Unemployment (West Midlands)

HC Deb 22 February 1983 vol 37 cc806-56

Mr. Speaker

Before I call the first hon. Member to speak to the first motion, may I say that there is a great deal of difficulty? Every hon. Member for a constituency both in the west midlands and in Yorkshire and Humberside is hoping to catch my eye, and the number of hon. Members who will catch the eye of whoever is in the Chair depends on the length of other hon. Members' speeches. I earnestly hope that that will be borne in mind in the first debate, and particularly in the second debate, where far more constituencies are involved.

3.42 pm

Mr. George Park (Coventry, North-East)

I beg to move, That this House condemns the policies of the present Government which have led to the near collapse of the West Midlands economy, have brought about the fastest growing unemployment in mainland Britain, have led to a continuing shrinkage in the foundry, manufacturing, machine tools, engineering and car components industries; deplores the transformation of the Region from a leader in industry to a leader in unemployment and calls upon Her Majesty's Government to take immediate steps to reverse the Region's structural industrial decline. My hon. Friends and. I appreciate this further opportunity to bring to the attention of the House and the Government the serious situation in the west midlands region. However, we earnestly hope that on this occasion the Minister who replies for the Government will make some attempt to answer the points raised in the debate, and that he will not merely indulge in a tirade against trade unionists that bears no relation to the facts.

Since our previous debate on 7 February, there has been partial recognition of our plight in the decision of the Secretary of State for the Environment to accord programme authority status to Coventry, Walsall and Sandwell. Unfortunately, that will not, as the right hon. Gentleman at first thought, give access to the European regional development fund, and it is now clear from his letter to me that only those in assisted areas are eligible to apply to that fund.

It is true that the Government are trying to extend the scope of the regional development fund to take in inner city designated areas, but we all know how protracted discussions with the Commission can be, and the 'west midlands may be beyond help before those negotiations come to a conclusion. Objections that have been heard to assisted area status are largely based on the belief that financial aid should be given on a sectoral or industrial basis, not on a geographical basis. That idea is worth consideration.

Conservative Members may say that this motion will serve only to "talk down" the region, but, before they do so, I ask them to consider the fact that there are now 367,343 registered unemployed in the region and we all know that that is not the true total. There are 19,000 people on short-time working—they are on the edge of the precipice—and 49 people are chasing every vacancy in the west midlands. A recent survey showed that 23 per cent. of employers in the west midlands expect to reduce their labour force again in the near future.

Mr. David Winnick (Walsall, North)

Did my hon. Friend see a recent press report in the Express and Star two weeks ago, pointing out that there was one vacancy in an engineering factory at Tamworth, and that 600 people turned up for that one job?

Mr. Park

Yes, my attention was drawn to that press report. It demonstrates the serious endeavours of people in the west midlands to find work, no matter how remote the possibility.

In all the redundancies that have been declared, no sector of the population has escaped. Professional, managerial, clerical, skilled, and semi-skilled people have all been affected by the redundancies. Only a minute proportion of school leavers can hope to gain a place in the sharply reduced totals of apprenticeships. The majority of the job losses have been in manufacturing, where one in four of the jobs that existed when the Government came to power have gone. There are 300,000 people in the west midlands conurbation who now claim supplementary benefit, and that puts them on or below the poverty line.

Prospects for future employment are not made any brighter by the policies adopted by some large companies. For example, Lucas, Dunlop and GKN are investing heavily abroad, helped by the removal of exchange controls. British Leyland is now purchasing components abroad. That may be understandable in a strict commercial context, but in view of the amount of taxpayers' money that has gone into BL, one would have thought that when home suppliers cannot match the competition, the Government would insist on knowing the reasons, and if, for instance, it was a question of investment in new tools and equipment, that they would have done something about it.

A Minister in the Department of Industry is reported as saying that British Telecom may buy digital exchanges from abroad. If it does that, it will mean further massive redundancies in the GEC factories in Coventry. For the Government to stand back and allow jobs to go abroad without lifting a finger, as part of the dogma of free trade competition, is a dereliction of duty.

Of course, this arm's-length relationship is typical. The Government are content to rely on what are euphemistically called gentlemen's agreements, particularly for the motor industry and machine tools. The people involved in reaching those agreements are themselves importers. The retiring president of the Machine Tool Trades Association, Mr. Gailey, told its annual meeting: We hope to see enough moderation of the rate of imports in 1983 to allow the survival of a vital sector of a strategic industry in this country, but not so much as would seriously endanger our importing members". He went on to say that new orders in 1982 were only 35 per cent. of the 1979 level and that there had been closures and redundancies every week in the machine tool industry, with the inevitable consequence that the skill and ability to make machine tools are dissipated.

That trend is highlighted by the decision of the John Brown group in Coventry to suspend its development work on two new machines and instead to assemble an American machine. The development of a new machine for Webster and Bennett Ltd.—part of the same group—has been held up, which means that the John Brown group will not be exhibiting at the European trade fair in June because it has nothing new to offer. In those circumstances, buying British, or even thinking British, has a hollow ring about it.

The Department of Trade says that, because of the general agreement on tariffs and trade we cannot unilaterally determine the imports of motor vehicles into Britain. But other countries which are signatories to GATT do not seem to suffer from that disability. We also see that British Leyland is poised to strike a new deal with Honda for a replacement of the Rover car, but I do not suppose for a moment that the Government will do anything about insisting on a high domestic content of components if that deal is struck.

Hon. Members keep asking about the Nissan project. To my mind that is like inviting a fox into a hen coop. If the Government are prepared to provide attractive incentives to the Japanese to locate their industries in Britain in direct competition with our companies, why do not they provide similar incentives for British industry? Are the Government prepared to do anything specific—even unilaterally—about the disparity in import and export tariffs? What action has been taken about the counterfeiting of components which undercut our home products? Are the Government to continue playing cricket while others practise karate? If these practices continue it is obvious that even the most strenuous efforts by British companies to improve their competitiveness will be negated.

The CBI agrees that the Government can play a crucial supportive role in the recovery of the national economy, including that of the west midlands, by shifting resources into the region through capital investment programmes and local authorities. It has submitted to the Chancellor for his Budget consideration specific suggestions such as the boosting of capital investment on viable projects such as roads, sewers and communications; the abolition of the national insurance surcharge; the reduction of transport and energy costs; the re-introduction of an improved version of the small engineering firms' investment scheme; and support for research and development. Any or all of those suggestions would benefit the west midlands. To that list I would add only one other—the removal of the additional car tax.

The motion before the House refers to a structural decline because some industries such as steel have disappeared from the region and the foundry industry is to be severely cut back by a haphazard scheme devised by Lazards with the object of destroying firms irrespective of their efficiency. Those basic industries which do survive will not in future be able to offer the same number of jobs, if only through the advance of technology. The west midlands is more dependent on manufacturing industry than any other region. Over 40 per cent. of its labour force is employed in that sector, compared with the national average of 28 per cent. At present there is serious and widespread spare capacity in most of the region's manufacturing industries, so any upturn would have little effect on unemployment.

An alternative is the creation of jobs in industries and services which are currently under developed, the nurturing of new ideas sparked off in the science parks and elsewhere, and the kind of support for new ideas which seems to be more readily available abroad than in Britain. The development of small firms can help but it will not deal with the hundreds of thousands at present unemployed. The region's infrastructure stands in need of renewal and development—the completion of the motorway network south of Birmingham and the improvement of roads in the black country, and the railway system. In a previous debate I also mentioned the clearance and redevelopment of derelict industrial land and buildings. All that requires positive thinking from the Government and a move away from the discipline of the dole queue.

The Labour party cannot accept that high unemployment is inevitable and that we must learn to live with it. The problem is now so massive that it cannot be contained by special programmes aimed at various age groups, which too often undermine wage levels and working conditions. The play of the market has been shown to be completely destructive in human terms. The Government must abandon their arm's-length approach and become actively involved in the problems of industry. In the debate on 7 February some Conservative Members professed sympathy and support for the case put forward by my hon. Friends and myself. If they are not to be accused of shedding crocodile tears, they should carry that support into the Lobby tonight and vote for the motion.

3.56 pm

The Under-Secretary of State for Industry (Mr. John MacGregor)

My hon. Friend the Member for Coventry, South-West (Mr. Butcher) has asked me to explain to the House that he would very much like to be present today, but he cannot be here because he has other responsibilities on the Standing Committee considering the British Telecommunications Bill. Indeed, I understand that he is probably dealing with amendments upstairs at the moment.

The hon. Member for Coventry, North-East (Mr. Park) will realise that, in the interests of brevity, I cannot cover all the points that he raised, but I shall endeavour to deal with some of them.

I should like to deal immediately with the point that the hon. Gentleman raised about the designation of inner urban areas in Coventry and access to European Community aid. My right hon. Friend the Secretary of State did not mislead the House. The hon. Gentleman asked whether that designation would provide an opportunity for access to European Community funds. That is precisely what it will provide—an opportunity. However, as my right hon. Friend has already explained in more detail to the hon. Gentleman, we are seeking to establish that inner city areas, like assisted areas, are eligible for both the European regional development and social fund facilities, and the newly designated inner city districts will join in that.

We are seeking to achieve precisely what the hon. Gentleman asks for and, as he knows from the letter that he has received from my right hon. Friend, officials from the Department of the Environment are preparing to put Coventry's case before the Commission. I want to put that on the record. As I am endeavouring to be brief, I hope that the hon. Gentleman will forgive me if I do not pursue the matter further.

Mr. Park

I do not want any more misinterpretations. The letter that I received from the Secretary of State for Industry states clearly that, currently, only those in assisted areas are eligible. There cannot be any misinterpretation about that.

Mr. MacGregor

The Government are endeavouring to extend that to the other inner urban areas. That is what we are trying to achieve for Coventry and all the other areas.

I fully recognise the anxieties of all hon. Members—anxieties which the Government wholly share—about the real problems in the west midlands, which have created rising unemployment and serious difficulties for many industries. It is obviously distressing, both from the national and the local point of view, that a region that once led the world in having the most modern and prominent industries of the day should now find itself overtaken so dramatically by overseas competition in those very industries, and also find that it does not have as wide a base in the new industries of the future as it had in the car and engineering industries—the metal-bashing industries as they are known—in the past.

Because I wish to be brief, I shall make only two other points about the background and the problems that we have previously debated. First, it is ludicrous to suggest that the situation has arisen only in the past three or four years. I have seen references to reports written 20 years ago drawing attention to the dangers ahead. The more fair minded of Opposition Members have conceded that this situation has been creeping up on the west midlands for two decades or more.

Mr. Denis Howell (Birmingham, Small Heath)

That is not what the hon. Gentleman said at the last election.

Mr. MacGregor

Had the tasks of dealing with the car industry's—

Mr. Howell

rose—

Mr. MacGregor

The right hon. Gentleman can deal with those points when he speaks in the debate. He is simply leaving other hon. Members out of the debate. I shall not give way.

Had the tasks of dealing with the car industry's poor productivity record, the damaging number of days lost through strikes, the overmanning, the lack of sufficient new models to beat the competition and meet consumer preferences here and abroad and the problem of component supply, too often of insufficiently good qualify or competitive price, been tackled earlier with the vigour with which they have been tackled over the past three or four years, the state of the west midlands today would be very different. Significant improvements have been made in recent years. The number of man hours lost at BL as a percentage of total work time was as high as 5.9 per cent. in 1977, during the period of the previous Government, and fell to 0.5 per cent. last year. Wage settlements have become more realistic. That is the legacy that the Government are tackling.

Secondly, I repeat what I said in the earlier west midlands debate, in which I took part, in December 1981, that it would be an uphill climb for the west midlands to reach its former level of relative prosperity. I note that in the recent debate on 7 February of this year the hon. Member for Birmingham, Stechford (Mr. Davis) repeated that comment. I make no apology for it. Given the speed of change today, the intensity of world competition, and the background of over-dependence on what were becoming three increasingly uncompetitive industries which have often been described in the House, it is bound to take time to achieve the recovery of the west midlands and the car industry—only now are the new models coming on stream—and the reconstruction of the industrial base of the region.

I have just come from a Financial Times conference on automated manufacturing, at which I have been speaking. A senior American industrialist spoke there of the—[Interruption.] This is not a laughing matter, but is vital to the future of our industry. That industrialist spoke of the serious challenge to the United States manufacturing capability and productivity in the face of intense world business competition … America's manufacturing effectiveness must be renewed and the factory of the future is the key to this renewal. That is as true of our industries, and, alas, in robotics we are engaging in the race much further behind our competitors than we should have been.

At that same conference there was much talk of the lack of worldwide demand. The markets have diminished—that is now the major factor—while other things over which we have more control in this country are coming right. As the hon. Gentleman will know from talking to exporting industries in the west midlands, that is one of the key difficulties that faces many of our exporting industries. That is the background, and to get anywhere near the right prescriptions for the future we have to face it.

I want to devote the main part of my speech today to outlining the ingredients of the strategy which the Government are pursuing, and I take first regional policy. As the House knows, my right hon. Friend the Secretary of State for Industry has made it clear on many occasions, following the review of assisted areas last summer, that, in the interests of stability and continuity for industry, we intend to make no further changes in regional policy and assisted area status except in the most exceptional circumstances during the lifetime of this Parliament. And in looking at these matters, unemployment is only one of the factors that is taken into account. We must look far wider at the "other circumstances" to which the Industrial Development Act 1982 refers. The heart of the west midlands is of course in national terms superbly located with ample road and rail communications—I know some of my hon. Friends want some aspects improved—and that great national advantage remains—something which the traditional assisted areas do not share. It is an advantage that will weigh heavily with potential investors. A further part of the region's industrial legacy which must count in its favour is its reservoir of industrial talent and skills. That reservoir will form a tremendous asset as the world recession clears and the economy starts to expand again.

The House also knows that officials of the Departments concerned have completed the first stage of a review examining the working of current regional economic policies and identifying ways in which they might be made more effective. This is a long-term task, and I know that all the Opposition parties are similarly engaged on such a review. Ministers are considering this first stage. We now have to decide what further work, if any, we want to commission in preparation for any possible policy changes. But I repeat that no further substantial change in regional policy or to the assisted area map is envisaged in the lifetime of this Parliament.

I know, too, that while, naturally, some voices have been raised in favour of considering the possibility of assisted area status for the west midlands within the region itself, there are very strongly divided views, both in the chambers of commerce and in the CBI, among industrialists and, indeed, as was clear from our recent debate on the Consolidated Fund, here in the House, on both sides as well. I have listened to many people discussing this issue. I have no doubt that that debate will continue and we will listen carefully to the views.

I stress again that under this Government a number of the relative disadvantages, as they are seen from the west midlands, of regional policy have been lifted from west midlands' shoulders. The reduction in assisted area status from 44 per cent. of the working population to 27 per cent. is one of them. There are many fewer parts of the country, which did not need that relative incentive advantage over the west midlands, which now have it. The suspension of IDCs has removed an obstacle to the expansion of new and existing industries within the west midlands which, I accept and had long thought, was one of the reasons why the west midlands was not able to build up a more widely based and different industrial structure over the last 20 years.

There is one further point that I should like to make. Those who call for assisted area status, from other parts of the country as well as the west midlands, frequently do so on the ground that this will make them eligible for various European schemes. I draw to the attention of all small and medium-sized businesses in the west midlands the fact that only last month I was able to announce a new European scheme for which for the first time all qualifying firms in the non-assisted areas will be eligible. The west midlands benefits from the new loans under the new Community instrument from the European Investment Bank, which are available to firms with fewer than 500 employees through ICFC to cover up to 50 per cent. of the fixed asset costs of projects in manufacturing industry, mining and extraction, tourism and industry related services outside the assisted areas.

We believe that that money will bring forward projects which would not otherwise have taken place because of the relative advantage the scheme offers in borrowing costs. Although the cost may vary from time to time depending on interest rate levels in the Community and other countries, loans under the scheme are currently being lent by ICFC at the attractive rate of 11½ per cent. for an eight-year term. The Government are playing an important role by providing the necessary exchange risk cover to protect the borrower against adverse exchange rate movements.

I am pleased to say that there has been strong interest in the west midlands in the scheme, from both professional advisers and potential borrowers. It is, of course, too early to say how many of the inquiries will result in loans being offered and accepted, but, as always, there is much more that can be done to make known to all firms in the region what is available. I hope that my hon. Friends and hon. Members will draw this scheme to the attention of firms which talk about being excluded from the European schemes. They now have this one available to them. Details are available from the Department of Industry's small firms centre in Birmingham and if anyone is interested in applying for a loan he should approach the ICFC's office in Birmingham. I hope that before long some of the clearing banks will also join the scheme.

I have talked about regional aid. As I have often stressed in terms of Government assistance—assistance from the taxpayer—it is vital, if we are to get an accurate picture, not to exaggerate the impact of the aid through regional industrial instruments and to ignore what comes in other ways. I give just one or two examples of relevance to the west midlands.

The hon. Gentleman has urged the Government to do something about the west midlands. I want him to know what the Government have been doing. BL has received funding to date of £1,230 million, a substantial proportion of which will have gone direct to the car industry and its component suppliers in the west midlands. This compares with £1.87 billion to the end of December 1982 in regional development grants for all regions, not just one. That sets the matter in context.

It must surely be good news for the west midlands that BL is now in a much better position to compete in the market. It has new models produced with modern facilities and much higher levels of productivity. With Longbridge and the LM 10 facilities at Cowley, we are now achieving productivity levels that are comparable to the best in Europe. Productivity in Jaguar doubled between 1980 and 1982. In Austin Rover, productivity jumped from 5.9 cars per man year in 1979—when we took office—to 10.1 in 1982. The management, supported by the Government, achieved that.

Mr. Peter Snape (West Bromwich, East)

With full co-operation from the shop floor.

Mr. MacGregor

I agree that there was full co-operation throughout the firm. In 1982 there was a loss of less than one working day through disputes in the Austin Rover group. The future of the Austin Rover group depends very much on the new model and I am sure that the whole House will wish it every success on its launch next month. When Opposition Members ask what we are doing for the west midlands, there is the evidence. In the most crucial industry in the west midlands enormous strides have been made in putting right mistakes and causes of trouble and making it thoroughly competitive again.

I know that there is great concern among many of my hon. Friends about the large tariff differences between Spain and ourselves on cars. I shall not dwell on that today, because there was a substantial exchange yesterday during Question Time. Suffice it to say that the Government have been very active in promoting their views and urging action within the Commission, with a great deal of speed, and my right hon. Friend the Secretary of State for Trade is in Brussels today at a meeting of the Foreign Affairs Council, to which the Commission is reporting on its continuing discussions. As my hon. Friends know, he will be meeting industry leaders in the west midlands next Monday, and my hon. Friends will wish to await the outcome of those meetings.

Mention has been made of BL's components strategy—

Mr. Nick Budgen (Wolverhampton, South-West)

rose—

Mr. MacGregor

I hope that my hon. Friend will forgive me for not giving way, but I am anxious to enable as many hon. Members as possible to participate in the debate.

I should like to make several quick points about the components strategy. First, individual decisions on the source of supply of component are rightly a matter for the commercial judgment of the BL board of management. I know that BL understands the benefits, both to itself and to the United Kingdom's economy as a whole, of a strong United Kingdom components industry. At the same time, it cannot lose sight of the need to keep down its costs and so improve its overall competitiveness. This same consideration must, of course, apply to component manufacturers if they are to survive and to supply not only BL but other United Kingdom and foreign car manufacturers. The Government have asked to be kept informed on those matters and have taken a close interest in them.

Secondly, we have made it clear that component manufacturers are eligible for the various forms of financial assistance available from the Government, through selective financial assistance and in other ways, towards capital investment or innovation projects. Thirdly, I am sure that the House will have been pleased to learn recently that Dunlop and Austin Rover have reached agreement on a contract for Dunlop to supply wheels to Austin Rover. The retention of this business is of great importance to Coventry. I should point out that BL's use of suppliers in the United Kingdom remains at the very high level of around 90 per cent. Finally, it is worth noting that the recent, adjustment in exchange rates will have had a beneficial impact on this issue.

The assistance that the Department of Industry gives for both investment and innovation is very important to the building up of the new industries. Since May 1979, offers of £29 million have been made for investment in the west midlands under section 8 of the Industrial Development Act 1982. Since April 1981, offers of £24 million have been made under the innovation schemes.

Another important point that is often not brought out is that major firms in the region, such as GEC, have benefited from Government assistance in their efforts to win major overseas contracts. The Castle Peak power station in Hong Kong is expected to be worth some £200 million to factories in the west midlands, and the Rihand power station in India will be worth a further £40 million. Those are significant benefits for the west midlands.

There are also significant benefits to the west midlands from the new urban initiatives announced by the Secretary of State for the Environment on 15 February 1983. As has been said, from 1 April 1983 Coventry and Sandwell will join Wolverhampton as programme authorities and Walsall will become a designated district. Birmingham is already a partnership authority. Resources allocated to these authorities will total £32 million for 1983–84 and emphasis will be given to projects that contribute to the economic regeneration of the older industrial areas.

In addition, the urban development grant scheme will be available within all of these areas. The scheme was launched last April and is designed to use public funds to attract much larger resources from the private sector, and, of the 41 projects so far approved nationally, six are in the west midlands. These will involve total estimated project costs of almost £5.5 million. A substantial number of other projects are currently at a detailed state of negotiation. Dudley was one of the first enterprise zones and since designation 300 acres have become available for new development. Discussions on establishing an enterprise zone in Telford are well advanced. The zone will consist of 275 acres of publicly and privately owned land and will come into operation this summer. The combination of relaxed planning controls and other incentives to development will be a tremendous boost to this part of the west midlands, which has suffered badly during the recession.

Another important aspect is that more than 125,000 people in the west midlands currently benefit from the Government's special employment and training measures, including 67,000 under the youth opportunities programme. It is worth referring to such matters, because they show what the Government are doing to build up new skills and a new industrial base. I wish that I had more time to develop that argument, because there is much that I could say about what is being done by way of science parks and so on to build up those new industries.

I must mention briefly the impact of the Government's 98 measures that are exclusively or mainly directed to encourage small businesses. The small business sector has always been vital to the west midlands' economy and will be crucial in helping to achieve the transition to the newer industries that the region needs. Suffice it to say that small businesses in the region have benefited greatly from our measures in this area. Indeed, 742 loans have been guaranteed under the loan guarantee scheme, to a value of £24.3 million, in the region so far.

The west midlands, as was to be expected and as we had always hoped and intended, has benefited particularly from the small engineering firms investment scheme. To date, 261 offers totalling over £6 million have been made to west midlands companies under the scheme. The small firms service continues to receive a very high level of inquiries and offers a marked degree of consultancy help and advice to many small businesses in the region. One of the five pilot areas for the enterprise allowance has been in the west midlands, in Coventry, and that, too, has seen a very substantial take-up—519 people out of 660 applicants benefited in Coventry to the end of January this year. I know of the many efforts that have been made by others in the private sector, chambers of commerce, local authorities and so on to help to build up the small business sector in the west midlands.

I have spelt out—although briefly—the many ways in which west midlands industry and commerce are benefiting from direct Government measures, and I have done so because of the charge by Opposition Members, repeated today, that assistance is going elsewhere and not to the west midlands. It is necessary to nail that charge and to put the record straight, but I am the first to acknowledge that, far more than these measures, what industry wants and what the west midlands needs is success with the Government's long-term economic strategy. Only in that way will we get real competitiveness back into the United Kingdom economy.

The fact that the annual inflation rate is now down to 4.9 per cent.—the lowest level for 13 years—must be good news, because it is a critical factor in restoring our competitiveness—[Interruption.] I shall tell hon. Members what industry says in a moment. Without doubt the key to sustained recovery, leaving aside the other major question of world demand, over which we have little control, is to regain and improve our competitiveness. Here too, in other ways, the news is better. In view of the time I shall not go into the figures now, but productivity compared with our recent past and with other countries is improving all the time. But there is still lost ground to make up.

In that context, helping with industry's costs is vital—I agree with the hon. Member for Coventry, North-East—and is the area in which industry in the west midlands as elsewhere most seeks action. The hon. Gentleman read out a list of things for which the CBI is calling, but that was rich coming from him, because they are all Conservative policies, which build on our strategy, and are the exact opposite of what a Labour Government would achieve. This Government have helped industry's own prodigious efforts to cut costs. We have cut the national insurance surcharge—Labour's tax on jobs—by two percentage points. The announcements last year on industrial gas and electricity prices should help further. The drop in interest rates has made a big difference to many companies' cash flow.

Let us contrast that action with such evidence as there is of Labour politicians in action and of the Labour party's proposals today. Let us consider rates, which are now the largest single tax on businesses, discounting the employers' national insurance contribution. The House knows of the many steps that the Government have taken to help on rates and to curb the excessive spending ambitions of some local authorities which in the past have found their additional spending underwritten year by year by the taxpayer, but which now face grant penalties if they continue to exceed spending targets through lavish plans. The contrast in the west midlands is there for all to see. A Tory-controlled council, Birmingham city council, has now been able by good housekeeping, prudent management and by the savings achieved through such steps as tendering for its refuse disposal contract, to announce this year a 12 per cent. cut for its ratepayers. It would be tragic if that success, which is vital to the industries and small business in the area, were negated by a substantial rate increase by the Socialist-controlled West Midlands county council.

This week we have seen the contrast painted all too clearly at the national level too. The London Business School has forecast that under a Labour Government's economic policies, which would trigger off a devaluation of sterling and a wages explosion, the country would be far worse off in every respect—inflation, unemployment, interest rates, the exchange rate and output—than under a Conservative Government. In particular, inflation would reach a massive 17 per cent. by 1986 and interest rates would also soar to 17 per cent.

It is not surprising, therefore, that we have heard so little from the Labour Front Bench today about how it would deal with the admitted and real west midlands problems. Opposition Members know that industry does not support them. They know that the people of the west midlands understand in their realistic and honest fashion what has gone wrong and what needs to be done to put it right. It is this Government's strategy that will restore the west midlands, on a new footing, to its much earlier position of industrial eminence. That is why we reject the motion.

4.21 pm

Mr. Jack Ashley (Stoke-on-Trent, South)

In a lengthy speech the Minister spelt out the massive help which has been given to the west midlands, and has painted an attractive picture of Shangri-la. If we are to believe the Minister, everything that could be done is being done.

The Minister also attacked the Labour party for its policies. He cannot attack us for making party political points if he makes cheap party political points. Government Members complained throughout the last debate about party political points being made from this side of the House. If the Government are as good as the Minister claims, he should explain why the west midlands has the lowest economic growth rate of any region in the last decade. It has suffered the greatest increase in unemployment in recent years. It has the most serious long-term unemployment problem of any region and it has more unemployed per vacancy than any other region.

Those are the facts, despite all the help that is supposed to have been given by the Government. That is the state to which the west midlands has been reduced by the Government. It is a political issue, and the Minister is right to make it such. The Government stand condemned for smashing the west midlands, despite the fact that the Minister has attempted to portray it as a fine prosperous area.

The west midlands is being greatly damaged by the Government. There should be no doubt that the blame for the condition of the area rests squarely upon the Government's economic policies. Dogmatic monetarism may have helped to reduce inflation but at the same time it has reduced the west midlands economy to crisis, verging on collapse. It is hard to imagine a more misguided policy.

Many hon. Members want to speak, so I shall try to be brief, especially in view of the very long speech by the Minister. One section of the west midlands that has not been given the attention it deserves is Staffordshire, especially north Staffordshire and Stoke-on-Trent. Staffordshire has suffered more than any other county in the region, and north Staffordshire has suffered most in Staffordshire.

Between 1979 and 1982 unemployment in Great Britain rose by 143 per cent., in the west midlands by 192 per cent., in Staffordshire by 199 per cent. and in north Staffordshire by 219 per cent. The terrible fact is that unemployment in north Staffordshire has more than trebled during this period.

It is all very well for Ministers to speak complacently about the rationalisation of industry, but many job losses in Staffordshire are due not to rationalisation but to closures. In the last two years nearly 30 per cent. of those who have lost their jobs lost them through closures. Their jobs have vanished; they have gone for ever. They are a permanent loss to our industrial base.

The pottery industry has become vulnerable to closures. The main trade union for pottery workers, the Ceramic and Allied Trades Union, has estimated that, of 50,000 pottery jobs in the Stoke-on-Trent travel-to-work area, no fewer than 20,000 have gone. There are sometimes understandable reasons for job losses in old-fashioned and declining industries in the face of international competition, but there can be no justification for damaging such a progressive industry as the pottery industry, which exports a high percentage of its products, which has adapted to industrial change, and which has been free of industrial disputes. If the Government do not change their policies they will kill the goose that lays the porcelain eggs.

We have also suffered severe losses in the steel industry, notably when Shelton closed, and we are now losing jobs in the rubber industry. The Michelin company, which is based in my constituency, recently annouced a cut of 4,000 jobs in the next two years; 1,000 are in Stoke-on-Trent, which is already devastated by unemployment.

Thus, in stable, sensible Stoke-on-Trent and north Staffordshire, we are facing an industrial crisis. The fine skills of the people are being corroded by unemployment; the optimism of youngsters is being blunted by despair; the long-term unemployed are becoming embittered, and women workers are losing hope.

I want to make what I regard as constructive proposals. First, the Government should examine closely the evidence of dumping cheap goods from foreign countries on British markets. One leading business man in the pottery industry has said that Italy and Spain are dumping millions of ceramic tiles here, at less than they cost to produce. I hope the Minister will consider that point. Stoke-on-Trent and north Staffordshire can face competition but we cannot face unfair competition, and we want the Minister to take action.

Secondly, the Government should give more encouragement and assistance to development associations. The Staffordshire development association has done valuable work in the area and over 2,000 jobs have emerged from projects which it has assisted. That does not solve the problem, but it helps.

Thirdly, the Government should assist the diversification of industry in Stoke-on-Trent and north Staffordshire. The area is excessively reliant on too few industries; it needs to widen its base and to take advantage of technological advances.

Fourthly, the Government should stop improvising and start planning for the future. When the recession ends, industrial capacity is unlikely to be made up, because of technological developments. Unless in the long term we develop a new approach to the organisation of work, the frightful and frightening divisive gap between employed and unemployed will become wider and more menacing. Social unrest will become more than a distant fear; it will become a reality.

Fifthly, the Government should become more alert and responsive to economic changes and their consequences. It is far too easy to lay down a blanket policy such as monetarism and to stick to it, calling it a resolute Approach for reducing inflation. Such lack of sensitivity and flexibility will result not only in the destruction of jobs but also in the loss of opportunity to create new ones.

Sixthly, despite some adjustments in the exchange rate, I hope that the Government will pursue policies to ensure that we keep a realistic exchange rate. The pottery and rubber industries have been greatly damaged by an unrealistic exchange rate.

Finally, as no region can prosper without general national prosperity—although I am pleading for Stoke-on-Trent, north Staffordshire and the west midlands—the Government should adopt a reflationary policy using, rather than abusing, the concept of public expenditure.

I make these proposals in the hope that Ministers are at last beginning to realise the frightful and frightening consequences of existing policies. Governments cannot wave magic wands, but they can and should play an important role in creating a healthy and prosperous economy.

4.31 pm

Mr. Percy Grieve (Solihull)

Few hon. Members are held in greater respect that the right hon. Member for Stoke-on-Trent, South (Mr. Ashley). I listened with interest to the constructive proposals that he made. I do not agree with all of them. With some, I can go along with the right hon. Gentleman. I cannot, however, accept his stricture that the Government have been responsible for smashing the west midlands. Without the actions of the Government, it is doubtful whether the industries of the west midlands would be anything like as viable and prosperous as they are likely to become. I intend to give the figures to the House.

The truth, as all hon. Members know, is that between the two wars and immediately after the last war the west midlands became not only the greatest workshop of this country but also one of the great workshops of the world. For too long, it was taken for granted. For too long, the motor industry, which, along with the foundry industry, was at the heart of a great deal of it, was bedevilled by Government policies, by ever-increasing demands for wages, by under-productivity, and by unions which, although over-powerful, were unable to control wildcat strikes by their members. It was bedevilled by the go-slow policies of successive Governments, Conservative as well as Labour.

Between 1964 and 1970, I heard Donald Stokes and others, at that time at the head of British Leyland, complain frequently that they were never given a fair chance to develop their industry. As soon as it was prosperous, it was made the subject of Government stop-go policies. Whenever it achieved success and desired to expand, it found that IDCs had been used to establish factories in parts of the country that were uneconomic and where labour relations were a great deal worse than those that prevailed at the time in the west midlands. The whole industry was taken for granted. It was bedevilled by Government policies and by gross under-productivity.

Created by a Labour Government in its united form, British Leyland had to be saved by public money and was put into the hands of a man who did a great deal to bring it back on to the road to prosperity. I refer to Michael Edwardes, who achieved a great deal for Leyland. As a result, Leyland now has a viable future. I speak as an hon. Member in whose constituency an important part of Leyland is located. If it succeeds, in due course the industries that cater for the motor industry will also succeed.

I accept that spare parts are at the moment being brought from abroad. Why? [AN HON. MEMBER: "Shame."] It is not shame at all. British industry, if it is to survive, must be competitive. When British industry can supply the British motor industry with the parts that it needs at competitive prices, that industry will go with open arms to British industry for those parts. These home truths are not much liked by Opposition Members. However, every observer of British industry knows that they are true.

Mr. Peter Snape (West Bromwich, East)

Clichés.

Mr. Grieve

One example of the gross over-optimism that prevailed in the motor industry only a few years ago was the investment of £31 million of public money in the new Rover car assembly lines in my constituency. It was assumed that there would be a demand for hundreds of Rover motor cars a week. The figure had never been attained previously and it has never been reached since. It is a tragedy for Solihull that Rover has had to abandon those assembly lines and switch manufacture to Cowley. I am glad to say that production at Cowley is going well. The loss of jobs has been much reduced by the fact that 1,100 new workers have been taken on at Cowley, although 2,000 lost their jobs in Solihull.

I wish to give figures showing the present state of British Leyland, especially the Land Rover and the Range Rover, which are still made in my constituency, and the Austin Rover company. The figures from both give grounds for qualified optimism. I am glad to be able to underline in this respect the remarks made by my hon. Friend the Under-Secretary of State. In 1982, the Land Rover achieved £220 million of exports. Eighty per cent. of British production of utility vehicles was supplied by Land Rover—and that was in a difficult year. Increased production was achieved at a time when Mercedes was cutting back on production of utility vehicles. Altogether, 52,000 vehicles were produced by Austin Rover in 1982, in the face of Japanese competition. Over 300 a week are now being produced and sales have improved by 12 per cent.

At present, as the House will be aware, £200 million is being invested in a programme for a new Land Rover. It will probably be launched next month. I am sure that all hon. Members will join in wishing the Land Rover and the Range Rover company success in this great new enterprise.

Another success story has been the Freight Rover. Nothing has been heard about it in the debate. It is a small but nevertheless important part of the motor industry. There has been success with the Sherpa van range. In less than a year, the output of vans has been doubled. The company that was producing 190 vehicles a week in January 1981 is now producing 400 vehicles a week. A new range has been produced. British Telecom has contracted for 3,000 vehicles. I am glad to see that British Telecom is buying British. I suggest to hon. Members that buying British is one way to help this country. There are far too many foreign cars in the House of Commons car park.

I come now to the Austin Rover end of BL. The group is on target to break even this year. A new medium range car is being manufactured at Cowley, and £210 million is being invested in it. Cowley has taken on 1,100 more people.

At Longbridge, the Metro was the best-selling car in Great Britain last year. Sales in Europe were up 25 per cent. on 1981. BL achieved its highest sales figures in Europe since 1978, with 51,000 cars being exported to France and Italy. The company's export record is that sales of all cars to France increased by 39 per cent. and to Italy by 16 per cent. in 1982. More than 37,000 cars went to France and 32,000 to Italy. As my hon. Friend the Under-Secretary said, industrial relations were particularly good at Austin Rover in 1982. The number of hours lost through disputes amounted to less than one day. Productivity has risen by 20 per cent. over the past 12 months and doubled over four years.

To underline the point that I was making about under-productivity, at Longbridge seven cars per man per year were produced in 1980 and 25 cars per man per year in 1982. It is good news, but two swallows do not make a summer. It is a beginning. British Leyland—Austin Rover, Land Rover and Range Rover—is on course. If we can continue the support that the Government have already given, the principal factor being the reduction in inflation, there is a chance for the west midlands motor industry.

4.42 pm

Miss Betty Boothroyd (West Bromwich, West)

The hon. and learned Member for Solihull (Mr. Grieve) and the Minister began their speeches with a long record of excuses for the state of the west midlands. I hope that Conservative Members will not have the cheek this afternoon, as they have in previous debates, to suggest that the world recession is the chief cause of our industrial and employment problems. A glance at the OECD's comparable figures for unemployment will disabuse them of that argument, as will the Secretary of State's admission that in all other countries of the European Community unemployment since May 1979 has increased by 88 per cent. while in this country it has increased by 154 per cent.

Responsibility for the horrific scene in this country rests with the Government. They have used unemployment as a weapon against inflation. Their policies have been the principal cause of job losses. In the west midlands, even the Government's own "cooked" figures show an increase of almost 230 per cent. since 1979. I find it difficult to comprehend such an increase. I do not intend to tour the ruins of the region left by four years of Tory policies. We have experienced a far higher rate of increase in job losses than any other region.

I wonder whether it is the Government's neglect of the region and their constant refusal to recognise the need for special assistance that has spurred the European Commission to take some action to halt the downward spiral. I have been pressing the Commission for a long time to see what help might be given to places in the black country, such as West Bromich, Tipton and Wednesbury, when assisted area status is denied to the entire region.

Yesterday, I received a letter from Brussels from the Commissioner responsible for social affairs and employment policies about proposals which seem to me to take the criteria for funding out of the Government's hands by amending the operation of the social fund in such a way that the west midlands and areas within it might have access to resources which we have been constantly denied by the inaction of our own Government.

The Commissioner says: in the proposals we have made regarding the review of the European Social Fund.… we are suggesting that the fund should not in future be linked in any way to regional policy classifications decided at national level. It seems a clear statement. It is a considerable and welcome departure from previous policy.

I understand that the proposals will enable the region to participate in the use of the funds for the improvement of employment opportunities, development of employment policy and restructuring. In other words, we would have access to resources to which we have a legitimate claim but which have been placed out of bounds by this Government.

The proposals go a step further. They recognise that while there are areas, such as West Bromich, where unemployment levels are higher than the regional average, within such areas there are pockets of even higher unemployment which reach 22 per cent. to 25 per cent. The proposals recognise that these black spots are disguised by the surrounding areas which may have less serious problems. Therefore, under the proposals headed Selection of application for funding the criteria proposed have four components of equal worth.

The first is overall unemployment levels. We all know that the west midlands unemployment levels are about 4 per cent. higher than the national average. The area will qualify on that basis.

The second component is long-term unemployment. The increase in those out of work for over a year in the west midlands since the Government came to office has been 380 per cent. We shall qualify on that basis.

The third component is youth unemployment. Since the Government took office, the numbers of unemployed persons under the age of 20 in the west midlands have risen 620 per cent. That is disgusting. In my area, Sandwell, the increase is 552 per cent.

The fourth component is GDP per head of population, which we all know has dropped below the national average.

There is ample evidence to show that the west midlands, and parts of it, will qualify for intervention. The criteria for selectivity are changing in such a way as to concentrate finance in areas of greatest need, irrespective of regional classification.

The Commissioner's letter continues: The whole debate about assisted areas status in the UK should, therefore, no longer be relevant, at least as regards the future interventions of the Social Fund. These proposals, welcome as they are, represent a condemnation of the Government's inertia and failure to recognise the west midlands' demise. I gave notice this morning to the office of the Minister who will wind up that I want some comments on these proposals. I want to know whether they have yet reached the Council of Ministers, and, if not, why not? When will they reach the Council? When can we look forward to their implementation and receive some help for the west midlands?

With regard to the immediate situation, the regional CBI and the chambers of commerce have called on the Government for capital investment projects in the region. In a survey issued late last year, the chambers of commerce said that they wanted early implementation of capital spending programmes to provide much needed encouragement to the construction and manufacturing industries in the region. I agree with them. I shall cite one or two examples of areas where action now would achieve a reduction in unemployment and at the same time provide a boost to manufacturing output.

There are 100,000 people on council housing waiting lists in the region. Those are not my figures, but those of the National Federation of Housing Associations. The Birmingham Architectural Association reports that 500,000 houses in the region are in urgent need of repair. On the Government's own figures, 200,000 construction workers in the region are on the dole and there are enough bricks stockpiled to build a town the size of Leicester. Yet the Government persist in standing between available workers and unused materials, while families in the region pay a high price in the loss of their livelihoods.

A survey by the Council of Estate Management shows that parts of the Birmingham conurbation require extensive investments in water pipes. Complaints to the Severn-Trent water authority show the need to refurbish water mains at an estimated cost of £50 million just for the backlog, and annual expenditure of at least £2 million to keep pace with deterioration. The authority reports a decaying sewerage system, with 220 miles of tunnels nearly 100 years old and urgently in need of attention. It reports that a 10-year programme of repair and replacement is needed at a cost of about £10 million per year. It was ironic and tragic that a year ago, on the day when I helped to launch Labour's "Plan for Jobs" in the region and spelt out the type of immediate action that could be taken, a midlands firm with a famous household name, which for generations had manufactured pipes, tunnelling and sewerage equipment, announced that it was to close because its order books were empty. The tragic fact is that the Government cannot match men and materials.

There are other examples where investment of this kind would arrest the decay in manufacturing and at the same time rescue the crumbling infrastructure. That approach, however, whether it comes from the Opposition, the TUC or even from the Government's own friends, is rejected by the Prime Minister, who again and again repeats that we cannot solve our problems by throwing money at them. I tell the right hon. Lady that neither can she go on throwing our problems on the scrap heap of inattention and indifference.

Conservative Members who argue that spending on public sector projects and programmes is the root of all evil should realise that it is the Conservative Government who have failed to make the distinction between spending for investment and spending for consumption, between spending for the accumulation of goods and spending on investment for a secure future. It is the Conservatives who stand accused of squandering the wealth from the North sea and much else in support of ever-lengthening dole queues. It is the Government who are the big spenders, because unemployment is the biggest spender of all. There is work to be done in the region and there are people to do it. If the Government are not prepared to get on with the job, they should get out and let others tackle it.

4.53 pm

Sir Hugh Fraser (Stafford and Stone)

I shall not follow the hon. Member for West Bromwich, West (Miss Boothroyd) very far, as time is short. I merely comment that she seems to have found a new love for the Common Market, which she hopes will bail West Bromwich out of some of its difficulties.

I congratulate the Government on some of the things that they have done. In my division, through management efficiency and work force ability, GEC has managed to increase both orders and employment. Yet that is one of the firms that the Opposition propose to nationalise. How absurd can one get?

I wish to take up some of the serious points made by the right hon. Member for Stoke-on-Trent, South (Mr. Ashley). I believe that the Government could provide genuine and immediate help to the west midlands in two ways. First, dumping is undoubtedly taking place in some sectors. The boot and shoe industry is a clear example, as are those to which the right hon. Gentleman referred. The influx of steel products from the Common Market at below price is against every arrangement with the Common Market and should be stopped at once.

In the long term, it is frightening to remember that the west midlands is—or was—the industrial heart of this country, and it is truly alarming to note from the latest figures that for the first time in history this country now has an adverse balance of payments in relation to manufactured goods. That should disturb us all.

Personally, I do not believe that these things can be put right with little grants of £50,000 here or there or with money from the EC. A major problem must be put right. Without the true reinvigoration of British manufacturing industry, what future will this country have after the oil has gone but to sing for its supper, putting on barbecues and morris dancing for visitors? I am sure that the whole House agrees that that basic problem must be tackled by all political parties both now and in the years to come.

There are two main ways in which the problem can be tackled. First, we must ensure that costs for industry are reduced. A great deal more could be done in that sphere. Rating of industrial and commercial properties should be re-examined de novo and those rates should be decided not by local authorities but by central Government. Secondly, we should see what can be done about taxes. It is ludicrous in this day and age that there should be a tax on employment, and it should be removed as soon as possible.

Far more fundamental, however, are the two wider questions of what can be done about the world economy and home investment. One thing is certain. The kind of investment that I wish to see—the hon. Member for West Bromwich, West wants public investment, but I believe that it must come from the private sector or from a mixture of private and public sector—can only be achieved through profits, and the only way to ensure that profits can be made is by reducing the burden on industry. That is the first stage.

I believe that it is impossible in the long term to achieve industrial revival when real rates of interest are running at 8 per cent., as is happening throughout the western world today. The rate of inflation here is 5 per cent. or 6 per cent., yet most countries are paying 13 per cent. or 14 per cent. for their money. It is simply not worth investing in British industry when that kind of return can be achieved elsewhere. As I have said many times, the great problem facing western capitalism today is to bring interest rates into line. That is why, although it may seem a long way from the west midlands, I believe that the summit conference that is shortly to be held must achieve the vital step of starting some movement so that interest rates can be brought into line. Some of the debts could be put on one side, although I shall not go into detail about that today. World trade must be revived and interest rates brought down. That is the key to the recovery of western capitalism.

These are serious times. Only through those two methods can we achieve a revival. We must ensure that industry has profits to reinvest. I am sure that the right hon. Member for Stoke-on-Trent, South agrees that there are great areas in the west midlands in which new investment is needed. The big companies and the smaller companies that are growing up need a big change in their industrial objectives. That must be done through profits. Above all else, we must have joint action with the Japanese, the Germans and other sound economies—possibly the Americans—to draw the world out of its dangerous and vast depression. We must ensure that Britain's industrial base remains sound and profitable.

5 pm

Mr. Denis Howell (Birmingham, Small Heath)

I am glad to follow the right hon. Member for Stafford and Stone (Sir H. Fraser) because I entirely agree with him about the great danger to the present world economic order. My right hon. Friend the Member for Leeds, East (Mr. Healey) said recently in Birmingham that the whole banking system is threatened with collapse unless great industrial nations join together and follow one policy.

I am an extreme pessimist about the whole of our economic future. The numbers in work are decreasing rapidly, and the desecration of the industrial might of the west midlands means that the superannuation, pension and other funds upon which we rely for our future prosperity are in grave jeopardy. That message must be spelt out to those still in work. The industrial might of Birmingham is being desecrated; no one can doubt that. There is a remarkable consensus among the CBI, the chambers of commerce, and such firms as Joseph Lucas and IMI, about what needs to be done about the destruction of the industrial might of the west midlands and the power base of industrial Birmingham.

I represent the inner city constituency of Small Heath. The Government have placed a time bomb under the social fabric of our cities and their industrial life. In Small Heath, 80 to 90 per cent. of last year's school leavers still do not have jobs. What do the Government think that means in social terms for the peace and harmony of our inner-city communities? It is devastating. A whole generation of school leavers will never know the dignity of work. Men and women throughout Birmingham have been made redundant. Some of them are family men with responsibilities, aged between 40 and 50, who know that they will never work again. That must be the background to the debate.

The Government have brought the problems upon themselves, not least through their tremendous cuts in social services, which have been reduced to a shell in many parts of the west midlands. That affects the old, the sick and the needy, and especially one-parent families. In many of the schools in Small Heath, 60 or 70 per cent. of the children come from one-parent families. The social consequences of the Government's policies during the past two or three years, which have laid waste industrial Birmingham and the west midlands, are too grave for any of us to contemplate.

The Minister made a gramophone speech today. It was the same speech that his predecessor made last year and the year before. It was in contradiction of everything that the Tory party said in 1979 during the election campaign. Then the theme was that Labour policies were not working, and that the Tories would put things right.

The work force in Joseph Lucas in 1979 was 20,000-plus. This year it is 13,000, with another 1,200 redundancies to come, together with another 500 redundancies at Girling. The figure for apprenticeships tells its own story. Joseph Lucas used to take on 50 apprentices a year. This year, the figure has been reduced to 25 and next year it will be 13. Yet those represent the skills of our industry on which any growth in Birmingham and the west midlands must depend.

I have heard horrific stories about the British car industry. Ten years ago it produced 1£7 million cars, but it now produces less than 980,000. We no longer have a car manufacturing industry in Birmingham and the west midlands—we have a car assembly industry. That is the heart of the problem. What can be done about it? I shall spell that out. First, there must be a dramatic change in the economic direction of Britain to produce investment in industry and to create jobs. That means an immediate increase in public expenditure in local government and health services. We must use our oil revenue to invest in the future and to create new industries. What nonsense it is for the whole of our oil revenue to be spent on unemployment and social security benefits rather than on investment in the future of British industry.

Secondly, we must spend money on real jobs for youngsters and on apprenticeships. There is hopelessness in our constituencies when youngsters are training on the special schemes but know that that does not mean real jobs. They know that there will be no jobs for them at the end of the day. We must create real jobs in industry.

Thirdly, we must stop the ridiculous sales tax imposed on the British motor industry. It is nonsense to have a 10 per cent. sales tax ex-works, and then to impose 15 per cent. VAT. I am not surprised that the component industry says time and time again that in no other area is there such a self-imposed burden on the products of British industry.

Fourthly, as my hon. Friend the Member for West Bromwich, West (Miss Boothroyd) said, we must demand some harmonisation in the EC's external tariffs. The Government must take immediate action about the flooding of Britain with motor car components from Spain and Japan. The Prime Minister and Ministers talk about it—the Minister did so today, and I am sure that he was sincere. Ministers want to act, but they are not acting. They must act today. Spain has imposed a 57 per cent tax on British imports, yet it directly, or indirectly through Vauxhall or other companies, sends imports to Britain with a tariff of only 9.2 per cent. Have we all gone mad? Should we continue to allow that to happen in the midst of a recession and growing unemployment?

What do the Government intend to do about the Japanese? We constantly send trade delegations to Japan, which return with words of comfort from the Japanese, who must be laughing while they bank the money from their import penetration of western Europe. Italy has more sense; it does not allow any penetration from the Japanese motor market. France allows only 2 per cent. penetration; Belgium, Holland, Ireland and Denmark only 4 per cent.; and Germany 8 per cent. Britain has an import penetration of 11 per cent.

The Government are charged with defending the British economy and the British people from persistent import penetration by the Japanese. They are doing nothing about it. We cannot any longer listen to the honeyed words of the gentlemen in Tokyo. We must take action immediately.

Fifthly, we must control manufactured imports. The volume of manufactured imports to Britain this year has exceeded, for the first time, the volume of British industrial production. That is a recipe for disaster It is also astonishing. Ministers of this Government have presided over that. We should immediately require that a minimum fixed percentage of components in all motor cars that are imported here should be made in Britain. We must play fair with the British components industry, if necessary by using the measures that we are allowed to take under EC provisions.

Mr. Richard Shepherd (Aldridge-Brownhills)

rose—

Mr. Howell

We must protect the British motor car component industry.

Mrs. Renée Short (Wolverhampton, North-East)

Will my right hon. Friend give way?

Mr. Howell

No, I must finish quickly; otherwise I would.

Sixthly, we must develop sensible investment policies. For example, Lucas Aerospace drew to my attention a scheme at Huyton in which the Government provided the cost of buildings and plant and then leased them back to Lucas Aerospace. That is one way to get things moving and to provide the necessary investment.

Seventhly, we need to designate Birmingham and the west midlands as special development areas. I listened to what the Minister said about that. I hope that he does not mind my saying that he was prescribing sticking plasters when we need a blood transfusion. The Government's urban grant and grants from the EC are hopelessly inadequate. We must attract EC regional grants, but we are not doing so. Why cannot Birmingham, which has the fastest growing rate of unemployment in the country, attract regional grant? Why is the Industry Act 1972 proving so deficient for the west midlands? Why is the Science and Technology Act 1965 hopelessly inappropriate to the needs of the west midlands now?

Eighthly, we need massive urban aid and partnership grants. We need infrastructure. As the CBI said, we need green belts. It should be possible to whip out the old sewerage pipes and cellars and provide green field sites for industry in the heart of our blighted industrial areas. We need tremendous house building and house improvement schemes as well as general environmental ones.

Finally, as we must now choose between unemployment at the beginning of the life cycle for school leavers, or earlier retirement for people at the end of that cycle, it would be much more intelligent to provide Government funds so that people who have worked all their lives in industry and want to retire early can do so. There are things which can be done now, which Birmingham wants to be done now and which the west midlands needs. Let the Government get on and do them.

5.13 pm

Mr. John Stokes (Halesowen and Stourbridge)

It is rather a pity that this debate, which is on such a serious subject, should lend itself to people who make what are clearly partly polemical points. I shall try to avoid that.

I have noticed that the motion is not exactly couched in moderate terms. There is not much common sense about it. There is no mention, for instance, of the world slump. Nor is there any mention of the competitiveness, or lack of it, of firms in the west midlands. Nor is there any mention of the need there, which we all agree exists, for some of the higher technologies. The motion is clearly drafted in party political terms. It bears no relation to the true state of affairs in that part of the country.

This subject was debated only a fortnight ago. I have read that debate through again. One naturally wonders what new or helpful ideas can come from us today. It is a fallacy to think that from our deliberations today will come a solution or a wonder remedy. In my experience, the House is short of hon. Members with industrial experience, either as managers or as workers. It must infuriate industrial leaders who face difficult circumstances to hear some people pontificating here when they have no real knowledge of the problems involved. Nor does the House have much influence on the state of the world economy.

We all know that we are now going through the most serious recession since the 1930s. Moreover, we all know that it was caused by the fantastic rise in the price of oil. Despite what defeatists say, the fall in the price of oil may give British industry, including that in the west midlands, just the stimulus it needs—more, perhaps, than anything that any Government can do. Of course, I agree with those hon. Members who have talked about the imbalance of tariffs between ourselves and Spain and the unfairness of the trading customs of many foreign companies.

We in the west midlands are new to slump. Unlike Scotland and the north, we have never really had bad times before. Indeed, when there were bad times, people flocked to the midlands for work. Now the bad times in the midlands are as bad as in Scotland. It is not that people complain. Hon. Members never stop complaining, but I find that my constituents, at whom I marvel, never complain. They do not blame the Government, the Prime Minister or me.

Traditional industry in the midlands was hit by the world slump. It was probably too production-orientated. Marketing and sales were sometimes neglected. Firms made goods and hoped that there would be customers all over the world to buy them. Moreover, basic research and development was not always all that it should have been. Then there was the overmanning and lack of competitiveness in many companies. That has now been largely put right.

In the west midlands, we are far too dependent on traditional metal-bashing and engineering industries. We do not have enough of the higher technologies. We are far behind Scotland, which now has a high proportion of such new high technologies. Moreover, we must think whether industry should cater more for the needs of the leisure and service industries, the needs of which are bound to increase as the working week becomes shorter, people retire earlier and holidays get longer.

One complaint of industry in the west midlands has, and which I wholeheartedly share, is the colossal burden of rates, about which we have heard nothing from the Opposition. We have heard nothing about the awful burden that the West Midlands county council puts on every business in that part of the country. We also have to bear the charges of the nationalised industries, including energy costs. Those charges rise inexorably, although there has, at last, been some remission. Those monolithic corporations, which are not subject to competition, have not slimmed as private industry has done and are still barely aware of the realities of commercial life. The sooner they are taken over by private enterprise the better.

One vital sector which my hon. Friend the Minister mentioned is the need to foster the small business. Quite a lot has been done—all of us are aware of that from our constituencies—but more could be done. In particular, loans from the banks in the second or third year of a new business, when it is just getting it second wind, are still too hard to get and—if my hon. Friend the Minister will listen—too expensive.

Industry in the west midlands looks to the Budget for some encouragement. The most important contribution that the Budget could make is to improve morale. Morale is everything, in peace or war, and morale, I am afraid, is low in the west midlands. We must have confidence and hope from my right hon. and learned Friend the Chancellor of the Exchequer. A reduction in personal taxation will help demand and industry must be ready to satisfy it.

The upturn will come and firms must make the necessary preparations. I was distressed the other day to hear the head of a huge construction business say that already it was short of bricklayers and was not training enough. That must be put right.

My right hon. Friend the Member for Stafford and Stone (Sir H. Fraser), who spoke shortly and so well, referred to the vital importance of interest rates. I realise that that is a world problem more than our problem. However, with inflation reducing and interest rates remaining so high, it is difficult to borrow money, get hold of staff, obtain raw materials, make products and then have a profit at the end. That is a problem which I hope will be dealt with by the Government during the summer.

Industry in the west midlands does not expect or want handouts but it expects parity with the other regions of the United Kingdom. The regions of England are, in their way, quite as important as places in Northern Ireland, Wales and Scotland. Many of us think that the building industry could be busier. One suggestion is tax help for householders who maintain and improve their property or who engage in improvements, for example to save energy. Such a scheme would help builders and reduce the large black economy, which has been with us for years in the west midlands. The black economy operators would have to produce proper bills for householders, who would then claim tax relief on the amounts set out.

Such schemes are only palliatives. I do not believe, despite the speech of the right hon. Member for Birmingham, Small Heath (Mr. Howell), that people in, the west midlands expect vast public works. They ask in their sensible way, "Where is the money coming from?" If there is to be new commercial investment, they equally sensibly ask, "Where are the customers?" It is customers that industry wants, and customers cannot be produced by the Opposition's rhetoric. A new scheme whereby the Government produce a small sum which can then be topped up by a much larger sum by private enterprise is extremely sound. I am glad that Halesowen, for the first time in history, has had some tangible benefit from the Government.

We must not be too depressed. In the west midlands we have the brains, the entrepreneurs, the finest skilled work force in England and the right attitude. In some respects our training may need improving, especially in higher technology, but young men and women in the west midlands want to be trained, want to learn a job and, unlike others in some parts of the world, do not all want to become school teachers, for example.

When the world upturn comes, as it surely will in 1984, we may see a considerable recovery in the west midlands, which is so well placed, geographically and in other ways. Labour Members play a gramophone record of gloom. It never does, either in public or private life, to exaggerate our fears. I have the greatest faith in the Government and so, according to the polls, do an increasingly large number of the electorate. I believe that the Government's sound monetary policies will create the right climate for a proper and sustainable expansion.

Mrs. Renée Short

When?

Mr. Stokes

I also have the greatest faith in the men and women on the shop floor in the west midlands, who understand fully what is happening and the reasons, who will surely respond when the time comes.

5.16 pm

Mr. Andrew Faulds (Warley, East)

We have just heard from the hon. Member for Halesowen and Stourbridge (Mr. Stokes) what I think can charitably be described as a fairly predictable speech. He seemed to argue that his constituents never complain to him about Government policy. There really can be only one reason for that. They know him to be such a devout supporter of this appalling Government that they think it a waste of time to make any representations to him.

Mrs. Renée Short

They probably never see him.

Mr. Faulds

I think that his two colleagues on the Government Front Bench may have read behind those veiled panegyric utterances some warnings about what the hon. Gentleman considers is necessary for the health of the west midlands. I am delighted to have the hon. Gentleman's affirmation in that rather wan smile that wafted across the Chamber.

We have now had in the lifetime of this Government four debates on the industrial decline of the west midlands and the consequent surge in unemployment. At each of those four debates loyal Conservative Back Benchers—we have had them again this afternoon—have tried to excuse the Government by claiming that because of the concentration of the motor car industry and the component industry that decline in the West Midlands was inevitable, that Labour was as much to blame as the Conservative Government, and that, of course the world recession was the overriding reason behind the whole disastrous collapse.

Well those are convenient excuses for what has been happening, but did any of those Conservative Members with west midland seats, who are soon to be an extinct species—[Interruption.] We hear sickly laughter from the Conservative Benches, but we shall see at the next election.

Mr. J. F. Pawsey (Rugby)

Yes, wait and see.

Mr. Faulds

Did any of them warn their electorates that the Conservative Government would treble unemployment in our area? Did they warn that there were not factory walls long enough anywhere in the west midlands to accommodate the thousands upon thousands of unemployed in a Saatchi and Saatchi-type advertisement, riot of hired performers, but of real live unemployed? Do those Tory Members of Parliament not think now in all honesty that they were guilty of some misrepresentation in their unkept promises to mop up the dole queues? Did they warn that the Government's policies would actually close down factory after factory in the thriving west midlands?

In these four years of Conservative Government policies the west midlands—the great heartland of Britain's industrial activity—has suffered a 30 per cent. loss of its manufacturing capacity. Unemployment has trebled. No Conservative manifesto that I read spelt out those promises. At each of the four previous west midlands unemployment debates over the past four years, Ministers—this brace of sitting ducks is only the latest in a series, kept in perpetual motion so that he cannot be too easily peppered—have presented the Government's case. Did any of the Ministers who were put up at the Dispatch Box tell us the actual facts of what was happening in the west midlands? They made excuses. They said that things would soon be looking up and that the worst was about over. Well, we shall see.

The Cambridge econometric January forecast presents a much more pessimistic forecast than its October one. If the recent trends continue and the west midlands share of total United Kingdom unemployment continues to rise, unemployment levels of 18.6 per cent. by the end of this year and 28.6 per cent. by 1990 seem sadly inevitable. Can the Minister assure us that those figures will not ensue from present policies? He has no eagerness to leap up to deny them. Where is the promised upturn? The latest regional chamber of commerce survey does not augur well. More firms think that their turnover will worsen. Investment in plant and machinery has been revised downwards. Compared with the 1981 survey, fewer firms were reporting increases in United Kingdom and export orders and more were reporting decreases. There were more cash flow problems.

All those considerations can point only one way. They mean a further rundown in the labour force throughout the west midlands. When I moved into my constituency in 1966 the unemployment rate was 1.6 per cent. In terms of my constituency, the contraction and cessation of industrial activity has been catastrophic.

In previous debates on the west midlands situation I have itemised the litany of destruction caused by the Government's policies.

I do not want to weary the House, but in all fairness to my constituents I have to make the following comments. The closures in Smethwick have included all nationally and internationally known companies—Midland Motor Cylinders, Dartmouth Manufacturing, Smethwick Drop Forging, Chance Brothers, Chatwin's Foundry and others. Massive redundancies have been forced upon many companies in the area. Some companies have enforced those redundancies more willingly than others. Some have tried to keep their work forces as best they could but they have been driven by the hard economic circumstances to dump people whom they wanted to keep. There have been literally thousands of redundancies at the Co-op Bakery, Mansill Booth, Avery's, GKN, Birmid Qualcast, Mitchell and Butler, T.I. Sturney and so on.

Redundancy payments and the relief of the dole queue ease the situation to a small degree, but no one who has witnessed this deprivation of work among skilled workers, and indeed among unskilled workers, can fail to have sensed the affront to human dignity or the denial of personal fulfilment that these people suffer. Most of us who have constituency problems know only too well of the great increase in family problems that ensues.

Suffering on this scale was not inevitable. It has not been an act of God. It is the result of a series of acts by this Government. The suffering among the ethnic minorities—there are large number of these people in the west midlands—is of course directly increased by the sad and quite inexcusable extent to which covert discrimination is practised. The figures are available.

The unemployment percentage rates in the Dudley-Sandwell travel-to-work area, which of course includes Smethwick, have all but quadrupled from 4.4 per cent. in October 1978 to 16.6 per cent. in October 1982. In the area covered by the DHSS office in Smethwick, which does a marvellous job coping with the problem in which it is immersed, the number of unemployed people receiving supplementary benefit has risen from 1,228 in May 1979—already too high—to 8,730 in February 1983, and the total number claiming supplementary benefit in that period has risen from 7,980 to 20,115.

In all humanity, it cannot go on like this. The Government must alleviate some of the difficulties. What needs doing? It is all very well all of us complaining, but some of us have to make constructive suggestions. I think that one or two have been made from both sides of the House. A number of colleagues on both sides of the House have argued for assisted area designation for the region. Surely all the relevant criteria apply here. Assisted area designation should be introduced.

Although I am not happy about the prospect of import controls and have always argued against them, I am now persuaded that they should be applied very selectively where inequitable tariffs exist—certainly in the Spanish case. But I remain perturbed—perhaps my colleagues will part company from me here—at the prospect of import controls which would adversely affect the Third world and its developing patterns of trade.

There is not nearly enough Government subvention for essential innovation in advanced technologies, because it is clear that that drive into the future, with its needs, is not going to come from local or multinational industry here in Britain.

There is a very strong case for reconsidering energy costs for industry, in view of the quadrupling of those costs over the past decade.

We all receive regular representations about the impact of rates on industrial activity. It may be marginal, but perhaps we should consider the need for industrial derating. It is a nonsense that the problem of void rating has not been tackled. If there is an upturn, an awful lot of roofs will have to be replaced in the west midlands. The small engineering firms investment scheme should have much more funding.

All or some of those measures might help a little, but primarily we need demand in the economy to get that great industrial heart of Britain beating again. The Government can create that necessary change in the economic climate by reflating—however touchy a word that is to them, and however much they dislike it—but there are no signs that they are prepared to do so. The only real hope for Britain is that the electorate will decide within this year that they have had enough of Thatcherism and that they will return a Labour Government that can, and will, get this country under way again.

5.34 pm

Mr. David Knox (Leek)

The point that has come out most strongly in most of the speeches so far in the debate is that unemployment is the most serious issue in the west midlands at present. That is certainly the case in my constituency.

I suppose that it is not surprising that unemployment has risen more sharply in the west midlands than in other regions in the past decade. The west midlands is, after all, the manufacturing centre of this country and manufacturing industry has been particularly badly affected by depressed world markets, by currency fluctuations and by domestic Government policies since 1974. Indeed it is significant that manufacturing output peaked in early 1974 just at the time when the last Labour Government took office. Since then it has declined by almost a quarter. It is an inevitable consequence of this decline in manufacturing output that unemployment in the west midlands has risen from well below the national average to well above it. It has risen from just over 46,000 in February 1974 to about 350,000 today, or from 2 per cent. in February 1974 to about 16 per cent. today.

The Labour party would do well to remember that it has been in government for rather more than half the time since 1974, so it shares the responsibility for this severe decline in manufacturing output and for the steep rise in unemployment during the past nine years. Obviously, I am particularly concerned about unemployment in my constituency which, for the 30 years after the war, enjoyed an exceptionally low rate of unemployment. Early in 1974 when the Labour Government took office, 650 people were out of work in my constituency. Now, 5,500 people are out of work in the Leek parliamentary constituency.

Despite this steep rise in unemployment, my constituency receives no special help, apart from assistance which the Development Commission has provided for the town of Leek and the moorlands area surrounding it. We are grateful for this help, which is making a real contribution to helping small businesses. But, given the problem, it is not very much.

Unemployment in Leek is accentuated by the fact that it borders Stoke-on-Trent. Many of my constituents are—or before they lost their jobs were—commuters to that city. We are told in the Leek constituency that we cannot have any special help because a good deal of the constituency is in the Stoke-on-Trent travel-to-work area, and that the unemployment rate in Stoke-on-Trent is just about the national average. However, that argument does not take into account the fact that my constituents are disadvantaged in getting new jobs in Stoke-on-Trent compared to those living in the city.

When my constituents seek employment in Stoke, in competition with residents of Stoke, employers inevitably tend to take the person who lives nearer the job rather than someone who lives five or 10 miles away, particularly given the winter weather in north Staffordshire. My constituents therefore find it more difficult to find new jobs than those living nearer the jobs and, consequently, unemployment tends to be higher in my constituency than in other parts of the Stoke-on-Trent travel-to-work area. I ask my hon. Friend the Under-Secretary of State to consider this matter again. It is a problem which faces not only my constituents but constituents in other parts of the country bordering large cities.

We are told that the present high level of unemployment is a consequence of excessive wage claims, restrictive practices, overmanning, bad labour relations, managerial incompetence and lack of investment. Industries in my constituency cover a wide range of manufacturing activity and the work force has a wide range of skills. The people are hard-working, but not highly paid. Labour relations have always been good and there have been few strikes. Firms have invested in new plant and equipment. My constituency has a good labour force that is engaged in efficient factories and mills. Management and unions are puzzled by the fact that, having done all the right things, they have not avoided the consequences of different behaviour. High unemployment has afflicted the area despite the exemplary behaviour of both management and workers.

The steep rise in unemployment during the past nine years must provide a strong case for special help. But, much though we would appreciate such help, it is important to recognise that the best way to help Leek and the west midlands is to revive the national economy. Leek and the west midlands were prosperous and enjoyed full employment when Britain was prosperous and enjoyed full employment. But a return to prosperity will not happen automatically. The Government must act to raise aggregate demand for goods and services and, in turn, the demand for people to produce those extra goods and services. There are three ways in which this can be done.

First, the Government should cut industrial costs by abolishing the national insurance surcharge and by reducing energy prices to industry. Secondly, they should undertake worthwhile public sector investment projects. Thirdly, they should cut direct and indirect taxes and so leave people with more money to spend, which will create demand for goods and services, and so create demand for people to produce those goods and services.

The effect of those proposals would be to increase employment, which is what all hon. Members wish. We wish to bring the unemployed back into employment. Under-utilised capital equipment should be more fully used instead of standing idle or partially idle as it is now. If there was high demand, there would be more wealth for all of us to share. Unemployment in the west midlands is a waste of resources. It is socially damaging and divisive. Its reduction should be the Government's first priority.

5.42 pm

Dr. John Gilbert (Dudley, East)

My hon. Friends have spoken eloquently about the problems of our region, Birmingham, the black country and their constituencies. They will forgive me if, on this occasion without apology, I speak about the problems of my constituency and borough.

Many hon. Members have quoted statistics about the decay of the west midlands economy. We have had the highest increase in unemployment of any region during the past few years. We have the worst long-term unemployment in the country, and we have had the greatest contraction in our employment base. Within that gruesome record, the consequences to Dudley have been the most appalling. Not only is it a microcosm of the west midlands, but what has happened in the region has happened to its greatest degree in Dudley. Unemployment in the region has increased by between 200 and 300 per cent. since the Government came to power; in my constituency it has increased by more than 400 per cent. Juvenile unemployment used to be the second lowest in the country, but now it is among the highest. The west midlands forum of county councils said in August last year that in the Dudley-Sandwell travel-to-work area the increase in unemployment was greater than anywhere in the West Midlands.

However, even that understates the problems of Dudley. Many in the northern end of the borough, for example, in Coseley and Sedgley, register for unemployment in Wolverhampton, so their figures do not appear in the totals for Dudley and Sandwell. Most families in Dudley have members or close friends who have been thrown pitilessly out of work. No sector of our economy has been spared. The list includes large firms, small firms, men in the prime of their careers, young men wishing to start work, women workers, part-time workers, private sector workers and local authority workers. Wherever one looks, there is terrible devastation. Foundry men, school dinner ladies, lorry drivers, shop workers and bakers—the list is endless—are losing their jobs.

The high unemployment is no accident and has little to do with the world recession. We all know that there is a world recession, but where did it start? It started in Britain as a result of this Government's policies. It is worse here than anywhere else in the industrialised world and it is becoming still worse. We have been told that oil prices should be blamed. I cannot imagine how oil prices can be blamed for a recession in the oil-richest country in Europe.

The hon. Member for Halesowen and Stourbridge (Mr. Stokes), who I regret is not in the Chamber—

Mr. Stokes

I am here.

Dr. Gilbert

I beg the hon. Gentleman's pardon. He is a good friend of mine, although we differ politically. He talked about rates, but we have been suffering from a Tory council in Dudley for goodness knows how many years, with some of the lowest rates in the country, and we still have unemployment. Rates have nothing to do with it. Yet another reason adduced by Conservative Members is that unemployment is our fault. It has come upon us in retribution because our workers are lazy, mutinous and hell-bent on the destruction of their jobs. That theme is taken up from time to time by the Prime Minister when she believes that she can get away with it in front of a sycophantic audience. It is the most preposterous allegation ever made by the enemies of the trade unions on the Conservative Benches.

I could echo almost word for word the peroration of the hon. Member for Leek (Mr. Knox). He told us that his constituency, like mine, has a loyal and hard-working work force. In the 13 years that I have represented Dudley we have had no major strikes. Firm after firm, and shop steward after shop steward, could tell us about the good industrial relations there. One can ask the chamber of commerce, the trade council, large firms or small firms—the answer is always the same. Yet scores of efficient firms have been laid low and thousands of diligent and loyal workers have been thrown into idleness.

We need help in Dudley. The enterprise zone is no solution. I hope that my hon. Friends do not believe that Dudley has purloined jobs from their constituencies as a result of achieving enterprise zone status. If anything, it is an albatross round our necks. Few new jobs are being created, as I have always prophesied. Most of the jobs that have been created are in steel stockholding and not in productive industry. The firms threatened are not other firms in the region but small firms immediately outside the boundaries of the zone.

Above all, Dudley needs a massive infusion of public expenditure to keep men in jobs instead of paying them to be idle. Conservative Members ask, "Where will the money come from?" The answer could not be simpler, and anyone who has studied fifth form economics knows it. There will be a drastic reversal in the torrent of unemployment pay and supplementary benefits into a beneficial flow of income tax payments from those happy to be back at work. Everyone knows that the money will come from there.

We desperately need such public expenditure. I echo many of the remarks of my hon. Friend the Member for West Bromwich, West (Miss Boothroyd). We need new housing. The present housing stock must be repaired so that many thousands of families can have decent living accommodation. We desperately need more medical facilities and a better sewerage system. We need a better flood control system, because parts of my constituency are flooded regularly each winter and it is high time that something was done about that Victorian relic. We need a new transport system—a black country road route—from the enterprise zone, if it is to produce jobs, giving access from my part of the country to the national motorway system. As my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell) said, we need a serious job training programme, not just for apprentices as he suggested, but for 30, 40 and 50-year-olds. Men should not feel that they have been thrown on the scrap heap at the age of 50, although we should be able to offer them earlier retirement if they want it.

Our region has been a region of immigration since the 1930s. The phrase "Get on your bike" was known to us long before the Secretary of State for Employment used it. In the 1930s, people in this country got on their bikes to come to the west midlands to find work. They do so no longer. Instead, the people of Dudley and the other proud boroughs of the black country now turn desperately in every direction to seek work. They have nowhere to go. They have little hope. They pray urgently for the opportunity to bring about the end of a Government who have calmly and indifferently watched such things come to pass.

5.50 pm

Mrs. Jill Knight (Birmingham, Edgbaston)

As I listen to this debate I feel more and more sorry for the Opposition. My heart is beginning to bleed for their predicament. One can see how the situation has come about. I wish that the hon. Member for Warley, East (Mr. Faulds) would read the polls as carefully as he reads his lines. If he did, he would know that there is no question of a Labour victory at the next general election. One sees exactly how Opposition minds are working: "Gracious, we are in terrible trouble. The polls are down. We may lose Bermondsey. What shall we do? Of course, let's have another debate on unemployment. We had a debate on that subject two weeks ago, but that does not matter." It does not matter that the Opposition were beaten into the ground two weeks ago, and that they will be beaten again today.

One is very sorry to see the charade that is being played out today. I cannot help feeling that it is a little like Tommy Cooper trying to saw a lady in half. The trick is supposed to end with the lady, whole and unscarred, stepping from the cabinet. However, if Tommy Cooper did it, he would either slice her clean through the abdomen, or cut off his own thumb. One can see that happening to the Opposition.

People are not nearly as stupid as Labour Members think they are. We have been told, not once but several times, in the sound and fury that has been generated on the Opposition Benches this afternoon—as Shakespeare said, "signifying nothing"—that this Government are responsible for unemployment in the west midlands. When they say that to people in their constituencies, the answer will come: "Wait a moment, if the Conservatives are responsible for unemployment in the west midlands, who is responsible for it in America or Australia or Canada?" [HON. MEMBERS: "Other Conservatives"'] Not in Canada. In France—a mere stone's throw away, and no doubt a Socialist paradise—Mr. Mitterrand has engineered exactly the same unemployment. There are other countries, too, such as Italy. There is also Germany. [Interruption.] If hon. Members were to listen, they might learn something. If Germany had not sent out all her itinerant immigrant workers, her unemployment figures would be just as serious as ours.

Some hon. Members, particularly the right hon. Member for Birmingham, Small Heath (Mr. Howell), mentioned import penetration. I should have liked to buy a totally British car, but the only British car that met my requirements had a Honda engine. Why is a Honda engine in a British Leyland car? The answer, presumably, is that a decision has been made by those responsible in BL that we cannot produce in this country an engine suitable for that car.

Mr. Denis Howell

Why not buy a Rover?

Mrs. Knight

I cannot afford one.

My hon. Friend the Under-Secretary listed all the things that had been done for industry in the west midlands. He spoke of the .1,230 million that this Government made available to British Leyland because they knew that hundreds of small firms in the west midlands were utterly dependent on orders from British Leyland. That act alone will have saved many jobs in the west midlands.

My hon. Friend gave a long list of what has been done. I happen to believe that it is important that so much has been done to help small businesses to start. Many people have jobs because of that help. I sometimes wonder why Labour Members do not try to master what has already been done to help the young unemployed, about whom most of us are extremely worried. Do the Opposition know nothing of the scheme, recently announced, whereby all school leavers will either go to a job or to training? Does that mean nothing? I should have thought that it was worth mentioning.

The help for new technology in our area is crucial. Assistance for projects introducing the new technologies, which are vital if we are to be competitive, is available from the research stage, through the design stage, development and launching of a new commercial project. That is immensely important. I could go on listing the ways in which help has been given, but I shall not do so. It would be infinitely better if everyone tried to help to overcome the serious situation that exists.

The most recent community programme—one of many—interested me considerably. Its aim was to make available 130,000 jobs—temporary jobs admittedly, but jobs none the less—for people who have been out of work for some time. The idea is to produce projects that will help the community as a whole. In common with many of my hon. Friends, I looked at the scheme with great care. I went through the suggestions made, and I thought that, for the Birmingham area, the suggestion for the clearance of canals and footpaths would be of immense value. In fact, Birmingham has more miles of canals than Venice, and many of us are interested in a project of that nature. However, when I wrote to the chief executive of the council, I was told that we could not do that because the unions objected. What a pity. Why should that happen, when this scheme would help some people who had been unemployed for a long time?

It is possible that the west midlands depends more on manufacturing than any other region. The figures show that 40 per cent. of the labour force is in manufacturing, while the national average is only 28 per cent. That is why we have suffered while other parts of Britain have benefited from the recent consumer boom. Even in the west midlands there was an interesting consumer boom in small shops in the high streets, and more money was spent overall than ever before— £900 million more. But our area needs manufacturing industries, and there is much spare capacity in manufacturing industry in the west midlands.

I was interested to hear the hon. Member for West Bromwich, West (Miss Boothroyd) talk about the CBI and regional help, but surely the CBI, in common with other business groupings in the west midlands, is not asking for assisted area status. The CBI told me that, and I have no doubt that it has told Labour Members the same thing. The CBI says clearly—how I agree with it—that jobs can only be created by private enterprise. [Interruption.] I cannot believe that the CBI will tell the right hon. Member for Small Heath one thing and me another. Perhaps the right hon. Gentleman and I should put our heads together afterwards. It may help if I read a letter from the CBI. It says: When this subject was debated on 7 February several. MPs argued that the region should be given some form of assisted area status. It might be helpful, therefore, to know the reasons why the regional CBI, after some debate, came down against this proposal.

Mr. Denis Howell

rose—

Mrs. Knight

If the right hon. Gentleman has received a letter which says something completely different, I shall give way.

Mr. Denis Howell

My hon. Friends the Members for Coventry, North-East (Mr. Park), Wolverhampton, North-East (Mrs. Short) and others, along with myself, had a two-hour discussion with the CBI. It is completely divided. The younger members present at the meeting wanted assisted area status in order to attract EC grants. It is true that nationally the CBI is against it, but in the west midlands it is divided, and the more intelligent want it.

Mrs. Knight

That will teach me to give way to the right hon. Gentleman. Nothing that he said made any difference at all to what I have said because he has acknowledged that the CBI has come down against the idea which is what I was trying to tell the House.

There are three vital points. First, business costs must be reduced and rates comes into that. The right hon. Member for Dudley, East (Dr. Gilbert) must understand that rates have a great deal to do with industries' costs. We must reduce or abolish the national insurance surcharge and the cost of energy. Secondly, we must reduce unfair competition, a point which has been made and which I only wish to support. Finally, we must increase capital investment in motorways. I regret that we have heard nothing lately about the channel tunnel, which would help the west midlands greatly.

There is no magic solution to the problems, but let us at least acknowledge that there are certain needs that must be met. However, in the final analysis it is the west midlands industries, with their own expertise and application, which will successfully surmount all the problems.

6.2 pm

Mr. John Forrester (Stoke-on-Trent, North)

The hon. Member for Birmingham, Edgbaston (Mrs. Knight) chided Labour Members for choosing this subject for debate and questioned why. The answer is that unemployment is the most important issue in Britain today. It refuses to go away despite the fact that the Government may wish it to do so. As one famous comedian said—whether it was Tommy Cooper, Eric Morecambe or Ernie Wise I do not know—the Government have to get out of this if they can.

My right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) and the hon. Member for Leek (Mr. Knox), referring to north Staffordshire, the Stoke travel-to-work area, Newcastle-under-Lyme and Leek, pointed out that in 1979 unemployment was about 4 per cent., which was below the national average, and now it is about 14 per cent., which is slightly above the national average. I appreciate that in the west midlands the rate is over 16.5 per cent., but what is frightening to people in the area is the speed and extent of unemployment in recent years. A recently prosperous and industrial area has now become one of decay and decline with a fear for the future.

Many fear that the official statistics do not tell the whole story. For instance, the pottery industry employs many women who do not pay a full stamp and do not register as unemployed. There are those whose benefit has expired, those on temporary job creation schemes and those who have just despaired of ever finding a job again.

In April 1981 the official figure for those registered as unemployed was 11.3 per cent. in the month that the census figures were taken, and 11.9 per cent. said that they were registering or looking for employment. That was a difference of 735 people against the official figures. Since the Government cooked the way in which the statistics are now presented, we reckon that 1,600 people in the Stoke travel-to-work area are not officially declared as unemployed. That amounts to 30,000 miserable human beings who wonder why their world has fallen apart.

My right hon. Friend the Member for Stoke-on-Trent, South referred to the fact that the Michelin tyre company has already declared that over 1,000 people will be made redundant in the next two years—another burden on an already hard—pressed area. The Government tell us that after this period of history has passed we shall all be slimmer and fitter than we were before. We fear that British manufacturing industry is really suffering from anorexia nervosa, that it is fading away, and that when the great revival comes—it always seems to be around the next corner but one—there will be insufficient industry and skilled workers to take us towards that promised land.

One side effect of youngsters' difficulty in finding employment in Stoke-on-Trent is that over the past three years another 3 per cent. have decided to stay on at school or to take further education courses. The Department of Education and Science might take note of that when it asks the county council to cut its education budget. We should have incentives other than a depression to encourage young people to stay on at school, which is a desirable objective anyway.

Many people say that there is no point in training for specific jobs if there is no employment for them. However, I suggest that training opportunities should be increased rather than reduced. Anybody who is skilled by hand or brain will be more likely to be retrainable for some other job in future than someone who is unskilled. Britain cannot afford a whole generation of unskilled people with no training at all if we are to face the future with any confidence.

The Government often point to the fall in inflation. That is the great panacea. They never remind us that they were responsible for fuelling inflation when they took office in 1979. What a different story it would have been if the nation had followed the Labour Government's pleas for moderation, and if they had also followed sensible policies. Perhaps we would not then be in our present state.

In addition, we have had high interest rates, a high pound—fortunately that is falling now—and the national insurance surcharge. But, worst of all for the Potteries, the Government have put a tax on gas. For an industry which is a high user of that fuel, that was a crippling imposition. Apart from reducing the national insurance surcharge and bringing down interest rates, the Government should have an energy policy to help British industry.

The result of Government policies is that many firms in north Staffordshire have gone out of business, despite the fact that for over 100 years they have been able to weather all the depressions that have come along. Indeed, it looks as though they have closed their gates for good. There is a fear that a fundamental change is taking place in north Staffordshire and in the west midlands generally—that the old traditional industries will never return to employing the same number of people as they employed in the past. Since the war, Stoke has seen a dramatic drop in the number of people employed in the mining industry, and there has been a steady decline in the number of people employed in the pottery industry. Despite what the Minister said, the Government should look again at their regional policies and consider whether assistance is being given to the right people in the right places.

I was interested to hear what was said about money from the EC, but I have been waiting a long time to see any of that money coming into Stoke-on-Trent. I hope that the Minister's statement will give us some hope for the future, but we shall believe it when we see it. We must not allow the west midlands and north Staffordshire to become deserts of the deindustrialisation revolution that appears to be taking place at the moment.

Successive Governments have positively discouraged other industries from coming to places, such as north Staffordshire, where there were prosperous industries, as the pottery industry once was, so that those other industries would not take labour from existing industry. If the areas satisfied the Government of the day at that time, the Government now have a responsibility to assist, financially or otherwise, with diversification of industry.

The pottery industry has all the virtues that the Government say are ideal to take the United Kingdom out of the recession. It has hard working operatives, high productivity, and moderation in wage demands. It has not had a national strike this century, yet it is struggling for existence. Why? If the pottery industry cannot survive in this position, what hope can the Government give us? When the rest of the country has all the virtues of the pottery industry, the recession will be well and truly over.

The pottery industry in the west midlands must not perish. If the Government cannot alter the position, they must make a way for a Government who can.

The Government must take action on the problem of cheap subsidised foreign imports and imitations. The Government must not stand idly by. Their friends in the CBI and those in the trade union movement are pressing them for action. Industries in this country—certainly the pottery industry—can and must live with fair competition, but they cannot compete with dumping and dubious practices. If dumping and dubious practices come from the European Community, that is all the more reason for the Government to take immediate action. The Government have the power to create real jobs and to put people to work on socially useful assets for the future. I hope the Chancellor of the Exchequer will seize that opportunity next month.

The Government may take satisfaction from the national opinion polls, but they cannot take any comfort from the fact that there are now two nations—the midlands and the north versus the south. Hon. Members must ask themselves how long a nation of this size can survive such a division within its society.

Neither north Staffordshire nor the west midlands want charity. We have a long tradition of hard work, moderation, skill, dedication, and pride in the products that we manufacture. We want the Government to give this area the opportunity to use those gifts so that we can continue to make our contribution to society.

6.14 pm

Mr. Ivan Lawrence (Burton)

It is a pleasure to follow my county colleague, the hon. Member for Stoke-on-Trent, North (Mr. Forrester), although I have a different tale to tell.

No one in Britain can pretend that unemployment in the west midlands is other than bad. That is beyond dispute. Unemployment is especially bad in this region for a variety of reasons, on some of which we can all agree, such as the recession in the car industry following the rise in oil prices. Naturally, the Opposition are bursting every sinew to blame the Government for everything. Do they imagine that the people do not see what they are up to? The more blame they heap on the Government the less blame they hope they will reap for themselves after years of restrictive practices which have been encouraged and given the force of law by Labour Governments. Now they have a vested interest in gloom. They believe that if they continue blaming the Government long enough and loud enough people will vote Labour at the next election.

Mr. Snape

We shall see.

Mr. Lawrence

What a hope! With such a massive lead in the public opinion polls, people have shown a marked resistance to being taken in. Since this series of debates on unemployment, the national opinion polls have been giving the Government an even greater lead. Unhappily for the west midlands, the more gloom and despondency that the Opposition spread the worse the situation gets. "If everything is so rotten in the west midlands," potential investors will say, "then that is the last place we wish to go to." The slower the recovery will be and the longer will be the dole queues. The position is bad, but there is no point in making it worse. It would get better if we highlighted the good points and not the bad points.

So I will try to offset some of the miseries. I will not spend time on the lengthening catalogue of useful actions that the Government have taken, such as the reduction in the rate of inflation from 22 to 5 per cent. It is an undoubted fact that those firms still in existence are better able to meet competition because of Government policies over the past three years than they would have been, I will cheer everyone up a little by talking about Burton-on-Trent and the constituency of Burton.

We have bad unemployment, but it is better than nearly everywhere else in the west midlands. While the west midlands has 16 per cent. and the national average is 13.5 per cent. Burton has 9 per cent., which is 7 per cent. better than its region. Why is it so much better, despite many of the same problems that everyone else is facing'?

Mr. Terry Davis (Birmingham, Stechford)

Look at what happened to the Birmingham breweries.

Mr. Lawrence

That is part of it. If I outline six reasons it may give helpful pointers to other areas in the future.

The first reason is the diversity of industries. We have brewing, engineering, tyres, plastics, agricultural machinery, iron foundries, food, construction, glass, agriculture and service industries. Perhaps none of that will help other towns and cities immediately, but there may be a lesson for us all to learn. That lesson is diversity. If we diversify businesses and spread them throughout our towns and cities, the large and dying industries will be replaced by a diversity of activities which will be less disastrously affected by future economic downturns.

Secondly, Burton has good industrial relations. There may be a moral in the relatively low proportion of closed shop trade unionisation in Burton. Nevertheless, the wages earned are among the highest. Even where the unions are strong, a good relationship tends to exist between employers and work force. The main area of conflict is often between the trade unions' paid officials and their members, who get very angry at being kicked around in breach of democratic procedures and suffer the infringement of their reasonable civil liberties. The number of strikes and disruptions in Burton is very low. Nothing attracts support in lean times as much as a dependable work force. One industry that I am trying to attract to Burton from abroad is interested in that factor above all others.

Thirdly, Burton has the advantage that management not only values good relationships with its work force, encouraged by an open door policy to the manager's office and profit sharing, but is prepared to get off its backside and sell in the world markets and to compete energetically. The factories that are weathering the world economic storm are all fighting in the world for business. They are firms such as Adams, the biscuit makers, setting up its stall for the first time in the United States of America, Robert Mortons, the brewery engineering firm, exporting an entire brewery to the United States of America and whose brewing industry support has secured five major contracts, one of which is in Canada, Everards, the brewers, who are setting up with Morton equipment to produce "Penguin Bitter" in the Falkland islands, JCB, the excavator company, introducing a complete new range of products at the height of the recession and improving its export potential, and the small workers co-operatives in the glass industry in Tutbury resurrected from the ashes of a larger closed factory.

There is a refusal in Burton construction companies to accept defeat and their order books are beginning to revive. Companies like Robirch, in the food industry, are beginning to expand their operations. This is management at its most dynamic. It is an example to everyone.

Fourthly, there is active encouragement for businesses from the East Staffordshire district council. It has consistently, under Conservative control, held its rates below the level of its neighbours, and this year hopes to reduce the rates. It is a local authority that has made sites available for small businesses with little or no grant help from the Government. It has negotiated construction contracts with local developers that are an example of cooperation working to everyone's benefit. The key to the district council's activities has been the increased capital investment while the current account has been painfully brought under control.

Fifthly, there is a very active chamber of commerce and industry in Burton, which works ceaselessly to advise members on how best to brave the chill winds, and to plan constructively for the future and to help with mutual assistance.

Finally, the farming industry's output and efficiency—both locally in Burton and nationally—are second to none.

Any Member of Parliament would be proud of this industrial area. I could go on listing the achievements of Burton-upon-Trent and the district. There is optimism in Burton, and its Member of Parliament refuses to talk down that optimism and achievement. The world recession will come to an end, and when it does Burton companies will be found to be competing successfully in the world. So the message from Burton industry to the Government is clear. It is, "Keep it up. Though your medicine is sometimes painful, your policies are right. For goodness sake stick to them, though be careful what you do to us in the Budget." And the message that Burton sends to the people of Britain is, "For goodness sake keep drinking our beer. It is the best there is."

6.20 pm

Mr. John Spellar (Birmingham, Northfield)

The hon. Member for Birmingham, Edgbaston (Mrs. Knight) said that the Opposition Benches had an air of frustration. They certainly do because we believe that, if there is a further period of Conservative Government, there will be very little industry left in the west midlands. I refer the hon. Lady to the reply that the Minister of State, Department of Employment gave on Friday about unemployment in the area and about the Northfield jobcentre. In May 1979, when the Conservative party came to office, there were 2,701 unemployed people registered at the Northfield jobcentre. In January 1983, the new, revised, "sanitised for your protection" figure was 10,079. That is the difference. It is not—as the hon. Member for Leek (Mr. Knox) said—that the trend is inevitable, whatever the Government. Under this Government, there has been a dramatic increase in unemployment.

In the Birmingham travel-to-work area there has been an increase in the number of unemployed from 40,000 in May 1979 to 113,000 in May 1982. In the vehicle industry, the figures are even worse. In May 1979, 2,521 people were unemployed. In May 1982 that figure had risen to 11,717. Heaven knows what the figure is now. According to the redundancy notices issued through the Department of Employment during the past year for the Austin Rover Longbridge plant, the figures are 1,500, 1,000, 600 and, for last year, 3,100. That is just one of the car plants in the Birmingham area.

Birmingham and the west midlands now have the worst unemployment to vacancy ratio in Great Britain. In the United Kingdom, only Northern Ireland's ratio is worse. I suppose that it is fairly easy to understand the rather sanguine attitude of the Under-Secretaries of State. One of them represents a constituency in East Anglia which has the second best unemployment to vacancy ratio. The constituency of the Under-Secretary of State for Industry, the hon. Member for Norfolk, South (Mr. MacGregor), was No. 464 in the unemployment league table. The constituency of the Under-Secretary of State for Employment, the hon. Member for Eye (Mr. Gummer), is No. 517 in the unemployment league table. Perhaps their consciences are a little easier about what is happening than the consciences of those who represent constituencies that are among the top 100 or 150. The situation is rapidly becoming worse.

The figures that I have given are reflected in the Longbridge plant in my constituency. In 1979, there were 19,000 manual workers, but that figure is now down to 10,000, and the figures are becoming worse. In the time available, I shall concentrate on the car industry, in particular BL, because of its major impact on my constituency and because its fate and that of the car industry is inextricably bound with the industries that have been mentioned tonight and with west midlands constituencies. Many of the firms mentioned depend heavily on BL. Therefore, we need to know the Government's and the management's intentions for BL. In some ways, we can only speculate, because the Government have built a wall of silence round themselves on the question of BL.

In the House a few weeks ago both the hon. Member for Bromsgrove and Redditch (Mr. Miller) and I asked the Minister when he would publish the BL corporate plan. In a written question on Friday I repeated that question. The only answer that we receive is that the Minister will be presenting it some time. Why is he delaying? Why is there a gap in the Government's expenditure estimates against British Leyland? Why is there no figure for that? Is it because concerted negotiations are going on and because the Government are putting pressure on BL to take decisions that may be detrimental to the company? Are the Government putting pressure on BL? Are they saying that they will not give the company money in future, or even money already accounted for, unless it sells off Jaguar, Land Rover and special products, and breaks up the corporation?

Are the Government saying that BL cannot have the finance unless it accepts a financial straitjacket that will make it artificially profitable? I say "artificially" because, with one or two Japanese exceptions, all the world's car manufacturers are making heavy losses. They are not generating enough internal financing to invest for the future. All the major corporations admit that there is an important world problem. Are the Government trying to force BL into short-term financial profitability so that the balance sheet looks right and the sharks in the City will feel able to invest? Is that the way in which the Government are negotiating with BL?

What is the Government's view about the manufacture of components? Do they see BL merely as an assembler of components, which are possibly British or Possibly —a fear raised by hon. Members on both sides—foreign imports? The figure quoted is possibly up to 20 or 30 per cent. Hon Members should consider the impact of that on the west midlands. Is it the Government's policy that BL should be mainly an assembler and that engine and gearbox manufacture, as well as the manufacture of other components, should stop, with the major threat that that poses in particular to the Longbridge plant? The Longbridge plant is not only an assembly plant, but a manufacturing plant. What negotiations and discussions have the Government and BL held with other manufacturers, particularly Honda? What is the nature of the deal? What will it mean for the components industry? The workers in British Leyland and those in the components industry have a right to know.

What will the company and the Government do about the introduction of vitally needed new models, particularly in relation to the Longbridge complex? I do not want to set up an artificial dispute between Longbridge and Cowley, but the LM 10 and the LM 11 are going to Cowley. BL has announced that the XX will go to Cowley. What is the Government's views about the future of the Longbridge complex? Will they tell us before the general election, or are they keeping quiet until afterwards?

Will the Government lift the veil from that hidden figure in the expenditure survey and say what they will put in in terms of vitally needed investment for the future of BL? Do they want BL run down to a small-scale assembler, with possibly a luxury division that is soon to be sold off, or do they want BL to stay in the major league, possibly through a merger? We need clear answers.

We also want more general answers from the Government on the vehicle industry. What do they propose to do about increasing demand? What do they propose to do about cutting the excess tax on vehicle sales? What will the Government do to protect us against rampant and unfair foreign competition? During the Northfield by-election a Minister said that the control of Spanish imports was firmly in the action file. We see precious little Government action on anything, but in this instance there has been no action five months later, despite the fact that the issue is vital. Spanish imports are only one of the unfair imports to enter Britain, whether they come from Korea, Eastern Europe, South Africa or Australia. There is a great list that adds up to hundreds and thousands of jobs in the car assembly and motor industry.

Therefore, we want confidence to be restored in the industry. We want investment not only in manufacture, but in research and design. The uncertainty that hangs over the car and components industry in the west midlands should be removed. That should happen before the general election. Otherwise, the doubt, fear and uncertainty will continue. Tens of thousands of jobs, the lives of tens of thousands of families and the industrial future of the west midlands are dependent on the nature of the reply by the Government tonight.

6.30 pm

Mr. Richard Shepherd (Aldridge-Brownhills)

No one can say that things are well in the west midlands. Hon. Members on both sides of the House have expressed unhappiness and anxiety about the way in which things have turned out. The concern has not been well served by the motion proposed by the Opposition. It is a silly motion, because it is not true. That is perceived by many people in the west midlands, as is evident from poll after poll. The people recognise that something deeply disturbing has happened to the structural arrangements of employment within the west midlands. They know that this goes back many years and that the causes are not easy to remedy rapidly. They do not lay the blame for the long structural decline at the feet of this Government, but they think that certain things might be done to assist recovery.

The observation has been made that we do not always buy cars from manufacturers within the west midlands. It is difficult to direct free people to purchase goods at certain places when there is an open market. To insist upon a certain quota of imported cars or of components assembled here may mean more uneconomic cars. Commercial firms use their judgment to buy as best they can so that their end product is as cheap and competitive as possible. If quotas or special arrangements are sought for a proportion of the car industry it may lead to the further decline of that industry.

All the time in my constituency I am being asked whether we could do more. The answer has to be yes. A tight monetary policy may exacerbate recession. One of the largely unfair criticisms that I hear about the Government is that they do not seem to be sympathetic and that they have ignored some of the problems inherent in the west midlands. That observation was made forcefully to me last Friday by an intelligent convener at one of my most important factories. If the Government could demonstrate a more positive and perhaps more sympathetic approach, it would be much appreciated.

This is happening to some extent. In Walsall we are delighted that at long last we have become a designated district. There is much evidence that we should have designated long ago.

Almost every hon. Member has referred to the rating problem. My hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle) has harassed the Government about void rating. Because of its inheritance through mismanagement by a former Left-wing Socialist council, Walsall has an awful problem about how to reallocate its resources. If it were to lift the burden on industrial premises it would have to impose a great burden on domestic ratepayers, which would be invidious In the rating area of the West Midlands county council much work has been done by the west midlands ratepayers federation, which is representative of all political parties. It is alarmed about the spending policies of West Midlands county council. The chairman of the ratepayers federation, Tony Jarvis, who is a resident of Aldridge, has ably pursued this issue. There would be wide common cause to abolish West Midlands county council. The Government should give serious consideration to that proposition.

In regard to investment, the convener who I saw last Friday argued strongly that the position in his company had been brought about by a lack of investment in good years. That reflects all too often the pattern of investment, particularly in firms which have grown from family firms into larger concerns. In good years they did not return to their factories the investment that they should have done. That has rendered us less competitive. There is a good work force and good labour relations. Labour relations have improved since 1980. There is also much tougher management. But industry is using equipment that is grotesquely out of date in some instances, which puts it at a severe disadvantage in comparison with its competitors. Therefore, I urge the Government to look favourably at proposals for new investment in capital and equipment under the industrial legislation.

Energy cost have been touched upon by most hon. Members, as they are in many of these debates. We have not yet got energy costs right. We are still at a disadvantage. I urge the Government to do what they can about energy costs.

My right hon. Friend the Member for Stafford and Stone (Sir H. Fraser) referred to dumping. The inequality of tariff arrangements such as those that operate in Spain are intolerable and unacceptable. People do not understand why the Government are not moving faster on that score.

A working party is examining the idea of free ports. I have some knowledge of the success and tremendous stimulation to the economy of southern Florida resulting from free port status for Miami. I understand that the Government are thinking of coastal or near coastal towns. There would be a tremendous boost to the west midlands' economy if a free port were sited there, perhaps at the west midlands airport. This would enable us to process and forward goods through our region instead of their being dealt with in what we regard as more peripheral parts of the United Kingdom.

If the question is raised whether there is hope, certainly there is, and there are signs of it already. I am glad that the pound has settled at its present level. I should not mind if it were a little lower. Some people say that is a short-term argument, but it is an observable fact—a loathsome expression—that with a lower pound the demand for sterling-priced exports grows in dollar terms. Therefore, we see small signs of an increase in United States dollar orders. Because of the decline of the pound against the mark, there is also an increase in my constituency of German orders. I am sure that the same thing is happening throughout the economy.

6.38 pm

Mr. Peter Snape (West Bromwich, East)

Inevitably, because of the pressures on the time available for the debate, the winding-up speeches of both myself and the Minister will be truncated. It is right to point out immediately that the purpose of the debate was not, as some hon. Members seem to think, merely to score political points, although in all seriousness and honesty many genuine, relevant political and economic points could well be scored against the Government because of their policies and the impact of those policies on the west midlands over the past three years.

We were dealt rather a blow in the opening sentence of the Minister's speech, because he made it clear that there would be no change in the Government's regional policy on the west midlands before the general election. There are differences of opinion among various groups in the west midlands about the desirability of the area receiving assisted area status. However, more and more people are coming round to the view expressed by my hon. Friends and by the west midlands Labour party generally that without such status the inevitable decline that we have seen over the past three years will accelerate.

Even newspapers that one does not normally associate with support for the party to which I have the honour to belong say that there is a good case for the region to receive assisted area status following the decline of industry in the area, particularly since 1979. As recently as last night, my local newspaper, the Sandwell Evening Mail, in an editorial dealing with the manner in which the Department of the Environment had misled my hon. Friend the Member for Coventry, North-East (Mr. Park) on European grants, concluded by saying: If necessary, Sandwell borough —in which my constituency lies— should be given assisted area status that would qualify it for aid —that is European aid. The editorial went on to say: In fact, there is a very strong case for making the whole of the West Midlands an assisted area. Over to you Mr. King." That is what a prominent newspaper, which at least editorially has traditionally supported the Conservative party, feels. The manner in which the Minister dashed our hopes shows that the economic revival of the region is unlikely to take place under the present Government. The Minister, like most of his hon. Friends, had a ritualistic dig at the West Midlands county council. I am always surprised—I should not be—at the constant and non-stop hypocrisy of the Tory party. One would think that the Conservatives had been the great opponents of the creation of the West Midlands county council in the first place.

I remind the hon. Member for Aldridge—Brownhills (Mr. Shepherd) and the Minister that it was the Labour party that opposed the creation of metropolitan county councils in the early 1970s. Most of those who now complain about the budget dutifully trooped through the Lobby to support the creation of that authority. They will no doubt dutifully troop through the Lobby tonight to support their Government, despite the disasters that the policies of that Government have brought on the west midlands.

All my hon. Friends representing the west midlands are in favour of the cheaper public transport policies of the West Midlands county council. We are also much in favour of the public consultation exercise that the county council has carried out in respect of those policies. I have received 500 leaflets back from people in West Bromwich saying that they want better and cheaper public transport. [Interruption.] The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) complains about the cost of the initial exercise. The fact that over 500 people in my constituency have been prepared to spend money on a stamp, to address the envelope and, in many cases, to include a letter, shows the popularity of such a policy. It demonstrates why the West Midlands county council was won heavily by the Labour party at the last county council elections.

The motion mentions certain industries in the region. I should like to refer to most of those industries by name. I start with the foundry industry, which has long been regarded as the industrial bedrock, if that is the right term, of the black country and the borough of Sandwell. The industry has inevitably suffered financial losses and reductions of manpower over the years through the acceptance of modern working practices and changes in those practices. The loss of manpower that occurred during the 1970s came about with the full co-operation of the much-maligned trade unions that have been mentioned today.

A different approach to the foundry industry has been adopted by the present Government. The latter-day Luddites wear pinstripe suits and work for merchant bankers. At firms like F. H. Lloyd and others throughout the west midlands it is now policy, aided and abetted by the Government, to rip out machinery and smash it up to guarantee that foundry production ceases on the site. If the Government had fought the 1979 general election more honestly, they would have pointed out to the people of the west midlands that a vote for the Conservative party was a vote not only for unemployment but to smash up the machinery that would have helped Britain to move forward and out of recession in the 1980s. That is what is happening in the foundry industry under present policies.

There are various aspects of aid and assistance to this vital industry that the Government have not even bothered to consider. They could have examined the vexed question of the control of imports of foreign castings. However, import controls are regarded as anathema by the Government. They believe in fair trading. Where is the fairness in expecting the British foundry industry to compete with foundries in western Europe alone where energy costs, on average, in most of those countries are anything up to 20 per cent. cheaper?

Conservative Members have complained about energy costs. They must think that Opposition Members have short memories or that the public are totally unaware of the events of the past four years. Was it not this Government who insisted that the nationalised energy boards should put up their prices—to double them, in fact, in the first 18 months—to ensure that the Treasury, as they put it, would have a better return on capital? Had not Conservative Members considered the impact that the doubling of prices would have on British industry in general and on the foundry industry in particular? Have those hon. Members any right to come to the House and complain about the pricing policies of nationalised industries when they presumably voted for those policies, again as dutifully as they will vote at seven o'clock tonight for the strangulation of the west midlands economy? It is pointless coming to the House to complain about energy prices if one supports a Government who, deliberately and as a matter of policy, have gone out to double those prices in their first two years of office.

There are other actions that the Government could take to help this hard-pressed industry. There has been reference to the need for the abolition of the 10 per cent. car tax. The foundry industry depends heavily on motor car sales within the United Kingdom. My hon. Friends and myself are united in the belief that there is need for far greater public expenditure on roads, railways and the sewerage system. These are major public works that will have to take place in the 1980s. To put them off only means that when the day comes when they have to be done the cost will be even greater than if the process had been started five years earlier. It is the economics of the madhouse to waste the massive revenues from North Sea oil to keep people standing around in the dole queues. That is what the Government are doing. It is one of the reasons why the foundry industry, like many others, finds itself in its present state.

The motion mentions machine tools. This reveals a sad decline for a nation that once led the world in the production of sophisticated machine tools. Import penetration has increased from 28 per cent. in 1970 to over 50 per cent. in 1981. The concentration of the British machine tool industry in the 1970s on comparatively low technology machinery—the lathes, the drills, the milling machines and the grinders—has meant that another world lead has been frittered away. It cannot be blamed on the trade unions. The management decisions, the takeovers, the disinvestment and the so-called rationalisation that took place in the 1970s are having their impact in the 1980s. In the short term, the Government should provide research and development investment funds for this vital industry if it is to compete properly in the 1980s.

The motion also mentions engineering. A great deal has been heard about the start of new businesses in the west midlands. However, little has been heard from the Conservative Benches about the record bankruptcies in other sectors.

Mr. Denis Howell

They amount to 230 a month.

Mr. Snape

As my right hon. Friend says, they amount to 230 a month, many in the small engineering industry. Without an economic upturn and a change in economic policy, there is little hope.

Car components are mentioned in the motion. I do not think that even the Minister, from the industrial heartlands of Eye, will disagree that the British car components industry is suffering. Without a change in the managerial philosophies in companies such as F. H. Lucas and Dunlop, the decline in the British car component industry will continue. The recruiting abroad by companies such as F. H. Lucas, while sacking workers in this country, does not strike me as patriotism, although I have no doubt that there is a portrait of Her Majesty in its boardroom. For companies such as Dunlop to export their technology and our jobs to China—to name but one country—does not bode well for the future of the British car component industry. We need action from the Government.

There are currently 57 people unemployed for every vacancy in the west midlands. No Conservative Member mentioned the impact that the Government's economic policies have had and will have on the region. In its report published earlier this year the Cambridge economic unit suggested that if present policies were continued to the end of the decade—heaven forbid—unemployment in the west midlands region would be 21.9 per cent. I dare say that the right hon. Lady the Prime Minister will still be grinning when that happens, but I hope that the people of the west midlands will realise the con trick pulled on them in 1979. Whatever else they voted for, my constituency did not vote for 28,600 people to be on the dole. They did not vote for the Dudley and Sandwell area unemployment figures to be up 271.8 per cent. since polling day in 1979. The posters in the constituencies of my right hon. and hon. Friends and myself which said, "Labour is not working" in 1979 would not need actors to set the same scene in 1983.

Despite the sniggers of Conservative Members, those of us in the west midlands are looking forward to the next general election with a bit more enthusiasm than some of them.

6.51 pm

The Under-Secretary of State for Employment (Mr. Selwyn Gummer)

Many points have been raised, and I have even less time than I was promised originally to deal with them. I shall seek to answer them as quickly as I can.

The right hon. Member for Stoke-on-Trent, South (Mr. Ashley) raised the fundamental matter of unfair competition, and I believe that that is one of the subjects that we should cover. We must make the distinction between unfair competition and proper competition that we fail to meet. It is a distinction that it ill behoves us to miss.

The right hon. Gentleman mentioned the pottery industry and said that there is considerable unfair competition from both Spain and Italy. We have sought to meet those complaints. We are preparing a major criticism and seeking to deal with the valid case that has been made about Spanish dumping. So far, no case has been made about Italian dumping. If the right hon. Gentleman can provide the evidence from the people whom he says have talked to him about it, we shall take up the matter immediately and deal with it.

We believe that competition must be fair. We should look, therefore, at the points made about counterfeiting. There has been a considerable amount of counterfeiting of British goods throughout the world, and we must meet the problem. That is why we have, for the first time, set up a major anti-counterfeiting unit in the Department of Trade to deal only with this problem.

One of the matters to which we can point—not as a direct result of that, but as part of the movement in the world—is the strict new legislation that the Taiwanese authorities have introduced. We look to the Taiwanese authorities to stop the counterfeiting that has gone on there, about which we are anxious, by careful monitoring.

I do not believe that we meet the problems of unemployment or industrial decline in the west midlands by using expressions that make the position not just worse, but alter its terms. The right hon. Member for Birmingham, Small Heath (Mr. Howell) should have been a little more careful about the figures he used. He managed to give the impression that 80 per cent. or 90 per cent. of the young people in his constituency were unemployed. He was including all those who were still at school and in further education—[Interruption.] Before Opposition Members shout, the point that they make so often is that the Government are not prepared to meet each point as we go along. I am trying to do that.

It was also rather curious of the right hon. Member for Small Heath to complain about the 11 per cent. penetration of Japanese car imports, as if there were no Japanese car imports when he was a Minister in the Labour Government. It is curious behaviour to use any statistic that suits the argument rather than statistics—

Mr. Denis Howell

rose—

Mr. Gummer

I shall not give way, because I have only four minutes in which to speak. When the right hon. Gentleman reads his speech, he will see that what I have said is correct.

Mr. Howell

The Minister is wrong. I checked my figures this morning.

Mr. Gummer

It is not reasonable for the right hon. Gentleman to make a statement that undermines the west midlands case. Its case surely is that it was and ought to be the power-house of British industry and be able to compete thoughout the world. We want to enable it to regain that status. It is already, as my hon. and learned Friend the Member for Solihull (Mr. Grieve) pointed out, an important exporting area.

What does the right hon. Member for Small Heath say? He says that we must control imports of manufactures. He bases that upon the argument that we already have an excess of manufactured imports over our manufactured goods. He is wrong. He is £1,500 million wrong on the figures for the first nine months of last year—the latest figures that we have. The right hon. Gentleman must not put forward any old figures to support an insupportable case.

The hon. Member for West Bromich, West (Miss Boothroyd) made some creative proposals. I shall miss out the first four minutes of her speech, which I felt was uncharacteristic. The characteristic part suggested that the problem of the European Community and its investment of the social fund should be looked at seriously. The Government have constantly said that they want the social fund to extend the degree to which it puts its aid where it is needed in specific areas. We have fought for that, and when the Commission produced its proposals in October 1982 we supported them wholeheartedly. We have pressed hard for the negotiations to continue. The proposals will come before the Council of Ministers in June this year, and we hope that it will be possible—

Miss Boothroyd

It has already been before the Select Committee.

Mr. Gummer

The hon. Lady knows perfectly well that we must have the support of all the countries within the Community. No country would suggest that we have done other than act as fast as possible. We are pressing this matter as fast as we can. We fully support the points that she has made.

It does not help when dealing with such matters to avoid the facts. It is worth remembering that my hon. Friend the Under-Secretary of State for Industry pointed out that the regional development grant for the whole country amounted to £1,870 million since the Government came into office. The majority of that went to the west midlands. We gave British Leyland £1,230 million. It cannot be said that the west midlands has not received a considerable amount. Compared with regional grants, the west midlands has received more than many of the assisted areas merely by the amount that goes to British Leyland.

I am sorry that the right hon. Member for Dudley, East (Dr. Gilbert) is not here, and I understand why, but he made the most amazing statement. He said that the Conservative Government were responsible not just for everything that went wrong in the west midlands, but for the world slump. It is an economic argument which has not been heard before. Not even the Cambridge economy unit has come up with that before.

According to the right hon. Gentleman the British Government are so powerful, so remarkable and so central that they have caused the world slump. With that one remarkable statement, the right hon. Gentleman put out of court everything else that he said.

The only case put forward by the Opposition against the Government's policy for the regeneration of British industry is the worst mixture imaginable. The ingredients are simple. The first—import controls—would result in massive retaliation and hit the west midlands worse than any other part of the country. The second—to remove Britain from the EC—would result in the largest disinvestment in our history. The third—[Interruption.] It is all very well for the Shadow Chief Whip to complain, but it was the Opposition who took the extra time and therefore took time from me. I intend to complete what I have to say.

The third suggestion is that we should tax successful industries in the west midlands to raise vast sums for bad local councils to spend. If the Opposition want to help the west midlands, the first thing that they should do is to ensure that west midlands local government stops the tax on jobs that the West Midlands county council imposes with every increased rate demand.

Question put:—

The House divided: Ayes 239, Noes 301.

Division No. 75]	[7 pm
AYES
Abse, Leo	English, Michael
Adams, Allen	Ennals, Rt Hon David
Allaun, Frank	Evans, Ioan (Aberdare)
Anderson, Donald	Evans, John (Newton)
Archer, Rt Hon Peter	Ewing, Harry
Ashley, Rt Hon Jack	Faulds, Andrew
Ashton, Joe	Field, Frank
Atkinson, N.(H'gey,)	Fitch, Alan
Barnett, Guy (Greenwich)	Foot, Rt Hon Michael
Barnett, Rt Hon Joel (H'wd)	Ford, Ben
Beith, A. J.	Forrester, John
Benn, Rt Hon Tony	Foster, Derek
Bennett, Andrew(St'kp't N)	Foulkes, George
Bidwell, Sydney	Fraser, J. (Lamb'th, N'w'd)
Booth, Rt Hon Albert	Freeson, Rt Hon Reginald
Boothroyd, Miss Betty	Freud, Clement
Bottomley, Rt Hon A.(M'b'ro)	Garrett, John (Norwich S)
Bradley, Tom	Garrett, W. E. (Wallsend)
Bray, Dr Jeremy	George, Bruce
Brocklebank-Fowler, C.	Gilbert, Rt Hon Dr John
Brown, Hugh D. (Provan)	Ginsburg, David
Brown, R. C. (N'castle W)	Golding, John
Brown, Ronald W. (H'ckn'y S)	Gourlay, Harry
Brown, Ron (E'burgh, Leith)	Hamilton, James (Bothwell)
Buchan, Norman	Hamilton, W. W. (C'tral Fife)
Callaghan, Rt Hon J.	Hardy, Peter
Callaghan, Jim (Midd't'n & P)	Harrison, Rt Hon Walter
Campbell, Ian	Hart, Rt Hon Dame Judith
Campbell-Savours, Dale	Haynes, Frank
Canavan, Dennis	Healey, Rt Hon Denis
Cant, R. B.	Heffer, Eric S.
Carmichael, Neil	Hogg, N. (E Dunb't'nshire)
Carter-Jones, Lewis	Holland, S. (L'b'th. Vauxh'Il)
Cartwright, John	Homewood, William
Clark, Dr David (S Shields)	Hooley, Frank
Clarke, Thomas(C'b'dge, A'rie)	Horam, John
Cocks, Rt Hon M. (B'stol S)	Howell, Rt Hon D.
Cohen, Stanley	Hoyle, Douglas
Coleman, Donald	Hughes, Mark (Durham)
Concannon, Rt Hon J. D.	Hughes, Robert (Aberdeen N)
Conlan, Bernard	Janner, Hon Greville
Cook, Robin F.	Jay, Rt Hon Douglas
Cowans, Harry	Jenkins, Rt Hon Roy (Hillh'd)
Cox, T. (W'dsw'th, Toot'g)	John, Brynmor
Craigen, J. M. (G'gow, M'hill)	Johnson, James (Hull West)
Crowther, Stan	Jones, Rt Hon Alec (Rh'dda)
Cryer, Bob	Jones, Barry (East Flint)
Cunliffe, Lawrence	Jones, Dan (Burnley)
Cunningham, Dr J. (W'h'n)	Kaufman, Rt Hon Gerald
Dalyell, Tam	Kerr, Russell
Davidson, Arthur	Kilroy-Silk, Robert
Davies, Rt Hon Denzil (L'Ili)	Lambie, David
Davis, Clinton (Hackney C)	Lamond, James
Davis, Terry (B'ham, Stechf'd)	Leadbitter, Ted
Deakins, Eric	Leighton, Ronald
Dean, Joseph (Leeds West)	Lestor, Miss Joan
Dewar, Donald	Lewis, Arthur (N'ham NW)
Dixon, Donald	Lewis, Ron (Carlisle)
Dobson, Frank	Litherland, Robert
Dormand, Jack	Lofthouse, Geoffrey
Douglas, Dick	Lyon, Alexander (York)
Dubs, Alfred	Lyons, Edward (Bradf'd W)
Duffy, A. E. P.	Mabon, Rt Hon Dr J. Dickson
Dunnett, Jack	McDonald, Dr Oonagh
Dunwoody, Hon Mrs G.	McElhone, Mrs Helen
Eadie, Alex	McGuire, Michael (Ince)
Eastham, Ken	McKay, Allen (Penistone)
Edwards, R. (W'hampt'n S E)	MacKenzie, Rt Hon Gregor
Ellis, R. (NE D'bysh're)	McNally, Thomas
Ellis, Tom (Wrexham)	McNamara, Kevin

McTaggart, Robert	Short, Mrs Renée
McWilliam, John	Silkin, Rt Hon J. (Deptford)
Marks, Kenneth	Silkin, Rt Hon S. C. (Dulwich)
Marshall, D(G'gow S'ton)	Silverman, Julius
Marshall, Dr Edmund (Goole)	Skinner, Dennis
Marshall, Jim (Leicester S)	Smith, Rt Hon J. (N Lanark)
Martin, M(G'gow S'burn)	Snape, Peter
Mason, Rt Hon Roy	Soley, Clive
Maxton, John	Spearing, Nigel
Meacher, Michael	Spellar, John Francis (B'ham)
Mikardo, Ian	Spriggs, Leslie
Millan, Rt Hon Bruce	Stallard, A. W.
Miller, Dr M. S. (E Kilbride)	Steel, Rt Hon David
Mitchell, R. C. (Soton Itchen)	Stoddart, David
Morris, Rt Hon A. (W'shawe)	Stott, Roger
Morris, Rt Hon C. (O'shaw)	Strang, Gavin
Mulley, Rt Hon Frederick	Straw, Jack
Newens, Stanley	Summerskill, Hon Dr Shirley
Oakes, Rt Hon Gordon	Taylor, Mrs Ann (Bolton W)
O'Halloran, Michael	Thomas, Jeffrey (Abertillery)
O'Neill, Martin	Thomas, Dr R.(Carmarthen)
Orme, Rt Hon Stanley	Thorne, Stan (Preston South)
Palmer, Arthur	Tinn, James
Park, George	Torney, Tom
Parker, John	Varley, Rt Hon Eric G.
Parry, Robert	Wainwright, E.(Dearne V)
Pavitt, Laurie	Wainwright, R.(Colne V)
Penhaligon, David	Walker, Rt Hon H.(D'caster)
Pitt, William Henry	Wardell, Gareth
Powell, Raymond (Ogmore)	Watkins, David
Prescott, John	Weetch, Ken
Price, C. (Lewisham W)	Wellbeloved, James
Race, Reg	Welsh, Michael
Radice, Giles	White, Frank R.
Rees, Rt Hon M (Leeds S)	White, J. (G'gow Pollok)
Richardson, Jo	Whitehead, Phillip
Roberts, Albert (Normanton)	Whitlock, William
Roberts, Allan (Bootle)	Wigley, Dafydd
Roberts, Ernest (Hackney N)	Willey, Rt Hon Frederick
Roberts, Gwilym (Cannock)	Williams, Rt Hon A.(S'sea W)
Robertson, George	Williams, Rt Hon Mrs(Crosby)
Robinson, G. (Coventry NW)	Wilson, Rt Hon Sir H.(H'ton)
Rooker, J. W.	Wilson, William (C'try SE)
Roper, John	Winnick, David
Ross, Ernest (Dundee West)	Woodall, Alec
Rowlands, Ted	Woolmer, Kenneth
Ryman, John	Wrigglesworth, Ian
Sandelson, Neville
Sever, John	Tellers for the Ayes:
Sheerman, Barry	Mr. Hugh McCartney and
Sheldon, Rt Hon R.	Mr. George Morton.
Shore, Rt Hon Peter
NOES
Adley, Robert	Body, Richard
Aitken, Jonathan	Bottomley, Peter (W'wich W)
Alexander, Richard	Bowden, Andrew
Alison, Rt Hon Michael	Boyson, Dr Rhodes
Amery, Rt Hon Julian	Braine, Sir Bernard
Ancram, Michael	Bright, Graham
Arnold, Tom	Brinton, Tim
Aspinwall, Jack	Brittan, Rt. Hon. Leon
Atkins, Rt Hon H.(S'thorne)	Brooke, Hon Peter
Atkins, Robert(Preston N)	Brotherton, Michael
Atkinson, David (B'm'th,E)	Brown, Michael (Brigg & Sc'n)
Baker, Kenneth (St.M'bone)	Browne, John (Winchester)
Baker, Nicholas (N Dorset)	Bruce-Gardyne, John
Banks, Robert	Bryan, Sir Paul
Beaumont-Dark, Anthony	Buchanan-Smith, Rt. Hon. A.
Bendall, Vivian	Buck, Antony
Bennett, Sir Frederic (T'bay)	Budgen, Nick
Benyon, Thomas (A'don)	Burden, Sir Frederick
Benyon, W. (Buckingham)	Butcher, John
Berry, Hon Anthony	Carlisle, John (Luton West)
Best, Keith	Carlisle, Kenneth (Lincoln)
Bevan, David Gilroy	Carlisle, Rt Hon M. (R'c'n)
Biffen, Rt Hon John	Chalker, Mrs. Lynda
Biggs-Davison, Sir John	Channon, Rt. Hon. Paul
Blackburn, John	Chapman, Sydney
Blaker, Peter	Clark, Hon A. (Plym'th, S'n)

Clark, Sir W. (Croydon S)	Hawkins, Sir Paul
Clarke, Kenneth (Rushcliffe)	Hawksley, Warren
Cockeram, Eric	Hayhoe, Barney
Colvin, Michael	Heath, Rt Hon Edward
Cope, John	Heddle, John
Corrie, John	Henderson, Barry
Costain, Sir Albert	Higgins, Rt Hon Terence L.
Cranborne, Viscount	Hill, James
Critchley, Julian	Hogg, Hon Douglas (Gr'th'm)
Crouch, David	Holland, Philip (Carlton)
Dickens, Geoffrey	Hooson, Tom
Dorrell, Stephen	Hordern, Peter
Douglas-Hamilton, Lord J.	Howe, Rt Hon Sir Geoffrey
Dover, Denshore	Howell, Rt Hon D. (G'ldf'd)
du Cann, Rt Hon Edward	Howell, Ralph (N Norfolk)
Dunn, Robert (Dartford)	Hunt, David (Wirral)
Durant, Tony	Hunt, John (Ravensbourne)
Dykes, Hugh	Hurd, Rt Hon Douglas
Eden, Rt Hon Sir John	Irvine, Rt Hon Bryant Godman
Edwards, Rt Hon N. (P'broke)	Irving, Charles (Cheltenham)
Eggar, Tim	Jenkin, Rt Hon Patrick
Elliott, Sir William	Jessel, Toby
Emery, Sir Peter	Jopling, Rt Hon Michael
Eyre, Reginald	Joseph, Rt Hon Sir Keith
Fairbairn, Nicholas	Kaberry, Sir Donald
Fairgrieve, Sir Russell	Kershaw, Sir Anthony
Faith, Mrs Sheila	Kimball, Sir Marcus
Farr, John	King, Rt Hon Tom
Fell, Sir Anthony	Kitson, Sir Timothy
Fenner, Mrs Peggy	Knight, Mrs Jill
Finsberg, Geoffrey	Knox, David
Fisher, Sir Nigel	Lamont, Norman
Fletcher, A. (Ed'nb'gh N)	Lang, Ian
Fletcher-Cooke, Sir Charles	Langford-Holt, Sir John
Fookes, Miss Janet	Latham, Michael
Forman, Nigel	Lawrence, Ivan
Fowler, Rt Hon Norman	Lawson, Rt Hon Nigel
Fox, Marcus	Le Marchant, Spencer
Fraser, Rt Hon Sir Hugh	Lennox-Boyd, Hon Mark
Fraser, Peter (South Angus)	Lester, Jim (Beeston)
Fry, Peter	Lewis, Sir Kenneth (Rutland)
Gardiner, George (Reigate)	Lloyd, Ian (Havant & W'loo)
Gardner, Sir Edward	Lloyd, Peter (Fareham)
Garel-Jones, Tristan	Loveridge, John
Gilmour, Rt Hon Sir Ian	Lyell, Nicholas
Goodhart, Sir Philip	McCrindle, Robert
Goodhew, Sir Victor	Macfarlane, Neil
Goodlad, Alastair	MacGregor, John
Gorst, John	MacKay, John (Argyll)
Gow, Ian	Macmillan, Rt Hon M.
Gower, Sir Raymond	McNair-Wilson, M. (N'bury)
Grant, Sir Anthony	McNair-Wilson, P. (New F'st)
Gray, Rt Hon Hamish	McQuarrie, Albert
Greenway, Harry	Madel, David
Griffiths, E.(B'y St. Edm'ds)	Major, John
Griffiths, Peter (Portsm'th N)	Marlow, Antony
Grist, Ian	Marshall, Michael (Arundel)
Grylls, Michael	Marten, Rt Hon Neil
Gummer, John Selwyn	Mates, Michael
Hamilton, Hon A.	Maude, Rt Hon Sir Angus
Hamilton, Michael (Salisbury)	Mawby, Ray
Hampson, Dr Keith	Mawhinney, Dr Brian
Hannam, John	Maxwell-Hyslop, Robin
Haselhurst, Alan	Mayhew, Patrick
Hastings, Stephen	Mellor, David

Meyer, Sir Anthony	Sims, Roger
Miller, Hal (B'grove)	Skeet, T. H. H.
Mills, Iain (Meriden)	Smith, Tim (Beaconsfield)
Mills, Sir Peter (West Devon)	Speed, Keith
Miscampbell, Norman	Speller, Tony
Mitchell, David (Basingstoke)	Spence, John
Moate, Roger	Spicer, Jim (West Dorset)
Monro, Sir Hector	Spicer, Michael (S Worcs)
Montgomery, Fergus	Sproat, Iain
Moore, John	Squire, Robin
Morris, M. (N'hampton S)	Stainton, Keith
Morrison, Hon C. (Devizes)	Stanbrook, Ivor
Mudd, David	Stanley, John
Murphy, Christopher	Steen, Anthony
Myles, David	Stevens, Martin
Neale, Gerrard	Stewart, A(E Renfrewshire)
Needham, Richard	Stewart, Ian (Hitchin)
Nelson, Anthony	Stokes, John
Neubert, Michael	Stradling Thomas, J.
Newton, Tony	Tapsell, Peter
Nott, Rt Hon Sir John	Taylor, Teddy (S'end E)
Onslow, Cranley	Tebbit, Rt Hon Norman
Oppenheim, Rt Hon Mrs S.	Temple-Morris, Peter
Osborn, John	Thatcher, Rt Hon Mrs M.
Page, Richard (SW Herts)	Thomas, Rt Hon Peter
Parkinson, Rt Hon Cecil	Thompson, Donald
Parris, Matthew	Thorne, Neil (Ilford South)
Patten, Christopher (Bath)	Thornton, Malcolm
Patten, John (Oxford)	Townend, John (Bridlington)
Pawsey, James	Townsend, Cyril D, (B'heath)
Percival, Sir Ian	van Straubenzee, Sir W.
Pink, R. Bonner	Vaughan, Dr Gerard
Pollock, Alexander	Viggers, Peter
Porter, Barry	Waddington, David
Prentice, Rt Hon Reg	Wakeham, John
Price, Sir David (Eastleigh)	Waldegrave, Hon William
Proctor, K. Harvey	Walker, Rt Hon P. (W'cester)
Pym, Rt Hon Francis	Walker, B. (Perth)
Rathbone, Tim	Walker-Smith, Rt Hon Sir D.
Rees, Peter (Dover and Deal)	Wall, Sir Patrick
Renton, Tim	Waller, Gary
Rhodes James, Robert	Walters, Dennis
Rhys Williams, Sir Brandon	Ward, John
Ridley, Hon Nicholas	Warren, Kenneth
Ridsdale, Sir Julian	Watson, John
Rifkind, Malcolm	Wells, Bowen
Rippon, Rt Hon Geoffrey	Wells, John (Maidstone)
Roberts, Wyn (Conway)	Wheeler, John
Rossi, Hugh	Whitelaw, Rt Hon William
Rost, Peter	Wickenden, Keith
Royle, Sir Anthony	Wiggin, Jerry
Rumbold, Mrs A. C. R.	Wilkinson, John
Sainsbury, Hon Timothy	Williams, D.(Montgomery)
St. John-Stevas, Rt Hon N.	Winterton, Nicholas
Scott, Nicholas	Wolfson, Mark
Shaw, Giles (Pudsey)	Young, Sir George (Acton)
Shaw, Sir Michael (Scarb')	Younger, Rt Hon George
Shelton, William (Streatham)
Shepherd, Colin (Hereford)	Tellers for the Noes:
Shepherd, Richard	Mr. Carol Mather and
Silvester, Fred	Mr. Robert Boscawen.

Question accordingly negatived.