HC Deb 08 March 1983 vol 38 cc698-9
9. Mr. Dubs

asked the Secretary of State for Employment what is his estimate of the percentage fall in wage rates that would be necessary to achieve full employment.

Mr. Tebbit

Any such estimates would depend on a variety of variable factors, few of which are reliably predictable.

Mr. Dubs

Is not the truth that the Secretary of State wants to get British wages down to the level of those in Hong Kong and Taiwan—under 50p an hour?

Mr. Tebbit

The hon. Gentleman must know that he is being rather silly when he says such things. If people charge more for their labour than the market will bear, jobs will disappear.

Mr. Wilkinson

Does my right hon. Friend agree that one of the worst aspects of the British economy is that while it has been a low wage economy for many years it has also been a low productivity economy and that what we need is not so much to bring wage levels down to those in Hong Kong and Taiwan as to increase productivity to their levels?

Mr. Tebbit

Yes, indeed. We need to reach the productivity levels of Germany, the United States and Japan and then we would be able to pay much higher wages. That is the object of our policy. It is no good paying people more than the value of the work that they do.

Mr. Flannery

Does the Minister not realise the simple fact that the lower wages are the fewer goods people can buy and, because they cannot buy the goods, that accelerates the slump?

Mr. Tebbit

I realise that I am being taken on now by the intellectual wing of the Labour party. If the hon. Gentleman considered what would happen were wages to double, he would have to conclude that our projects would become uncompetitive and we would lose markets and jobs. That is precisely what has happened in recent years.

Mr. Varley


Mr. Speaker

Order. In order that the House can understand my system, may I say that I should like to know in advance which Front Bench Members wish to speak, so that I can maintain the correct balance?

Mr. Varley

The Secretary of State implies that present policies are working. How can that be so when 2.5 million people have lost their jobs, when plant after plant has been forced to close, when manufacturing production is down by one fifth and investment by one third, and when over the past four years our national wealth has been reduced by 5.5 per cent? If that is success, God help us when the Government admit failure.

Mr. Tebbit

I am sorry to interrupt the right hon. Gentleman when he is rolling with delight at bad news but I must tell him that if, for example, he had been watching the ITN weekly job survey recently he would have seen that in the last month, for the first time for some considerable time, the new jobs recorded exceeded those lost. If the right hon. Gentleman likes he could have a list of many of the new jobs on the way—1,000 in Texaco in South Wales; 100 at Tattung television manufacturers in Bridgnorth; 1,200 on the urban development programme; 40 at Edgley Aircraft, Old Sarum; 1,000 at Hyster, Ayrshire; 200 at Leicestershire Co-operative—but, Mr. Speaker, you would not want me to go on too long and it only gives the right hon. Gentleman a great deal of pain.