party pushed to a vote an issue that would have been detrimental to Scotland and it caused Scottish Labour Members to vote with the Conservative Party in order to safeguard Scottish interests vis-a-vis those of their own party. It is because of the Labour Party's failure to protect Scotland's interests, and indeed the failure of the Conservative Party to improve the economy, that I am utterly convinced that we require a Scottish Parliament to solve our problems.

8.55 pm
Mr. Fred Silvester (Manchester, Withington)

I have had the pleasure of listening to every word of the debate, and what strikes me most is its familiarity. Everyone who listens to debates on regional policy in the House has a strong sense of deja vu.

There are three fundamental errors in our attitude to regional policy. We seem to regard it as temporary, as charity and with regard to industrial matters only.

Regional policy is not temporary. People express surprise that it has been going on since the 1930s. However, it will continue until the 2030s because it deals with a fundamental situation that will not go away. There is nothing that we can do, short of maintaining a policy from Government and using Government funds, to correct the permanent imbalance between different parts of Britain. It is important that we should understand that, because it affects the way in which we deal with the individual policies.

I get fed up with the way in which people talk about the application of regional policy to different parts of Britain as though it were an act of charity or a subsidy. It is nothing of the kind. Regional policy is a bargain struck between the regions and an over-centralised country. Because of the flow of funds in Britain there would be a continuous flow to the South-East if there were no bias in public expenditure. The differences between the regions would become unacceptably acute.

We tend to discuss regional policy in terms of industrial policy. Most hon. Members today have spoken of the £900 million that goes in industrial aid on the regional Vote. Again, that is not true. The most valuable forms of regional policy are those that take into account expenditure on all forms of government. One of the most interesting aspects of the partnership development was the attempt to bring together the Votes of different Departments to ensure that policies in relation to health, housing, transport and roads were all brought together with the Vote for industry.

At this hour I shall not belabour a local point, but I must tell my hon. Friend the Minister that his attitude towards the question whether the Manchester and Salford inner city partnership area should or should not be a development area—I apply this to all those other inner city areas which are not covered by urban development corporations—is based simply on the criteria relating to the travel-to-work area and unemployment statistics.

The essence of the partnership area is that every Department makes its contribution. The Minister's Department's contribution is to deal with regional development grants and regional policy. My hon. Friend the Minister could and should make his contribution towards getting things moving in the inner cities. The argument that is based on the narrow ground of travel-to-work areas is bizarre.

I listened with great respect to the speech of my right hon. Friend the Secretary of State, and I would love to believe him. However, I see no evidence of the upturn of which he spoke. There are certain swallows and signs in the clouds that we would love to believe. Indeed, earlier in the year I thought that there might be a sign of change when we saw that lovely point in the graph at which the level was beginning to flatten out.

In the North-West, the unemployment figures show that in December, January and February the trend was in our favour. In March, the figures began to get worse, in April they were a little worse, and in May even worse, and the provisional figures for June are again worse. There is room for intelligent relaxation. The Department of Industry and related Departments could take many steps that would prove to be of permanent benefit to the economy and that would provide temporary relief for unemployment. I hope that my right hon. Friend and his colleagues will direct their attentions to such matters.

9.1 pm

Mr. Barry Sheerman (Huddersfield, East)

I shall, of necessity, be brief and truncate my speech. However, I must not omit to add my congratulations to those that have already been given to my hon. Friend the Member for Coatbridge and Airdrie (Mr. Clarke) on his maiden speech. I warn him that if my experience is anything to go by that will be the last time that he is called to speak so early in a debate.

However, my hon. Friend's speech reminded me of the time when I made my maiden speech, three years ago. Despite the rising tide of unemployment, the number of industrial collapses and the general misery that faces us, there has been a decline in the strength of passion expressed in speeches in the Chamber. One cannot keep up such a level of passion for ever. My hon. Friend reminded us how passionately we should feel about the awful situation facing Britain.

As a Member of Parliament from the Yorkshire and Humberside area, I know that that area has been devastated in the past three years by the Government's policies. Indeed, I congratulate my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), because he made one of the most interesting and fresh speeches that we have heard for a long time. It showed that the Labour Party is not sitting on its backside saying that it will try the same old policies. The Labour Party sent two of its Front Bench spokesmen into the regions to talk to people at every level of industry and local government to ensure that the new structures that are needed will be relevant and creative and will bring an end to mass unemployment. That is a sign of fresh thinking.

In my maiden speech I warned that we look too often for panaceas and for easy, simple solutions that will cure everything. In July 1979 I warned against becoming too hooked on monetarism. However, the Government have become hooked on it. When I go round Yorkshire and Humberside I meet business men, trade union officials and ordinary working people. They do not have any grand ideas about completely new structures to meet the needs of today. They do not talk as coherently as the chairman of the Yorkshire and Humberside CBI. On 8 July he said that Yorkshire and Humberside were stagnating and: The economy was as dead as a dodo. Everything would seem to suggest that we are back into another recession before we have even come out of the last one. The chairman does not call for a 0.5 per cent. decrease in interest rates but for a reduction of 2 per cent. to 4 per cent. He calls for a mini-Budget and a realisation that the position of most business men in Yorkshire and Humberside is desperate and that they cannot hang on until April. That is the message from the CBI and Yorkshire Post business section, which states: Business failures in Yorkshire hit record level. That is now, and it is not in cloud-cuckoo-land. In view of that evidence, we do not need just a mild reflation or, as the chairman of the CBI was saying, to embrace Keynesianism. Let us reflate our economy. We can talk about regional policies, but most people want a modest start to a reflation of business activity at every level.—[AN HON. MEMBER: "At any price?"] Not at any price. As sensible business men, and the Labour Party point out, we need a programme of relatively non-inflationary public works and investment—gas-gathering, new sewerage schemes, and electrification of the railway lines. That could start the country back on the road to recovery, and it is the way we must go, if not much further.

During our period in Opposition we are creating policies for alternative structures that will go far beyond embracing Keynesianism. Our plan for responsive democratic structures in the regions will make a great difference. No hon. Member could be satisfied with previous regional policies. The evidence is that about 250,000 jobs were created during the growth period from 1960 to 1976 by regional policies. That is not a negligible number. However, many other jobs were lost because of the change from urban to rural development. Those changes in the geo-economic life of the country are often more important than what Governments do.

From 1976 regional policies have not achieved what they should have done, because they do not work against a backcloth of decline. Regional policies have to be much more innovative if they are to deal with regional regeneration in a time of recession. Two things have to go hand in hand. We have to reflate our economy and have regional structures and development. There has been a television advertisement that annoyed many hon. Members from the regions. It comes from the London Docklands development corporation and says: Why go to the middle of nowhere when you can go to the middle of London? My constituents and most people in the regions outside the South-East believe that the Government have no conscience about what they believe to be the middle of nowhere. The Government should remember that in Yorkshire, Lancashire and the West Midlands—in the middle of nowhere—the people have the vote. When the next election comes, they will give the Government the answer.

9.10 pm
Mr. Stanley Orme (Salford, West)

My first job is pleasant. It is to congratulate my hon. Friend the Member for Coatbridge and Airdrie (Mr. Clarke) on his outstanding maiden speech. He brought a great deal of wit and amusement to his speech, but he made it with dignity and compassion. We shall hear a great deal more from him and he will bring from Scotland much expertise and experience. I sincerely congratulate him.

We have had a major and important debate, which has exposed the blatant failure of Government policies. My hon. Friends have highlighted the problems of unemployment and industrial decline in almost every region. It is important to emphasise the need for a regional policy. Major arguments were advanced by my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) in a fine speech. We must have a nation-wide strategy. The Labour Party and the TUC liaison committee, in a major policy statement issued yesterday, point the way forward.

The Secretary of State mentioned Labour Weekly. Perhaps he will have time in the next day or two to study our up-to-date policy statement in which we spell out the areas where there must be change and development.

The Secretary of State made a miserable announcement about assisted area status. In 1979, the Government cut regional aid, which then covered 40 per cent. of the population, to cover 26 per cent. of the population. Last week they increased that by a mere 1 per cent. I cannot get the figures from the Department.

Mr. Patrick Jenkin

The figure involved is about £6 million.

Mr. Orme

I thank the Secretary of State. That is £6 million compared with a £233 million cut in 1979. That £233 million was not to assist the regions but a straight public expenditure cut to save money when the Government were giving money to taxpayers in the higher tax bracket and others. If ever there was a case of fiddling while Rome burns, this is it.

Over 3 million people are unemployed and there is no sign of an improvement. The rosy picture painted by the Prime Minister and other Ministers is false. Even one of the Secretary of State's hon. Friends cannot see an upturn. He has seen a few swallows but no summer. That is underlined by independent sources. For example, the London Business School's latest outlook predicts a growth of 1 per cent. over 1981 for the year. That is the fourth successive time that the school has downgraded its growth forecast. A year ago it predicted that output would grow by 2.8 per cent. in the current year.

The OECD "Economic Outlook" states that its main themes are the grave prospect for jobs and the uncertain prospects of a substantial revival of investment. It forecasts that unemployment will continue to rise. It shows that the situation in Britain is worse than that in any other major industrial nation.

The justification given by the Government for the economic state of the country is that the recession is world-wide and no fault of theirs. That is just not so. The report states that while unemployment rose by about 2½ per cent. in the major seven countries between 1979 and the first quarter of 1982, in Britain alone it rose by 6¾ per cent.

We also have evidence from last night. The Tory Back-Bench finance group met Sir Terence Beckett, the president of the CBI. The Guardian states today: Sir Terence gave the committee an unpalatable forecast that unemployment was likely to reach 3,250,000 by the turn of the year. He predicted that British industry, the 'Mr. Atlas' who was holding up the British economy, was now looking more anaemic and seedy than at any time in the past. He complained that the Government had failed to deliver its promised help for productive industry. He called on the Government to increase industrial investment. Those are the words of the president of the CBI. He is saying directly to the Secretary of State that the policies that he is pursuing are not working. That is the evidence from industry. He said that the cause was lack of investment and lack of the will of the Government to turn round the situation.

Similar gloomy predictions have been made by ICI, for example. There was a debate about ICI last night. It forecasts that to the end of the decade it cannot see anything but 1 per cent. per annum of growth. One of the tragedies, which the Government should be doing something about, is that ICI is threatening to transfer its investments overseas, in other words to take British capital out of the United Kingdom and to take British jobs out of the United Kingdom at the same time. A company such as ICI should be told that it has a responsibility to the British economy, under which it has prospered so well in the past. That is another example of disaster for British industry and jobs.

The manufacturing sector of industry has been severely eroded. In the engineering industry the forecast is minuscule growth. The Engineering Employers Federation stated this week that the present rate of improvement was so slow that we would not get back to the 1975 figures of output until 1986. Those are not the words of a Left-wing organisation. I have experienced the EEF at the negotiating table. It consists of hard-headed business people.

One of our major industries is steel. Once again, the British Steel Corporation is in crisis. The weakness of Britain's main steel-consuming industries—engineering, motor cars, shipbuilding and construction—is cutting the ground from under BSC. The problem is simply one of demand. As Mr. MacGregor said recently: The great tragedy of British Steel is not the decline of the British Steel Corporation but the decline in the British manufacturing industries. Mr. MacGregor is a hard-headed business man who was appointed by the Government to reorganise BSC. He has now achieved reorganisation, improved output and growth. He now says that it is not the efficiency of British Steel but the lack of demand that is responsible for his problems. The Government must be answerable for that lack of demand.

Car production has dropped to its lowest level since the 1950s. The textile industry is once again in one of its major slumps. They seem to occur more regularly than ever. Investment in manufacturing continues to decline, yet the Government fail to obtain vital orders for British industry. The latest example is the proposed Cunard order for a replacement of the "Atlantic Conveyor". It is to be built in either Japan or South Korea. My hon. Friend the Member for Jarrow (Mr. Dixon) raised the matter under Standing Order No. 9 earlier today. The original ship was lost in the Falklands conflict. Seamen's lives were lost with it. The seamen should be decorated. The directors of Trafalgar House should be charged with treason.

Mr. Ian Lloyd (Havant and Waterloo)


Mr. Orme

I shall name them. Lord Matthews, Nigel Broackes, E. W. Parker, Sir Francis Sandilands, G. H. B. Carter, W. B. Slater, the Marquess of Tavistock, V. A. Grundy—

Mr. John Ward (Poole)

On a point of order, Mr. Deputy Speaker. Is it in order for a member of the Opposition Front Bench to make charges of treason that he cannot substantiate?

Mr. Deputy Speaker (Mr. Ernest Armstrong)

The right hon. Gentleman must take responsibility for his speech.

Mrs. Elaine Kellett-Bowman (Lancaster)

Further to that point of order, Mr. Deputy Speaker. Is it in order for a member of the Opposition Front Bench to mention a Member of the other place in such terms?

Mr. Deputy Speaker

The right hon. Gentleman cannot accuse Members of the other place of treason.

Mr. Orme

I withdraw. Nevertheless, I have made the matter clear. The Secretary of State has some responsibility. Ministers go around talking about buying British but when it comes to purchasing British and telling Cunard and Trafalgar House to invest in the British economy, they are silent.

Mr. Ian Lloyd

All hon. Members would like British Shipbuilders to be able to tender effectively and competitively for a container ship. However, it is unwilling to do so, it is unwilling to build a ship of that complexity and it cannot do so competitively. Does the right hon. Gentleman believe that that burden should be deliberately placed on British Shipbuilders?

Mr. Orme

Throughout the Falklands crisis, when we needed ships and they had to be turned around quickly, men in the North-East and elsewhere worked night and day. British Shipbuilders could build the new container ship competitively. It merely needs the chance to do so.

The story is the same throughout every sector of British industry—lack of investment, collapse of demand, layoffs, redundancies and short time working. The economic news is universally bad, despite the latest output figures. The hon. Member for Colne Valley (Mr. Wainwright) suggested how the May figures were calculated in relation to the bank holiday. There was also undoubtedly a Falklands crisis factor involved as well.

The Government have no strategies to deal with the tidal wave of destruction. They continue to rely on market forces without reference to the needs of our industry. They look no further than occasional tinkering with the problems. They are blind and deaf to the death rattle of British industry. Wherever one looks, unemployment is reaching new records—441,000 in the North-West, 350,000 in the West Midlands, which is currently the area with the highest growth rate, 223,000 in the North-East and 699,000 in the South-East. One could go on. The figures speak for themselves. The banner on the front of County Hall has obviously hurt the Secretary of State because it tells the truth about the number of unemployed in the Greater London area.

Despite those horrific figures and imposible Government policies, people are fighting back. I congratulate the GLC on setting up its enterprise board to create jobs in the capital. I also congratulate the West Midlands and Lancashire enterprise boards. Local authorities are fighting back to create jobs. That has been their major priority since they have been attacked and partly dismantled by the Government's policies. Their task is to create jobs in their areas. Whether it is on a large scale, as in the case of the GLC, the West Midlands, Corby, Sheffield, St. Helens, Salford and many other areas, or on a smaller scale, jobs are being created. Section 137 of the Local Government Act 1972 provides only a 2p rate, but it is being used to create employment, as my hon. Friend the Member for Leigh (Mr. Cunliffe) has said.

Against that gloomy overall picture, we were given a taste of what a further dose of Thatcherism would mean for the British people in the recent speech of the Chancellor of the Exchequer. He spelt it out very clearly. Instead of talking about growth, productivity, investment and unit costs, he gave the familiar anti-trade union speech threatening further privatisation in industry and in local government, including health and education. All that adds up to a policy of two nations—discrimination by a favoured minority against the majority. A nation torn by dissent with rising unemployment, social deprivation and a rising crime rate is the reality of Tory policies.

Yesterday, the Labour Party and TUC liaison committee launched a major part of its industrial policy under the heading of planning and industrial democracy. That policy is completely opposed to Thatcherism and monetarism. It will lay the basis for industrial recovery. The plan for jobs spells out an economic future for this country that will restore employment opportunities, based on the concept that investment linked with a major public sector and the implementation of industrial democracy is a radical and Socialist alternative to the Government's disastrous policies.

We must restore competitiveness without conflict. We shall use planning to expand capacity and replace outdated equipment. We shall lower the rate of the pound to make British industry competitive. We shall certainly do something about the export of capital that is still leaving the United Kingdom at a disastrous rate for our economy. Investment should be made in the United Kingdom.

Our policy statement makes it clear that we want to see an expanded Department of Industry that will have powers in its own right. Transfer forecasting and medium-term forecasting must be removed from the Treasury and given to the Department of Industry. Expenditure planning could also go to the Department of Industry. We want industry to be financed by a national investment bank. We also want to attract pension fund investment.

The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) referred to a national planning college. There are about 36 universities in the United Kingdom, but not one of them is solely committed to training people for management in industry or the public sector. Continuously, we have to obtain management for the public sector from the private sector. We need to train people ourselves for the public sector. We would set up a training college for that purpose.

Within this infrastructure there is clearly a need to strengthen regional policy and the contribution that regional and local planning can make to our objectives. In the past few years there has been a rapid decline in the traditionally prosperous areas, with unemployment rates reaching levels usually associated with the deprived areas. Critical problems are emerging within our inner city areas.

A Labour Government will get the economy moving and create growth and employment, but there is no doubt that areas will be left behind, in parts of Scotland, the North-East, Wales and Merseyside, that will need a regional policy. At present every region needs a regional policy and an overall policy is necessary. My hon. Friend the Member for Kingston upon Hull, East has been visiting such areas and discussing the measures that will be necessary to solve their problems. We accept that the policies implemented by past Labour Governments have not filled the bill. We need to look afresh at these areas and to regenerate industry.

The Secretary of State referred to inflation. I agree, that is important. He referred to unit costs, and that, too, is important. He talked about competitiveness of British industry. Yes, that is important. We want to see industry moving, because without a successful British industry we shall not create wealth in our society, let alone improve or even maintain our standard of living. The manufacturing sector in the United Kingdom is approximately 26 per cent. of the insured working population. Therefore, a great responsibility rests on the manufacturing sector.

The proposals put forward by the Opposition are an alternative to the policies pursued by the Government. The position now is not two or three times as bad as it was when the Government came to office, but five or six times as bad. That is a condemnation of Government policy. The sooner we can implement the policies outlined by the Opposition this evening, the better it will be for Britain.

9.34 pm
The Minister of State, Department of Industry (Mr. Norman Lamont)

I join the right hon. Member for Salford, West (Mr. Orme) in congratulating the hon. Member for Coatbridge and Airdrie (Mr. Clarke) on his maiden speech. The hon. Gentleman is a rare phenomenon in the House—a Labour victor at a by-election. He told us in most amusing and attractive terms about the largest bowling alley in the country, and, as the right hon. Gentleman observed, he bowled the House over. He made some well-deserved tributes to his predecessor, Mr. Dempsey, who was well respected and well liked on both sides of the House. The hon. Gentleman has great experience in local government, and we very much look forward to hearing from him again.

The hon. Member for Kingston upon Hull, East (Mr. Prescott) spent much time talking about the basis on which our announcement on assisted areas was made. Our major consideration was the maintainance of stability in regional policy. We wanted to keep changes to a minimum. That has been one of the things that business men have asked of us repeatedly.

The factors that we considered in that review were relative unemployment rates, not just in the short term but over a period; the geographical location of individual areas; their distance from markets; and the consequences for neighbouring areas of an up-grading or down-grading. We also took absolute numbers into consideration.

Because of that emphasis on stability, we have attempted to rectify only the worst anomalies. I am not saying that some areas do not have higher unemployment rates than others—

Mr. Prescott

You can say that again!

Mr. Lamont

Of course I can, because there are no fewer than 380 travel-to-work areas, and the idea that we can chop and change, or put areas on and off the map in response to short-term movements in unemployment rates, is absolutely impracticable and quite impossible. Our commitment, which business men have wanted, is to maintain the stability of the map, and we intend to do so until the next election.

Mr. Prescott

To save money.

Mr. Lamont

The hon. Gentleman will know that changes to areas in the intermediate class do not produce great savings. Therefore, the motive was not money, it was stability.

My hon. Friend the Member for Manchester, Withington (Mr. Silvester) referred to the Manchester-Salford partnership area. He and other hon. Members have uttered some strong criticisms of the decisions that have been made. I accept that the interaction of our urban area programme and regional policy requires further examination, and my hon. Friend made some valid points.

I cannot hope to cover all the areas that have been mentioned in the debate, although it was surprisingly free of regional lobbying of the kind that one might have expected.

The hon. Member for Leigh (Mr. Cunliffe) mentioned the North-West. The Government have recognised the most serious problems in that area. Between 1979 and 1982, we have given £400 million in regional assistance to the North-West. Most of it has gone to the development areas and special development areas, and they will continue to receive the bulk of that help. Even after the changes that we have made to the map in the North-West of England, 45 per cent. of the population there will still be in assisted areas. That is the second highest of any region in England, and far higher than in the country generally.

I understand the strong feelings of hon. Members who represent constituencies in the North-West, but they should take into account the strong feelings of those who represent the West Midlands, feelings epitomised in the speech of my hon. Friend for Birmingham, Selly Oak (Mr. Beaumont-Dark). Many parts of the West Midlands have higher unemployment than the North-West, but they are not assisted areas. It would be nonsense to make large parts of the West Midlands assisted areas. In fairness to that part of the country, the representations that we received did not call for that. The hon. Member for Kingston upon Hull, East asked who had made representations to us and whether we had received councils.

Yes, we have seen councils, and, yes, we have seen Labour-controlled councils, and industrialists. However, when we put it to Labour-controlled councils that there was not a strong case for assisted area status for the West Midlands, they did not dissent. They wanted the end to discrimination against the West Midlands. That is why we have removed the IDCs that have been a restricting influence on that area. The councils wanted to be able to compete fairly with other areas. How could we say that the West Midlands was able to do so when there were areas in the North-West for which Labour Members are advocating assisted area status even though they have lower rates of unemployment than the West Midlands?

Mr. Park

I do not know whether your minutes are faulty, or whether your hearing is faulty, but certainly on two occasions when I attended with delegations in your office—

Mr. Deputy Speaker

Order. I assure the hon. Gentleman that there is nothing wrong with my minutes.

Mr. Lamont

The hon. Gentleman did not attend when the West Midlands county council came to see me, or when I talked to the Birmingham chamber of commerce. I assure the House that what I have said reflects the true position.

Some scepticism has been expressed on both sides of the House about the effectiveness of regional policy, and there is every reason for this scepticism. It is a sobering thought that those areas which were assisted in the 1930s are the ones that are assisted today. What is our reaction to that to be? Is it simply to carry on with the same regional policies for ever? Our view is that regional policy, to be effective, needs to be sharpened, and it makes no sense, even in a deep recession, for half the country to be covered by assisted area status. That is not a regional policy, it is half a national policy, and not a very good one at that.

Regional policy needs to be more concentrated to become more effective. The changes that we have made will strengthen the relative position of the assisted areas. Labour Members have drawn attention to the differences in unemployment rates in the country in different regions. The object of regional policy is to narrow those gaps, but we must be realistic. All countries in Western Europe have differences in unemployment rates and it is my impression that the rates here are little different from those elsewhere. No one can say, when we are spending £800 million a year on regional policy, that regional policy does not have a high enough priority.

The right hon. Member for Stockton (Mr. Rodgers) drew attention to the absence of head offices and research and development facilities in the regions. I agree with the thrust of his remarks. One of the problems with regional policy is that we have placed too much emphasis on assistance to manufacturing industry, which has not been the growth area for employment opportunities. If the regions are to be redeveloped, we need more service industries, head offices and research and development facilities there. That is why the Government have put more emphasis on the Office and Service Industries Scheme. We believe that regional policy should be directed more towards service industries.

A number of hon. Members referred to the British Steel Corporation. The hon. Member for Coatbridge and Airdrie asked about Ravenscraig. The corporate plan that is in operation is based on the assumption that there will be no change in the configuration of the BSC, and no suggestion has been made to us that Ravenscraig should be closed.

It was predictable and understandable that a number of hon. Members should raise the question of the new "Atlantic Conveyor". I understand the strong feelings and emotions that the issue arouses, though I deplore the language used by the right hon. Member for Salford, West. I am sure that he will regret it tomorrow.

The Government would certainly prefer the order to be placed in the United Kingdom. We are keeping in close touch with British Shipbuilders and with the situation. We give the company considerable assistance in obtaining orders. However, for that assistance to be effective British Shipbuilders must be competitive and come within striking distance of the prices of its competitors. Naturally, we note what has been said in the debate.

I agree substantially with the speech of the right hon. Member for Stockton, but it reminded me of what Harold Macmillan said about the Liberals—they had many sound and original ideas, but the trouble was that the original ideas were not sound and the sound ideas were not original.

The SDP has expressed its support for the loan guarantee scheme, the business start-up scheme and competition in the public sector. All that is sound, but not original. The right hon. Member for Stockton's plans for regional administration were original, but not sound. He outlined a plan for the revival of the Saxon kingdoms, with 12 regional authorities that would have taxing and spending powers. We have always heard that the SDP is an elitist party, but the right hon. Gentleman's ideas are irrelevant and of interest only to politicians and administrators.

The hon. Member for Colne Valley (Mr. Wainwright) referred to the manufacturing production figures. Yesterday's figure of a 1½ per cent. increase on the May level is not one on which too much emphasis should be placed. I agree with the hon. Gentleman that we should not take one month's figure in isolation, but the May figure confirms that a gradual recovery is taking place. Manufacturing output is 2½ percent. above the level of last spring.

Whatever anxieties there may be about future demand, it is futile to think that we can expand our way out of recession faster than other countries, unless our rate of inflation is lower than that of other countries. We have made substantial progress in bringing down the rate of inflation, but it still remains higher than that of Japan and Germany. We intend to get our rate down to their level.

Mr. Richard Wainwright

The Secretary of State for Industry is paid to be a member of the National Economic Development Council, but in the 48 minutes of the House's time that he pre-empted to say nothing new, and to crowd out one of his own Back Benchers, he did not refer to the request of the director general of the NEDC that he be allowed to examine straight away the scope for an expansionary policy. Will the Minister of State say something about the Department's attitude to the NEDC request?

Mr. Lamont

I am sure that the request and any proposal from the director general of the NEDC will be considered and that there will be a response from the Government. Whatever the NEDC may say, the most important task is to get the rate of inflation down.

Labour Members seem to query the relevance to industry of reducing inflation, but that does matter to industry. We need lower inflation to get confidence for investment, to be competitive and to get lower interest rates.

The hon. Member for Kingston upon Hull, East referred to what he called the crisis in developed countries. The level of interest rates is a cause of anxiety to business men all over the world. If anything, unprecedentedly high interest rates show that the world is suffering from excessive Government borrowing and high inflation that have undermined investors' confidence. After a decade in which inflation was three times that of the previous decade, it is hardly surprising that lenders and investors should be sceptical and cautious about whether inflation has come down permanently. If we can get inflation down and keep it down, companies can borrow at a fixed and controlled price. That is the path to faster growth and more jobs.

There are signs that we are making progress. Rates of interest have fallen by 4 per cent. since the beginning of the year. That is significant because the fall has occurred when international forces have been pushing up interest rates in other countries. Our lower interest rates have occurred because the Government have concentrated on the one factor within their control—their own borrowing. That policy has reduced our interest rates. If inflation falls, interest rates will fall and we shall reap a harvest of investment, growth and jobs. The hon. Member for Kingston upon Hull, East said that the recession in Britain had been worse than elsewhere and the right hon. Member for Salford, West repeated that charge. But the hon. Gentleman made that assertion without acknowledging that British inflation at the beginning of the recession was much higher than in other countries. Our competitiveness was undermined for many years and we suffered from much concealed unemployment that has now come out into the open.

All that we hear from the Labour Party is that it will embark on the biggest programme of expansion that has ever been undertaken, regardless of the effects on inflation, on interest rates and on the balance of payments. The Labour Party seems to believe that, because a policy of high spending and expansion worked in the 1930s, it can work now, but there is a great difference between the position then and now. Then we were suffering from falling prices, whereas now we are living through a period of high inflation and the greatest threat to the world economy is that inflation will rise again.

The Opposition's proposals are similar to those now operated in France.

Mr. Campbell-Savours

Why do Icelandic conservatives say that it is possible to have high inflation and almost no unemployment and British Conservatives say that that is impossible?

Mr. Lamont

The Conservative Party has never based its policies on those of Icelandic conservatives.

The Opposition are advancing a prescription similar to that now being put into practice in France. The prescription is higher spending and the creation of more public sector jobs. I can think of nothing that Britain needs less than the creation of more public sector jobs. The public sector is already overmanned, and if we went down that road we should sacrifice all the gains that have been made in the past two or three years.

The Opposition's prescription will be no more successful in Britain than it was in France. The French policies have led to two devaluations, a 20 per cent. rise in unemployment and one of the highest inflation rates in Europe. While our interest rates have fallen by 3 to 4 per cent. since the beginning of the year, France's has risen. We shall not find the solution to our problems if we follow the example of France.

The hon. Member for Kingston upon Hull, East said many times that the Government have exaggerated the effect of high rates increases on business. It is astonishing that the hon. Gentleman should accuse us of not talking to business men. If he does not believe that high rates increases are greatly resented by business men, he has spent little time in his tours of the regions talking to business men.

Mr. Allen McKay (Penistone)

Would it surprise the Minister to know that two months ago the Engineering Employers Federation said that the recession was caused by high interest rates, high energy prices and the inflow of subsidised materials? It said that the effect of rates had little to do with the recession. Yet that is one of the employers to whom the Minister says we should talk.

Mr. Lamont

The Engineering Employers Federation said that, and we all agree about the need to reduce interest rates. However, that federation, together with the CBI and many chambers of commerce, stressed the absurdity of Labour-controlled councils in areas of high unemployment pushing up the rates and causing more unemployment.

Mr. Straw


Mr. Lamont

I shall not give way.

The Opposition chose not to dwell on their programme because they know that it is unpopular, anachronistic and irrelevant. They have chosen not to spell out their plans for the nationalisation of banks and for greater State control and ownership. It is intriguing that the Labour Party said that its programme must be combined with exchange controls against an inward flow of capital. Its problem will be an outflow, not an inflow, of capital.

All the ideas advanced by the Opposition parties will undermine our long-term competitiveness, increase inflation and lead to more unemployment. All that they offer is the atrophy of State ownership and control. Those ideas are widely regarded both in Britain and in the House as an obstacle to prosperity and opportunity. Competition and private ownership are ideas whose time has come. The Government were elected to bring about a decisive reversal of our long-term decline. We shall not be deflected from those policies just when they are bringing about a long-worked-for and hard-earned benefit. I urge my right hon. and hon. Friends to reject the Opposition motion and to vote in favour of the amendment standing in the names of my right hon. Friends.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 216, Noes 330.

Division No. 275] [10 pm
Abse, Leo Bidwell, Sydney
Adams, Allen Booth, Rt Hon Albert
Allaun, Frank Boothroyd, Miss Betty
Anderson, Donald Bottomley, Rt Hon A.(M'b'ro)
Archer, Rt Hon Peter Bray, Dr Jeremy
Ashley, Rt Hon Jack Brown, Hugh D. (Proven)
Ashton, Joe Brown, R. C. (N'castle W)
Atkinson, N.(H'gey,) Brown, Ron (E'burgh, Leith)
Bagier, Gordon A.T. Buchan, Norman
Barnett, Guy (Greenwich) Callaghan, Rt Hon J.
Barnett, Rt Hon Joel (H'wd) Callaghan, Jim (Midd't'n & P)
Bennett, Andrew(St'kp't N) Campbell, Ian
Campbell-Savours, Dale Johnson, James (Hull West)
Canavan, Dennis Jones, Rt Hon Alec (Rh'dda)
Cant, R. B. Jones, Barry (East Flint)
Carmichael, Neil Kaufman, Rt Hon Gerald
Carter-Jones, Lewis Kerr, Russell
Clark, Dr David (S Shields) Kilfedder, James A.
Clarke, ThomasC'b'ge, A'drie Kilroy-Silk, Robert
Cocks, Rt Hon M. (B'stol S) Lambie, David
Cohen, Stanley Lamond, James
Coleman, Donald Leadbitter, Ted
Concannon, Rt Hon J. D. Leighton, Ronald
Cook, Robin F. Lestor, Miss Joan
Cowans, Harry Lewis, Ron (Carlisle)
Cox, T. (W'dsw'th, Toot'g) Litherland, Robert
Craigen, J. M. (G'gow, M'hill) Lofthouse, Geoffrey
Cryer, Bob McCartney, Hugh
Cunliffe, Lawrence McDonald, Dr Oonagh
Cunningham, Dr J. (W'h'n) McElhone, Frank
Dalyell, Tarn McGuire, Michael (Ince)
Davidson, Arthur McKay, Allen (Penistone)
Davies, Rt Hon Denzil (L'lli) McKelvey, William
Davis, Clinton (Hackney C) MacKenzie, Rt Hon Gregor
Davis, Terry (B'ham, Stechf'd) McMahon, Andrew
Deakins, Eric McNamara, Kevin
Dean, Joseph (Leeds West) McTaggart, Robert
Dewar, Donald McWilliam, John
Dixon, Donald Marks, Kenneth
Dobson, Frank Marshall, D(G'gow S'ton)
Dormand, Jack Marshall, Dr Edmund (Goole)
Douglas, Dick Marshall, Jim (Leicester S)
Dubs, Alfred Martin, M(G'gow S'burn)
Duffy, A. E. P. Mason, Rt Hon Roy
Dunnett, Jack Maxton, John
Dunwoody, Hon Mrs G. Maynard, Miss Joan
Eadie, Alex Meacher, Michael
Eastham, Ken Millan, Rt Hon Bruce
Edwards, R. (W'hampt'n S E) Miller, Dr M. S. (E Kilbride)
Ellis, R. (NE D'bysh're) Mitchell, Austin (Grimsby)
English, Michael Morris, Rt Hon A. (W'shawe)
Ennals, Rt Hon David Morris, Rt Hon C. (O'shaw)
Evans, loan (Aberdare) Moyle, Rt Hon Roland
Evans, John (Newton) Newens, Stanley
Ewing, Harry Oakes, Rt Hon Gordon
Faulds, Andrew O'Neill, Martin
Field, Frank Orme, Rt Hon Stanley
Fitch, Alan Palmer, Arthur
Flannery, Martin Park, George
Fletcher, Ted (Darlington) Parker, John
Ford, Ben Parry, Robert
Forrester, John Pavitt, Laurie
Foulkes, George Pendry, Tom
Fraser, J. (Lamb'th, N'w'd) Powell, Raymond (Ogmore)
Freeson, Rt Hon Reginald Prescott, John
Garrett, John (Norwich S) Price, C. (Lewisham W)
Garrett, W. E. (Wallsend) Race, Reg
Golding, John Radice, Giles
Gourlay, Harry Rees, Rt Hon M (Leeds S)
Graham, Ted Richardson, Jo
Hamilton, James (Bothwell) Roberts, Albert (Normanton)
Hamilton, W. W. (C'tral Fife) Roberts, Allan (Bootle)
Hardy, Peter Roberts, Ernest (Hackney N)
Harrison, Rt Hon Walter Roberts, Gwilym (Cannock)
Hart, Rt Hon Dame Judith Robertson, George
Hattersley, Rt Hon Roy Robinson, G. (Coventry NW)
Healey, Rt Hon Denis Rooker, J. W.
Heffer, Eric S. Ross, Ernest (Dundee West)
Hogg, N. (E Dunb't'nshire) Rowlands, Ted
Holland, S. (L'b'th, Vauxh'll) Ryman, John
Home Robertson, John Sever, John
Homewood, William Sheerman, Barry
Hooley, Frank Sheldon, Rt Hon R.
Howell, Rt Hon D. Shore, Rt Hon Peter
Hoyle, Douglas Short, Mrs Renée
Huckfield, Les Silkin, Rt Hon J. (Deptford)
Hughes, Mark (Durham) Silverman, Julius
Hughes, Robert (Aberdeen N) Skinner, Dennis
Hughes, Roy (Newport) Smith, Rt Hon J. (N Lanark)
Janner, Hon Greville Soley, Clive
Jay, Rt Hon Douglas Spearing, Nigel
John, Brynmor Spriggs, Leslie
Stallard, A. W. Welsh, Michael
Stoddart, David White, Frank R.
Stott, Roger White, J. (G'gow Pollok)
Strang, Gavin Whitlock, William
Straw, Jack Wigley, Dafydd
Summerskill, Hon Dr Shirley Willey, Rt Hon Frederick
Thomas, Dafydd (Merioneth) Williams, Rt Hon A.(S'sea W)
Thomas, Jeffrey (Abertillery) Wilson, Rt Hon Sir H.(H'ton)
Thorne, Stan (Preston South) Wilson, William (C'try SE)
Tilley, John Winnick, David
Tinn, James Woodall, Alec
Torney, Tom Woolmer, Kenneth
Urwin, Rt Hon Tom Wright, Sheila
Varley, Rt Hon Eric G. Young, David (Bolton E)
Wainwright, E.(Dearne V)
Walker, Rt Hon H.(D'caster) Tellers for the Ayes:
Watkins, David Mr. Frank Haynes and
Weetch, Ken Mr. George Morton
Adley, Robert Churchill, W. S.
Aitken, Jonathan Clark, Hon A. (Plym'th, S'n)
Alexander, Richard Clark, Sir W. (Croydon S)
Alison, Rt Hon Michael Clarke, Kenneth (Rushcliffe)
Alton, David Clegg, Sir Walter
Amery, Rt Hon Julian Cockeram, Eric
Ancram, Michael Colvin, Michael
Arnold, Tom Cope, John
Aspinwall, Jack Cormack, Patrick
Atkins, Rt Hon H.(S'thorne) Corrie, John
Atkins, Robert(Preston N) Costain, Sir Albert
Atkinson, David (B'm'th,E) Cranborne, Viscount
Baker, Kenneth(St.M'bone) Crawshaw, Richard
Baker, Nicholas (N Dorset) Critchley, Julian
Banks, Robert Cunningham, G. (Islington S)
Beaumont-Dark, Anthony Dickens, Geoffrey
Beith, A. J. Dorrell, Stephen
Bendall, Vivian Douglas-Hamilton, Lord J.
Bennett, Sir Frederic (T'bay) Dover, Denshore
Benyon, Thomas (A'don) du Cann, Rt Hon Edward
Benyon, W. (Buckingham) Dunn, Robert (Dartford)
Best, Keith Durant, Tony
Bevan, David Gilroy Eden, Rt Hon Sir John
Biffen, Rt Hon John Edwards, Rt Hon N. (P'broke)
Biggs-Davison, Sir John Eggar, Tim
Blackburn, John Elliott, Sir William
Blaker, Peter Ellis, Tom (Wrexham)
Body, Richard Eyre, Reginald
Bonsor, Sir Nicholas Fairbairn, Nicholas
Boscawen, Hon Robert Fairgrieve, Sir Russell
Bottomley, Peter (W'wich W) Faith, Mrs Sheila
Bowden, Andrew Farr, John
Boyson, Dr Rhodes Fell, Sir Anthony
Bradley, Tom Finsberg, Geoffrey
Braine, Sir Bernard Fisher, Sir Nigel
Bright, Graham Fletcher, A. (Ed'nb'gh N)
Brinton, Tim Fletcher-Cooke, Sir Charles
Brittan, Rt. Hon. Leon Fookes, Miss Janet
Brooke, Hon Peter Forman, Nigel
Brotherton, Michael Fowler, Rt Hon Norman
Brown, Michael(Brigg & Sc'n) Fox, Marcus
Brown, Ronald W. (H'ckn'y S) Fraser, Rt Hon Sir Hugh
Browne, John (Winchester) Fry, Peter
Bruce-Gardyne, John Gardner, Edward (S Fylde)
Bryan, Sir Paul Garel-Jones, Tristan
Buchanan-Smith, Rt. Hon. A. Ginsburg, David
Buck, Antony Glyn, Dr Alan
Budgen, Nick Goodhart, Sir Philip
Bulmer, Esmond Goodhew, Sir Victor
Burden, Sir Frederick Goodlad, Alastair
Butcher, John Gorst, John
Butler, Hon Adam Gow, Ian
Cadbury, Jocelyn Grant, Anthony (Harrow C)
Carlisle, John (Luton West) Grant, John (Islington C)
Carlisle, Kenneth (Lincoln) Gray, Hamish
Carlisle, Rt Hon M. (R'c'n) Greenway, Harry
Cartwright, John Griffiths, E.(B'y St. Edm'ds)
Chalker, Mrs. Lynda Griffiths, Peter Portsm'th N)
Channon, Rt. Hon. Paul Grimond, Rt Hon J.
Chapman, Sydney Grist, Ian
Grylls, Michael Monro, Sir Hector
Gummer, John Selwyn Montgomery, Fergus
Hamilton, Hon A. Moore, John
Hamilton, Michael (Salisbury) Morris, M. (N'hampton S)
Hampson, Dr Keith Morrison, Hon C. (Devizes)
Hannam, John Morrison, Hon P. (Chester)
Haselhurst, Alan Mudd, David
Hastings, Stephen Murphy, Christopher
Havers, Rt Hon Sir Michael Myles, David
Hawkins, Sir Paul Neale, Gerrard
Hawksley, Warren Needham, Richard
Hayhoe, Barney Nelson, Anthony
Heath, Rt Hon Edward Neubert, Michael
Heddle, John Newton, Tony
Henderson, Barry Normanton, Tom
Heseltine, Rt Hon Michael Nott, Rt Hon John
Hicks, Robert O'Halloran, Michael
Higgins, Rt Hon Terence L. Onslow, Cranley
Hogg, Hon Douglas (Gr'th'm) Oppenheim, Rt Hon Mrs S.
Holland, Philip (Carlton) Osborn, John
Hooson, Tom Page, John (Harrow, West)
Horam, John Page, Richard (SW Herts)
Hordern, Peter Parris, Matthew
Howe, Rt Hon Sir Geoffrey Patten, John (Oxford)
Howell, Rt Hon D. (G'ldf'd) Pattie, Geoffrey
Howell, Ralph (N Norfolk) Pawsey, James
Howells, Geraint Penhaligon, David
Hunt, David (Wirral) Percival, Sir Ian
Hunt, John (Ravensbourne) Peyton, Rt Hon John
Hurd, Rt Hon Douglas Pink, R. Bonner
Irvine, Bryant Godman Pitt, William Henry
Irving, Charles (Cheltenham) Pollock, Alexander
Jenkin, Rt Hon Patrick Porter, Barry
Jenkins, Rt Hon Roy (Hillh'd) Prentice, Rt Hon Reg
Jessel, Toby Price, Sir David (Eastleigh)
Johnson Smith, Sir Geoffrey Prior, Rt Hon James
Jopling, Rt Hon Michael Proctor, K. Harvey
Kellett-Bowman, Mrs Elaine Pym, Rt Hon Francis
Kershaw, Sir Anthony Raison, Rt Hon Timothy
Kimball, Sir Marcus Rathbone, Tim
King, Rt Hon Tom Rees, Peter (Dover and Deal)
Knight, Mrs Jill Rees-Davies, W. R.
Knox, David Renton, Tim
Lamont, Norman Rhodes James, Robert
Lang, Ian Rhys Williams, Sir Brandon
Latham, Michael Ridley, Hon Nicholas
Lawrence, Ivan Ridsdale, Sir Julian
Lawson, Rt Hon Nigel Rifkind, Malcolm
Lee, John Rippon, Rt Hon Geoffrey
Lennox-Boyd, Hon Mark Roberts, M. (Cardiff NW)
Lester, Jim (Beeston) Roberts, Wyn (Conway)
Lewis, Kenneth (Rutland) Rodgers, Rt Hon William
Lloyd, Ian (Havant & W'loo) Roper, John
Lloyd, Peter (Fareham) Ross, Stephen (Isle of Wight)
Loveridge, John Rossi, Hugh
Luce, Richard Rost, Peter
Lyell, Nicholas Royle, Sir Anthony
Lyons, Edward (Bradf'd W) Rumbold, Mrs A. C. R.
Macfarlane, Neil Sainsbury, Hon Timothy
MacGregor, John Scott, Nicholas
MacKay, John (Argyll) Shaw, Giles (Pudsey)
Maclennan, Robert Shaw, Sir Michael (Scarb')
Macmillan, Rt Hon M. Shelton, William (Streatham)
McNair-Wilson, M. (N'bury) Shepherd, Colin (Hereford)
McNair-Wilson, P. (New F'st) Shepherd, Richard
Madel, David Shersby, Michael
Magee, Bryan Silvester, Fred
Major, John Sims, Roger
Marland, Paul Skeet, T. H. H.
Marten, Rt Hon Neil Smith, Dudley
Maude, Rt Hon Sir Angus Smith, Tim (Beaconsfield)
Mawby, Ray Speed, Keith
Mawhinney, Dr Brian Speller, Tony
Mellor, David Spence, John
Meyer, Sir Anthony Spicer, Michael (S Worcs)
Miller, Hal (B'grove) Sproat, Iain
Mills, Iain (Meriden) Squire, Robin
Mills, Sir Peter (West Devon) Stainton, Keith
Miscampbell, Norman Stanbrook, Ivor
Moate, Roger Stanley, John
Steel, Rt Hon David Walker, Rt Hon P.(W'cester)
Steen, Anthony Walker, B. (Perth)
Stewart, A.(E Renfrewshire) Waller, Gary
Stewart, Rt Hon D. (W Isles) Walters, Dennis
Stewart, Ian (Hitchin) Ward, John
Stokes, John Warren, Kenneth
Stradling Thomas, J. Watson, John
Tapsell, Peter Wellbeloved, James
Taylor, Teddy (S'end E) Wells, Bowen
Tebbit, Rt Hon Norman Wells, John (Maidstone)
Temple-Morris, Peter Wheeler, John
Thatcher, Rt Hon Mrs M. Whitelaw, Rt Hon William
Thomas, Rt Hon Peter Whitney, Raymond
Thompson, Donald Wickenden, Keith
Thorne, Neil (Ilford South) Wiggin, Jerry
Thornton, Malcolm Wilkinson, John
Townend, John (Bridlington) Williams, D.(Montgomery)
Townsend, Cyril D, (B'heath) Wilson, Gordon (Dundee E)
Trippier, David Winterton, Nicholas
Trotter, Neville Wolfson, Mark
van Straubenzee, Sir W. Wrigglesworth, Ian
Vaughan, Dr Gerard Young, Sir George (Acton)
Viggers, Peter Younger, Rt Hon George
Waddington, David
Wainwright, R.(Colne V) Tellers for the Noes:
Wakeham, John Mr. Anthony Berry and
Waldegrave, Hon William Mr. Carol Mather.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 (Questions on amendments):

The House divided: Ayes 300, Noes 246.

Division No. 276] [10.13 pm
Adley, Robert Budgen, Nick
Aitken, Jonathan Bulmer, Esmond
Alexander, Richard Burden, Sir Frederick
Alison, Rt Hon Michael Butcher, John
Amery, Rt Hon Julian Butler, Hon Adam
Ancram, Michael Cadbury, Jocelyn
Arnold, Tom Carlisle, John (Luton West)
Aspinwall, Jack Carlisle, Kenneth (Lincoln)
Atkins, Rt Hon H.(S'thorne) Carlisle, Rt Hon M. (R'c'n)
Atkins, Robert(Preston N) Chalker, Mrs. Lynda
Atkinson, David (B'm'th,E) Channon, Rt. Hon. Paul
Baker, Kenneth(St.M'bone) Chapman, Sydney
Baker, Nicholas (N Corset) Churchill, W. S.
Banks, Robert Clark, Hon A. (Plym'th, S'n)
Beaumont-Dark, Anthony Clark, Sir W. (Croydon S)
Bendall, Vivian Clarke, Kenneth (Rushcliffe)
Bennett, Sir Frederic (T'bay) Clegg, Sir Walter
Benyon, Thomas (A'don) Cockeram, Eric
Benyon, W. (Buckingham) Colvin, Michael
Best, Keith Cope, John
Bevan, David Gilroy Cormack, Patrick
Biffen, Rt Hon John Corrie, John
Biggs-Davison, Sir John Costain, Sir Albert
Blackburn, John Cranborne, Viscount
Blaker, Peter Critchley, Julian
Body, Richard Dickens, Geoffrey
Bonsor, Sir Nicholas Dorrell, Stephen
Boscawen, Hon Robert Douglas-Hamilton, Lord J.
Bottomley, Peter (W'wich W) Dover, Denshore
Bowden, Andrew du Cann, Rt Hon Edward
Boyson, Dr Rhodes Dunn, Robert (Dartford)
Braine, Sir Bernard Durant, Tony
Bright, Graham Eden, Rt Hon Sir John
Brinton, Tim Edwards, Rt Hon N. (P'broke)
Brittan, Rt. Hon. Leon Eggar, Tim
Brooke, Hon Peter Elliott, Sir William
Brotherton, Michael Eyre, Reginald
Brown, Michael(Brigg & Sc'n) Fairbairn, Nicholas
Browne, John (Winchester) Fairgrieve, Sir Russell
Bruce-Gardyne, John Faith, Mrs Sheila
Bryan, Sir Paul Farr, John
Buchanan-Smith, Rt. Hon. A. Fell, Sir Anthony
Buck, Antony Finsberg, Geoffrey
Fisher, Sir Nigel McNair-Wilson, M. (N'bury)
Fletcher, A. (Ed'nb'gh N) McNair-Wilson, P. (New F'st)
Fletcher-Cooke, Sir Charles Madel, David
Fookes, Miss Janet Major, John
Forman, Nigel Marland, Paul
Fowler, Rt Hon Norman Marten, Rt Hon Neil
Fox, Marcus Maude, Rt Hon Sir Angus
Fraser, Rt Hon Sir Hugh Mawby, Ray
Fry, Peter Mawhinney, Dr Brian
Gardner, Edward (S Fylde) Mellor, David
Garel-Jones, Tristan Meyer, Sir Anthony
Glyn, Dr Alan Miller, Hal (B'grove)
Goodhart, Sir Philip Mills, Iain (Meriden)
Goodlad, Alastair Mills, Sir Peter (West Devon)
Gorst, John Miscampbell, Norman
Gow, Ian Moate, Roger
Grant, Anthony (Harrow C) Monro, Sir Hector
Gray, Hamish Montgomery, Fergus
Greenway, Harry Moore, John
Griffiths, E.(B'y St. Edm'ds) Morris, M. (N'hampton S)
Griffiths, Peter Portsm'th N) Morrison, Hon C. (Devizes)
Grist, Ian Morrison, Hon P. (Chester)
Grylls, Michael Mudd, David
Gummer, John Selwyn Murphy, Christopher
Hamilton, Hon A. Myles, David
Hamilton, Michael (Salisbury) Neale, Gerrard
Hampson, Dr Keith Needham, Richard
Hannam, John Nelson, Anthony
Haselhurst, Alan Neubert, Michael
Hastings, Stephen Newton, Tony
Havers, Rt Hon Sir Michael Normanton, Tom
Hawkins, Sir Paul Nott, Rt Hon John
Hawksley, Warren Onslow, Cranley
Hayhoe, Barney Osborn, John
Heath, Rt Hon Edward Page, John (Harrow, West)
Heddle, John Page, Richard (SW Herts)
Henderson, Barry Parris, Matthew
Heseltine, Rt Hon Michael Patten, John (Oxford)
Hicks, Robert Pattie, Geoffrey
Higgins, Rt Hon Terence L. Pawsey, James
Hogg, Hon Douglas (Gr'th'm) Percival, Sir Ian
Holland, Philip (Carlton) Peyton, Rt Hon John
Hooson, Tom Pink, R. Bonner
Hordern, Peter Pollock, Alexander
Howe, Rt Hon Sir Geoffrey Porter, Barry
Howell, Rt Hon D. (G'ldf'd) Prentice, Rt Hon Reg
Howell, Ralph (N Norfolk) Price, Sir David (Eastleigh)
Hunt, David (Wirral) Prior, Rt Hon James
Hunt, John (Ravensbourne) Proctor, K. Harvey
Hurd, Rt Hon Douglas Pym, Rt Hon Francis
Irvine, Bryant Godman Raison, Rt Hon Timothy
Irving, Charles (Cheltenham) Rathbone, Tim
Jenkin, Rt Hon Patrick Rees, Peter (Dover and Deal)
Jessel, Toby Rees-Davies, W. R.
Johnson Smith, Sir Geoffrey Renton, Tim
Jopling, Rt Hon Michael Rhodes James, Robert
Kellett-Bowman, Mrs Elaine Rhys Williams, Sir Brandon
Kershaw, Sir Anthony Ridley, Hon Nicholas
Kimball, Sir Marcus Ridsdale, Sir Julian
King, Rt Hon Tom Rifkind, Malcolm
Knight, Mrs Jill Rippon, Rt Hon Geoffrey
Knox, David Roberts, M. (Cardiff NW)
Lamont, Norman Roberts, Wyn (Conway)
Lang, Ian Rossi, Hugh
Latham, Michael Rost, Peter
Lawrence, Ivan Royle, Sir Anthony
Lawson, Rt Hon Nigel Rumbold, Mrs A. C. R.
Lee, John Sainsbury, Hon Timothy
Lennox-Boyd, Hon Mark St. John-Stevas, Rt Hon N.
Lester, Jim (Beeston) Scott, Nicholas
Lewis, Kenneth (Rutland) Shaw, Giles (Pudsey)
Lloyd, Ian (Havant & W'loo) Shaw, Sir Michael (Scarb')
Lloyd, Peter (Fareham) Shelton, William (Streatham)
Loveridge, John Shepherd, Colin (Hereford)
Luce, Richard Shepherd, Richard
Lyell, Nicholas Shersby, Michael
Macfarlane, Neil Silvester, Fred
MacGregor, John Sims, Roger
MacKay, John (Argyll) Skeet, T. H. H.
Macmillan, Rt Hon M. Smith, Dudley
Smith, Tim (Beaconsfield) Vaughan, Dr Gerard
Speed, Keith Viggers, Peter
Speller, Tony Waddington, David
Spence, John Wakeham, John
Spicer, Michael (S Worcs) Waldegrave, Hon William
Sproat, Iain Walker, Rt Hon P.(W'cester)
Squire, Robin Walker, B. (Perth)
Stainton, Keith Waller, Gary
Stanbrook, Ivor Walters, Dennis
Stanley, John Ward, John
Steen, Anthony Warren, Kenneth
Stewart, A.(E Renfrewshire) Watson, John
Stewart, Ian (Hitchin) Wells, Bowen
Stokes, John Wells, John (Maidstone)
Stradling Thomas, J. Wheeler, John
Tapsell, Peter Whitelaw, Rt Hon William
Taylor, Teddy (S'end E) Whitney, Raymond
Tebbit, Rt Hon Norman Wickenden, Keith
Temple-Morris, Peter Wiggin, Jerry
Thatcher, Rt Hon Mrs M. Wilkinson, John
Thomas, Rt Hon Peter Williams, D.(Montgomery)
Thompson, Donald Winterton, Nicholas
Thorne, Neil (Ilford South) Wolfson, Mark
Thornton, Malcolm Young, Sir George (Acton)
Townend, John (Bridlington) Younger, Rt Hon George
Townsend, Cyril D, (B'heath)
Trippier, David Tellers for the Ayes:
Trotter, Neville Mr. Anthony Berry and
van Straubenzee, Sir W. Mr. Carol Mather.
Abse, Leo Davies, Rt Hon Denzil (L'lli)
Adams, Allen Davis, Clinton (Hackney C)
Allaun, Frank Davis, Terry (B'ham, Stechf'd)
Alton, David Deakins, Eric
Anderson, Donald Dean, Joseph (Leeds West)
Archer, Rt Hon Peter Dewar, Donald
Ashley, Rt Hon Jack Dixon, Donald
Ashton, Joe Dobson, Frank
Atkinson, N.(H'gey,) Dormand, Jack
Barnett, Rt Hon Joel (H'wd) Douglas, Dick
Beith, A. J. Dubs, Alfred
Bennett, Andrew(St'kp't N) Duffy, A. E. P.
Bidwell, Sydney Dunnett, Jack
Booth, Rt Hon Albert Dunwoody, Hon Mrs G.
Boothroyd, Miss Betty Eadie, Alex
Bottomley, Rt Hon A.(M'b'ro) Eastham, Ken
Bradley, Tom Edwards, R. (W'hampt'n S E)
Bray, Dr Jeremy Ellis, R. (NE D'bysh're)
Brown, Hugh D. (Provan) Ellis, Tom (Wrexham)
Brown, R. C. (N'castle W) English, Michael
Brown, Ronald W. (H'ckn'y S) Ennals, Rt Hon David
Brown, Ron (E'burgh, Leith) Evans, loan (Aberdare)
Buchan, Norman Evans, John (Newton)
Callaghan, Rt Hon J. Ewing, Harry
Callaghan, Jim (Midd't'n & P) Faulds, Andrew
Campbell, Ian Field, Frank
Campbell-Savours, Dale Fitch, Alan
Canavan, Dennis Flannery, Martin
Cant, R. B. Fletcher, Ted (Darlington)
Carmichael, Neil Ford, Ben
Carter-Jones, Lewis Forrester, John
Cartwright, John Foulkes, George
Clark, Dr David (S Shields) Freeson, Rt Hon Reginald
Clarke,Thomas(C'b'dge, A'rie) Garrett, John (Norwich S)
Cocks, Rt Hon M. (B'stol S) Garrett, W. E. (Wallsend)
Cohen, Stanley Ginsburg, David
Coleman, Donald Golding, John
Concannon, Rt Hon J. D. Gourlay, Harry
Cook, Robin F. Graham, Ted
Cowans, Harry Grant, John (Islington C)
Cox, T. (W'dsw'th, Toot'g) Grimond, Rt Hon J.
Craigen, J. M. (G'gow, M'hill) Hamilton, James (Bothwell)
Crawshaw, Richard Hamilton, W. W. (C'tral Fife)
Cryer, Bob Hardy, Peter
Cunliffe, Lawrence Harrison, Rt Hon Walter
Cunningham, G. (Islington S) Hart, Rt Hon Dame Judith
Cunningham, Dr J. (W'h'n) Hattersley, Rt Hon Roy
Dalyell, Tam Healey, Rt Hon Denis
Davidson, Arthur Heffer, Eric S.
Hogg, N. (E Dunb't'nshire) Marshall, Dr Edmund (Goole)
Holland, S. (L'b'th, Vauxh'll) Marshall, Jim (Leicester S)
Home Robertson, John Martin, M(G'gow S'burn)
Homewood, William Mason, Rt Hon Roy
Hooley, Frank Maxton, John
Horam, John Maynard, Miss Joan
Howell, Rt Hon D. Meacher, Michael
Howells, Geraint Millan, Rt Hon Bruce
Hoyle, Douglas Miller, Dr M. S. (E Kilbride)
Huckfield, Les Mitchell, Austin (Grimsby)
Hughes, Mark (Durham) Morris, Rt Hon A. (W'shawe)
Hughes, Robert (Aberdeen N) Morris, Rt Hon C. (O'shaw)
Hughes, Roy (Newport) Morton, George
Janner, Hon Greville Moyle, Rt Hon Roland
Jay, Rt Hon Douglas Newens, Stanley
Jenkins, Rt Hon Roy (Hillh'd) Oakes, Rt Hon Gordon
John, Brynmor O'Halloran, Michael
Johnson, James (Hull West) O'Neill, Martin
Jones, Rt Hon Alec (Rh'dda) Orme, Rt Hon Stanley
Jones, Barry (East Flint) Owen, Rt Hon Dr David
Kaufman, Rt Hon Gerald Paisley, Rev Ian
Kerr, Russell Palmer, Arthur
Kilfedder, James A. Park, George
Kilroy-Silk, Robert Parker, John
Lambie, David Parry, Robert
Lamond, James Pavitt, Laurie
Leadbitter, Ted Pendry, Tom
Leighton, Ronald Penhaligon, David
Lestor, Miss Joan Pitt, William Henry
Lewis, Ron (Carlisle) Powell, Raymond (Ogmore)
Litherland, Robert Prescott, John
Lofthouse, Geoffrey Price, C. (Lewisham W)
Lyons, Edward (Bradf'd W) Race, Reg
McDonald, Dr Oonagh Radice, Giles
McElhone, Frank Rees, Rt Hon M (Leeds S)
McGuire, Michael (Ince) Richardson, Jo
McKay, Allen (Penistone) Roberts, Albert (Normanton)
McKelvey, William Roberts, Allan (Bootle)
MacKenzie, Rt Hon Gregor Roberts, Ernest (Hackney N)
McMahon, Andrew Roberts, Gwilym (Cannock)
McNamara, Kevin Robertson, George
McTaggart, Robert Robinson, G. (Coventry NW)
McWilliam, John Rodgers, Rt Hon William
Magee, Bryan Rooker, J. W.
Marks, Kenneth Roper, John
Marshall, D(G'gow S'ton) Ross, Ernest (Dundee West)
Ross, Stephen (Isle of Wight) Torney, Tom
Rowlands, Ted Urwin, Rt Hon Tom
Ryman, John Varley, Rt Hon Eric G.
Sever, John Wainwright, E.(Dearne V)
Sheerman, Barry Wainwright, R.(Colne V)
Sheldon, Rt Hon R. Walker, Rt Hon H.(D'caster)
Shore, Rt Hon Peter Watkins, David
Short, Mrs Renée Weetch, Ken
Silkin, Rt Hon J. (Deptford) Wellbeloved, James
Silverman, Julius Welsh, Michael
Skinner, Dennis White, Frank R.
Smith, Rt Hon J. (N Lanark) White, J. (G'gow Pollok)
Soley, Clive Whitlock, William
Spearing, Nigel Wigley, Dafydd
Spriggs, Leslie Willey, Rt Hon Frederick
Stallard, A. W. Williams, Rt Hon A.(S'sea W)
Steel, Rt Hon David Wilson, Gordon (Dundee E)
Stewart, Rt Hon D. (W Isles) Wilson, Rt Hon Sir H.(H'ton)
Stoddart, David Wilson, William (C'try SE)
Stott, Roger Winnick, David
Strang, Gavin Woodall, Alec
Straw, Jack Woolmer, Kenneth
Summerskill, Hon Dr Shirley Wrigglesworth, Ian
Thomas, Dafydd (Merioneth) Young, David (Bolton E)
Thomas, Jeffrey (Abertillery)
Thorne, Stan (Preston South) Tellers for the Noes:
Tilley, John Mr. Frank Haynes and
Tinn, James Mr. Hugh McCartney.

Question accordingly agreed to.

Mr. Deputy Speaker

forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House, whilst sharing the deep concern for the unemployed, recognises that today's unemployment reflects a loss of competitiveness over many years as well as the effect of the world recession; supports Her Majesty's Government in their objective of creating conditions in which all parts of the country can prosper; further supports Her Majesty's Government in concentrating their regional industrial policy in the areas of greatest need; and rejects the proposals of Her Majesty's Official Opposition as leading only to higher inflation and more unemployment.

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