House of Commons Hansard Debates for 8 Dec 1992

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left to the market. We have a market failure in Britain. We need public action. If we look around our towns and cities today, we see that there is work that needs to be done. We need something like Roosevelt's New Deal. During the war we had full employment to produce weapons of destruction. Is it really beyond our wit to bring about full employment now, to make the things that we need so desperately in the country at the moment ?

We need a counter-cyclical boost of public expenditure to aid recovery. We should be encouraging that across Europe, if possible. But what do we have? I am closing on this note, because the European dimension has been raised by a number of hon. Members. We have the outdated and outmoded Maastricht treaty, the whole thrust of which is deflationary. It ordains huge cuts in public expenditure right across Europe.

If we in Britain were to get our public borrowing requirement down to 3 per cent. of gross domestic product as the treaty ordains, we should have to make cuts of £20 million, prolonging and deepening the recession. So I trust that when the Bill is in Committee we shall have a full examination of the employment effects of the treaty and that this matter will be fully dealt with, because in my view a strategy to bring back full employment will entail junking the Maastricht treaty.

7.13 pm

Mr. Barry Legg (Milton Keynes, South-West) : We have had a wide- ranging debate this evening and a lot of unanswered questions are still to be addressed. A number of Opposition Members have referred back to halcyon days in the 1950s and 1960s when they left school and there was full employment. They seemed to be searching for the holy grail that will take us back to those times. They have talked about full employment, and if we look at the periods of great economic success that the world has experienced, we see that the first requirement for prosperity, success and growth of employment is growth in trade. That is particularly what we had during the 1950s and 1960s.

I am pleased that Britain is taking a lead in Europe on the issue of trade, and particularly on the GATT round, because addressing that problem and sorting it out will be of great benefit not only to Britain and Europe, but to the world as a whole. Growth in world trade will deliver prosperity and jobs.

The other important factor that needs to be taken into account in considering how to generate jobs, wealth and stability is productivity. We hear very little about productivity from the Opposition Benches. If we look at the successful economies in the world, we see that the economies that are gaining strength, a greater share of world trade, greater employment and prosperity are those that are achieving gains in productivity.

The world has been through a very difficult recession. Britain has experienced a difficult recession, which it is now coming out of, and I shall be saying more about that later.

We have just seen some very good figures from the United States on growth and employment. In the United States, unemployment has just fallen from 7.4 to 7.2 per cent. and 100,000 new jobs have been created in the last month. What do we find lying behind that growth in

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employment and that success in the United States? We find two things. The first is monetary easing and lower interest rates. Over the past 18 months the Americans have steadily reduced their interest rates and that has given their consumers another $65 billion to spend, because that is the amount of money they would otherwise be spending on servicing domestic debt.

We have seen from Her Majesty's Government in the last few months welcome reductions in interest rates, which will help to provide a similar boost here in the United Kingdom.

The second factor in growth in employment in America is the very good figures on productivity growth and unit labour costs. In the past year, unit labour costs in the United States have risen by 0.5 per cent., the best record in the last nine years.

That is the sort of growth in productivity that we need in this country. Furthermore, reducing labour costs is not a route to poverty, as one might think from listening to some Opposition Members, but a route to wealth. At the same time as the United States produces figures showing how well it is containing labour costs, other figures show that income in the United States has risen by 1 per cent. in one month. Those are some of the trends that we need to see in the British economy to carry forward our recovery here.

Again, we see that the successful economies in the Far East are taking a greater share of world trade and their people are becoming more prosperous. Looking at the underlying reasons, we find that those are deregulated economies in which the price of labour is very competitive.

If we move back to the European scene, we find that Europe as a whole, particularly continental Europe, has not done very well over the past decade in terms of world trade. In the past seven years, Europe's share of world trade has declined by some 7 per cent. Some very worrying trends are apparent in the structure of labour costs, particularly in Germany, to which the hon. Member for Birkenhead (Mr. Field) referred earlier. Nearly 50 per cent. of German labour costs are now accounted for by non-wage costs. They are accounted for by social costs, and the German economy has been becoming more and more uncompetitive. In Germany, the average hourly labour cost is currently running at about $21 ; in Britain, it is running at about $12. We have achieved that significant gain by avoiding the heavy social costs that Opposition Members are only too keen for us to sign up to, in the form of the social chapter.

We can take a lead in Europe, on GATT and on the social chapter. We should encourage our European partners not to opt for a route that, rather than improving employee welfare, will spread poverty and unemployment. Let us examine the unemployment records of some continental countries. In Germany, unemployment is rising rapidly : 50,000 more people were made unemployed there last month, and some 3 million are currently unemployed. That figure is far too large. In France, some 2.9 million are unemployed ; in Italy, the figure is about 2.8 million. In Spain, some 17 per cent. of people are unemployed, while the figure is nearly 20 per cent. in Ireland. The figures for unemployment among people under the age of 25 are even more horrifying. In France, the rate is 21 per cent. ; in Italy, it is 28 per cent. ; in Spain, it is 31 per cent. Those are damaging figures, and I think that they

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have some bearing on the remarks about the growth in extremism that were made earlier by the hon. Member for Holborn and St. Pancras (Mr. Dobson).

The economies that I have mentioned are experiencing a number of problems. Europe has not had an easy time over the past two years, but France, Italy and Spain all operate a minimum wage policy. The Labour party thinks that such a policy would benefit Britain, but minimum wage policies do not help the people at the bottom--they hurt them by keeping them out of work. Employers do not want to take on people whose skills are not as great as those of other workers, and they do not want to take on people who will need training. If they take on such people, they do not want to pay them more than the market rate. A minimum wage policy would in fact produce more unemployment, as the Labour party knows only too well.

None of the recipes cited by Opposition Members, today and on other occasions, will help employment ; on the contrary, they will increase unemployment. I shall wait with interest to see how Labour will develop the policy of full employment that the hon. Member for Holborn and St. Pancras had the audacity to mention today. My constituency, like many others, has had a difficult time during the recession. Opposition Members tend to come up with figures relating to job losses, doom and disaster, but, despite the difficulties experienced by my constituency, I intend to highlight some of the good things that are happening in Milton Keynes, which is a typical English town. In the past 12 months, some 6,515 new jobs have been created there. That will not capture the headlines in the national newspapers, as did the announcement of the loss of 15,000 Post Office jobs over five years through natural wastage, because it is essentially the result of small, successful local businesses expanding their work forces.

In the past year, 222 new working establishments have been started in Milton Keynes. That, too, will fail to make the headlines, but it is all about extra jobs. Milton Keynes has a diversified economy : we are very dependent on small businesses, which make up about 65 per cent. of our economy. Those small businesses are succeeding and taking on new employees, although I concede that times are difficult.

Mr. Dobson : Will the hon. Gentleman confirm that unemployment in Milton Keynes has trebled in the past two years?

Mr. Legg : As I said earlier, Milton Keynes has had a difficult time. I could have concentrated on the fact that unemployment in Milton Keynes has risen from 3 to 8 per cent. over the past two years ; I could have detailed the job losses there. Instead, I recognised that Britain is now coming out of recession. Unemployment is a lagging indicator of recession. The hon. Member for Holborn and St. Pancras will be interested to learn that unemployment in Milton Keynes has now flattened out, settling at 8 per cent. We are creating new jobs, and Milton Keynes--like the rest of Britain--will go forward under the Conservatives.

7.26 pm

Mr. David Hanson (Delyn) : As hon. Members will expect, I shall not follow the line of route initiated by the hon. Member for Milton Keynes, South-West (Mr. Legg). Unlike Conservative Members, Opposition Members fully

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support the minimum wage policy, and we are proud to have fought the last election on that basis ; when the opportunity arises, we will introduce the minimum wage in the interest of justice and fairness. Sadly, the motion sums up all that the Opposition consider relevant about the current level of unemployment. At least we believe that it offers a glimmer of hope to the millions of people who are unemployed.

Having sat through the debate since 3.30 pm, I have been particularly struck by the staggering complacency of Conservative Members. They have not accepted an iota of the Opposition's argument that we face a national crisis in manufacturing employment, and that action should be taken at a national level, with the Government accepting responsibility for generating investment, wealth and creating jobs. That abdication of responsibility is one of the strangest aspects of the debate.

It may have escaped the notice of Conservative Members that, since the Prime Minister took office about two years ago, 1.1 million people have lost their jobs. Every day since then, 2,500 people have become unemployed. I am not here to doom-monger--I want to talk positively--but when 29 people are chasing every job vacancy, Government action is clearly needed.

What do we get from the Government? We have had a Gracious Speech and an autumn statement, which addressed the wrong issues ; we have rail privatisation and coal privatisation ; we have the abolition of the basic floor provided by wages councils ; we have reductions in Government spending ; we have the opting out of schools ; we have tinkering with investment on the edges of the economy. We do not have a Government who are committed to the central agenda of creating employment and improving the lot of the millions--both Labour and Conservative voters--who want a better Britain to be provided through job creation.

I sometimes think that the Government are not living in the real world. I do not claim that my constituency is the worst affected in Wales or in the United Kingdom. Indeed, there are many good things in my constituency, and I would be the last person to run down Delyn. It has many factories which are creating wealth, employment and jobs. However, it would be foolish of me to ignore the fact that much has gone wrong in my constituency, which needs support from and action by the Government to promote employment.

In October there were 5,971 unemployed men and 1,641 unemployed women in the Shotton, Flint and Rhyl travel-to-work area which encompasses my constituency and that of my hon. Friend the Member for Alyn and Deeside (Mr. Jones). Those figures represent a 9 per cent. unemployment rate in my constituency and a rate of 10.5 per cent. in Clwyd. My hon. Friend the Member for Alyn and Deeside is as concerned as I am about the level of unemployment in that travel-to-work area. I shall shortly discuss some of our proposals to help reduce those figures.

Mr. Barry Jones (Alyn and Deeside) : My constituency shares boundaries with that of my hon. Friend. Today we heard that Northwest Airlines said that it would abandon its order for 74 airbus aircraft. LIke me, my hon. Friend might want to know the consequences of the loss of that order for the British aerospace industry and for the 4, 000 people employed at the Broughton works in my constituency where the airbus wings are made. Does my

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hon. Friend agree that the Government should aim to put at the top of their agenda measures to help British manufacturing industry?

Mr. Hanson : I fully agree with my hon. Friend. I recently visited the aerospace works in his constituency because many of the workers are my constituents. They are crying out for an aerospace strategy to help create jobs and employment. Today's news that the airbus order might be cancelled is of particular concern to my part of north-east Wales.

In the Delyn borough council area there are 2,283 people out of work. In some of the wards in my constituency, 40 per cent. of males are unemployed. This is the 30th consecutive month in which unemployment has risen in Delyn constituency, where the total number of unemployed is 2,806. Although that is not the greatest number in Wales, it means that 2,806 people want to work and deserve the opportunity to do so. Government support could create valuable jobs. In my constituency only 416 job vacancies are currently registered and in Flint--the largest town in the borough of Delyn--only 45 vacancies are registered with the jobcentre. With such a level of unemployment and lack of vacancies, we need solid action by the Government.

I draw again to Ministers' attention a fact that has been mentioned by many of my colleagues. It costs £9,000 to keep a person unemployed. That means that taxpayers in Delyn are spending £25 million this year on wasteful unemployment when we could undertake many projects to create wealth and jobs and to build a better society. The hon. Member for Chesham and Amersham (Mrs. Gillan), who is no longer present, said that public money does not create wealth, but many employers and business people in my constituency would welcome portions of that £25 million being spent in the private sector to provide the services that we need and to retain private sector jobs.

On Friday I attended a business lunch in Mold in my constituency with business men, none of whom, I suspect, voted for me in the general election but all of whom stated categorically that the Government were off the track and were not providing the necessary resources for the private sector through public investment. Most of all, they wanted public sector investment to help create private sector jobs. What do my constituents have to look forward to? Unfortunately, the answer, as for the rest of the United Kingdom, is, "Not a great deal".

Although the issue of travel-to-work areas is not part of the Minister's responsibility, I wish to raise it now. As my hon. Friend the Member for Alyn and Deeside is aware, the Flint, Shotton and Rhyl travel-to-work area, which has been in operation since 1984, is in the Government's proposed review. Deeside fears that the assisted area status, the accompanying Objective 2 status and the special development area status, which were put in place because of massive job losses in the steel and textile industries, will be lost when the review is completed.

There are still some of the 40 per cent. black spots in my constituency and along the coast which existed when the original Objective 2 status area was agreed. We also face the prospect of further job losses through colliery closures, which should add to the urgency with which the Government should tell north-east Wales that they believe that its assisted area status should be maintained. The

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Minister is shaking his head. Does he disagree with that point, is he not especially interested, or is he doing his crossword? I and many colleagues believe that assisted area status is valuable to our community and, if it is not maintained after the review, we shall return to the previous level of unemployment. At the moment, the enterprise zone and assisted area status is due to be withdrawn. My hon. Friend the Member for Alyn and Deeside and I wish it to be continued.

It is absolutely amazing that the Government can consider such a step, especially as my constituency faces the closure of the Point of Ayr colliery in the north of my constituency. When discussing unemployment, we must mention the Government's responsibility to create jobs, as well as that of the private sector.

The Point of Ayr pit is perfectly viable. It sells 80 per cent. of its coal to a power station down the road and the other 20 per cent. to businesses on the Wirral in the constituency of the Secretary of State for Wales. It has a market for its coal, and hon. Members may wish to refer to early-day motion 970 which mentions the world-beating coal produced in that pit. However, we now face the potential loss of 527 direct jobs and a total of 1,047 jobs there because of Government policy. Closure is proposed despite recent investment in the pit and despite the fact that it has the ability to produce coal at competitive prices. It is an absolute scandal. The colliery and its on-site contractors provide an immense resource for a local skill base. What surer way is there to continue unemployment and the downward cycle than to remove from the local economy a major skill base from my constituency and other affected areas?

The Secretary of State for Employment referred to the potential cost of retraining redundant miners. In Wales that cost is estimated at £2.6 million. That includes the retraining of miners who might lose their jobs at the Point of Ayr colliery. Would not it be better if that money were invested in the colliery to ensure its productivity and if we had a proper energy policy which ensured that coal had a valuable role?

Delyn borough council recently did some excellent work on estimating the cost of replacing the 1,000 jobs that would be lost if the Point of Ayr colliery were closed, although I hope that it will not come to that. The council estimated that about £150 million of taxpayers' money at a local level would be needed to replace those jobs. Do not hon. Members accept that it would be better to find positive ways in which the Government can spend the £150 million and to put jobs on the agenda instead of using those resources to respond to a closure which need not occur? Valuable resources have been invested in the pit in the past few years.

I am sure that my hon. Friend the Member for Blaenau Gwent (Mr. Smith) will mention south Wales if the opportunity arises. Bearing in mind all the problems facing my constituency and those of my colleagues, surely the Government could have tabled a better amendment than the waffle that they have produced. The Government are complacent about what is happening. Perhaps Ministers and Conservative hon. Members are not aware of what is happening outside the House. Many people who are natural Conservative supporters are suffering tremendously in the recession. They are looking to the House for leadership and for quality jobs.

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Mr. Heald : The hon. Gentleman makes the point that people from all walks of life are suffering in the current recession. Does he agree that it is a Europe-wide problem and that the results of unemployment in this country are by no means the worst in Europe? The hon. Gentleman should consider the figures quoted by my hon. Friend the Member for Milton Keynes, South-West (Mr. Legg). In Spain, which has a minimum wage policy, the unemployment level for young people is 33.7 per cent. The hon. Gentleman will recall that figure. In a European context, what are your proposals for dealing with the problem--

Madam Deputy Speaker (Dame Janet Fookes) : Order. I remind the hon. Gentleman that he should address me. His intervention has now gone on long enough.

Mr. Heald : I apologise, Madam Deputy Speaker.

Mr. Hanson : I find it interesting that a Conservative Member asks an Opposition Member about Government policies and about what our position in Europe should be when Britain has the presidency of the European Community and when the Prime Minister has the opportunity to feed in policies. Perhaps the hon. Member for Hertfordshire, North (Mr. Heald) would care to speak to the Prime Minister and to ask him what his policies for Europe are. We shall ask that because we do not appear to be getting Government support or co-ordination on those points. We can discuss the minimum wage at another time. I regard the minimum wage as vital to our community and especially to Wales, which is the lowest-paid region in the United Kingdom.

Conservative Members have mentioned the depressing side of our arguments and the fact that we have concentrated on job losses. I want to be positive about our community. As I have said, Delyn has much to offer prospective employers, as does north Wales and especially north-east Wales. I should like to hear support from Conservative Members for our positive proposals for job creation. There is much that we need to do. I could cite a number of examples in my own constituency of things that could be done to create employment in Wales and elsewhere.

Let us consider transport. As I said, it would cost £150 million to replace the jobs that may be lost at Point of Ayr colliery. It would cost £40 million of Government money to improve the Crewe-Holyhead rail link. My hon. Friends from all parts of the United Kingdom could mention projects that would create employment, would help the infrastructure and would bring jobs and support, especially to north Wales. The third Dee crossing is a major road infrastructure project which is close to the heart of my hon. Friend the Member for Alyn and Deeside. It would create jobs, it would put construction workers back to work, it would get people off the dole and it would improve the infrastructure of north Wales. It is a valuable capital project. The retention of Objective 2 area status for north Wales, including the Shotton, Rhyl and Flint travel-to-work area, is now entirely in the hands of the Government and of Conservative Members. The retention of that status would ensure, as it would in other parts of the United Kingdom, the retention of support to areas that have been hard hit since 1979 when the Government took office.

On energy policy, I make no apology for repeating the fact that my community is in dire need because the

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Government may close the Point of Ayr colliery. Many people's jobs depend on that colliery. It would be simple for the Government to make a statement and to consider a positive energy policy to help to reduce the burdens on the community.

An aerospace strategy has been mentioned, as has a tourism strategy which would support the parts of my constituency that depend on tourism. We need a housing strategy to put the many building workers in my constituency back to work and to help to meet the needs of the 2,650 people who are currently homeless in Delyn. All of those are positive policies that the Government could propose to help to create employment in the community. However, the Government choose not to do so which is a scar on their reputation and on Conservative Members who do not seek to invest in jobs in our community.

Our motion sums up our concern for jobs and for employment. The one message that I shall take back to my constituency at the weekend is the frightening level of complacency that Conservative Members who have spoken tonight have shown about our economy and about the level of jobs in our communities. Above all places in the United Kingdom, the House should say to people in our communities, "We know why you are suffering, we know how you are suffering, and we have a strategy to build our way to recovery." Conservative Members have shown that they have no strategy and no plans for recovery. That is why the Government will fail in due course.

7.44 pm

Mr. Graham Riddick (Colne Valley) : One of the disappointing aspects of the debate has been the rather poor attendance of hon. Members of all parties. The hon. Member for Delyn (Mr. Hanson) should also take the message to his constituents that few of his hon. Friends bothered to turn up to listen to their own debate on unemployment. That is an indictment of the Labour party.

I can well understand that Labour Members did not turn up because they did not want to listen to the hon. Member for Holborn and St. Pancras (Mr. Dobson). That is fully understandable. However, it is a shame that we do not see more Labour Members present for such a debate.

The hon. Member for Delyn asked about the Government's European policy. One thing I know about Labour's policy on Europe is that it seeks to increase the money provided through the social fund and through the cohesion fund, which the Maastricht treaty seeks to introduce. The reality is that any extra funds that go into the two funds will find their way to the poorer, southern countries of the European Community rather than to the regions of this country. Labour Members should be slightly cautious about calling for more funds in those areas.

The hon. Member for Holborn and St. Pancras made a disappointing and poor speech. On three or four occasions, he responded to interventions by saying that we should have to wait until later in his speech and that he was not able to deal with interventions at that stage. He was rather insulting to the unemployed when he suggested that they would all commit crimes because they were unemployed. That comment was unfortunate.

The hon. Member for Holborn and St. Pancras talked about right-wing, fascist extremists. The reality is that

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there is a problem with right-wing, fascist extremists in Europe. They are not a problem in this country. They are a problem in Germany, in Italy and in France, but not in this country.

The only job creation scheme put forward by the Labour party which has ever worked is the one in Monklands district council where 22 wives, sons and daughters of a small group of Labour councillors have been employed. I ask Opposition Members when they will express sympathy for 51-year-old Tom McFarlane, who was made redundant because he and his wife dared to question the internal procedures of the local Labour party and its corrupt control of the local council. To date, we have heard nothing about that saga from the right hon. and learned Member for Monklands, East (Mr. Smith), the Leader of the Opposition. He has been totally silent. It is time that he put that right and it is time that he condemned the practices in Monklands district council.

Unemployment is a curse on our society : of that there is no doubt. All hon. Members accept that. Unemployment leads to all sorts of desperate difficulties for individuals who have lost their jobs and for their families. The strain that unemployment puts on families sometimes leads to the break-up of those families and sometimes even leads to people losing their homes. Conservative Members care about the real problems that face ordinary people--our constituents who become unemployed.

It is misleading to suggest that there is an easy answer to the difficulty. The quack solutions that we have heard from the Labour party today demonstrate why it was that the British people did not entrust Labour with government last April. The propositions put forward by the hon. Member for Holborn and St. Pancras were glib and facile on the whole, and demonstrated, once again, that the Labour party is wedded to state intervention as its preferred option. We heard that the Government must take action on jobs. The hon. Member for Delyn said that we need an industrial policy and a package of measures. However, Opposition Members never tell us how those measures are to be paid for.

So long as Labour advocates a national minimum wage and pushes for Britain to sign the European social chapter, Labour does not deserve to be taken seriously in respect of unemployment. Those two proposals would cost hundreds of thousands of our fellow citizens their jobs. The scourge of unemployment will be tackled properly only when the process of wealth creation is set solidly on track. The fundamentals are what counts. For a year until golden Wednesday on 16 September, interest rates in this country were too high. They were at a level inappropriate to Britain's domestic requirements. We all know that that stemmed directly from Britain's membership of the exchange rate mechanism--a policy that was supported wholeheartedly by the Labour party. However, now that the Government have been able to reduce interest rates by three points to 7 per cent., British exporters are more able to sell their products overseas and a recovery will take place. The fundamental requirements for recovery are now in place. I know that Ministers are wary of trumpeting recovery for fear of heralding a false storm once more. However, as a humble Back Bencher and a humble Parliamentary

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Private Secretary, I am prepared to stick my neck out and say that I believe that a good recovery will take place in 1993. I believe that it might be considerably stronger than the 1 per cent. forecast by my right hon. Friend the Chancellor of the Exchequer in the autumn statement.

Anecdotal evidence suggests that the recovery may already have started--at least in the north of England where people are less highly geared. Yorkshire folk are very sensible and canny and they did not borrow up to their eyeballs in the heady days of the 1980s. As they have fewer borrowing commitments, they will be able to take advantage of the lower mortgage repayments and of the favourable economic conditions that now exist.

I spoke recently to a medium-sized manufacturer based in Halifax who does a great deal of exporting. He told me that his order book has exploded since the devaluation of the pound. He has taken on a greatly increased number of orders and that is good news. He is also looking to employ people.

Only a week ago, I spoke to a stockbroker based in Huddersfield. He told me that he saw green shoots of recovery all over Yorkshire. I do not want to get carried away, but there are some encouraging signs. Some companies' order books are increasing and there is more confidence about the future.

I spoke to a friend of mine who sells furniture. He told me that his sales have increased markedly in Yorkshire and, funnily enough, particularly in the north-east of England. That anecdotal evidence, allied to figures showing the recent growth in the money supply and in retail sales, provides encouraging signs for the future. Putting that evidence to one side, my real cause for optimism is that we now have in place the economic and monetary policies conducive to recovery. I believe that that recovery will take place. Recovery in the wealth-- creating sectors will bring in its wake the new jobs that we all so desperately want to see. That will not come about through the quack solutions of the hon. Member for Holborn and St. Pancras, who advocates state intervention here and state spending there.

Between 1985 and 1990, unemployment fell by more than 1 million because of the new jobs being created in the real industrial world. We created the right economic conditions of low inflation, minimum regulation, moderate personal and corporate taxation, less of the nation's wealth being swallowed up by the state and a climate for enterprise. Those are the conditions that we will have to recreate--and which I believe that we are creating--for the 1990s. There are no facile, quack solutions.

The Labour party does not understand industry. Labour Members advocate that politicians should have a hands-on approach to industry and that politicians should have an industrial policy. However, the reality is that hardly any Labour Members have ever worked in industry. It is fair to point out that practically none of the spokesmen in the shadow Employment, Treasury or Trade and Industry teams have ever worked in industry.

I was interested to note from his biographical details that the hon. Member for Holborn and St. Pancras worked at the headquarters of the Central Electricity Generating Board for 10 years. That was certainly a nationalised industry in those days, but I am not sure what his job entailed. I suppose that it was at least close to industry so I must not denigrate it.

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The fact that the hon. Member for Holborn and St. Pancras can refer to business men in this country as

"stinking, lousy, thieving, incompetent scum"

demonstrates his contempt for people who run businesses in this country.

Ms. Quin : Will the hon. Gentleman give way?

Mr. Riddick : The hon. Lady is now going to try to defend the indefensible.

Ms. Quin : Far from defending the indefensible, I would like to repeat the comments of my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson). He made it clear that he was referring to employers who pay poverty wages.

Mr. Riddick : Whatever the circumstances, one should not refer to business men as

"stinking, lousy, thieving, incompetent scum".

One simply does not do that, particularly if one claims to hold a responsible position within the shadow Cabinet as the hon. Member for Holborn and St. Pancras does. The comments of the hon. Member for Holborn and St. Pancras demonstrate his contempt for industry and for business in general. We hear that kind of approach from the Opposition far too often.

The negative knocking of industry by the Labour party achieves nothing and it certainly does not help to create a climate of confidence. We all know that confidence is terribly important. Out there in the real world confidence is fragile. The Labour party could help by being less negative and more positive about opportunities and about the future.

When companies make announcements about redundancies, that is also bad for confidence. It certainly does not help to restore confidence. Last week, the Post Office announced 16,500 job losses. When I heard that, I thought, "My God, that's appalling. That will be disastrous for confidence." However, when I read the small print in the newspapers the next day, I realised that the jobs were to be lost through natural wastage over five years.

The fact that those jobs are to be lost is regrettable. However, they are being lost not so much because of the recession, but because of improved technology which is being introduced in the Post Office. An interesting article by Anatole Kaletsky appeared in The Times on Monday. He pointed out that too many companies are making big redundancy announcements when they have no intention of losing so many people. He reported that there is a cult of management machismo. If that is the case, it is most unfortunate. Industrialists should stop making such announcements unless absolutely necessary. Mr. Kaletsky pointed out that

"redundancy costs can often be reported as an extraordinary item' in a company's accounts and do not therefore affect the earnings per share from continuing operations".

I understand that the practice will cease in the middle of next year--and about time, too.

The Government's economic policy is now on the right tracks. Interest rates have come down and inflation is low. The autumn statement responded to the representations of industry, contrary to many of the statements made from the Opposition Benches. Recovery is in sight and with recovery will come renewed job opportunities. The small

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businesses will create the jobs of the future. The big companies are shedding jobs because of improved technology that they are introducing into their factories.

My old company, Coca Cola and Schweppes Beverages, is able to produce as many cans of pop by employing 200 people in its new factory in Wakefield as it took 1,800 people to produce only a few years ago. I do not particularly welcome that ; it is simply a fact of life. It demonstrates the difficulty of creating new jobs in the United Kingdom. The small businesses will create new jobs, so we must create the right economic conditions in the United Kingdom. That is exactly what the Government are doing. The Labour party's quack solutions involve an extension of state intervention and power, which represents the policies of the past. Private enterprise competing with a free market will create the jobs of the future.

7.59 pm

Mr. John Hutton (Barrow and Furness) : I have been fortunate to listen to most of the speeches in the debate. Unlike the hon. Member for Colne Valley (Mr. Riddick), I have not heard any of my right hon. and hon. Friends knock British industry. I assure the hon. Gentleman that I will not knock British industry because I am a strong and passionate supporter of industry, especially the engineering industry.

I should like to talk about the current level of unemployment in my constituency and its effect on the fabric of life in my community. I should also like to talk more widely about the current difficulties in British manufacturing industry.

Before doing so, I express to my hon. Friend the Member for Wallasey (Ms. Eagle) the immense feeling and regret in my constituency about the closure of Cammell Laird at Merseyside. Cammell Laird is a great shipyard. It has a great and strong history. The people in my constituency feel real regret that it has been announced that the yard will close. I place the responsibility for that closure not on the management of Vickers Shipbuilding and Engineering Limited but on the policies being pursued by the Government. Since 1979 the Government have consistently failed to support the British shipbuilding industry.

Today there was a lobby of Parliament from people in my constituency. It is unusual for my constituents to lobby Parliament, because my constituency must be one of the most difficult to get to and from. However, many of my constituents made the effort to come to Parliament to meet hon. Members and Ministers and to remind them of what has been happening in one of the great centres of the British engineering industry.

Since 1990 and the publication of "Options for Change", 8,500 redundancies have been declared in my constituency. More redundancies have been declared in Barrow and Furness than in any other British constituency. Those redundancies are a devastating blow to my constituency. About 4,500 people are registered as unemployed, although the true extent of unemployment in the constituency is substantially higher. I have just learnt that 5,500 of my constituents claim sickness benefit, the vast number of whom will be unemployed. If the number of my constituents claiming sickness benefit is added to the

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number claiming unemployment benefit, the real level of unemployment in my constituency is probably nearer 20 per cent. than the official figure of 10 per cent.

My particular worry is the effect that the redundancies and job losses have had on young people. Since 1990, 1,000 engineering apprentices have disappeared from my constituency. Every year the VSEL shipyard recruited about 300 young people aged 16 years. Most of them were boys, but many were young women. That recruitment of apprentice trainees has finished. Vickers accounted for a high proportion of the total number of engineering apprentices in the United Kingdom. The loss of the recruitment programme is a serious blow not only to my constituency but to the engineering industry of the United Kingdom and our future as a trading nation. That level of apprentice lay-offs is a devastating blow to my community and the country as a whole.

Unfortunately, we know that there will be heavy job losses in Barrow in the next two years. The programme of shedding workers and redundancies at Vickers is far from over. The worst expectation is that as many as 4,000 extra redundancies could be made in my constituency in the next two to three years. The combined effect of those redundancies will be that every family in my constituency will have been directly affected by unemployment. Whole families have lost their jobs at the shipyard. Many parents are worried about the employment prospects for their children. Therefore, in my constituency and in the constituencies of my hon. Friends--and, I suspect, the constituencies of Conservative Members--an entire culture of service to the nation and an entire tradition of skill and work are at risk.

The hon. Member for Colne Valley spoke about the feelings of many Conservative Members about those who are out of work. I was glad to hear him say that, because the impression I gained from listening to the debate is that there is not a great deal of concern among Conservative Members. I welcome the hon. Gentleman's reassurance. When we talk about unemployment we are not whingeing. We are not knocking British industry or running the country down, as many Conservative Members would like the House to believe. We are simply reminding the Government and Conservative Members of the consequences of their economic policies. For many communities in Britain, those economic policies have been devastating in the past few years. The root of the present difficulties in my constituency lies with the Government's failure to support manufacturing industry, especially the engineering industry. The shipbuilding industry has been badly hit by the recession. Indeed, that industry has been in a process of structural decline, certainly since the late 1970s. In response to some of the comments that I have heard tonight, I should point out that Britain's shipbuilding industry and, indeed, the shipbuilding industry of Europe is not a smokestack or old-fashioned industry. It is a high-tech and highly skilled industry.

The contribution of my constituents to shipbuilding and the quality of engineering in my constituency are second to none in the world. In particular, the engineering work on the Trident programme is without parallel ; it is some of the highest-quality work that any British shipyard has ever produced.

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